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Lesson
Counterpart funding and incentive issues in TA loans. Despite the challenges in project implementation, the project support unit (PSU) and local support unit (LSU) had utilized close to $4 million in counterpart funding, while ADB disbursed only 15% of the TA loan. As a result, the actual split between ADB and the government was 15:85, when the agreement was 70:30. Thus, a key lesson is that there should have been far greater oversight on the utilization of counterpart funds, as the ADB-financed expenditures and activities and overall progress of the TA loan lagged far behind.

Project Number: 38405-013
Project Name: Mega City Development Project
Report Date:
Lesson
Consultants should be fielded early in project implementation.

Project Number: 33548-013
Project Name: Urban Water Supply Project
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Lesson
The policy reforms agreed on at appraisal were overshadowed by the broader reform agenda introduced under local government ordinance (LGO) 2001 before project approval. Where major changes occur in the external environment of projects before ADB approval, it is more efficient to revise the project design up front rather than postpone the major adjustments.

Project Number: 27182-013
Project Name: North-West Frontier Province Urban Development Sector Project
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Lesson
Sludge treatment. Proper handling of sludge has been an issue for most wastewater treatment plants (WWTPs) operating in the People's Republic of China (PRC) since traditional landfill options have become problematic. The government and WWTPs must find alternative solutions for sludge treatment. More sustainable sludge treatment methodologies may need to be considered during project preparation. Tangshan and Baoding are piloting the composting of sludge for fertilizer; however, this solution may not be sustainable without clear safety measures, due to increasing health concerns.

Project Number: 32327-013
Project Name: Hebei Province Wastewater Management Project
Report Date:
Lesson
More strategic and participatory planning is desirable. LGU chief executive officers (CEOs) often selected subprojects and made investment decisions on their own rather than on the basis of strategic local development plans. Although the project assisted some LGUs in formulating comprehensive land use plans, it did not succeed in ensuring that such plans are standard tools for investment planning despite an LBP requirement mandating that LGUs possess annual development plans to qualify for loan approval.

Project Number: 30551-013
Project Name: Mindanao Basic Urban Services Sector Project
Report Date:
Lesson
A single executing agency could have simplified implementation. The report and recommendation of the president (RRP) and the loan agreement both established an unnecessary overlap of functions between LBP and the DILG. This could have been avoided through a more straightforward and functional separation of roles: LBP to implement Part A, and the DILG to limit its role to Part B. The existence of two executing agencies under the project should have been avoided.

Project Number: 30551-013
Project Name: Mindanao Basic Urban Services Sector Project
Report Date:
Lesson
Revenue-earning subprojects were favored. Many of the implemented subprojects e.g. public markets, public transport terminals, and water supply schemes are good revenue earners or have the potential to be good revenue earners. These subprojects provide essential economic and environmental benefits that will have long-lasting positive impacts. It is expected that most of these investments will be sustainable and will lead to further related investments to expand infrastructure networks.

Project Number: 30551-013
Project Name: Mindanao Basic Urban Services Sector Project
Report Date:
Lesson
The value of capacity development. Although not easily measurable in terms of monetary impacts and outcomes, capacity development support made an important contribution to the project. The investment of $6 million through an Nordic Development Fund (NDF) loan to the DILG was an unprecedented engagement in favor of LGUs; this amount was augmented with a substantial in-kind operational counterpart contribution by the DILG.

Project Number: 30551-013
Project Name: Mindanao Basic Urban Services Sector Project
Report Date:
Lesson
Land acquisitions and resettlement. Most of the compensation rates for resettlement were higher than those in the resettlement plans. However, according to the data provided by each municipal sewerage company (MSC), the total resettlement costs for permanent land acquisition, temporary land use, building demolition, and associated items on the ground were lower than those estimated in the resettlement plan.

Project Number: 32327-013
Project Name: Hebei Province Wastewater Management Project
Report Date:
Lesson
Participating local government units (LGUs) obtained several benefits. The project generated strong interest among LGUs. Most LGUs appreciated the loan terms (particularly the fixed long-term nature of ADB funds) and the assistance and services provided by the Land Bank of the Philippines (LBP) and the Department of Interior and Local Government (DILG). LGUs also appreciated receiving assistance in modernized governance systems, including assistance in rationalized planning (comprehensive development plans), property tax administration, and revenue enhancement.

Project Number: 30551-013
Project Name: Mindanao Basic Urban Services Sector Project
Report Date:
Lesson
LGUs see banking requirements as too tedious. Despite various introductory workshops, some LGUs kept complaining about the documentation requirements. The assistance of DILG and its consultants has helped ease their concerns, but LGUs reported that at times they felt like they were being forced into compliance with procedures that other official development assistance (ODA) providers (like Japan Bank for International Cooperation) had already relaxed. Both ADB and LBP procedures could have been simplified to better bond LGU customers with the project.

Project Number: 30551-013
Project Name: Mindanao Basic Urban Services Sector Project
Report Date:
Lesson
Reclaimed water development. The government has not recognized the tariff issues related to recycled water, although 30% of treated wastewater is being recycled as of 30 June 2010. The government needs to streamline the tariff system for recycled water, including tariff setup, charging standards, and collection mechanisms.

Project Number: 32327-013
Project Name: Hebei Province Wastewater Management Project
Report Date:
Lesson
Capital grants are attractive, but should only be given as a reward for good performance. In the first years of the project the DILG offered capital grants for eligible subprojects. These were discontinued in 2005 after the cancellation of the DILG's grant source. After that, many LGUs stopped subproject preparation work because of the (perceived high) costs of ADB loans. The commitment and buy-in of LGUs was weak at times. Many LGUs were more oriented toward grants than the lending facility.

Project Number: 30551-013
Project Name: Mindanao Basic Urban Services Sector Project
Report Date:
Lesson
Sewer construction. For the Tangshan component, construction of a fully functioning sewer system should have been adequately addressed during the planning stage. The construction delay had a negative impact on the project. Technical preparation needs to be enhanced, as does overall coordination of project implementation among government agencies.

Project Number: 32327-013
Project Name: Hebei Province Wastewater Management Project
Report Date:
Lesson
Decentralized projects call for a better PPMS. The scattered nature of investments throughout Mindanao created substantial management challenges of reporting and data management. The disparity and decentralized nature of the subprojects should have made it imperative that the project implement a web-based project performance monitoring system (PPMS) instead of employing traditional narrative reporting methods. A web-based PPMS would have facilitated management and supervision.

Project Number: 30551-013
Project Name: Mindanao Basic Urban Services Sector Project
Report Date: