Japanese ODA

Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry: Kingdom of Cambodia
Project: Niroth Water Supply Project
Loan Agreement: March 25, 2009
Loan Amount: 3,513 million yen
Borrower: The Royal Government of Cambodia
2. Background and Necessity of the Project(1) Current State and Issues of the Water Supply Sector in Cambodia
Cambodia’s water supply facilities has been repaired and upgraded since the mid
1990s primarily in the capitol of Phnom Penh. However, both urban areas and rural
areas still suffer from a shortage of water supply facilities. As a result, although about
80% of the population of Phnom Penh has access to safe water, the rate is only 68%
in the urban area around Phnom Penh making up the metropolitan area. Nationwide,
the access rate is 53% for urban areas and 25% for rural areas, making for anationwide average of a low 29.4%.
After the civil war, Japan and other donors supported Cambodia to build and repair
three water treatment plants, lay 300 km of water supply pipes, and provide
assistance for operational and maintenance technology, based on “The Study on
Phnom Penh Water Supply System in the Kingdom of Cambodia” established by JICA
in 1993. These efforts expanded water supply capacity and improved the skills ofpersonnel who is working for this sector. As a result, the water access rate in Phnom
Penh increased about four times over between 1993 and 2006, a 24-hour watersupply came off, and the non-revenue water rate fell sharply (from 72% in 1993 to 8%in 2006). In addition, employees of the Phnom Penh Water Supply Authority, who hadreceived assistance in operational and maintenance technology, carried out
technology transfer for other municipal water supply authorities.
However, in the Greater Phnom Penh area, which includes Phnom Penh City andthe surrounding neighboring provinces, the existing water supply capacity would beunable to meet the growing demand for water resulting from the increase in thepopulation and commercial facilities. It is expected that water demand (maximumwater supply per day) would exceed water supply capacity in 2011, making it essentialthat water supply capacity is bolstered quickly.
(2) Development Policies for the Water Supply Sector in Cambodia and the Priority ofthe ProjectIn the National Strategic Development Plan established in May 2006, Access toSafe Water is one of its main development goals (MDGs). This MDG targets an 85%
access rate in urban areas and a 45% access rate in rural areas by 2015.
As part of “The study on the master plan of Greater Phnom Penh Water Supply in
the Kingdom of Cambodia (Phase 2)” (completed in February 2006) implemented byJICA, a master plan with a planned target year of 2020 was prepared with the basic
policies of providing a stable water supply, ensuring safety and expanding the watersupply region. The master plan also points to the need to expand water supply
facilities to meet future demand, with this project recommended as the mostappropriate for this purposed based on a comparison with alternatives in terms ofsites and water sources.

(3) Japan and JICA’s Policy and Operations in the Water Supply Sector
Japan’s aid plan for Cambodia identifies waterworks development as of theimportant issues for the basic infrastructure required for socio-economic development.
Accordingly, JICA has designated redressing the discrepancy in the infrastructuredevelopment rate between the capitol and outlying areas and addressing financial
cooperation and technical cooperation from a medium to long-term and national
perspective as key areas for its aid. This project is consistent with this policy. Supportfor the water supply sector is positioned within the Urban Basic Infrastructure
Improvement Program, and this project will be implemented as part of this program.
<Projects supported by Japan>
Development Study ”Study on Phnom Penh Water Supply System in the Kingdom ofCambodia” (1992～1993)
Grant Aid “Project for Improvement of the Water Supply Facilities in Phnom Penh (Phase 1)”(1992-1993)
Grant Aid “Project for Improvement of the Water Supply Facilities in Phnom Penh (Phase 2)”(1997-1999)
Technical Assistance “The Project on Capacity Building for Water Supply System”(2003-2006)
Development Study “The study on the master plan of Greater Phnom Penh Water Supply in
the Kingdom of Cambodia (Phase 2)” (2004-2006)
Technical Assistance “Capacity Building for Water Supply System in Cambodia (Phase 2)”(2007-2011)(4) Other Donors’ Activities
In Cambodia’s water supply sector, and particularly in Phnom Penh, the Chamkar
Mon Water Treatment Plant was constructed (1993-1994) and then expanded andrepaired (1996-1997) by Grant Aid from the French government. ADB carried out awater supply and sewage development project (1997-2003), the World Bank financed
the new construction of the Churoy Changva Water Treatment Plant (2000-2001),
which is currently being expanded by AFD (2007-2009).
(5) Necessity of the ProjectThis project would help Cambodia meet growing demands for safe water with theconstruction of new water supply facilities, and is consistent with JICA’s priority aidareas. For these reasons, JICA’s support for this project is highly necessary andrelevant.
3. Project Description(1) Project Objective(s)This project aims to provide safe and stable water supply services with theconstruction of water supply infrastructure in the Greater Phnom Penh area (PhnomPenh City, Kandal Province), and thus improve the living environment for residents ofPhnom Penh City and the surrounding region, including the poor, and improve theinvestment environment.
(2) Project Site/Target Area
Greater Phnom Penh area (Phnom Penh City, Kandal Province)(3) Project Component(s)【JICA loan targets】
1) Construction of Water Treatment Plant (water capacity of 130,000 m3/day),2) Construction of Treated Water Mains,
3) Construction of Sewer【ADF loan targets】
1) Construction of Water Intake Tower
2) Construction of Raw Water Mains
3) Consulting services (aid for bidding screening, supervision of works)(4) Estimated Project Cost (Loan Amount)
6,532 million Yen（Loan Amount：3,513 million Yen）
(5) Schedule
January 2009 – April 2013 (total of 52 months)
The project will be completed when the construction work financed by JICA and
AFD have undergone a field test and the guarantee period has ended.
(6) Project Implementation Structure1) Borrower: The Royal Government of Cambodia
2) Guarantor: None
3) Executing Agency: Phnom Penh Water Supply Authority (PPWSA)
4) Operation and Maintenance System: Same as 3)(7) Environmental and Social Consideration/Poverty Reduction/Social Development
1) Environmental and Social Consideration① Category: B② Reason for Categorization: This project is classified in category B, as definedin the JBIC Guidelines for Confirmation of Environmental and Social
Considerations (established in April 2002), as it does not correspond to asector or have attributes that would tend to affect the environment, nor does itcorrespond to a region susceptible to adverse impacts, and it is not deemed
likely to have a serious adverse effect on the environment.
③ Environmental Permit: The Environmental Impact Assessment (EIA) for thisproject has been submitted by the implementing institution to the Ministry of theEnvironment and authorization procedures are underway.
④ Anti-Pollution Measures: Ground sinkage is not expected as water will be takenfrom a nearby river, and air quality and noise and vibration measures taken
during construction will be in line with Cambodia’s environmental standards.
⑤ Natural Environment: The regions targeted in the project are not regions suchas national parks that would be likely to suffer adverse impact, nor are theynear such regions, and thus any undesirable impact on the naturalenvironment would be minimized.
⑥ Social Environment: Cambodia’s procedures were followed in acquiring about
10 ha of land for the project. There will be no relocations.
⑦ Other / Monitoring: Water quality, noise and vibrations, among others, will bemonitored by the implementing agency during construction and operation.
2) Promotion of Poverty Reduction: The implementing agency plans to evaluate theeconomic condition of the poor households in the service area and reduce water
connection fees for poor households based on certain criteria.
3) Promotion of Social Development (e.g. Gender Perspective 、 Measure for
Infectious Diseases Including HIV/AIDS、Participatory Development、Consideration
for the Handicapped etc.): The implementing agency requires in its contract that
construction companies take AIDS measures with its workers.
(8) Collaboration with Other Donors: Co-financing with AFD(9) Other Important Issues: None
4. Targeted Outcomes(1) Performance Indicators
1) Operation and Effect Indicator
Indicator

Baseline

Target (2015)（Actual Value in 2008）【Expected value 2 years
after project completion】

Water supply capacity (m3/d)--

130,000

Water quality (turbidity [NTU])--

2

Water quality (Chromaticity)

--

0.7

population

1,239,000

1,708,784

Numberofhouseholds
connected to water supply

177,000

244,122[Indicator for Water
Treatment Plant][Indicator for Service area]
Water supplied(people)(2) Internal Rate of Return
Based on the conditions indicated below, this project’s Economic Internal Rate ofReturn (EIRR) is 16.3% and its Financial Internal Rate of Return (FIRR) is 5.6%.
【EIRR】
Cost ：Business costs (construction costs, operational and maintenance costs;excluding taxes)
Benefit：Income from fees, reductions in the cost of buying water (from adistributor), reduction in medical expenses
Project Life：30 years【FIRR】
Cost ：Business costs (construction costs, operational and maintenance costs)
Benefit：Income from fees
Project Life：30 years

5. External Factors and Risk Control
Construction work funded by AFD is being carried out as planned. The water supply
network is also being built as planned.
6. Lessons Learned from Past Projects
Ex-post evaluations of previous similar projects demonstrate that water distribution
must be adequately considered when considering the project scope. Given the above,in this project, the implementing agency has verified the water supply network plan.
Moreover, previous similar projects teach that aspects other than the loan targets
must be monitored to achieve the project effect. This project is financed jointly withAFD, so JICA plans to discuss and share information with AFD at the procurement
and business implementation and management stage.
7. Plan for Future Evaluation(1) Indicators to be Used
① Water supply capacity (m3/d)② Water quality (turbidity [NTU])③ Water quality (Chromaticity)④ Water supplied population (people)⑤ Number of households connected to water supply (households)⑥ EIRR (%), FIRR (%)(2) Timing
Two years after project completion