Document of The World Bank

Report No: 27575

IMPLEMENTATION COMPLETION REPORT(CPL-38990)

ON A

LOAN

IN THE AMOUNT OF US$10.09 MILLION

TO THE

LEBANESE REPUBLIC

FOR A

SOLID WASTE/ENVIRONMENTAL MANAGEMENT PROJECT

June 21, 2004

Rural Development, Water and Environment GroupMiddle East and North Africa Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective December 2003)

Currency Unit = Lebanese Pound LL 1.00 = US$ = 0.0006 US$US$ 1.00 = LL 1,650

FISCAL YEARJanuary 1 to December 31

ABBREVIATIONS AND ACRONYMS

CAS Country Assistance Strategy CDR Council for Development and ReconstructionCPPR Country Portfolio Performance Review CZM Coastal Zone ManagementCZMP Coastal Zone Management PlanDBO Design-Build-Operate DO Development ObjectiveEA Environmental AssessmentEDL Electricite du LibanEU European UnionERRP Emergency Reconstruction and Rehabilitation ProjectGDP Gross Domestic ProductGIS Geographic Information SystemGOL Government of LebanonIMF Independent Municipal FundLL Lebanese Pound (“Livre Libanaise”)METAP Mediterranean Environmental Technical Assistance ProgramMIM Ministry of Municipalities and MunicipalitiesMMRA Ministry of Municipal and Rural AffairsMOE Ministry of EnvironmentMOP Memorandum of the PresidentNERP National Emergency Reconstruction ProgramNGO Non-Governmental OrganizationNIMBY Not-In-My-Back YardOD Operational DirectiveOECF Overseas Economic Cooperation Fund PCU Project Coordination UnitPMU Program Management UnitPSR Project Status ReportQAG Quality Assurance Group REA Regional Environmental AssessmentSA Special Account SIU Sectoral Implementation UnitSWEMP Solid Waste/Environmental Management Project SWM Solid Waste ManagementTA Technical Assistance

TCC Technical Coordination CommitteeTOR Terms of ReferenceUNDP United Nations Development Program

Vice President: Christiaan J. PoortmanCountry Director Joseph P. Saba

Sector Director Letitia A. Obeng Task Team Leader/Task Manager: Allan Rotman

LEBANESE REPUBLICSOLID WASTE/ENVIRONMENTAL MANAGEMENT PROJECT

CONTENTS

Page No.1. Project Data 12. Principal Performance Ratings 13. Assessment of Development Objective and Design, and of Quality at Entry 24. Achievement of Objective and Outputs 55. Major Factors Affecting Implementation and Outcome 116. Sustainability 127. Bank and Borrower Performance 138. Lessons Learned 159. Partner Comments 1710. Additional Information 17Annex 1. Key Performance Indicators/Log Frame Matrix 18Annex 2. Project Costs and Financing 19Annex 3. Economic Costs and Benefits 21Annex 4. Bank Inputs 22Annex 5. Ratings for Achievement of Objectives/Outputs of Components 24Annex 6. Ratings of Bank and Borrower Performance 25Annex 7. List of Supporting Documents 26Annex 8. Borrower’s Evaluation Report 27Annex 9. ICR Workshop on SWEMP: April 27-28, 2004 - Various Views on the Project Expressed by Workshop Participants

37

Annex 10. Lebanon: Framework for National Solid Waste Management Investments (2004)

40

Project ID: P005345 Project Name: SOLID WASTE/ENVIRONMENTTeam Leader: Allan Rotman TL Unit: MNSREICR Type: Core ICR Report Date: June 22, 2004

1. Project DataName: SOLID WASTE/ENVIRONMENT L/C/TF Number: CPL-38990

Country/Department: LEBANESE REPUBLIC Region: Middle East and North Africa Region

Sector/subsector: Solid waste management (80%); Central government administration (20%)

Theme: Other financial and private sector development (P); Municipal finance (P); Other urban development (P); Pollution management and environmental health (P); Water resource management (P)

KEY DATES Original Revised/ActualPCD: 12/10/1993 Effective: 08/12/1996

Appraisal: 10/16/1994 MTR: 07/16/2001Approval: 06/06/1995 Closing: 12/31/2001 12/31/2003

Borrower/Implementing Agency: Government of Lebanon/Ministry of Finance/Council for Development and Reconstruction/Ministry of Interior & Municipalities

Other Partners:

STAFF Current At AppraisalVice President: Christiaan J. Poortman Caio Koch-WeserCountry Director: Joseph P. Saba Inder K. SudSector Manager: Narasimham Vijay Jagannathan Alastair J. McKechnieTeam Leader at ICR: Allan RotmanICR Primary Author: Allan Rotman; Sati Achath

2. Principal Performance Ratings

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible)

Outcome: U

Sustainability: UN

Institutional Development Impact: M

Bank Performance: S

Borrower Performance: U

QAG (if available) ICRQuality at Entry: U

Project at Risk at Any Time: Yes

3. Assessment of Development Objective and Design, and of Quality at Entry

3.1 Original Objective:

The original objectives of the US$135.0 million project (Loan US$55.0 million) were to: (i) eliminate unsanitary and improper dumping of solid-waste and improve methods of waste collection and disposal; (ii) improve cost recovery and modernize municipal management and finance systems; (iii) improve the quality and marketability of compost, through the introduction of sorting of the waste at the entrance to the compost plant; (iv) increase the involvement of the private sector in solid waste management; (v) strengthen Council for Development and Reconstruction (CDR) and Ministry of Municipal and Rural Affairs

1

(MMRA), and participating municipalities; and (vi) create instruments for the more orderly planning and development of the Lebanese coastal zone.

The objectives were clear and important to the country’s social and environmental development. They were also timely and appropriate to the needs of the Borrower, especially considering that the civil war in Lebanon, which erupted in 1975 and lasted for about 15 years, had led to the deterioration of public services, particularly water supply, waste water treatment, solid waste collection and disposal, power supply, and public transport. In particular, the deterioration of solid waste services had created a severe risk to public health and the environment due to: (i) proliferation of illegal solid waste dumps in Greater Beirut and in secondary cities; (ii) pollution of water sources and distribution systems; (iii) discharge of waste directly into the sea and into irrigation canals; (iv) mixing of hospital waste with domestic waste; and (v) air pollution caused by open burning of solid-waste. The situation was further exacerbated by the lack of a country-wide land use system which had led to haphazard expansion of dwellings on the sea coast, on fertile agricultural land and on sensitive natural ecosystems; pollution of surface waters and underground aquifers caused by uncontrolled pumping to provide the new communities with running water; pouring of sewage into disposal wells; widespread deforestation; destruction of the cultural heritage; and degradation of marine and coastal areas.

The project was consistent with the Bank's Country Assistance Strategy (CAS) for Lebanon, discussed by the Board in July 1994, which, inter alia, supported the rehabilitation of infrastructure, addressed environmental concerns, supported increasing the role of the private sector in the provision of public services and strengthening the core functions of public administration. It was also in line with the Bank’s 1993 Emergency Reconstruction and Rehabilitation Project (ERRP) to finance high priority components of the Government of Lebanon’s (GOL's) National Emergency Reconstruction Program (NERP). The Bank’s involvement in the Solid Waste/Environmental Management Project (SWEMP) was expected to help the government to complete the rehabilitation of the country's municipal solid waste management systems that began under the ERRP. The project was also expected to help to establish a technically and financially viable development policy in the solid waste sector.

The project envisioned several social and environmental benefits which included: (i) cleaning up the accumulated refuse in urban areas and along the Mediterranean coast, improving the management of existing disposal sites, creating new ones, and adding composting plants; (ii) benefiting the entire population, many of whom for years were deprived of adequate solid waste collection and disposal service or did not get service at all; (iii) strengthen the principal municipalities through training and other technical assistance; and (vi) encouraging private sector participation in the solid-waste management business through contracting to municipalities, which would increase efficiency by introducing an element of competition.

1/In 1998, as a result of the national presidential election, a new government was formed which combined the Ministry of

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Interior with the Ministry of Municipal and Rural Affairs (MMRA) to create the Ministry of Interior and Municipalities (MIM).

The project design was not judged to be complex, but it had a very demanding implementation schedule.

3.2 Revised Objective:

As a result of the developments mentioned in Section 4.1, starting in July 1998, even before the change of government, the Bank management proposed to the government to restructure the project. During the Country Portfolio Performance Review (CPPR) in June 2001, the government and the Bank agreed upon an action plan to reduce the loan amount and to extend the closing date by two years in order to implement a more limited scope under the project. Since it was evident that the original project objectives were not likely to be met under these circumstances, the government and the Bank decided to restructure the project formally in order to focus on activities that would be simple to implement for each component.

The project objectives were accordingly revised as follows: (i) to demonstrate improved solid waste management in the collection and disposal services through the establishment of 2-4 pilot sanitary landfills, with private sector participation; and (ii) to strengthen the capabilities of CDR and the municipalities in the areas of solid waste management.

3.3 Original Components:

The original components were reasonably related to achieving the project’s objectives. CDR, the implementing agency, had sufficient administrative and financial capacity for successful implementation.

The project consisted of the following four components:

Component 1: Waste collection facilities.

Purchase of collection equipment consisted of containers, compactor trucks and transfer trailer trucks for the purpose of transporting large quantities of waste. Other equipment included street sweeping and street washing equipment.

Component 1I: Waste disposal facilities: sanitary landfills and compost plants.

These included construction of 15 sanitary landfills.

Component III: Separate collection and disposal of hospital waste.

Provision was made for the procurement of special equipment. These included separate containers and trucks for the collection and transportation of hospital waste to a new specialized hospital waste incinerator.

Component IV: Technical assistance. Technical assistance consisted of three major sub-components, namely:

(a) Coastal Zone Management (CZM) Plan: This sub-component aimed at creating the instruments and building the institutional capacities for physical planning and monitoring of coastal zone development,

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in order to improve environmental conditions and prevent further degradation.

(b) Engineering Services: The engineering services to be included were: (i) engineering services for the design and supervision of landfills and solid waste equipment (compactor trucks, containers, etc.), (ii) design and construction supervision of the two compost plants in Saida and Zahle; (iii) design and construction of the air pollution control system and the compost plant at the existing Amrousiyeh incinerator; and (iv) design and construction supervision of the specialized incinerator for the disposal of hospital waste.

(c) Technical Assistance and Training: This consisted of institutional development for CDR, MIM, and the principal municipalities through the appointment of international experts, training of staff, and provision of computers and other modern equipment to help improve efficiency.

3.4 Revised Components:

At restructuring, the project’s scope of activities were reduced from 15 landfill locations to 2-4 locations, with the investments at each location to include the closure of old dumps, construction of a modern engineered sanitary landfills at each site, and the procurement of collection equipment and mobile landfill equipment. Similarly, the scope of technical assistance activities was reduced to focus on solid waste management related studies, initiation of a cost recovery system and capacity building for selected participating municipalities.

The facilities to be financed by Overseas Economic Cooperation Fund (OECF) (compost plants and hospital waste disposal) were removed from the project description, as it had decided to withdraw from financing the project.

3.5 Quality at Entry:

Unsatisfactory. There was no official assessment of the quality at entry by the Quality Assurance Group (QAG). The ICR deems the overall quality at entry to be unsatisfactory. The rating is based on an evaluation of the project objectives, the quality of the design, consistency with Bank policies, reasonableness of assumptions, and assessment of risks. These are discussed below:

Project objectives. As mentioned in the earlier section, the project objectives were consistent with the country assistance strategy and the government priorities and met the critical needs of the infrastructure sector of Lebanon. Since CDR had the technical capacity, the quality of project design was generally adequate to meet the project’s overriding objective. The ICR views this aspect as satisfactory.

Project design. During project preparation, various options for collecting, processing and disposing of solid waste were considered. The collection aspect was a choice between door-to-door collection and the placing of containers at convenient locations; the latter was selected for reasons of efficiency and affordability. For disposal, various alternatives, including landfills, composting and incineration were carefully analyzed. Based on the topography, population concentration, and the availability of suitable land, the alternative selected in each of the areas represented the optimal and least-cost solution. This aspect of the project design is rated satisfactory.

Cost recovery. The project had correctly taken into account the need for cost recovery. The Bank had also come to an agreement with the government to create a cost recovery system, which would initially be set at the equivalent of about 25 percent of the estimated cost of the collection and disposal of solid waste, and to

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commence collection of charges within a year of starting the new solid waste service. This agreement was included in the Loan Agreement. The ICR views this aspect as satisfactory.

On the other hand, the overall quality at entry is rated unsatisfactory because of the following shortcomings of the project:

(i) Ambitious and unrealistic. The design was not very realistic in scale and scope. Instead, it was ambitious, considering that: (i) it aimed to cover more than half of the country in five years, based on a Master Plan which was prepared before the civil war started; (ii) the country was static for about 15 years during the civil war and there was no comprehensive planning and budgeting system, and municipal governments were not operational during this turbulent period; and (iii) the concept of constructing 15 landfill sites was not realistic given the number of municipalities, ethnic diversity, and the limited financing plan for project implementation. The fact that project had to be restructured and the number of sites had to be reduced to 2-3 landfills, confirms the unrealistic nature of the project.

(ii) NIMBY phenomenon. The project underestimated the potential impact of NIMBY (Not-In-My-Back Yard) phenomenon during preparation and appraisal. Locating landfill sites and acquiring land was assumed to be on a voluntary basis and the participating municipalities were expected to provide the land for project purposes. Unfortunately, these municipalities found it very difficult to acquire land and provide sites for the project because of the NIMBY phenomenon. Given the fact that the NIMBY phenomenon has become a problem in solid waste management internationally, more attention should have been paid to this factor.

(iii) Stakeholder consultation. For a country ridden with so many religious denominations and affiliations, ethnic groups, political parties, and special interest groups, it was important to take into account the political, social and cultural aspects of Lebanon while designing the project. One of the basic problems which affected project implementation was the lack of consensus within municipalities and among neighboring municipalities on solid waste management issues. Proactive stakeholder consultations, both locally and nationally, among these various groups within municipalities and among neighboring municipalities could have provided them with the opportunity to raise questions and concerns about the landfills. In addition, these consultations also could have helped the project team and authorities to understand, appreciate, and deal appropriately with their concerns. This kind of consultation would have helped to build a consensus and mitigate the problems arising from NIMBY phenomenon.

4. Achievement of Objective and Outputs

4.1 Outcome/achievement of objective:

Unsatisfactory. The project outcome is rated as unsatisfactory as it was not able to achieve its objectives.

Background.

A. Social Resistance resulting from NIMBY.

The project from the beginning faced implementation problems because of social resistance provoked by solid waste issues. This type of resistance was not anticipated during project preparation but came up during the early stages of implementation. These incidents were part of the underlying political tensions still present in a post-conflict situation in Lebanon, as demonstrated by the following examples:

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(i) Bourj Hammoud: In early 1997, the Bourj Hammoud site serving northern Beirut was closed as a result of violent public street demonstrations and further threats of violence as the adjacent residents were opposed to accepting the large volumes of solid waste from the Greater Beirut being delivered to the Bourj Hammoud site. These events were in reaction to an increasing reliance on the site that had been originally opened as an emergency open dump, and then grew into a small “mountain” of waste. With the demonstrations, the government immediately adopted an emergency solid waste investment project that included collection, sorting, composting, and bailing as well as the disposal of household solid waste at a new sanitary landfill situated in Naimeh located south of Greater Beirut. The government took this drastic decision to finance the entire new solid waste system from its own budget, without Bank financing, in order to avoid a potential civil strife that would have launched the country into another round of social and militia resistance.

(ii) Amrousiyeh: The second incidence of social resistance occurred in 1998 at Amrousiyeh in the southern part of Greater Beirut. The operating solid waste incinerator facility serving Greater Beirut was destroyed and a fire ensued which incapacitated the facility. This was because of the opposition to the site and because of air pollution.

(iii) Baalbeck: A successful Environmental Assessment (EA) was completed for a site located a few miles north of the Municipality of Baalbeck in 1998. The site then underwent Lebanese land expropriation procedures, and advanced successfully through the various steps in the process. In parallel, the bidding process for the construction of the landfill was initiated, a bidder was selected, contract negotiation was completed, and the contract for landfill construction was signed. But in the last stage of the land expropriation process in 1998, the newly elected Municipal Council refused to accept the transfer of the land title to the Municipality because of pressure from local residents with strong political links. They believed the proposed sanitary landfill would produce odor and health issues.

(iv) El-Kourah: In El-Kourah also, the EA and land acquisition process reached a very advanced stage similar to the situation in Baalbeck, but due to overwhelming reaction from the public, all project activities had to be stopped in 1999.

(v) Saida: In Saida, public hearings for a landfill site also provoked strong emotions in 1998, verging on actions of social resistance due to traffic concerns and fears of pollution.

B. Change of government, reorganization of ministries, and establishment of municipal councils.

In 1998, as a result of the national presidential election, a new government was formed which combined the Ministry of Interior with the Ministry of Municipal and Rural Affairs (MMRA) to create the Ministry of Interior and Municipalities (MIM). The same year, newly elected municipal councils were also established, and they did not have any technical and managerial experience in solid waste services, or any knowledge of the project. As a result, most of the high level ministry officials and local municipal councils questioned the choice of landfill as a suitable technology and were eager to consider highly advanced technology and high-cost treatment options, such as gasification, incineration, anaerobic digestion, plasma and other unproven commercial technologies. These high cost options were incompatible with Lebanon’s macroeconomic conditions and lack of counterpart funds available to project.

C. Withdrawal of OECF from co-financing the project.

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In light of the above two factors, implementation of the project was totally frozen, including preparation of a pre-requisite studies for OECF co-financing. This situation led to the withdrawal of OECF from co-financing the project, amounting to $55.0 million, and consequently, two major compost plants in Saida and Zahle, and the hospital waste management system could not be implemented at all.

The withdrawal of OECF thus seriously affected project design and achievement of project objectives, as did the national emergency investments for solid waste in the Greater Beirut area. These two financing related issues, the institutional changes in government and municipalities, the low level of public awareness on solid waste issues and the difficulties in acquiring land for the project, all were factors that contributed to the project restructuring.

The project restructuring, as agreed in the CPPR action plan of 2001, included: (i) cancellation of $30 million of the project’s $55 million loan; (ii) extension of the closing date from December 31, 2001 to December 31, 2003; (ii) strengthening the Project Coordination Unit (PCU) at the implementing agency (CDR) so as to assume full responsibilities to implement the restructured project; (iii) streamlining the implementation arrangements, to resolve conflicting responsibilities among CDR, the participating municipalities and MIM; (iv) resolution of outstanding contractual and procurement issues; and, (v) clear project implementation plans for the construction of new sanitary landfills. As these CPPR progress targets were achieved by September 15, 2001, the project restructuring was formally approved on June 14, 2002 as described in the Memorandum of the President (MOP).

Project Outcome.

It is widely accepted in Lebanon that the project achieved valuable progress in solid waste management in on a national level, particularly in creating public awareness on the benefits of landfills and on demonstrating lower cost for solid waste management service. For example, while the cost for Greater Beirut is calculated at $110 per tonne

2

, the comparable cost for solid waste services in Zahle is only $40-50 per tonne. This substantial difference in cost has induced the government not only to re-bid the sole-source contract for Greater Beirut but also to issue tender documents for new landfill sites on a national level. The projected savings from this cost difference would allow a national framework to cover the whole country for the same cumulative cost currently being spent only on Greater Beirut. This is one of the major outcomes of the project, as evidenced in the new National Solid Waste Investment Program (See Annex 10). By the end of the project, there was a large political acceptance as evidenced by the National Solid Waste Investment Program that has been approved by the Council of Ministers and supported by the parliament.

On the other hand, the overall achievement of the project was limited in scope and size, compared to the total number of six original DOs, as demonstrated below:

2/ Metric tonne is 1000 kilogram, which is equivalent to 2340 pounds. US. ton is equivalent to 2000 pounds.

A. Eliminate unsanitary and improper dumping of solid-waste, and improve methods of waste collection and disposal.

Waste-disposal facilities:

(a) Sanitary landfills. For reasons mentioned in Section 5, the project could not construct 15 landfills as originally envisioned so as to improve waste-disposal facilities. However, a complete improved waste

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management system was implemented in the Caza of Zahle, including the construction and operation of a sanitary landfill.

(i) Caza of Zahle. The landfill at Zahle is now operational serving 10 municipalities of the Caza and the operations contract demonstrates a good quality of work at the site. With a total area of about 180,000 sq. m, this landfill receives solid waste with an average of 80 tonnes per day, and serves a population of about 100,000 from these municipalities.

(ii) Caza of Baalbeck, Taibeh Landfill Site. The following critical activities were finalized during project implementation, and this landfill site is ready for construction (although not in time to access project financing):

Land acquisition completed with financing from the Municipality of BaalbecklEA completed and has been positively reviewed by the Bankl

Civil work bidding documents submitted to the Bank for issuance of a “no-objection”lThe GOL is committed to using the Taibeh site, and implementation will proceed under lthe new National Solid Waste Investment Program or under financing from other sources. For example, the Caza will make an application to EU grant for financing the Taibeh site.

Furthermore, local municipal leadership, particularly the Mayor of Baalbeck, is fully committed to the project, and there is considerable public support for a modern landfill.

(iii) Caza of Jbeil, Hbaline Landfill Site. As in the case of Baalbeck, the Caza of Jbeil also has completed land acquisition. The EA was also completed and it has been positively reviewed by the Lebanese MOE and the Bank. However, there was considerable concern by the local population over proceeding with the proposed Hbaline landfill for environmental and social issues. A major concern was that the new landfill would serve all of Greater Beirut, rather than only the Caza of Jbeil. A special independent panel has completed a review the EA and environmental issues, and the final report and its recommendations have been submitted to CDR, MOE, and the Caza of Jbeil.

(b) Compost plants, Amrousiyeh complex, and incinerator for hospital waste.

These activities originally planned under the project could not be implemented because, as mentioned in Section 3.4, OECF withdrew its co-financing.

Waste-collection facilities:

In the Caza of Zahle, containers and collection vehicles were distributed to 10 out of 26 municipalities, and waste collection services are now under implementation by contract with the private sector. As a result, improved method of waste collection has been put in place, and unsanitary dumping in the Caza has been reduced to a great extent. However, the project could not make any progress in other municipalities and other cazas.

B. Improve cost recovery and modernize municipal management and finance systems.

The main mechanism for cost recovery used by the government for solid waste management is the Independent Municipal Fund (IMF). During the life of the project, the principle of earmarking indirect cost recovery through IMF for solid waste management had become the government de facto policy for the Greater Beirut area. By the end of the project, government has formalized a policy as part of the new

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National Solid Waste Investment Plan (See Annex 10), and has accepted to finance waste disposal from central funds. As a result, the landfill operations contract for the Caza of Zahle is being financed from the central government budget. Collection services in Zahle and in the rest of Lebanon continue to be financed from the local municipal level.

C. Improve the quality and marketability of compost, through the introduction of sorting of the waste at the entrance to the compost plant.

Although a compost marketing study was carried out to address quality issues, the objective did not progress beyond a general appreciation of the issues. In addition, as OECF withdrew its co-financing for compost plants, these issues could not be tested by the project under field operating conditions.

D. Increase the involvement of the private sector in solid waste management.

There was a strong involvement of private sector for all consultant studies, construction contracts, collection operations and landfill operations under the project. For example, the landfill site at Zahle was constructed by a private sector joint venture, and landfill operations is being carried out under a separate contract by another private sector joint venture. It is clear that this objective of the project was successfully met.

E. Strengthen CDR, MIM, and participating municipalities.

The project facilitated the strengthening of capacity at CDR, MIM, Ministry of Environment (MOE), municipalities, and the private sector because of various activities conducted during implementation, such as preparation of numerous EAs, engineering documents, engineering designs, and bidding documents. Personnel of these organizations worked with many environmental, technical, and financial experts to plan a fully-integrated solid waste management systems. As a result of the on-the-job training received by them, a collective expertise on solid waste management has been created in Lebanon, and their expertise is now even being utilized when Lebanese based nationals act as advisors in other countries in the region.

F. Create instruments for the more orderly planning and development of the Lebanese coastal zone.

An overview study on Coastal Zone Management was completed, but implementation of a detailed study and the pilot program was dropped upon project restructuring, and as a result, this objective has not been achieved.

4.2 Outputs by components:

Component 1: Waste collection facilities.

There were 1350 solid waste containers and 31 collection vehicles purchased under the project for use by the municipalities. The vehicles included 21 compactor collection trucks, street cleaning vehicles, one transfer trailer and other utility vehicles. Also see Section 4.1 (A)

Component 1I: Waste disposal facilities - sanitary landfills and compost plants.

See Section 4.1 (A)

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Component III: Separate collection and disposal of hospital waste.

A feasibility and EA study was completed, but implementation was not achieved since this component was dropped at restructuring.

Component 1V: Technical Assistance.

TA and Training: Under this sub-component, training manuals on waste collection, EA and public consultation, litter management, street sweeping services, and technical notes on sanitary landfills were prepared, and workshops were conducted, Even though preparatory work for conducting training sessions was completed, the formal training program was stopped half way through the project. However, informal on-the-job-training and transfer of knowledge continued throughout the implementation period.

Studies:

(i) Compost Marketing Study. This study was fully completed.

(ii) Hospital Waste Study. As in the solid waste sites, social resistance appeared again during the course of hospital waste feasibility and EA study in relation to a proposed site for a specialized hospital waste incinerator. As a result, the study could not provide a final recommendation for a modern hospital waste management system.

(iii) Coastal Zone Management Study. See Section 4.1 (F)

4.3 Net Present Value/Economic rate of return:

Not applicable

4.4 Financial rate of return:

Not applicable

4.5 Institutional development impact:

Modest. The project resulted in a modest institutional development impact. For example: (i) the project succeeded in creating public awareness on solid waste management, particularly with respect to changing attitudes towards open dumping of garbage. While in the beginning of the project, hardly anyone in Lebanon had knowledge of solid waste management and its sustainability, by the end of the project, the general public was fully conversant on all the various aspects of solid waste management such as unit cost, the government’s contributions, and their own contributions; (ii) there is also an increased awareness among the municipalities that waste disposal is a priority issue; (iii) the government has realized that solid waste management cannot be done on an ad hoc manner, and that it is important to have a clear-cut strategy on a national level; and (iv) the project also emphasized that it is necessary to have a transparent approach for identifying landfill sites; a clear cost recovery mechanism and financing options.

Further, as mentioned in Section 4.1 (E), the training given on technical and financial matters has improved the skills of the people working on this sector.

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5. Major Factors Affecting Implementation and Outcome

5.1 Factors outside the control of government or implementing agency:

A. Social Resistance: Systemic issues underlying the violent outbreaks of social resistance which affected project implementation were the following:

(i) Ethnic and religious problems. Diverse ethnic and religious factions prevalent in Lebanon was a major negative factor which affected project implementation. For example, waste from one ethnic group could not be disposed of in an area dominated by another ethnic group, as evidenced at several sites described in 3.2 (A).

(ii) Community acceptance of landfill sites. Another major stumbling block for the implementation was the unavailability of new sites and the non-acceptance of landfills as a means of waste disposal. Many municipalities and cazas refused to have landfills constructed in their jurisdictions. For example, after completion of the land acquisition, the public refused to accept the Hbaline landfill site in the Caza of Jbeil.

(iii) Divided political allegiance was a major impediment on implementation, as evidenced in the loss of Baalbeck landfill site. Further, the changing political environment also hindered implementation. For example, there were at least three major changes in leadership positions at the CDR, MOE, MIM, and municipalities, based on election results and the resulting reshuffling of appointed positions.

B. Withdrawal of OECF from co-financing the project. See Section 4.1

5.2 Factors generally subject to government control:

(i) Ministry of Interior and Municipalities (MIM): After making reasonable progress until 1998, the project came to a complete halt starting in January 1999. The MIM at that time instructed CDR to stop payment under the loan on existing and future consultant contracts. It further instructed CDR not to undertake any financial or administrative obligation under the project without prior consultation with MIM. The Ministry curtailed the monitoring authority of the PCU by requiring prior approval of the Ministry for any meeting related to solid waste; and suspended the project’s Technical Coordination Committee (TCC), composed of MIM, MOE, and CDR. In addition, all Bank-financed contracts which included counterpart funding were frozen, and the use of IMF funds for financing the operations contracts for landfill management and collection services were also prohibited. Subsequently, the Ministry abruptly dismissed the PCU, which was staffed by an international consulting firm on grounds that they were paid prohibitive fees (even though the contract was awarded by CDR on competitive basis under the Bank procurement procedures).

(ii) Legal and policy framework. The following factors also contributed to slow down implementation: (a) absence of institutional, legal, and financial systems for solid waste management; (b) unclear mandates and conflicting responsibilities of CDR, MIM, MOE and the municipalities participating in waste management; and (c) further, the government’s fluctuating approaches on disposal technologies and overall strategy to improve the waste management in Lebanon created lengthy delays. This resulted in initiating time-consuming discussions to convince the government to dismiss the opportunistic ideas presented by various individuals and business groups.

(iii) Lack of financial sustainability. Because of weak financing at the local level, the landfill at Zahle remained un-operated for two to three years after the end of the construction. This situation was resolved

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by the restructured project which provided financing for two years of operation as a transitional measure.

5.3 Factors generally subject to implementing agency control:

Inadequate procurement and contract management. Despite several changes in CDR management, throughout the life of the project, there was persistent slowness in procurement management which delayed implementation.

5.4 Costs and financing:

The total cost of the project was US$11.24 million compared with the SAR estimate of US$135.0 million. After restructuring, the Loan amount was reduced by $30 million, from $55 million to $25 million. After project closure $13.76 million of the committed funds remained undisbursed and were cancelled. This was because, the landfill sites at Baalbeck and Jbeil were not constructed and equipment for Jbeil was not purchased. The Bank financed US$10.09 million (85%), and the government contributed US$1.15 million equivalent in local costs (15%).

6. Sustainability

6.1 Rationale for sustainability rating:

Sustainability of the project is unlikely for the following reasons:

For the Zahle landfill site, the operations contract that was financially supported by the project since December 2001, ended in December 2003. The Municipality of Zahle has successfully negotiated an extension of the contract (on behalf of the entire Caza) with the operator. However, financial and participation issues have not been fully resolved as shown below:

Source of sustainable financing: As sanitary landfills are a new local-level responsibility, the financing of disposal facilities by the central government has been confirmed by the Council of Ministers under the Cabinet Decree Number 16, dated August 14, 2003 (see Annex 10). Nevertheless because of the macro-economic conditions, municipal leaders and the private sector are not convinced that earmarking funds for solid waste management from the central government budget is a reliable and sustainable financing mechanism. The sustainable financing mechanism desired by most stakeholders is cost recovery managed at the local level.

Participation of municipalities in regional landfills. At project closure, the mandatory participation of municipalities in a regional (i.e. caza level) landfill has not been resolved. Despite the access of municipalities to use central government budget for solid waste disposal facilities, many small and relatively poor municipalities throughout Lebanon continue to open dump their solid wastes. Even in the Caza of Zahle, where a regional sanitary landfill now is operational, 16 of 26 municipalities do not use the sanitary landfill. The mandatory participation of municipalities in regional landfills would resolve three sustainability issues: (i) environmental pollution by stopping open dumping, (ii) sufficient volumes of solid waste delivered to regional landfills to assure an economy of scale in the unit costs of operations, and (iii) sufficient total revenues to assure long-term operations.

On the other hand, there are some positive impacts as evidenced by progress in other related activities in Lebanon. These activities could enhance the project’s sustainability on solid waste management. For example:

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(i) Legal framework: Laws have been passed on environmental protection and EA, and a decree has been issued on to regulate hospital waste management.

(ii) Mediterranean Environmental TA Project (METAP): Under METAP there is a national activity, supported by the EU-SMAP regional solid waste capacity building project, that will establish a new solid waste management law including an administrative structure for cost recovery.

(iii) USAID Financing: USAID has an on-going project to support improved management of municipal finances and to provide community-type composting plants.

(iv) European Union (EU) Financing: The EU is implementing a small grants program to municipalities for collection and disposal of municipality solid waste. It is a total of 10 million Euro and is administered by the Ministry of Administrative Development.

6.2 Transition arrangement to regular operations:

See Section 6.1

7. Bank and Borrower Performance

Bank7.1 Lending:

Unsatisfactory. The Bank's identification process focused on critical gaps and opportunities for interventions in solid waste management. The project was consistent with the government’s development priorities and the Bank’s country assistance strategy. The project was designed and prepared in very close cooperation with the Borrower, and all the included activities were regarded as priorities within the environmental sector and endorsed by the government, such as improved waste management and coastal zone protection. The Bank had a harmonious team with a good skill mix and also had a consistently good working relationship with the Borrower during preparation and appraisal. The performance of the Bank was satisfactory on these aspects.

On the other hand, the Bank did not adequately take into account the weak institutional status and capacity of the municipalities. Similarly, considering the national scale of the project, the social aspects of consensus building were underestimated, and insufficient emphasis was allotted in the preparation efforts to verify social distrust on the government. This became a major stumbling block early in project implementation which persisted throughout the project. For these reasons, the Banks’ performance is rated unsatisfactory in Lending.

7.2 Supervision:

Satisfactory. The Bank's performance during the implementation of the project was satisfactory. Sufficient budget and staff resources were allocated, and the project was adequately supervised and closely monitored. Over the seven years of project implementation, there were 19 supervision missions, with an average of about 2.5 missions per year. The Bank’s client relationship was very cordial and productive. Review teams included specialists in environmental management, environmental engineering, solid waste management, social science, financial analysis, financial management, and procurement. External consultants were used for specific aspects of project components.

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Aide-Memoires were regularly prepared and transmitted, flagging outstanding issues and underscoring benchmarks for actions. These alerted the government and the implementing agency to problems with project execution and facilitated remedies in a timely manner, in conformity with the Bank procedures. The PSRs realistically rated the performance of the project both in terms of achievement of development objectives and project implementation. Whenever delays in implementation occurred, the Bank’s task team was able to define concrete steps and timetable for putting the project back on track and pace. The Bank paid sufficient attention to the project’s likely development impact. The quality of advice, and the follow-up on agreed actions were adequate. Loan covenants and remedies were enforced effectively. The task team met regularly with all stakeholders, including CDR, MIM, MOE, and the participating municipalities to discuss landfill sites.

The Bank constantly monitored the progress in achieving project objectives. For example, the Sector Director of the Region wrote a letter to GOL on March 11, 1999, urging the government to complete restructuring (including cancellation of funds), of the project. By the letter of June 14, 1999, the Director again urged restructuring, and proposed discussions with the country portfolio manager at CPPR Review in July 1999 to resolve the restructuring issues. In the absence of restructuring, the Bank management suggested suspension and possible cancellation of the Loan. On November 4, 1999 the Director reiterated the need for restructuring of the project. During this period of restructuring discussions, the Bank management and the Minister of MIM held detailed discussions on a restructuring option to dedicate significant amounts of financing to SWM in Greater Beirut area so as to complement the substantial national investments already undertaken by the government. As this option was not adopted, the restructuring was also delayed because of resistance from MOF to cancellation of amounts from any of the Bank loans, in order to avoid loss of confidence in Lebanon’s financial markets under the prevailing macroeconomic situation. This led to delicate discussions between the Bank management and GOL on the portfolio performance. Finally, taking into account these changing priorities and situations, at the CPPR review meetings in June 2001, there was agreement on cancellation of funds and formal restructuring of the project.

With the decentralization of Bank functions to the Resident Mission in Lebanon in January 2000, the Bank management continued to provide quick response and follow-up. The mission teams and the Country Manager in Lebanon worked closely with the government and the implementing agency, and provided them with extensive assistance including technical advice. The Bank conducted workshops at the early stages of implementation on specific subjects, such as procurement and disbursement; at the end of the project, a stakeholder workshop was conducted to share the experience of the project.

7.3 Overall Bank performance:

Overall, the Bank performance was satisfactory.

Borrower7.4 Preparation:

Satisfactory. The Borrower's performance in the preparation of the project was satisfactory. The Borrower displayed a reasonable level of commitment to the objectives of the project. The government officials and staff of the implementing agency worked closely with the Bank's project team on a continual basis, with full cooperation and enthusiasm.

7.5 Government implementation performance:

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Unsatisfactory. As mentioned in Section 5. 2 (i), after the elections in early 1999, when the MIM took over the leadership for implementing the project, many new ideas for the national policy framework for solid waste were discussed. These lengthy discussions lasted around two years. The new ideas had a very significant negative impact on the implementation schedule. For example, reducing the power of CDR had a serious adverse impact on the implementation. Because of these developments, the project urgently required formal restructuring in order to have an effective development impact.

MIM and MOE did not provide strong support to CDR in the critical issues of site selection and public consultations. As these critical tasks often involved political and social issues, pro-active government support from the highest levels would have greatly assisted project implementation, but this never appeared over the seven year project life. In addition, the government did not attempt to find any realistic solution to resolve the freezing of all Bank-funded activities under this project, during the period 1999-2001.

Similarly, as mentioned in Section 5.2 (ii) and (iii), the government was not proactive in the oversight of the legal, policy, and financial sustainability aspects related to solid waste throughout the implementation.

7.6 Implementing Agency:

Satisfactory. Performance of CDR was satisfactory on many of the aspects of project implementation. It carried out constant liaison with MIM, MOE, and municipalities, and supervised technical studies and consultants well. It was proactive on community consultations, and EA process. CDR also did a commendable job on site identification despite the enormous difficulty of finding appropriate sites, and carried land acquisition efficiently.

It was responsible for managing the project funds and all related financial transactions. Its financial management system was characterized by adequate control and clear segregation of financial tasks. CDR staff was experienced with the Banks guidelines and procedures dealing with the management of project funds and the Special Account (SA). Withdrawal Applications were remitted to the Bank on a timely basis, and they were accompanied by detailed Statement of Expenditures and Special Account reconciliation sheets balanced with the Central Bank SA statement.

Appropriate levels of review and approval were in place, expenditures were duly authorized before they were incurred and documentation was maintained properly for an adequate period of time for the purpose of review. There were no discrepancies or difficulties regarding the SA and funds flow, and there were no audit objections to compliance with contractual or internal control requirements.

On the other hand, CDR was not very familiar with the Bank’s procurement procedures mainly due to changes in the Bank Standard Bidding Documents. It did not supervise the quality of procurement documents, and as a result, extensive Bank reviews and comments were required for the clearance of any procurement document. Furthermore, CDR had internal approval procedures both at the staff level and at the level of CDR Board that adversely impacted the implementation schedule. All these steps made the procurement process very slow.

7.7 Overall Borrower performance:

Unsatisfactory. The overall performance of the Borrower was unsatisfactory.

8. Lessons Learned

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Lessons for the Bank:

• The Bank must have agreement with the government on an overall national SWM investment strategy, supported by public consensus, before launching new investment operations in Lebanon. The Bank should design future SWM projects in Lebanon only after ensuring institutional viability in terms of commitment and support from the government, the council of ministers, and the parliament, and clear agreement on important policy dimensions such as land site acquisition, environmental regulations, participation of municipalities and cost recovery. Unless these factors are ensured, this kind of project will not be sustainable, even though the technical design is the correct one.

• Social analysis and assessment should be undertaken during project preparation and if necessary, conflict-resolution mechanism should be used. These should be put in place to avoid social resistance resulting from NIMBY, as encountered by some of municipalities for the locations of solid waste disposal sites. The national framework recommended above would help to build public confidence in solutions for key issues, and thus reduce the NIMBY syndrome.

• The project at Zahle demonstrated that the Bank should concentrate on fully integrated systems, such as the Design-Build-Operate (DBO) procurement process. This type of integrated approach would minimize lengthy procurement procedures, and clearly access private sector technical skills. This approach can also include the Bank financing of initial landfill operations, so that sustainable cost recovery can be introduced on a gradual basis.

• Political stability is essential for implementation of this type of a project. The project also demonstrated that each political change necessitates the re-educating and re-selling the project to the new political leadership. The Bank should react faster for taking remedial measures such as canceling the project when the new political leadership does not support it or when the project is encountering serious obstacles in its implementation. Instead of dragging a project to seven years without making significant progress in implementation, the Bank should set a time limit of about one year either to restructure or cancel a project if it is not working properly. In this context, Sector Manager, Sector Director, and Country Director have to take more timely and appropriate actions within this period.

Lessons for the Borrower:

• NIMBY and related social resistance can be overcome only with the support of strong proactive local champions, who can facilitate site selection and maintain commitment of all stakeholders, including central government, CDR, MOE, municipalities, Non-governmental Organizations (NGOs), and local community residents.

• Solid waste is affordable in Lebanon and the cost is well known as indicated by the project results. In order to replicate it, however, political commitment by the Council of Ministers and Parliament is required to support the key strategic issues in a new national SWM strategy: land site acquisition, environmental regulations, participation of municipalities and cost recovery. Given Lebanon’s ethnic tapestry, a participatory approach to build a consensus in the communities, municipalities, and the central government is necessary to address these key solid waste issues in Lebanon.

• The first big step of upgrading solid waste (including trucks, bins, landfills construction, initial

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landfill operations and technical assistance) still needs to be financially supported by the central government, (through grants or cost sharing agreements for capital costs) so that the next step of operations can be sustainable with financing provided from local level.

9. Partner Comments

(a) Borrower/implementing agency:

See Annex 8: Borrower’s Evaluation Report

(b) Cofinanciers:

N/A

(c) Other partners (NGOs/private sector):

N/A

10. Additional Information

A. The Bank’s ICR Team consisted of the following members:

Allan Rotman (Task Team Leader)Sati Achath (Consultant)Syvie Creger (Program Assistant)

B. List of Task Team Leaders of the project in chronological order:

(i) Albert Peltekian(ii) Douglas Graham (iii) Sherif Arif(iv) Allan Rotman

C. Persons interviewed for the preparation of the ICR: (i) Joseph P. Saba (Country Director)(ii) Omar M. Razzaz (Country Manager)(iii) Narasimham Vijay Jagannathan (Sector Manager)(iv) Padmanabh Hari Prasad (Advisor)(v) Sherif Kamel F. Arif (Regional Environmental and Safeguards Advisor)(vi) Douglas Graham (Former Task Manger)(vii) Anders Halldin (Environmental Specialist)(viii) Nada Mufarrij (SeniorAdviser to Executive Director)

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Annex 1. Key Performance Indicators/Log Frame Matrix

Outcome / Impact Indicators:

Indicator/Matrix

Projected in last PSR1

Actual/Latest Estimate

No. of landfill sites constructed: 3 1Population served by wastecollection:

300,000 100,000

No. of old dumps closed: 3 1No. of cost recovery plans prepared:

3 2

No. of persons trained: 30-40 25

Output Indicators:

Indicator/Matrix

Projected in last PSR1

Actual/Latest Estimate

N/A

1 End of project

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Annex 2. Project Costs and Financing

Project Cost by Component (in US$ million equivalent)AppraisalEstimate

Actual/Latest Estimate

Percentage of Appraisal

Component US$ million US$ millionCivil Works for landfill 25.00 1.18 4.68Goods and Equipment for waste collection and disposal facilities

83.60 4.00 4.78

Technical Assistance 11.00 6.06 55.09

Total Baseline Cost 119.60 11.24 Physical Contingencies 3.90 Price Contingencies 11.50

Total Project Costs 135.00 11.24Total Financing Required 135.00 11.24

Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent)

Expenditure Category ICBProcurement

NCB Method

1

Other2 N.B.F. Total Cost

1. Works 0.00 22.40 0.00 7.00 29.40(0.00) (15.00) (0.00) (0.00) (15.00)

2. Goods 27.70 0.00 2.00 64.90 94.60(27.00) (0.00) (2.00) (0.00) (29.00)

3. Services 0.00 0.00 11.00 0.00 11.00(0.00) (0.00) (11.00) (0.00) (11.00)

4. Miscellaneous 0.00 0.00 0.00 0.00 0.00(0.00) (0.00) (0.00) (0.00) (0.00)

5. Miscellaneous 0.00(0.00)

0.00(0.00)

0.00(0.00)

0.00(0.00)

0.00(0.00)

6. Miscellaneous 0.00(0.00)

0.00(0.00)

0.00(0.00)

0.00(0.00)

0.00(0.00)

Total 27.70 22.40 13.00 71.90 135.00(27.00) (15.00) (13.00) (0.00) (55.00)

Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent)

Expenditure Category ICBProcurement

NCB Method

1

Other2 N.B.F. Total Cost

1. Works 0.00 1.17 0.00 0.00 1.17(0.00) (0.93) (0.00) (0.00) (0.93)

2. Goods 3.00 1.00 0.00 0.00 4.00(2.96) (1.00) (0.00) (0.00) (3.96)

3. Services 0.00 0.00 5.46 0.00 5.46(0.00) (0.00) (5.20) (0.00) (5.20)

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4. Miscellaneous 0.00 0.00 0.61 0.00 0.61(0.00) (0.00) (0.00) (0.00) (0.00)

5. Miscellaneous 0.00(0.00)

0.00(0.00)

0.00(0.00)

0.00(0.00)

0.00(0.00)

6. Miscellaneous 0.00(0.00)

0.00(0.00)

0.00(0.00)

0.00(0.00)

0.00(0.00)

Total 3.00 2.17 6.07 0.00 11.24(2.96) (1.93) (5.20) (0.00) (10.09)

1/ Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies.2/ Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff

of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units.

Project Financing by Component (in US$ million equivalent)

Component Appraisal Estimate Actual/Latest EstimatePercentage of Appraisal

Bank Govt. CoF. Bank Govt. CoF. Bank Govt. CoF.

Civil Works for landfill 0.93 0.24Goods and Equipment for waste collection and disposal facilities

3.96 0.04

Technical Assistance 5.20 0.87

Note: Appraisal estimate of project financing was not prepared in this format in the SAR

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Annex 3. Economic Costs and Benefits

Not Applicable

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Annex 4. Bank Inputs

(a) Missions:Stage of Project Cycle Performance Rating No. of Persons and Specialty

(e.g. 2 Economists, 1 FMS, etc.)Month/Year Count Specialty

ImplementationProgress

DevelopmentObjective

Supervision

07/19/1995 4 MUNICIPAL ENGINEER (1); ENVIRONMENTALIST (1); SR. FINANCIAL ANALYST (1); PRIVATE SECTOR DEV. (1)

S S

02/11/1996 5 CONSULTANT (1); ENVIRONMENTALIST (2); SR. FINANCIAL ANALYST (1); PRIV. SPECIALIST (1)

S S

05/17/1996 1 SR FINANCIAL ANALYST (1) S S00/00/0000 1 SR. ENV. SPEC. (1) S S10/30/1996 2 SR. OPERATIONS OFFICER

(1); SR. ENVIRONMENTAL SPEC (1)

U S

04/16/1997 2 PR. ENVIRONMENTAL SPEC (1); SOLID WASTE SPECIALIST (1)

S S

01/27/1998 3 PR. ENVIRONMENTAL SPEC (1); SOLID WASTE SPECIALIST (1); WASTE MANAGEMENT SPEC (1)

U S

08/13/1998 1 PR. ENV. SPECIALIST (1) S S05/16/1999 3 REGIONAL ENVIR. COORD.

(1); SOLID WASTE MGT SPEC. (1); SR. ENVIRON. SPECIALIS (1)

U U

12/22/1999 3 PORTFOLIO MANAGER (1); TASK TEAM LEADER (1); ENVIRONMENTAL SPECIAL. (1)

U U

05/27/2000 4 TEAM LEADER (1); SOLID WASTE/ENVIRONMEN (1); SOLID WASTE (1); PROCUREMENT (1)

U U

11/25/2000 1 TEAM LEADER (1) U U01/26/2001 6 TEAM LEADER (1); SOLID

WASTE SPECIALIST (1); PRIN. FIN. SPECIALIST (1); PROCUREMENT SPECIALIST (1); FM SPECIALIST (1); ENVIRON. SPECIALIST (1)

U U

06/16/2001 2 TEAM LEADER (1); SOLID WASTE MANAGEMENT (1)

U U

09/15/2001 1 TASK TEAM LEADER (1) S S

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04/23/2002 4 TEAM LEADER (1); CO-TEAM LEADER (1); PROCUREMENT SEPCIALIST (1); FM SPECIALIST (1)

S S

11/13/2002 1 TTL & ENV SPECIALIST (1) U S08/26/2003 4 TASK TEAM LEADER (1);

PUBLIC PARTICIAPTION (1); PROCUREMENT SPECIALIST (1); FINANCIAL MANAGMENT (1)

U U

ICR08/26/2003 4 TASK TEAM LEADER (1);

PUBLIC PARTICIAPTION (1); PROCUREMENT SPECIALIST (1); FINANCIAL MANAGMENT (1)

(b) Staff:

Stage of Project Cycle Actual/Latest EstimateNo. Staff weeks US$ ('000)

Supervision 161.3 654.9ICR 6.8 45.5Total 213.3 861.0

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Annex 5. Ratings for Achievement of Objectives/Outputs of Components(H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable)

RatingMacro policies H SU M N NASector Policies H SU M N NAPhysical H SU M N NAFinancial H SU M N NAInstitutional Development H SU M N NAEnvironmental H SU M N NA

SocialPoverty Reduction H SU M N NAGender H SU M N NAOther (Please specify) H SU M N NA

Private sector development H SU M N NAPublic sector management H SU M N NAOther (Please specify) H SU M N NA

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Annex 6. Ratings of Bank and Borrower Performance

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory)

6.1 Bank performance Rating

Lending HS S U HUSupervision HS S U HUOverall HS S U HU

6.2 Borrower performance Rating

Preparation HS S U HUGovernment implementation performance HS S U HUImplementation agency performance HS S U HUOverall HS S U HU

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Annex 7. List of Supporting Documents

1. Aide-Memoires, Back-to-Office Reports, and Project Status Reports.

2. Project Progress Reports.

3. Consultant Study Reports financed under the Project.

4. Borrower's Evaluation Report, dated May 2004; and

5. Staff Appraisal Report for Lebanon: Solid Waste/Environmental Management Project dated May 5, 1995 (Report No. 13860-LE).

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Additional Annex 8. Borrower’s Evaluation Report

1.0 Introduction

The Government of Lebanon (GoL), the World Bank (IBRD) and the Council for Development and Reconstruction (CDR) signed a loan and a project agreement on September 6, 1995 for a solid waste/environmental management project (SWEMP), which was ratified by the Lebanese Parliament under Law #501 of 1996. The Loan amount is US$55.0 million payable over 17 years with a 5-year grace period at the variable interest (fixed at 6.3%), and net commitment charges of 0.25 percent on unused amount with a closing date of June 30, 2001. The Loan Agreement was signed by the Ministry of Finance. The Council for Development and Reconstruction (CDR) was designated by the Lebanese government as the executing agency for the project. In July 2001, the loan amount was decreased to US$25.0 million and the closing date was extended by six month to December 31, 2003. 2.0 Objectives of the SWEMP

The primary objectives of the implementation of the SWEMP consists of developing a number of individual projects with the following elements:

Establishment of environmentally-safe landfills in groups of participating municipalities lClosure of old dumps; lPurchase of equipment for street sweeping, waste collection and for landfills; lFeasibility studies for marketing of compost and recyclable materials, treatment of hospital waste, land technical assistance services to the municipalities; and

Whereas the commitment of the GoL for this Loan are as follows:

The local counterpart funding is the responsibility of GoL, and the local municipalities are NOT lresponsible for the repayment of the loan service charges, interest and principal; Finance acquisition of land for disposal sites; lContribute 30 percent of costs for all civil works; lFinance the operations of collection services, street sweeping and management of the landfills; lDevelop cost recovery plans prior to turning over equipment to participating municipalities and lprior to establishing a contract for operation by the participating municipality or by the private sector; Work on institutional and technical components to introduce on a pilot basis; lProvide training and technical assistance in waste management, financial and environmental lanalyses as well preparing an integrated coastal management plan and development of 1-2 pilot demonstration projects; and Prepare an EA for all landfills, acceptable to the Bank, prior to land acquisition.l

3.0 Project Implementation

To ensure effective implementation of the project, a Project Coordination Unit (PCU) housed then in Ministry of Municipal and Rural Affairs (MMRA) was established to be responsible for day-to-day administration of the various components of the project.

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To assist in implementing and monitoring the project to the satisfaction and approval of MMRA, CDR and the World Bank, meetings were held between and among the Technical Coordination Committee (TCC) that had been established under NERP, the selected consultants and experts, representatives from the Ministry of Environment (MoE), Ministry of Interior (MIM) and Ministry of Finance (MoF), and various personnel related to the project the Project Implementation Committee headed by a Project Coordinator.

3.1 Project Status 1995-1998:

3.1.1 Since the Loan was signed the following actions were taken:

• Total loan commitment is US$8.7 million; and • Total disbursement is US$2.36 million corresponding to 4.3 percent of the total loan value over past 4 years, which is extremely low for a World Bank Loan.

3.1.2 The delays since 1996 were principally due to the following:

• Absence of land acquired for landfill sites;• Unclear mandates and responsibilities of CDR, MMRA, MoE and the municipalities in relation to waste management.

3.1.3 The GoL issued a Council of Ministers Decision # 18 of 1997 that states clearly:

• The method of disposal of municipal waste should be by transfer, separation, and sanitary landfill followed in the future by composting; • Governors are responsible for identifying sites for landfills; • The capital cost for all waste treatment should be the responsibility of CDR; and • The operational cost should be provided through the Independent Municipal Fund (IMF).

3.1.4 Since the issuance of the Decision #18 of 1997, the following project progress has been achieved:

• By Presidential decree, three sites for landfills were officially expropriated in Zahle, Baalbeck and Koura for which the corresponding environmental assessments (EAs) were approved in advance by the Bank; • Contracts were signed by CDR for street sweeping equipment, bins and collection trucks for Zahle,

Baalbeck/Hermel for US$ 3.8 million;• A sanitary Landfill was constructed at Zahle for a contract value of US$1.2 million (It has been operational since 21/2/02, and receives municipal solid waste from six municipalities);• A civil works contract for a sanitary landfill in Baalbeck for US$1.4 million was signed by CDR, but the land acquisition was not successfully completed due to disagreement over siting the location.; • The Project Coordination Unit (PCU) was established; • The hospital waste feasibility study was performed and drafted, with the finalization of the report being contingent on the GoL selecting a site for locating a central incinerator; and • A study for the marketability of compost was started.

3.2 Project Status 1999-2000

3.2.1 After rapid progress in calendar year 1998 (Attachment 1), the project had come to a complete halt

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starting in January 1999. The major issues affecting the progress, which were inconsistent with the Loan and Project Agreements and the Lebanese Law #501, were:

• Freezing all Bank-financed contracts, including counterpart funding; Prohibiting the use of IMF funds for financing operations contracts for landfill management and lcollection services;

• Restricting the PCU monitoring capacity, by requiring the prior approval of the Ministry of Municipalities and Rural Affairs (MMRA) for any meeting related to solid waste; and • The national fiscal budget had not been approved by end of January by the parliament, and consequently CDR had insufficient funds to pay the Local contribution of 30 percent for civil works, and to pay for customs duties on goods and equipment.

3.2.2 The World Bank (WB) Mission understood that the new Government of Lebanon was for:

• Initiating the decentralization process by empowering the newly elected municipalities with full local services responsibilities for solid waste collection, treatment and disposal; and · Examining new innovative disposal technologies that could complement or replace landfills at lower gate prices.

3.2.3 With the procurement of services and equipment for two landfill sites (Zahle and Baalbeck) being underway, the project seemed moving forward. However, given the delays in project start-up (as mentioned earlier in Section A), it was realistic to agree that the original project objectives and outputs could not be all attained by the project closing date of December 31, 2001. CDR and the WB Mission therefore agreed that a project restructuring was necessary to limit the scope, taking into consideration the following factors:

(i) The project could no longer resolve the municipal waste management problems of Lebanon. It would put in place the basic policy, project management and physical/equipment infrastructure for sustainable waste management practices on a pilot/model basis. The project would establish an integrated waste management system in selected municipalities with priority given to those municipalities, which are ready to provide a landfill site. The project components would be limited to financing improved collection and disposal of municipal waste, a model for cost recovery and providing technical and engineering assistance to CDR, MMRA, MOE and the municipalities. A cut-off deadline for providing the land would be fixed during the supervision mission of February 24, 1999. Already three Cazas (Baalbeck, Zahle and Koura) had provided land, and other Cazas (West Bekaa, Byblos, Sour and Nabatiyeh) have offered landfill sites for consideration.

(ii) Project restructuring could occur in two phases:

Phase 1: Maintaining, as requested by CDR, the loan amount of US$55 million with an unallocated amount for additional landfill sites that could be expropriated prior to the next supervision mission scheduled for February 8-24 1999; Phase 2: Canceling part of the loan in case no substantial progress could be achieved in acquiring additional landfill sites by February 24, 1999.

(iii) Since project activities would be scaled-down, the following components could be removed from the project: 1) an improved air pollution control system for the existing incinerator in Amrousieh (which was no longer operational), 2) the establishment of three composting plants (of which one was already financed by the GoL and which were to potentially be co-financed by the Government of Japan.

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Since Japanese co-financing has not materialized due to delays in preparing the feasibility studies for the respective components, the financing of the composting plants and the medical waste incinerator could be part of a parallel program. However, in case of project savings, consideration would be given to include the establishment of the national medical waste incineration facility and/or a demonstration project of waste-to-energy cells.

(iv) Financing would be limited to the Government of Lebanon (GoL) and IBRD.

3.2.4 Based on the above, CDR and the World Bank (WB) Mission prepared a project revision that provides the revised cost estimates, disbursement and procurement plan implementation, and as a comparison between the original and revised project elements.

The revised project can be summoned up as follows:

Revised Project Objectives (Phase 1). The revised project objectives are now better defined and are to : ° Improving the methods of waste collection and disposal in 3-5 governorates with increased private sector participation. ° Introducing, on a pilot basis, a cost recovery system of fee collection for municipal waste and of operation and maintenance (O&M) in landfill disposals fees in 5-7 participating municipalities. ° Strengthening the capacities of the MMRA, CDR, MOE, coastal authorities and municipalities in solid waste and coastal zone management and solid waste investment planning.

Revised Project Components (Phase 1). The revised project consists of two major components, which are arranged as follows:

(a) Waste Collection and Disposal Facilities Component consisting of: (i) Making operational the collection equipment of about-2,000-2,500 containers, about 70-80 trucks, and about 10-15 street sweeping equipment by the private sector; (ii) Developing 5-7 landfill sites, related transfer stations and landfill equipment in selected Cazas of Bekaa, Northern and Southern Lebanon, with operation by the private sector; (iii) Closing or rehabilitating of 3-5 dump sites with possible demonstration of waste-to-energy ce1ls; (iv) Establishing a national incineration facility for hospital waste and a national training program subject to the submitting of a feasibility study and EA acceptable to the Bank; and (v) Providing technical and engineering services for the design, implementation and supervision services by the private sector.

(b) An Institutional and Technical Component consisting of:

(i) Establishing through technical assistance and training a solid waste management system in CDR, MMRA and MOE for strategic and project planning in solid waste with emphasis on priority setting, project management, financial and environmental analyses; (ii) Introducing in 5-7 participating municipalities a mechanism for cost recovery of municipal refuse collection through proper estimation of collection costs; improving resource base and billing systems as well for O&M of disposal facilities through costs surveys and introduction of gradual collection of cost recovery fee; and training in billing collection, budgeting, contract award and monitoring as well as environmental awareness; and

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(iii) preparing an integrated coastal zone management (ICZM) program consisting of technical assistance and training in ICZM for CDR, MMRA, Ministry of Environment (MOE) and coastal zone authorities, as well as development of 1-2 pilot demonstration projects for ICZM.

Project Costing and Financing: The overall project cost is US$67.82 million with the Bank's loan remaining unchanged at US$55.0 million and the GoL contribution estimated at US$12. 82 million. An unallocated amount (Annex 1, table 1.4) of US$3 7.6 million reflects the cost of the waste collection and disposal facilities related to the four identified landfill sites, closure of 3 old dumps and possibly the establishment of a medical waste incinerator and/or waste-to-energy project.

Project Management: CDR will remain the executing agency of this project. Its responsibilities will be project oversight, loan management, identification and expropriation of landfill sites, as well as procurement of civil works, equipment and technical services. A Project Coordination Unit (PCU) in MMRA will be responsible for day-to-day management of the project, coordination and technical cooperation with tile selected municipalities, screening and identification of landfill sites, project monitoring and follow-up, as well as supervising the quality control of contractors and consultants. International and local consultants would be contracted for technical and engineering services, preparation of EIAs and on-the-job training of project beneficiaries. A technical coordination committee (TCC) consisting or representatives of CDR, MMRA, MOE, PCU and municipalities would monitor overall project progress, coordinate among the various entities and advise management regarding budgeting and decision-making. The composition of the TCC is different from the one proposed in Schedule 2 of the Project Agreement, which was originally set up for coordinating the Emergency Reconstruction and Rehabilitation Project (ERRP). Since this ERRP committee did not meet and the ERRP project is due to close in September 1999, the Project Agreement should be modified accordingly.

Project Risks. Three major risks are involved in this project:

(a) Acquisition of the remaining four landfill sites may slow down project implementation. This will be mitigated by timely identification of expropriation issues, proper monitoring and follow-up by the CDR and PCU of the expropriation arrangements and discarding any site for which substantial progress on the expropriation procedures could not be achieved by February 24, 1999. (b) A cost recovery system for O&M for disposal sites may not be operational in some participating municipalities because of socio-economic constraints. This risk could be mitigated by the close involvement of senior MMRA officials and municipalities staff in the development of a fee-for-services and assistance for issuance of the appropriate decrees, as well as conducting awareness campaigns for social acceptance of fee collections. (c) Lack of project management sustainability in MMRA. This will be mitigated by training and technical assistance of MMRA staff by a team of resident international consultants, and initially appointing two MMRA staff in the PCU.

Cost Recovery. CDR informed the Mission that a draft cost recovery plan was prepared in April 1998, but is now being updated by the PCU for discussion with MMRA and the participating municipalities belonging to the Caza of Zahle. This plan, which in accordance with Section 4.2 of the Loan Agreement calls for a gradual cost recovery, will be shared with the Bank prior to September 30, 1998.

3.2.5 CDR and the Mission found that the eligibility criteria set forth in Schedule 2 Section 4(a) of the Project Agreement cannot be operationally implemented. This section states that the participating municipality should have entered into an agreement with a private sector contractor to perform solid waste collection and disposal. CDR indicated that the requirement of having one single contractor to perform

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waste collection and waste disposal of the landfill sites was based on the assumption in the SAR that:

• all the landfill sites would have been identified; • procurement of mobile and landfill equipment for ail the Cazas and landfill would have also occurred concurrently; and • because of the anticipated economy of scale, there will be one single contractor that would be responsible for the collection and disposal of the wastes.

3.2.6 Given the delay in starting this project and that the landfill sites are now being identified on a continuous basis, the above assumptions are no longer valid. The need to synchronize this equipment delivery of one or more landfill sites with the achievement of civil works of individual landfill sites could not be operationally maintained. Furthermore, the combination of one contractor to perform both waste collection and disposal would limit competition for small- and medium-size private sector contractor specialized in solid waste collection only. It would also make it less transparent for the payment verifications to the contractor who would be paid on two types of tonnage for waste collected and/or disposed or a combination of both. In the cases of the Cazas of Baalbeck and Zahle, CDR has in fact prepared two separate tender documents for the collection and management/operation of the landfill site. Since the preparation of a cost recovery plan is a requirement by CDR to hand over the mobile equipment to the private sector contractor for solid waste collection and services, CDR and the Mission have agreed that the bidding documents for such contracts should be issued by August 10, 1998 so that contractor award would be synchronized with the arrival of the equipment.

3.2.7 Based on the above, CDR recommended to the Mission that this section be modified to reflect only the requirements to enter into an agreement with a private sector contractor for solid waste collection only as a requirement for making available the equipment to the participating municipalities. This is also consistent with the third

3.3 Project Status 2000-2003: The CPPR Missions

The purpose of a CPPR (Country Portfolio Performance Review) was to focus on the status of projects in the portfolio, with particular attention given to the projects at risk, and to propose measures to redress the problems faced to enhance their development impact; to take stock of the generic issues affecting implementation; and to agree on measures to accelerate the disbursement rate of the projects, to improve the projects' development impact and reduce the Government's commitment charges.

CPPR Mission of June 2000

Even though substantial progress had been made in the development of the SWEMP projects to a degree that the World Bank has designated the project satisfactory from a position where it had earlier been deemed unsatisfactory, a World Bank CPPR Mission (11-16 June) consisting of World Bank’s Senior Officers met with the Prime Minister H.E. Mr. Rafic Al HARIRI; H.E. Mr. Elias Al MURR, (MIM); H.E. Mr. Fouad SANIORA, (MOF); Colonel Nicolas Al HABER, (MIM) Chief of staff; Mr. Mahmoud OSMAN, President of CDR, and his staff, to discuss the SWEMP's restructuring strategy on the basis of the Bank's CPPR mission as to reach a final decision on whether or not the planned activities should be processed or be retrenched. H.E. Mr. Hariri indicated to the mission his propensity towards the inclusion of the private sector in the business of the SWM. On the other hand, H. E. Mr. Murr was inclined on having CDR be the sole accountable party for the project.

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At the end of the mission sessions, a decision to curtail the loan to a total round figure of $25 million was reached.

Ever since MIM co-signed with CDR, on July 9th 2001, on the CPPR recommendations in which it is stated that: “The restructured loan will be executed by CDR in accordance with the terms and conditions of the loan and project agreements.” a full collaboration with the municipalities and keeping the Ministry of the Interior and Municipalities (MIM) informed were maintained.

After a comprehensive review and study of the SWEMP’s entire structure, the project was downsized to very limited components, and the following implementation activities were put out for consideration:

• Revising the existing Strategy for the Project in general;• Finding the precise actual Situation of the Project on the ground;• Instigating Communications with key personnel;• Programming the Site Selections to be completed by 30th June, 2001;• Recognizing equal interest to the development of remaining landfills;• Considering planning, financing and managing SWEMP beyond 31st Jan, 2003;• Setting up a new Project Coordination Unit (PCU) from within the CDR with individual members being agreed upon with MIM, CDR and WB.

Mission of October 2002

Another World Bank mission held discussions with the Lebanese authorities on the portfolio of the World Bank Loans and Grants in Lebanon from October 23-20, 2002.

While the Government assured the mission that most of the critical actions detailed in the Aide Memoire dated August 2002 had been completed, the Bank suggested the possibility of canceling the Baalbeck landfill site (about US$10 million of the loan amount). The Government proposed a new schedule for the construction of two landfill sites (Jbeil and Baalbeck) with many critical steps falling due prior to or during the supervision mission scheduled for November 13-15, 2002. The CPPR mission reviewed the proposed project implementation schedule and agreed to the following:

The upcoming supervision mission of November 13-15, 2002 will review the completion of the lcritical steps for the Baalbeck landfill site. Based on strict compliance to deadlines, in particular the decision by the Council of Ministers and allocation of funds for the expropriation by November 15, 2002, the Bank will agree to the continuation of the Baalbeck landfill site project, and extend the project's closing date until the original closing date of the contracts for Jbeil and Baalbeck. If the deadlines are not met, the Bank would expect a formal request for cancellation of the funds ldedicated to the Baalbeck site, about $10 million of the loan amount. Similarly, if progress is not achieved on the Jbeil site, a formal request for all the remaining funds lunder the project is expected. Decisions on the cancellation loan funds and the extension of the closing will be taken by the lconclusion of the next supervision mission (by November 16, 2002).

4.0 Assessment of the SWEMP

Throughout SWEMP, the public has had to learn about waste management issues without orientation from the government. The Bank should have accepted from the beginning that opposition to controversial SWM

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schemes is to be expected at any stage.

Throughout SWEMP public participation was not very high. If education and awareness programs had been well planned and implemented, public support and participation would have grown steadily. Moreover, incentives in form of official recognition and awards, or occasional rewards, were not considered and accordingly, the feeling of “doing the right thing” was not nurtured.

The actual solid waste sector in Lebanon lacks the adequate management, whether at the level of the personnel or treatment approaches.

5.0 Institutional Framework

5.1 Preparation of Information Literature

For the longer term that is associated with Institutional development aspects of solid waste management, information literature has to be prepared by experts within the field that are recognized by the public. Addressing public awareness issues is critical, particularly in highlighting the methods of service provision to the public and the resulting benefits to residents.

5.2 Cost Recovery

The unit rate(s) for waste management (collection, processing and disposal) should be properly calculated and costs per municipality and/or per residents need to be clearly presented. An analysis of taxation yields and revenue performance is recommended to enable viable options on cost recovery for consideration by the government.

In the context of establishing alternatives for cost recovery for waste services, if the "polluter" pays principle is to be implemented, then a tax which generates income at individual or household level may seem appropriate.

5.3 Public Expenditure Review

The experience to date reflects a policy of private sector provision acting as agent to the government. This model of service delivery is set to continue as long as the central government funds capital investment in this sector.

The issue of sustainability through cost recovery has yet to be tackled. The absence of clear and precise management and financial information is counter-productive for sound management and performance and investment monitoring.

5.4 Institutional Development

Institutional support is required as a framework for development and implementation of management and financial systems at all levels of the solid waste sector. Incentives and controls in the form of institutional, financial and regulatory tools are still lacking. All this has to be accomplished within the constraints of the social and political structures of Lebanon, to encourage cooperation between municipalities and to encourage communal agreements on locations for disposal sites to minimize costs through economies of scale. A framework proposal has to be prepared and presented for discussion with CDR and the

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appropriate Ministries.

The municipality of Zahle has been most cooperative and has expressed a wish for the outcome of the institutional development process to be successful. This was very encouraging in view of the fact that the institutional programs developed for Zahle could behave been or be a basis to provide a template for institutional programs in the other municipalities.

6.0 Lessons Learned

Substantive lessons were learned from the design and implementation of the SWEMP. Given the comprehensiveness of the Project the categories of lessons are quite wide, from Policy to Politics, from Institutional to Technological, from Legal-regulatory to Economic and Financial, and from Strategy to Tactical/Operational. The SWEMP project provided a rich sector policy experience to Lebanon and to the Bank. The case of Lebanon should be used to demonstrate an approach to reform institutions for Institutional and Development (ID) and is an inspiration for other reforms. Preparation and implementation of such challenging project was not easy. It required intensive assistance, integrated focus, continuous discussions, project restructuring and one extension of closing date.

Co-financing. The project was done together with IBRD as a joint endeavor from the early beginning. Preparation was done together from the beginning. Implementation was done with very close coordination, supervision missions were joint and even the aide memoirs were the same.

High level Government commitment. A strong political commitment and will are needed for the success of such a project. This was not the case throughout SWEMP.

World Bank Priority. It is essential that the Bank commit to assist Lebanon with the best efforts from preparation to implementation assigning top expertise, adequate resources, and intensive supervision and proactive dialogue. Benchmarking key indicators and up-dating progress during supervision is key to planning, dialog and evaluation. Bank monitoring, benchmarking and follow-up discussion is extremely important during implementation stage.

Institutional Building. It was fundamental to create institutional capacity for project implementation. Such capacity and institutional building could have included actions inside the government and outside as well in the private sector. The process was more likely "learning by doing" and "try and modify" with no follow-up for corrections and also for dissemination. Capacity Building and Training. The training and capacity building program, which could have been very important for such a ground-breaking project, was not performed at all levels. This could have been a high value legacy from the Project to the whole country.

Participatory Process and Promotion of Landfills. CDR, the implementing agency did not succeed in adequately promoting the participation of beneficiaries in the planning, design, and construction and operation phases. In general its communications with stakeholders, particularly with beneficiaries, was not strong and effective. To persuade users to accept the landfills as well as to encourage them to agree to the proposed component margins, a very intensive promotion program has never been organized by CDR, including the use of audiovisual materials as well as a number of promotion teams contracted from the private sector.

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Empowerment of the Users. Since the use of funds and procurement of goods and services became the responsibility of the municipal council, a very fundamental point that could have contributed to the success of the project was the real empowerment of these councils, by participating in the decision making process.

Flexibility and quick response. As foreseen at appraisal, annual reviews were held to assess progress, including investment allocation and action plans, compliance with investment selection criteria and reaching remedial actions each time problems arose.

The Bank was flexible and supportive and gave quick responses under the Borrower's changing conditions and the extreme economic instability prevailing during most of the implementation period. To address the lack of funds the Bank recommended a cost-sharing financing mechanism to modernize the off-farm IDs, in order to keep and maintain pace with the project implementation, restructuring the program and amending the legal documents.

Additional obstacles: There were additional obstacles faced in the proper and successful execution of SWEMP, including:

Difficulty in selecting locations for the construction of landfill, mainly due to refusal of local lstakeholders.Lack of technical, financial and administrative capacities at the local municipal level to manage lsolid waste operations, in particularly, to operate landfills.Various stakeholders, in particularly non-government organizations (NGOs), continue to insist on limplementing waste reduction measures, composting and recycling operations prior to constructing disposal facilities. Moreover, the NGO’s insist on using landfills for inert materials only.The current legal framework of the GoL does not account for taxation to cover operation and lmaintenance of solid waste collection and disposal projects.The absence of a National Strategy for solid waste management that enables proper political ldecisions to be taken in support of the implementation of a solid waste management project.The insistence of implementing cost recovery components into the projects from the onset did not lfacilitate the progression of work.

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Additional Annex 9. ICR Workshop on SWEMP: April 27-28, 2004

Various Views on the Project Expressed by Workshop Participants

o The main original objective of the project was to eliminate unsanitary solid waste. This objective was not achieved, as only one landfill out of 15 landfills originally planned could be completed. Other objectives were linked to the landfill. So if the first objective fails, all other objectives would fail.

o NIMBY phenomenon was a problem because of lack of communication strategy. The government should have conducted a stakeholder consultation.

o The major problem of the project was that there was no national strategy. There is a need for a national master plan on solid waste management

o The sector was bombarded by lot of ideas by politicians, NGOs, administrations, etc., but the public was not familiar with solid waste management.

o The landfill at Zahle is a success on many aspects, even though there are some administrative problems. But these can be resolved by authorities.

o The country needs only one authority, but unfortunately three is no global view on the direction of solid waste management.

o Several factors affected implementation: (i) the design was too technical and was faulty; (ii) conclusion of the ERRP was used as the base for the SWEMP; (iii) it was a failure from the investment point of view; (iv) there was no clear vision from the government -for example, it switched its ideas a few times on the number of landfills needed for the country; (v) there was no wider discussion at government level on how solid waste management issues are to be dealt with at community and municipal levels; (vi) lack of scientific approach on the part of the government. As people came up with different ideas to politicians, they were wavering on the different types of technologies; (viii) lack of political support. Zahle landfill is a success because of the political support it received.

o The Bank took the approach that incinerator technology was too expensive, and took it for granted that the project will get acceptance at the caza level

o Right from the beginning, the Bank stressed on the full cost recovery issue. But in 1997, the government stepped back from cost recovery issue and wanted to finance solid waste management by itself, because it did not want to overburden the people with cost recovery.

o Even though there was a lack of experience on solid waste management in Lebanon, the consultants helped them to deal with this matter. The experience gained by the CDR staff on solid

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waste management is good and now they are able to manage the sector well.

o When we look at the situation now and compare it with what it was in 1999, we can see that a lot of progress has been achieved on solid waste management. Earlier, the government did not have a global view of the sector. But now there is a better understanding of the sector by the public and the government, and they have accepted the need to have landfills. From this point of view, the project is a success.

o The municipal election conducted in 1998 stopped the progress of the project, as demonstrated in the case of Baalbeck.

o We need a multi-sectoral team consisting of technical, environmental, economics, and social science specialists, in order to have a wider perspective on solid waste management. There is also a need to create a solid waste board.

o A major concern is the issue of sustainability. The residents of Zahle are concerned on the continuity of financing of the landfill. Even if there is no full cost recovery, at least partial cost recovery should be taken up.

o Municipalities have the option not to participate in the landfills. There is no law to enforce their participation. This is a hindrance on solid waste management .

o It is important to make a comparison between SWEMP and the solid waste management implemented by the government in Greater Beirut. If solid waste management is working well in Beirut which covers about half of the country, why is that it is not working well with SWEMP? But on the other hand, one should consider at what cost it is a success. While the cost in Beirut on solid waste is $110/tonne, in Zahle, it is only $28/tonne, excluding composting. It is likely that solid waste management of Beirut contributed to Lebanon’s high indebtedness.

o If SWEMP is taken as a one pilot TA project, it is a success, but not a success if taken as an investment project.

o The public should be involved on solid waste management right from the beginning of the project. Public has a tendency to reject government plans without knowing much about it. But if we explain to them, they will be convinced and then will support the project. Now the public is getting more and more involved on solid waste management. In addition, there is also political support now.

o Timing of the project is important. If SWEMP were to be done today, it may work out better. This change is because of the awareness of the public on solid waste issues. The project was prepared in 1995 when Lebanon was coming out of the war, While the Bank though that solid waste management was a priority in Lebanon, the government did not think so at that time.

o Lessons learned from the project are: (i) administration needs to be serious on achieving the objectives right from the beginning; (ii) public participation is very important; (iii) capacity

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building and technical assistance are essential; (iv) administrative structure for implementation should be simple and there should be a clear ownership. Earlier, it was not clear whether SWEMP was a MOE project or CDR project. The role of agencies also were not clear; (v) there should be a reduced number of layers of bureaucracy right up to municipalities; and (vi) there should be incentives for municipalities to participate on solid waste management.

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Additional Annex 10. Lebanon: Framework for National Solid Waste Management Investments (2004)

Based on the Council of Ministers Decisions: number 27 dated 11 July 2002; number 16 dated 14 August 2003: number 1 dated 13 November 2003: number 22 dated 28 March 2004; and number 12 dated 8 April 2004; the framework for a national solid waste management investment program can be summarized as follows:

1) The Government of Lebanon has decided to finance the cost of treatment, disposal and sanitary landfills throughout the country from the central government budget. To supplement the budget resources, additional sources of funding will be sought.

2) Construction of treatment centers and disposal of municipal solid waste in Lebanese cazas, where the treatment would consist of: separation of recycled material, composting of organic materials and landfilling of inert material.

3) Street sweeping and cleaning, collection, and transfer to the treatment centers and landfills will be the responsibility of the municipalities, and on their own account. The municipalities are free to execute the work, contract it to someone else, or cooperate with other municipalities or the municipalities union to do so.

4) Municipalities are compensated for bearing the responsibility for the treatment, disposal, and sanitary landfills.

5) Private health institutions, slaughterhouses, and industrial institutions bear the cost of collection, transport, treatment and landfill of solid waste generated by them.

6) Lebanon is divided into 4 service areas with respect to contracting the construction and operation of the treatment center and sanitary landfill for a 10 year period.

7) Every caza is held responsible for the treatment of its generated solid waste.

8) The Council for Development and Reconstruction will follow up the implementation of the solid waste treatment through an international bidding for treatment and landfill for 10 years.

9) With respect to Beirut: Maintain the already existing separation and composting centers, and evaluate the possibility of expanding them and distributing their solid waste on the neighboring cazas or absorbing it by expanding the existing landfills or the construction of new ones. The Council for Development and Reconstruction will launch an international bidding and contract a central incinerator in 2 years from now in accordance with the specific tender documents prepared in conformity with the rules and regulations that are in force.

Preparation Steps:

A technical committee has been appointed from the Ministry of the Interior and Municipalities, the General

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Directorate for Urban Planning, Ministry of Environment and the Council for Development and Reconstruction. The role of this committee is to identify the treatment and landfill areas in the Lebanese cazas to help in the bidding process.

A national consultant in combination with an international consultant has been selected to carry out the Environmental Assessment for the suggested treatment and landfilling areas, prepare the pre-qualification and tender documents for the collection and treatment of solid waste, as well as the expropriation files related to the selected areas.

The pre-qualification documents have been prepared, and an advertisement has been issued which sets out four (4) service areas:

1- Beirut and Mount Lebanon (currently generates 2,300 tonnes of municipal solid waste daily)

2- South and Nabatiyeh (currently generates 535 tonnes of municipal solid waste daily)

3- North and Akkar (currently generates 725 tonnes of municipal solid waste daily)

4- Bekaa & Baalbeck – Hermel (currently generates 430 tonnes of municipal solid waste daily)

20 landfill sites have been identified as shown in the following Table:

Proposed Treatment Process by Geographical Distribution within the Mohafazat

Mohafaza Caza Proposed Treatment Process (note 1)

Akkar S / C / LBatroun S / C / LBsharreh S / C

Akkar & Northern Lebanon Koura S / C / LMenhiyeh - Danniyeh S / C / LTripoli S / CZghorta S / C / L

Baalbeck S / C / LBekaaa – Western S / C

Bekaa, Baalbeck & Hermel Hermel S / CRashaya S / CZahle S / C / L

Beirut S / C / L / LBAley S / C / L / LBBaabda S / C / L / LB

Beirut & Mount Lebanon Jbeil S / C / L / LBKesrouan S / C / L / LBMetn S / C / L / LB

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Shouf S / C / L / LB

Bent Jbeil S / C / LHasbaya S / C / L

Southern Lebanon & Jezzine S / C / LNabatiyeh Marjeyoun S / C / L

Nabatyieh S / C / LTyre S / C / L

note 1: S: Sorting – C: Composting – L: Landfill – LB: Landfill Big Items

The scope of the services to be requested for bids includes construction of sorting and treatment centers and sanitary landfills. Street sweeping, cleaning and collection are included as an options activity. Other options proposed by bidders will also be considered.

- Submission by interested parties of pre-qualification documents is scheduled for closure on the 15th of April 2004.

- Evaluation Report to be prepared by the Evaluation Committee will be submitted on the 30th of April 2004 to the Council of Ministers.

- Tender Process: Issue of Tender Documents scheduled by 15th of May 2004.

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