Haiti Reconstruction: Factors Contributing to Delays in USAID Infrastructure Construction
Published: 2011-11-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: On January 12, 2010, a powerful earthquake struck Haiti, resulting in an estimated 230,000 deaths, including more than 16,000 Haitian government personnel, and the destruction of many ministry buildings. In addition to immediate relief efforts, in July 2010, Congress appropriated $1.14 billion in supplemental funds for reconstruction, most of which was provided to the U.S. Agency for International Development (USAID) and the Department of State (State). USAID and State are administering about $412 million in supplemental and regular fiscal year appropriations for infrastructure construction activities. In May 2011, in response to a congressional mandate, GAO reported on overall U.S. plans for assistance to Haiti. This report addresses infrastructure construction activities, including (1) USAID and State obligations and expenditures; (2) USAID staffing; (3) USAID planning; and (4) potential sustainability challenges USAID faces. GAO reviewed documents and interviewed U.S. officials in Washington, D.C., and Haiti, and visited ongoing and planned construction sites in Haiti..
section_title: What GAO Found
paragraphs: USAID and State have obligated and expended a small amount of funds for infrastructure construction activities in six sectors: energy, ports, shelter, health, food security, and governance and rule of law. As of September 30, 2011, USAID and State had allocated almost $412 million for infrastructure construction activities, obligated approximately $48.4 million (11.8 percent), and expended approximately $3.1 million (0.8 percent). Of the almost $412 million, about 87 percent was allocated from the 2010 Supplemental Appropriations Act and 13 percent from regular fiscal year appropriations. USAID accounts for about 89 percent of the $412 million, including funds for construction in the energy, ports, shelter, health, and food security sectors. State activities in the governance and rule of law sector account for the remaining 11 percent. USAID had difficulty staffing the Haiti mission after the earthquake, a factor that has contributed to delays in infrastructure construction activities. Soon after the earthquake, 10 of the 17 U.S. citizen Foreign Service Officers, known as U.S. direct-hire staff, in Haiti left. USAID, lacking a process for expediting the movement of staff to post-disaster situations, had difficulty replacing them and recruiting additional staff. These staff included key technical personnel such as engineers and contracting officers needed to plan and implement infrastructure activities in sectors such as energy and ports, where the mission had not previously worked. With limited U.S. direct-hire staff on board, the mission relied heavily on temporary staff, and remaining staff assumed duties outside their normal areas of expertise. The mission plans to have all U.S. direct-hire staff on board by February 2012. Since infrastructure activities will continue until at least 2015, the mission will need to maintain sufficient staff for several years to manage the activities supported by the increase in Haiti reconstruction funds. USAID and State are planning activities in Haiti, but various challenges have contributed to some of USAID's delays. As of October 2011, USAID had drafted eight Activity Approval Documents (AADs) that include planned activities, costs, risks, and assumptions. AADs for the education, energy, food security, governance and rule of law, health, and shelter sectors have been approved. The AAD process has been more comprehensive and involved than is typical for such efforts, according to USAID officials. Although USAID made progress in planning, construction of some activities was delayed for various reasons, and some activities do not yet have planned start dates. For example, the mission was delayed in awarding contracts in the shelter sector due to issues such as identifying sites for shelter and obtaining land title. The sustainability of USAID-funded infrastructure depends, in part, on improvements to the Haitian government's long-standing economic and institutional weaknesses. USAID has considered various sustainability issues and is planning institutional strengthening activities, such as management reform of the power utility, but USAID planning documents acknowledge that these reforms will be challenging and that infrastructure activities face risks. These challenges are consistent with prior GAO reports that address sustainability of U.S. infrastructure projects in other countries.
section_title: What GAO Recommends
paragraphs: To facilitate USAID's progress in planning and implementing its many post-earthquake infrastructure construction activities in Haiti over the next several years, particularly those requiring key technical staff, GAO recommends that the USAID Administrator ensure that U.S. direct-hire staff are placed at the mission within time frames that avoid future staffing gaps or delays. USAID described certain actions it is currently taking that, if continued, could address the recommendation.

section_title: Letter
paragraphs: The January 12, 2010, earthquake centered near Port-au-Prince, Haiti,  caused physical, social, and economic devastation to the poorest country  in the Western hemisphere. The earthquake is estimated to have caused  approximately 230,000 deaths, 300,000 injuries, and displaced  approximately 2 million people from their homes. According to the United  Nations (UN), the earthquake killed more than 16,000 of Haiti’s civil  service employees and destroyed almost all ministry buildings. The World  Bank reported that the earthquake caused $7.8 billion in damage  (exceeding Haiti’s 2009 gross domestic product). The UN Office of the  Special Envoy for Haiti reported that the country received unprecedented  pledges of support from around the globe, with bilateral and multilateral  donors, including the United States, pledging more than $5.6 billion to  help Haiti recover from the earthquake through 2011. Individuals and  private companies gave an additional $3.1 billion in private donations.
In July 2010, Congress passed the Supplemental Appropriations Act of  2010 (the Act), which provided more than $1.14 billion in reconstruction  funds for Haiti. In January 2011, the U.S. government issued the 5-year  Post-Earthquake USG Haiti Strategy: Toward Renewal and Economic  Opportunity, which targets the Port-au-Prince, Saint-Marc, and Cap- Haïtien areas. The U.S. Agency for International Development (USAID) is  allocating supplemental and other funds to support the construction and  rehabilitation of infrastructure in the energy, food security, health, ports,  and shelter sectors, while the Department of State (State) is allocating  supplemental and other funds to support the construction and  rehabilitation of infrastructure in the governance and rule of law sector. As  currently planned, nearly half of USAID’s and State’s funding for post- earthquake reconstruction assistance is for infrastructure construction  activities.
In the Act, Congress made funds available for GAO to monitor U.S. post- earthquake assistance to Haiti. In response, in May 2011, we issued a  report that described the planned uses for U.S. reconstruction assistance,  USAID’s internal controls for overseeing U.S. reconstruction funds, and  Interim Haiti Recovery Commission governance and oversight structures.This report addresses, for infrastructure construction activities only,  (1) the amounts of USAID and State obligations and expenditures;  (2) USAID’s staffing; (3) USAID’s planning; and (4) potential sustainability  challenges USAID faces.
To address these objectives, we reviewed reports, documents, and data and  interviewed officials from USAID and State in Washington, D.C., and Haiti. In  Haiti, we also met with representatives from organizations involved in the  reconstruction efforts. In Port-au-Prince, we visited sites damaged by the  earthquake where USAID and State have ongoing or planned reconstruction  activities. In the Cap-Haϊtien area, we visited sites USAID is considering for  reconstruction assistance.
We conducted this performance audit from November 2010 through  November 2011 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our work objectives. (App. I contains a  more detailed description of our scope and methodology. App. II contains  a more detailed description of each of the six sectors with infrastructure  construction we reviewed.)
subsections: section_title: Background
paragraphs: Haiti is the poorest country in the Western Hemisphere, with more than  75 percent of the population living on less than $2 per day and the  unemployment rate estimated at 60 to 70 percent. These conditions were  exacerbated when the largest earthquake in Haiti’s recorded history  devastated parts of the country, including the capital, on January 12,  2010. Since then, Haiti has suffered from a cholera epidemic that has  affected over 450,000 persons and caused over 6,000 deaths. In addition,  Haiti has experienced political uncertainty following the earthquake. Due  to the inconclusive presidential election of November 2010, the new  President was not inaugurated until May 2011. On May 13, 2011, the U.S.  and Haitian governments signed the Haiti Reconstruction Grant  Agreement. Later, the Haitian Parliament rejected two candidates  nominated by the new President for the post of Prime Minister, who  serves as head of government. In early October 2011, the Parliament  approved the President’s third nominee.
In response to the earthquake, in the Act, Congress provided more than  $1.14 billion in reconstruction funds for Haiti, available through the end of  fiscal year 2012. Of this amount, about $918 million was directed to  USAID and State, of which $770 million was provided through the  USAID-administered Economic Support Fund (ESF) account and about  $148 million through the State-administered International Narcotics  Control and Law Enforcement account (see table 1).
Of the almost $918 million in supplemental funds, as of September 30, 2011,  $356.9 million was allocated for the construction and rehabilitation of  infrastructure. In addition to these supplemental funds, USAID and State  allocated funding for reconstruction activities from other budgetary sources,  such as annual appropriations for fiscal years 2010 and 2011, of which $54.8  million was allocated for construction and rehabilitation of infrastructure. In  total, the agencies allocated almost $412 million from both supplemental and  other budgetary sources for construction and rehabilitation of infrastructure.
In September 2010, State and USAID, as required by the Act, issued a joint  spending plan that showed allocations of supplemental reconstruction funds  (see fig. 1 for a timeline of key government of Haiti and international donors  and U.S. government actions and events after the earthquake).
In January 2011, the U.S. government issued the 5-year Post-Earthquake  USG Haiti Strategy: Toward Renewal and Economic Opportunity.  Consistent with the government of Haiti’s development priorities, the U.S.  strategy seeks to, among other things, encourage reconstruction and  long-term economic development in several regions of the country— known as “development corridors”—including a region on the northern  coast of Haiti that is not close to the earthquake epicenter, but where  some people displaced by the earthquake moved. The strategy notes that  65 percent of Haiti’s economic activity was located in greater Port-au-  and states the U.S. government’s intent to support new economic  Princeopportunities in the Saint-Marc and Cap-Haïtien development corridors, in  addition to assisting with reconstruction in the Port-au-Prince corridor,  which suffered the most damage from the earthquake (see fig. 2).
The U.S. strategy identifies planned U.S. reconstruction assistance in  eight sectors. Six of these sectors—energy, ports, shelter, health, food  security, and governance and rule of law—involve infrastructure  construction and rehabilitation, while two sectors—economic security and  education—do not. The strategy also encompasses some of the  objectives set forth in the Haitian government’s 10-year Action Plan for  National Recovery and Development in Haiti, issued in March 2010. The  Action Plan identified and prioritized short- and long-term reconstruction  needs in four areas: (1) territorial rebuilding in Port-au-Prince and three  targeted regions of Cap-Haïtien, Saint-Marc, and Les Cayes;  (2) economic rebuilding in sectors such as construction, agriculture, and  tourism; (3) social rebuilding in the health, education, food security, and  other sectors; and (4) institutional rebuilding focused on developing  government capacity, justice, and a legal and regulatory framework.
To advise and support U.S. earthquake reconstruction efforts in Haiti,  USAID and State created special offices in Washington, D.C.
In February 2010, USAID created the Haiti Task Team (HTT) to help  coordinate U.S. emergency relief and reconstruction work and provide  technical and staff support. At its peak, the HTT had approximately 50  staff positions, primarily U.S. full- or part-time staff who were  temporarily reassigned from USAID’s Bureau for Latin America and  the Caribbean and other bureaus, as well as contracted staff.
In September 2010, State created the Office of the Haiti Special  Coordinator to oversee the planning and implementation of the U.S.  strategy in Haiti in coordination with USAID and other U.S.  departments and agencies. The Haiti Special Coordinator has  approximately 20 staff positions, primarily staff temporarily reassigned  full- or part-time from other bureaus and offices within State, and other  U.S. agencies as well as contracted staff.
section_title: USAID and State Have Obligated and Expended Small Amounts of the Almost $412 Million Allocated for Construction Activities
paragraphs: As of September 30, 2011, USAID and State allocated $411.6 million for  bilateral post-earthquake infrastructure construction activities in Haiti  using $356.9 million in fiscal year (FY) 2010 supplemental funds and  $54.8 million from regular fiscal year appropriations. In addition, USAID  and State had obligated $48.4 million (11.8 percent) and expended $3.1  million (0.8 percent) of the total allocated, as shown in table 2.
Combined, USAID and State allocated $411.6 million for post-earthquake  infrastructure construction activities as of September 30, 2011 (see table  2). USAID is responsible for implementing most of the infrastructure  construction activities. USAID activities in five sectors—shelter, energy,  ports, health, and food security—account for $365.7 million (88.9 percent)  of the $411.6 million in total funds allocated for infrastructure construction.  State has activities in the governance and rule of law sector, which  account for $45.9 million (11.1 percent) of the total funds allocated for  infrastructure construction. See appendix II for additional detailed  information on each of the six sectors. Table 3 shows USAID and State  funding allocations by sector.
Examples of post-earthquake infrastructure activities are as follows:
The energy sector includes rehabilitating substations in the Port-au- Prince area and in the Cap-Haïtien development corridor, providing  power to the North Industrial Park—an activity that is key to Haiti’s  economic development with donor and private-sector commitments of  about $400 million and a goal of creating about 60,000 direct and  indirect jobs, according to USAID and State officials.
The ports sector includes the construction of a new port along the  northern coast of Haiti in the Cap-Haïtien development corridor. Upon  completion, the port could provide improved shipping access for firms  operating in the North Industrial Park and other locations in the area.
The shelter sector includes the development of approximately 15,000  service plots, which include housing and access to essential services,  in new residential settlements in the Port-au-Prince and Cap-Haïtien  development corridors.
The health sector includes the reconstruction of the State University  Hospital in the Port-au-Prince development corridor.
The food security sector includes the construction of irrigation canals  and farm-to-market roads in the Cap-Haïtien, Port-au-Prince, and  Saint-Marc development corridors.
The governance and rule of law sector includes construction activities  funded through State’s Bureau of International Narcotics and Law  Enforcement (State/INL); the activities include the rehabilitation of  facilities at the Haitian National Police Academy.
subsections: section_title: USAID and State Have Obligated Almost 12 Percent and Expended 0.8 Percent of Funds Allocated for Infrastructure Construction
paragraphs: As of September 30, 2011, USAID had obligated $42.6 million for  activities in the energy, ports, shelter, health, and food security sectors.  The majority (67 percent) of USAID’s obligations have been for two  energy activities—$15.8 million for construction of power generation at  the North Industrial Park and $12.9 for rehabilitation of 5 power sub- stations in the Port-au-Prince area. State had obligated $5.8 million, as of  September 30, 2011, for its activities in the governance and rule of law  sector. State officials said that designing and planning of construction  activities generally involves a more lengthy process than for other  activities, and they expect obligations to grow at a faster pace later this  year and during 2012 as USAID and State infrastructure construction  activities reach the implementation stage. See table 4 for obligation and  expenditure data.
section_title: USAID Staffing Difficulties Were a Factor in Delaying USAID Infrastructure Construction Activities in Haiti
subsections: section_title: USAID Has Had Difficulty Replacing Staff Since the Earthquake
paragraphs: Within a month after the earthquake, 10 of the mission’s 17 U.S. direct- hire staff had departed Haiti, leaving the mission with 7 staff in country  to manage a program heavily involved in massive relief operations and  anticipating an increase in reconstruction activities. According to mission  officials, U.S. direct-hire staff were permitted to leave for several reasons,  primarily because approximately 40 percent of U.S. embassy housing  was damaged or destroyed, the school for mission staff children was  damaged and not functional, and staff were experiencing emotional  challenges after the earthquake.
To fill the U.S. direct-hire vacancies, USAID posted 10 routine agency  wide job announcements in March 2010, but no U.S. direct-hire staff  applied. According to USAID officials, potential applicants did not apply  due to, among other things, the damaged school, uncertainty about the  quality of life in Haiti, and the lack of financial or other incentives in the job  announcements. In May 2010, USAID again posted the 10 job  announcements and, this time, attracted a number of applicants because  the postings included financial incentives and waived the requirement that  successful applicants bid on positions in four USAID-designated critical  priority countries—Afghanistan, Iraq, Pakistan, and Sudan—upon  completion of their tours in Haiti. Having received a sufficient number of applicants for the May 2010 posting, the mission soon selected the staff.  However, U.S. direct-hire staff did not begin to arrive in Haiti until early  2011 because, among other things, households and families had to be  moved and some staff required up to 6 months in language training. In  addition to filling existing positions, USAID received approval from the  U.S. Ambassador to Haiti in February 2011 for 15 additional U.S. direct- hire staff to manage the surge in earthquake-related funding. These  positions were announced and some candidates selected when the  approval was granted in February 2011. Eleven had arrived as of  September 2011 and, according to mission officials, all are expected to  arrive in Haiti by February 2012. However, the mission will be  implementing infrastructure construction activities until at least 2015,  according to USAID planning documentation. During the next 4 years,  U.S. direct-hire staff will have opportunities to bid for other positions at  other posts. As U.S. direct-hire staff leave Haiti, the mission will need to  replace them in order to continue the progress of infrastructure  construction activities.
section_title: Lack of Staff Created Planning Delays
paragraphs: Since the earthquake, the mission has been operating with a reduced  number of U.S. direct-hire staff. During that time, the mission experienced  delays in planning and implementing some construction activities.  According to USAID officials, U.S. direct-hire staff are essential in  planning and establishing continuity for long-term reconstruction activities,  including infrastructure activities such as the design of power generation  facilities, which require specific skills. Delays in staffing key positions,  such as engineers, contracting officers, and sector specialists, created  particular difficulties. For example:  Engineering: Although USAID allocated more than $300 million in  supplemental funds for infrastructure activities that would require  engineering skills, the mission’s planning process was delayed due, in  part, to the lack of U.S. direct-hire engineers, according to USAID  officials. USAID was unable to reassign U.S. direct-hire engineers from  other missions around the world because USAID has few engineers  worldwide, according to mission officials. At the time of the earthquake,  the mission had two Haitian engineers on its staff, but these individuals  had experience in constructing and repairing roads and bridges and  rehabilitating small infrastructure—with no experience in energy and ports  construction. In anticipation of its pending involvement in infrastructure  activities, the mission created a new Office of Infrastructure, Energy, and  Engineering, but staff with specialized engineering skills did not begin to  arrive at the mission until early 2011. For example, the mission’s chief  engineer, who is responsible for overseeing construction activities in the  energy sector, arrived in April 2011, and an engineer overseeing the  construction of health facilities arrived in May 2011.
Mission officials in the health sector stated that initial delays in staffing an  engineer in the Office of Infrastructure, Energy, and Engineering  presented a planning challenge because in-country engineering expertise  is essential to rehabilitate a major hospital and numerous smaller health  clinics. According to mission officials, the lack of staff and expertise made  planning difficult for several reasons. For example, some staff who were  involved in developing certain cost and planning estimates and assessing  potential constraints had limited expertise, thus requiring more review by  others. Further, some construction activities experienced delays as a  result of staff shortages. For example, on September 22, 2011, about 3  months later than initially planned, the mission awarded a feasibility study  related to its plans to invest in port development in the Cap-Haïtien  development corridor. According to USAID officials, the delay occurred  because mission staff were focused on energy-sector issues related to  the North Industrial Park. The feasibility study is needed before the  mission can determine its specific plans for port construction and set an  award date for the construction contract that is expected to follow.
Contracting: The mission also experienced delays in awarding some  infrastructure construction contracts as originally scheduled because it  had only one U.S. direct-hire contracting officer in country with the  authority to approve contracts of more than $3 million, according to  USAID officials. The mission plans to award several complex contracts  for more than $3 million each from the more than $300 million in  supplemental funding it has allocated for infrastructure activities. The  mission currently has three other contracting officers with lower  contracting authority approval limits, and as of September 2011, the  mission had requested additional contracting officers it anticipates will be  needed to keep pace with the planned time frames for the mission’s  planned infrastructure activities.
Programming: The mission also experienced delays because, for more  than 1 year following the earthquake, it did not have several sector  directors, including a program office chief and office chiefs for economic  growth and democracy and governance offices, among other  programming positions. According to mission officials, key decisions  during the design and planning of construction activities were delayed, in  part, because the mission had not been involved in such activities before  the earthquake and there was limited expertise among existing staff. In  addition, mission staff have experienced increased workloads and some  mission staff have had to take on additional responsibilities outside their  normal areas of expertise. For example, the deputy mission director  assumed the additional role of leading energy sector planning for about  15 months until the April 2011 arrival of the chief engineer. In addition to  other staffing issues, three of USAID’s Haitian employees died in the  earthquake. Further, mission officials stated that numerous surviving  Haitian employees have been unable to contribute quickly to post- earthquake planning efforts because some had family members who died  or were injured in the earthquake and many had residences that were  damaged or destroyed.
section_title: USAID Haiti Relied Largely on Temporary Staff Following the Earthquake
paragraphs: Based on our review of USAID policies and guidance, including its  Automated Directives System, and statements of mission officials, USAID  does not have an expedited process for placing U.S. direct-hire staff to  work on reconstruction efforts in an urgent post-disaster or post-crisis  situation such as Haiti. Absent such a process, USAID Haiti used  USAID’s routine but lengthy staffing process, which involves, among  other things, posting job opportunities agency-wide, receiving  applications, selecting staff, and waiting until they are released from their  current assignments.
To meet the increased need for mission staff to manage the program, the  agency temporarily hired or reassigned staff, including staff from its Haiti  Task Team in Washington, D.C., to complete more than 400 temporary  duty assignments for periods ranging from one week to several months.  For example, USAID used personal services contracts to hire staff to  provide financial management expertise; assigned headquarters-based  staff from its Latin America and Caribbean Bureau to manage and  oversee rubble removal and other efforts; and provided fiscal year 2010  supplemental funding to an implementing organization to manage people  who repaired roads, cleaned drainage canals, and performed other  rehabilitation activities.
According to mission officials, planning and implementation of  reconstruction activities were delayed because the few staff remaining in  Haiti were heavily involved in recruiting, placing, and training temporary  staff in Haiti. Senior mission staff stated that, for many temporary staff  positions, the mission had to develop detailed scopes of work for the  positions and then brief and train newly arrived staff on substantive  issues. In addition, mission staff noted that the continuity of efforts was  sometimes problematic as multiple staff, who turned over frequently,  managed the efforts.
section_title: USAID Planning Is Still Under Way; Various Factors Contributed to Delays in Infrastructure Construction
subsections: section_title: USAID Has Finalized Six of Eight Sector-Specific Planning Documents
paragraphs: USAID planning for its earthquake reconstruction activities in Haiti is still  under way. The USAID mission in Haiti, in coordination with other U.S.  government agencies and USAID in Washington, D.C., has drafted eight  Activity Approval Documents (AADs)—detailed planning documents for  each sector. As of October 2011, six AADs had been approved:  education, energy, food security, governance and rule of law, health, and  shelter (see table 5). These six AADs account for 87 percent of USAID’s  available supplemental and program funds, according to USAID. The two  remaining AADs require additional work before they can be approved,  according to USAID officials. Specifically, the AAD for economic  security—which does not include any planned infrastructure  construction—requires further interagency discussion with the U.S.  Department of the Treasury (Treasury), which is the co-implementer of  economic activities in Haiti, and the AAD for ports has not been approved  because, among other things, USAID is waiting for the Haitian  government to make key decisions regarding port regulations, use of  territorial waters and the Haitian customs code.
According to USAID officials, the AADs for Haiti are more comprehensive  and have involved a more extensive review process than is typical. For  example, USAID officials stated that the AADs for USAID activities in Haiti  have included more analytical metrics, such as the results USAID plans to  achieve in return for its investment. These AADs incorporate a discussion  of how each sector will meet USAID’s agency wide procurement reform  known as USAID Forward, which has, among other objectives, the goal of  broadening the base of USAID’s implementing partners. According to  USAID officials, incorporating USAID Forward has changed the  procurement plan structure in the AADs, requiring more scrutiny by  agency officials. For example, USAID indicated for activities described in  the AAD procurement plans whether those activities will be targeted at  local firms or organizations or use traditional partners.
In addition, several factors led to a more extensive review process for the  AADs for activities in Haiti. According to USAID officials, AADs are  usually drafted at the mission and approved by the mission director.  However, due to U.S. foreign policy interests in Haiti, in addition to the  review and approval of the Haiti mission director, these AADs have  undergone high-level review by USAID and State’s Office of the Haiti  Special Coordinator. Because the U.S strategy is a whole-of-government  strategy, a number of other U.S. agencies were involved in reviewing and  approving the AADs. These agencies included the U.S. Department of  Agriculture for food security, Treasury for economic security, and the  Centers for Disease Control and Prevention for health. According to  USAID and State officials, the inclusion of other agencies in the process  added levels of review that have extended AAD development and  approval.
Prior to AADs being approved in Washington, D.C., the Haiti mission  continued with other planning efforts. The mission’s Office of Acquisition  and Assistance developed a procurement plan to manage contract  actions—such as the award of contracts for planning, design, and  construction services—that enable implementation of the activities. In the  shelter sector, for example, the mission has awarded contracts for the  design of the proposed residential sites; the design includes site layout  plans, environmental impact assessments, and housing-unit design  specifications. In instances where an AAD had not been approved but  where the mission deemed that sufficient planning had been completed,  the mission used activity-specific approval memoranda to initiate  procurement actions, and, in some instances where design work was  completed, award construction contracts. For example, a contract for the  construction of a 10-megawatt power plant for the North Industrial Park in  the Cap-Haïtien development corridor with a value of approximately $15  million was awarded while the energy AAD was in draft.
section_title: A Few Infrastructure Construction Activities Are Under Way; Various Factors Contributed to Delays
paragraphs: As of September 15, 2011, the mission had awarded its first two  infrastructure construction contracts—rehabilitation of five electrical  substations in Port-au-Prince and construction of a power plant in the  North Industrial Park—at a combined cost of $28.8 million; approximately  7 percent of USAID’s total allocation for infrastructure construction  activities. These awards were slightly delayed, as described below:
Rehabilitation of five electrical substations in Port-au-Prince: On  July 28, 2011, about 1 month later than planned, USAID Haiti  awarded a $12.7 million construction contract for work to improve  electrical service in Port-au-Prince. USAID extended the time for  contractors to submit construction proposals because USAID issued  new information in response to contractors’ questions, such as those  concerning the length of the contract performance period—considered  by contractors to be too short—and requests for clarification of  technical documents referenced in the original proposal solicitation.
Construction of a power plant in the North Industrial Park: On  September 15, 2011, about 6 weeks later than planned, the mission  awarded a $15 million contract for construction of a power-generating  facility to meet the start-up electrical needs of the North Industrial  Park. Some of the delay was to allow contractors time to respond to  USAID’s clarifications and new contract requirements that were the  result of contractor questions, changes to documents in the original  solicitation, and the addition of environmental mitigation requirements.  Some of the delay was also due to time spent by USAID mission staff  focusing on a bid protest of the Port-au-Prince substation  rehabilitation contract.
Some key USAID activities experienced delays in their original schedule  due to technical issues, and other activities do not yet have a planned  award date. These delays are in part related to issues such as the length  of time it takes contractors to submit construction proposals, difficulties  obtaining building sites, and incomplete environmental assessment  documents. In addition, some activities do not yet have dates set for  award of construction contracts because the scope and location of the  infrastructure have yet to be determined.
North Industrial Park long-term power generation: The mission  delayed its planned award of a construction contract to increase the  power plant’s generation capacity from November 2011 to April 2013.  According to a mission official, the dates were revised because the  number of future tenants in the industrial park and their electrical  power requirements are not yet known.
South Industrial Park power generation: As of October 2011, a site  for the South Industrial Park had not been established. Therefore, the  mission has not yet determined the contract award date for this  activity, which will provide power to a new South Industrial Park.
State University Hospital in Port-au-Prince (HUEH): The mission  delayed by about 5 months its plans to enter into an agreement with  the governments of France and Haiti to reconstruct, repair, and  modernize earthquake-damaged buildings on Haiti’s State University  Hospital campus. The delay is due, in part, to a USAID-funded  environmental assessment of the HUEH which is taking longer than  planned. Mission officials expect that the assessment will be  completed near the middle of November 2011, and estimate that the  mission will be able to execute the HUEH agreement by December  2011.
Shelter demonstration project: The mission planned to break  ground on a “demonstration” settlement of 200 houses and other  residential infrastructure on January 12, 2011. According to USAID  officials, the mission has faced challenges in obtaining land titles for  property on which to build because the government of Haiti lacks a  comprehensive, functional system for recording land ownership— resulting in only 40 percent of landowners possessing documentation  of title to their land and land records which may be inaccurate—as  well as overarching shelter legislation to guide housing, land-use, and  urban planning.
Development and construction of new residential settlements:  The mission’s plan to award contracts to prepare 15,000 housing plots  and build 4,000 housing units has been delayed about 7 to 10  months. Originally planned for August 2011, the awards of most of  these contracts are now expected to occur between March and June  of 2012. It has taken longer than planned to identify the sites,  negotiate agreements with the Haitian government on the selection of  beneficiaries, and negotiate agreements with nongovernmental  organizations building some of the housing.
section_title: Haitian Government Capacity Is a Key Challenge to Sustainability of U.S. Government Infrastructure Reconstruction Activities
paragraphs: The sustainability of USAID-funded infrastructure activities depends, in  part, on improvements to Haiti’s long-standing economic and institutional  weaknesses, the Haitian government’s political will to implement change,  as well as the success of planned capacity-building activities. Based on  data from the UN Office of the Special Envoy for Haiti, aid from bilateral  and multilateral donors represented approximately 57 percent of the  government of Haiti’s total revenue in 2009. Following the earthquake, the  percentage increased substantially, to an estimated 80 percent of total  government revenue in 2010. Additionally, more than 16,000 civil  servants died in the earthquake and, including those who left the country,  the Haitian government workforce is now reduced by 33 percent,  according to the United Nations Development Program. Further,  according to the U.S. government strategy and USAID documents and  officials, electricity laws, the structure of the health care system, the  customs code, and housing and urban development policy, among other  areas, all need reform.
As part of its required planning processes, USAID considered various  sustainability issues for its infrastructure activities. Some activities face  sustainability challenges. In planning and assessing the sustainability of  its activities in Haiti, USAID used a variety of resources. These included  relevant provisions in the Foreign Assistance Act, guidance from the   the agency’s project  agency’s Automated Directives System (ADS),design guidance, and studies and assessments by USAID and other  donors such as assessments of Haitian government ministries by the  Inter-American Development Bank. In addition, for infrastructure activities,  the mission relied on general principles for estimating costs, including  projecting operations and maintenance costs and estimating basic returns  on investments.
For four activities, as of September 2011, USAID has also completed  certification required by the Foreign Assistance Act indicating that Haiti is  capable of effectively maintaining and utilizing the projects. In addition,  each AAD contains a section broadly describing the sustainability issues  of the activities planned in each sector.
The following are examples of some of the challenges identified by  USAID and its plans to address those issues.
Energy sector: The power utility, Electricité d’Haiti (EDH), faces  considerable technical and managerial challenges that have resulted in  financial losses. The utility receives an annual subsidy from the Haitian  government of approximately $100 million, which, according to USAID’s  energy AAD, represents approximately 12 percent of the government of  Haiti’s national budget. To assist the EDH, in April 2011 the mission  awarded a 2-year contract to improve EDH management while long-term  modernization options are developed and evaluated. In addition, USAID  plans for the North Industrial Park power generation facility to be  managed independently of EDH through September 2016. This facility is  expected to generate enough revenue to cover operations and  maintenance costs, including the replacement of major equipment.  However, modernization of the energy sector is based, among other  things, on the assumption that the Haitian government will decide on an  appropriate modernization model and take necessary, but politically  challenging steps, to implement that model, according to the energy AAD.
Health sector: The Haitian government has made efforts to decentralize  the health care system since the 1990s, but only 12 of 63 local health  networks are currently operational. To support Haitian government  efforts to decentralize the health care system, USAID is planning to  provide resources, such as repair or construction of health facilities, to 9  to 12 local health networks in the U.S. development corridors. USAID is  also requiring business plans in this sector so that USAID will no longer  need to contribute to operations and maintenance of new or renovated  health facilities within 3 to 5 years of completion. USAID acknowledges  that strengthening the Haitian Ministry of Health and a decentralized  health care system—both of which would likely enhance sustainability— are complex undertakings that will require long-term efforts. According to  USAID, there are also shortages of community health workers, low  retention of doctors and nurses who can earn more money in private  practice or working for nongovernmental organizations, and a low skill  and knowledge base at all levels.
Ports sector: According to USAID’s draft ports AAD, the Haitian  government does not have a well-defined legal and regulatory framework  for ports, and the three Haitian government entities involved in port  operations have unclear roles and responsibilities. Furthermore, the sector is characterized by excessively high port charges, unreliably slow  port clearance processes, inadequate human and institutional capacities,  and poor integration between international and regional ports. To assist  with port construction in the Cap-Haïtien development corridor, according  to USAID’s draft ports AAD, (1) a public-private partnership will be  created and (2) USAID will provide technical assistance to Haitian officials  to help them lower port charges in the northern port and introduce  processes to expedite port clearance and tax collection. However, the  ports sector AAD notes that port construction is a “high-risk” program  whose success depends on, among other things, the political will of the  Haitian government to make improvements in a sector controlled by a few  individuals, tens of millions of dollars in additional funding from other  donors, and sufficient demand for port use.
Shelter sector: Haiti lacks a single agency for housing and urban  development policy resulting in a sector characterized by fragmented  authorities and unenforced policies, according to the shelter sector AAD.  Among other things, Haiti does not have an effective national land  register—known as a cadastre—and system to record land ownership; a  policy framework that establishes and streamlines building standards and  other controls to promote disaster-resistant housing; and has poor  capacity to support the community organizations needed for shelter  infrastructure and service delivery. USAID plans to provide assistance in  areas such as building standards and enforcement mechanisms; land  tenure, land title, and property tax records; and housing finance and  mortgage markets. The shelter AAD notes that sustainability depends on  the ability of the Haitian government to manage and maintain  infrastructure and services over the long term. Policy change requires the  political will and dedication of the Haitian government, as well as support  from other members of the donor community. Sustainability also depends  on economic growth, governance reform, and the ability of Haitians to pay  taxes. If economic opportunities at the planned new shelter sites in  locations outside of the capital are insufficient, people may return to Port- au-Prince. The success of USAID plans will depend on new economic  opportunities that would enable municipalities to pay for road  maintenance at the new sites and for housing beneficiaries to pay fees for  water services and basic maintenance, according to U.S. officials.
Our past work on U.S. assistance in developing countries shows that the  U.S. government has previously encountered challenges in ensuring the  sustainability of infrastructure activities. For example, following the 2001  earthquakes in El Salvador, we reported on sustainability challenges to  USAID-funded shelter and health clinic construction, including residents  who could not afford the cost of connecting to the potable water and  electricity systems in the new houses. In addition, in July 2011, we  reported that the governments of Cape Verde and Honduras faced  challenges sustaining several activities funded through the Millennium  Challenge Corporation (MCC). For example, in Honduras, uncertainty  about government funding for maintenance and other construction  activities may jeopardize the sustainability of some major roads built with  MCC funds.
section_title: Conclusion
paragraphs: The United States is providing over one billion dollars to Haiti for  reconstruction but faces an enormous task in helping the country begin to  recover from the 2010 earthquake. A number of factors have delayed  USAID’s planning and implementation of projects to rebuild infrastructure  in the energy, ports, and shelter sectors—areas where the agency has  not previously worked and that require specific skills or expertise. Haiti  has always been a challenging operating environment, and the  earthquake created additional difficulties. Further, USAID had difficulties  securing staff—particularly technical staff such as contracting officers and  engineers—who were willing to live and work in the country after the  earthquake and who could bring the expertise necessary to plan and  execute large, complex infrastructure projects. Such difficulties have  contributed to delays in U.S. efforts, with only a few contracts awarded to  date. Additional issues, such as difficulties in obtaining land title and the  time needed to conduct environmental assessments, have led to delays  in planning construction activities, and some activities do not yet have  start dates. Further, the Haitian government’s long-standing economic  and institutional weaknesses are complicating U.S. efforts and could  affect the future of this assistance, and the political will of the recently  formed Haitian government to implement reforms and undertake  sustainability efforts is unknown. Even though USAID is taking some  steps to address the long-term future of U.S.-funded infrastructure, it is  unclear at this point in time if those projects will ultimately be sustainable.  U.S. activities in Haiti will continue for many years, and USAID staff can  be expected to turn over numerous times. It is therefore critical that  USAID do as much as possible to match the number of staff with the  demands placed on the mission to ensure that the substantial amount of  U.S. funding provided for reconstruction is used efficiently and within time  frames that address the pressing needs in the country.
section_title: Recommendation for Executive Action
paragraphs: To facilitate USAID’s progress in planning and implementing its many  post-earthquake infrastructure construction activities in Haiti over the next  several years, particularly those requiring key technical staff such as  contracting officers, engineers, and program specialists, we recommend  that the USAID Administrator ensure that U.S. direct-hire staff are placed  at the mission within time frames that avoid future staffing gaps or delays.
section_title: Agency Comments and Our Evaluation
paragraphs: USAID provided written comments on a draft of this report, which are  reprinted in appendix III.  State did not provide written comments.  USAID  agreed with our finding that staffing difficulties were a factor in delaying  USAID infrastructure constructions activities in Haiti. In addition, USAID  described certain actions it is currently taking, such as providing  accelerated one-on-one language training and special bidding incentives  for Haiti, that, if continued, could address our recommendation.
USAID also emphasized staffing actions that the agency took following  the earthquake to quickly deploy staff temporarily to Haiti. Our report  recognizes these actions and the contributions they made in helping with  the relief and recovery efforts in Haiti. However, we maintain that such  efforts did not include bringing on U.S. direct-hire staff to fill permanent  positions and provide the continuity needed to manage longer-term  reconstruction projects. In particular, USAID noted that its Civilian  Response Corps (CRC), part of an interagency initiative, was used to  provide a surge capability and quickly deploy staff with specialized  knowledge and skills to Haiti. Our report notes that CRC, whose staff are  deployed for an average of 90 days, provides the U.S. government with a  first responder effort and supports the implementation of longer-term  reconstruction activities.
State and USAID both provided technical comments.  Those comments,  along with information contained in USAID's written response, were  incorporated into the report where appropriate.
We are sending copies of this report to interested congressional  committees, the Secretary of State, and the USAID Administrator. We will  also provide copies to others on request. In addition, the report will be  available at no charge on the GAO Web site at http://www.gao.gov.
If you or any of your staffs have any question about this report, please  contact me at (202) 512-3149 or gootnickd@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found  on the last page of this report. GAO staff who made major contribution to  this report are listed in appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: We reviewed the infrastructure-related post-earthquake reconstruction  efforts of the U.S. Agency for International Development (USAID) and the  Department of State (State) in Haiti. This report examines, for  infrastructure construction activities only, (1) the amounts of USAID and  State obligations and expenditures; (2) USAID’s staffing; (3) USAID’s  planning; and (4) potential sustainability challenges USAID faces.
In response to a congressional mandate in the Supplemental  Appropriations Act of 2010 (the Act) that made funds available for GAO to  review U.S. efforts in Haiti, we focused our review on the $918 million in bilateral reconstruction funding provided to USAID and State in the Act as well as other funding provided to USAID and State in annual fiscal  year appropriations that support reconstruction activities, including  infrastructure construction and rehabilitation, in Haiti. Of the $918 million,  $770 million was provided through the USAID-administered Economic  Support Fund (ESF) account and $148 million through the State- administered International Narcotics Control and Law Enforcement  (INCLE) account. USAID and State have planned to allocate $356.9  million for infrastructure construction activities from the funding  appropriated in the Act. In addition, USAID and State supported  infrastructure construction activities with almost $54.8 million from regular  fiscal year appropriations, such as, for example, fiscal year 2010 funding  for the Global Health and Child Survival account. Combined, USAID and  State have allocated almost $412 million from both supplemental and  regular fiscal year appropriations for infrastructure construction activities.
In the Act, Congress provided more than $1.14 billion in reconstruction funds for Haiti  available through the end of fiscal year 2012, including about $918 million for USAID and  State and about $220 million for the Department of the Treasury for debt relief, a Treasury  attaché office in Port-au-Prince, and technical assistance. We did not review the funding  directed to Treasury. Additionally, we did not review $1.64 billion in funding provided  primarily to reimburse U.S. agencies for their emergency and humanitarian efforts in Haiti  immediately following the January 2010 earthquake, nor did we examine the  approximately $144 million in U.S. embassy-related funding included in the law.
To obtain information on the appropriations, allocations, and planned  uses of U.S. reconstruction funding for Haiti, we reviewed the  Supplemental Appropriations Act of 2010, enacted by Congress in July  2010; the State and USAID FY 2010 Supplemental Appropriations  Spending Plan, issued by State in September 2010; the interagency Post- Earthquake USG Haiti Strategy: Toward Renewal and Economic  Opportunity, issued by State in January 2011; and Congressional  Research Service reports on Haiti. We also reviewed the Action Plan for  National Recovery and Development of Haiti, issued by the government  of Haiti in March 2010. In addition, we reviewed the Haiti Reconstruction  Grant Agreement, signed by the U.S. and Haitian governments in May  2011. We met in Washington, D.C., and in Port-au-Prince, Haiti, with  officials from USAID and State and other organizations implementing U.S.  government-funded activities. USAID defines allocation as the  identification and setting aside of resources for a specific program action.
To determine the amounts of funding obligated from USAID’s  supplemental ESF funding and State’s supplemental INCLE funding, as  well as funding from other sources for infrastructure construction  activities, we analyzed data reported by USAID as of June 30, 2011, and  September 30, 2011, and by State as of September 30, 2011. The  amounts reported to us by USAID and State include both expenditures  and unexpended obligated balances. These data include information on  obligations of supplemental appropriation funding overall, as well as  amounts provided for particular activities.
To assess the reliability of the data on planned allocations, obligations,  and expenditures, we conducted follow-up correspondence and  interviews with cognizant officials from USAID and State both in  Washington, D.C., and in Haiti. We asked them standard data reliability  questions—including questions about the purposes for which funding data  were collected, the use of the data, how the data were collected and  generated, and how the agencies ensured that the data were complete  and accurate—and determined the data to be sufficiently reliable for the  purposes of this report.
To assess USAID’s staffing challenges in Haiti, we reviewed bidding  opportunity notices, staffing pattern analyses produced by the mission  Executive Office, and interviewed relevant officials at the mission in Haiti  and at USAID’s headquarters in Washington, D.C.
To determine the status of USAID’s planning activities, we reviewed the  agency’s policies for planning as outlined in the Automated Directives  System. We also reviewed eight sector-specific Activity Approval  Documents (AADs), six of which had been finalized as of October 2011,  as well as more detailed planning documents for specific activities with  infrastructure components, which we obtained during our visits to the  USAID mission in Haiti. To determine challenges USAID faces in  implementing activities as planned, we reviewed USAID’s and State’s  requests for proposals, amendments, and award documents posted at the  U.S. government’s Web site www.fedbizopps.gov. We also reviewed  USAID’s AADs, award documents provided by the mission, and USAID’s  activity procurement plan. In addition we interviewed relevant officials at  the mission’s Office of Acquisition and Assistance and the mission’s  Infrastructure, Energy, and Engineering Office to discuss the procurement  plan, bid solicitation process, and activity delays. Due to the small amount  of INCLE funding allocated for infrastructure activities, we did not review  the State Bureau for International Narcotics and Law Enforcement’s  planning process.
To describe issues related to the capacity of the Haitian government, we  reviewed U.S. government documents such as the U.S. government Haiti  Strategy and the AADs, and reports from the United Nations Office of the  Special Envoy for Haiti and the United Nations Development Program. To  discuss USAID’s planning process for sustainability and potential  sustainability-related challenges, we interviewed relevant officials both at  the mission in Haiti and also at USAID’s headquarters in Washington,  D.C., about sustainability and reviewed agency guidance, documents,  and legislation. We also reviewed prior GAO reports with sections on  sustainability challenges experienced by the U.S. government in other  countries.
We traveled to Haiti in April 2011 and August 2011 and met with U.S.  officials from USAID and State, as well as representatives of some of  USAID’s international and local implementing partners for humanitarian,  development, and reconstruction programs—including the Cooperative  Housing Foundation and the American Institutes for Research. We also  met with officials from the Interim Haiti Recovery Commission. We visited  sites damaged by the earthquake where USAID and State have ongoing  or planned reconstruction efforts, such as the State University Hospital,  Haitian National Police Academy, and sites in Port-au-Prince where  rubble removal was ongoing. In addition, we visited sites in the Cap- Haïtien development corridor that USAID has targeted for reconstruction  assistance. While there, we observed and discussed with USAID officials  the preliminary results of U.S.-funded development programs, including a  planned residential settlement site, a planned port, and various planned  agricultural and watershed management activities.
We conducted this performance audit from November 2010 to November  2011 in accordance with generally accepted government audit standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our work objectives.
section_title: Appendix II: Sector Fact Sheets
paragraphs: Appendix II provides information on the funding, status of activities, select  challenges, and sustainability plans for the six sectors that include  infrastructure construction activities: energy, ports, shelter, health, food  security, and governance and rule of law.
Introduction  Prior to the January 2010  earthquake, less than 30 percent of  Haitians had access to electricity,  and many of those had access to  less than 10 hours per day. This  situation negatively affected  economic growth because a  functioning energy sector and a  dependable supply of electricity are  key to creating jobs and supporting  a healthy economy in Haiti.
Funding for Infrastructure  USAID allocated $98.3 million for infrastructure activities in the energy  sector, including an estimated $85.3 million from fiscal year 2010  Economic Support Fund (ESF) supplemental appropriations and $13.0  million from other sources.
subsections: section_title: The earthquake compounded the lack of access to electricity by damaging substations, distribution networks, and other components of the sector. Currently, the country’s electrical infrastructure cannot meet the needs of industries, businesses, or residents.
paragraphs: Obligated funds include both unexpended obligated balances and expenditures.
section_title: Haiti’s post-earthquake Action Plan for National Recovery and Development of Haiti (Action Plan) states that its priorities are to restore damaged power facilities, repair the electricity transmission and distribution network, and expand access to electricity in regions outside Port-au-Prince. The U.S. government’s Post- Earthquake USG Haiti Strategy Toward Renewal and Economic Opportunity (Haiti Strategy) includes a goal to improve and modernize Haiti’s electrical sector and bring affordable, reliable power to more households and businesses. USAID plans to target projects that will help make the supply of electricity more efficient and the power network more viable.
paragraphs: Status  USAID plans to rehabilitate five electrical substations in the Port-au- Prince area, provide power generation for the North Industrial Park, and  construct other power generation, transmission, and distribution facilities  for residential customers. Most of these activities are still in the planning  phase.
section_title: Selected Challenges • Haitian government capacity:
paragraphs: The electricity sector in Haiti,  which is largely government  owned, is characterized by  dramatic power shortages and  very low coverage of  electricity—with only about  12.5 percent of the population  having legal regular access to  electricity. According to State,  the government of Haiti’s public  electricity utility suffers from  inefficiencies, is poorly  maintained due to lack of  resources, and relies heavily  on subsidies and donor  funding.
section_title: • Completing energy activities as initially scheduled: USAID awarded a contract to construct a power plant for the new North Industrial Park on September 15, 2011, about 6 weeks later than planned; however, according to a USAID official the delay will not affect the opening of the park, because site work being completed by others has already delayed the opening.
paragraphs: For activities where an award has not been made, USAID planning documents include a  "procurement sensitive" cost estimate which is not shown but is included in the table total.
section_title: USAID awarded a contract to rehabilitate five electrical substations in July 2011. However, the award was protested and a “stop work” order was issued. As of November 15, 2011, work had not started.
paragraphs: Sustainability Plans  To enhance overall sustainability, USAID awarded a $10.9 million, 2-year  contract in April 2011 to help the Haiti electrical utility manage electricity  loss reduction. USAID plans to award a 3-year management contract in  early 2012 to support the operation of the North Industrial Park and other  utility operations in northern Haiti.
However, USAID planning documents state that the sustainability of the  electrical system as a whole, and particularly after the loss reduction  management contract ends, depends on, among other things, the  achievement of important legal and regulatory reforms to improve the  commercial viability of the system and provide necessary resources for  proper operations and maintenance of the electrical infrastructure.  USAID also acknowledged that the government of Haiti must take  necessary but politically challenging steps to do so.
USAID has delayed its initial  award of a contract for the  expansion of the North  Industrial Park power  generation facility from  November 2011 until April  2013 to better determine the  demand for power at the  location and the most efficient  means to provide electricity  when it is needed.
Introduction  As an island nation with depleted  natural resources, ports are crucial  to Haiti’s economic viability and  growth. However, for many years  prior to the January 2010  earthquake, Haiti’s major  international port in Port-au-Prince  had deteriorated and lacked the  capability to meet the country’s  cargo and shipping needs. The  earthquake caused significant  damage to the Port-au-Prince port,  further reducing its capabilities.
Funding for Infrastructure  USAID allocated $77.7 million in fiscal year 2010 ESF supplemental  appropriations to infrastructure activities in the ports sector.
Funding of Port Activities, as of September 30, 2011 (Dollars in millions)
Obligated funds include both unexpended obligated balances and expenditures.
section_title: Haiti’s post-earthquake Action Plan states that, as part of its overall effort to deconcentrate economic activities in Port-au-Prince, new deep water ports, including a new large-capacity port and harbor facility, need to be constructed in Haiti’s northern region. The U.S. government’s Haiti Strategy states that the United States is considering investing in the design and development of a major port on the northern coast.
paragraphs: Status  USAID is conducting a feasibility study and, depending on the results of  the study, plans to construct a new port in the Cap-Haïtien development  corridor. In addition, USAID plans smaller port rehabilitation and  construction in other areas. During our review, we visited an existing port  facility in Cap-Haïtien and a potential site in Fort-Liberte. The new port  would be less than 20 miles from the site of the North Industrial Park—a  post-earthquake public-private project scheduled to begin operation in  April 2012.
section_title: Selected Challenges • Lack of staff with relevant
section_title: technical expertise: USAID’s program in Haiti has not previously involved port construction activities. With no staff who have port construction expertise or experience, USAID will rely on (1) a private firm to conduct a feasibility study and make recommendations regarding, among other things, port design, economic feasibility, and financial viability; and (2) a public private partnership to construct a new port.
paragraphs: For activities where an award has not been made, USAID planning documents include a  "procurement sensitive" cost estimate which is not shown but is included in the table total.
section_title: • Potential funding shortfall:
paragraphs: Sustainability Plans  According to USAID’s current plans, the new port is to be constructed by a  public-private partnership and operated by private firms when completed.  These plans assume that the government of Haiti, particularly Haitian port  officials, will efficiently collect import duties and that sufficient port revenues  will be generated to fund recurring costs for port maintenance.
USAID’s current estimated cost  of constructing the northern  port is $105 million: Since  USAID has allocated only  about $68 million, the  remaining $37 million must be  obtained from other sources.  According to USAID officials,  the northern port feasibility  study includes an analysis of  financing options under a  public-private partnership to  provide the additional required  funding.
When completed, the economic viability of the port will depend on the  amount of income generated. According to USAID officials, the income is  projected to be derived from two broad sources, the growth in cargo  generated by business activity related to the planned North Industrial Park  and the increased cargo diverted from other ports to the new port as the  result of it being a modern well managed port. In addition, they stated only  one manufacturing firm is currently committed to operating in the North  Industrial Park, however discussions are underway with other possible  tenants. The economic viability of the port is one of the issues being  addressed in the feasibility study.
section_title: USAID, Haiti lacks a comprehensive, functional system for recording land RECONSTRUCTION ownership as well as an effective national cadastre. Prior to the earthquake, Introduction customary arrangements and Prior to the January 2010 knowledge characterized land earthquake, a majority of Port-au- tenure with only 40 percent of Prince’s more than 2 million landowners possessing inhabitants lived in crowded and documentation such as a legal poorly constructed housing, with title or transaction receipt. inadequate basic infrastructure and Furthermore, a large proportion unclear land tenure status. of displaced persons were renting property prior to the The earthquake destroyed earthquake—with the plots of approximately 115,000 homes and land on which they lived often severely damaged more than informally settled and 208,000, displacing over 2 million haphazardly delineated—and people. The International many will have difficulty Organization for Migration proving clear, legal tenancy estimated that, as of July 2011, due to document discrepancies over 590,000 Haitians displaced by or lack of documents. the earthquake continued to live at sites for internally displaced • Haitian government capacity: persons.
paragraphs: Developing and Building New Residential Settlements  Funding for Infrastructure  USAID allocated $55.1 million in fiscal year 2010 ESF supplemental  appropriations and other funding for the development and construction of  new residential settlements.
Other funding includes regular fiscal year appropriations.
section_title: The government of Haiti’s limited legislative, regulatory, Haiti’s post-earthquake Action Plan and institutional capacity to notes that housing is the sector manage urban development most affected by the earthquake. severely constrains the The Action Plan proposes to establishment of a viable establish new, permanent shelter sector. According to neighborhoods on sites identified USAID, the absence of a single by the Haitian government. national entity responsible for Displaced persons will first move overseeing the shelter into provisional shelters that will be provision process is the most replaced with permanent housing, important limitation. Currently, sustainable infrastructure, and the entities involved in basic services. The Action Plan managing different aspects of also states that the government shelter include the Ministries of intends to set up a security fund to Economy and Finance, Public support reconstruction activities in neighborhoods and communities. Works, Planning, Interior and Social Affairs, as well as the Similarly, the U.S. government’s Central Bank and the inter- Haiti Strategy prioritizes moving ministerial Committee for Land displaced persons to provisional shelters, providing permanent Use. housing and services, and strengthening institutional capacity and access to financing.
paragraphs: Status  USAID is planning to develop new residential settlements in the Port-au- Prince and Cap-Haïtien development corridors that will provide  approximately 15,000 households with plots of land, permanent housing,  and access to essential services. USAID will manage construction of  4,000 houses. Nongovernmental organizations will manage construction  of 11,000 houses using a combination of USAID and other funding.
Up to 12 new settlements in the  Port-au-Prince development  corridor  Development of 10,000 plots for  50,000-60,000 people and  construction of 1,500 core  houses by USAID in the Croix- des-Bouquets and Cabaret  municipalities  0.3
Award date: May 26,
Estimated end date:  September 15, 2013  $10.1  Award date for engineering and design, additional contracts will be awarded for remaining site  development.
Sustainability Plans  According to USAID’s plans, site locations are being selected in areas  where residents have access to jobs and/or transportation. USAID is  planning to fund technical assistance programs to improve the capacity  of the national government to improve urban management, and will seek  possible solutions to policy challenges such as the absence of legislation  to guide housing, land-use, and urban planning; lack of an independent  regulatory body for the construction sector; and lack of institutional  capacity in urban planning. At the local level, USAID plans to provide  technical assistance to municipalities in areas such as land use planning,  building standards, and enforcement mechanisms; and to establish  community management committees to guide community development.
USAID recognizes that the sustainability of the new settlements depends  on the ability of Haitians to pay taxes and the ability of the Haitian  government to manage and maintain infrastructure and services over the  long term. This, in turn, depends on whether the Haitian economy can  provide adequate job opportunities and whether the Haitian government  can effectively govern.
Introduction  Prior to the January 2010  earthquake, a significant portion of  the Haitian population had no  access to basic health services.  Currently, only 12 of the 63 health  networks created by the Haitian  government in the 1990s are  operational.
Funding for Infrastructure  USAID allocated $90.5 million for construction in the health sector, of  which $50.5 million is allocated from the fiscal year 2010 ESF  supplemental appropriations. An additional $40.0 million in funding from  other accounts is allocated for work on the HUEH and the National  Campus for Health Sciences.
Funding of Health Activities, as of September 30, 2011   (Dollars in millions)
section_title: The earthquake destroyed infrastructure such as hospitals, clinics, medical schools, and Ministry of Health buildings. For example, the State University Hospital (HUEH) was damaged during the earthquake and services such as surgery, and pre- and post-operation work are still being performed in temporary buildings. The earthquake also destroyed 90 percent of the State Faculty of Medicine.
paragraphs: Other funding is from the fiscal year 2010 base Global Health and Child Survival—State  appropriation.
section_title: Haiti’s post-earthquake Action Plan emphasizes rebuilding hospitals and training facilities in the earthquake-affected regions and construction of new hospitals in the department capitals. The U.S. government’s Haiti Strategy includes a 5-year goal to rebuild and reform management of public health infrastructure, including earthquake-damaged structures and clinics, dispensaries, and hospitals in 9 to 12 health networks. The Haiti Strategy also specifies that the State University Hospital will be rebuilt and fully operational in 5 years and have clearly defined responsibility for maintenance and operational costs.
paragraphs: Status  USAID is planning five construction activities in the health sector.  Although these activities are still in the planning stages, USAID began  needs assessments of health facilities in the Port-au-Prince, Cap-Haϊtien,  and Saint-Marc corridors and an environmental assessment of the HUEH  campus. The HUEH reconstruction is a joint activity between the U.S.,  French, and Haitian governments. The three governments signed a  memorandum of understanding in September 2010.
Status of USAID Health Activities, as of September 30, 2011   (Dollars in millions)
section_title: Selected Challenges • Haitian government capacity: According to USAID officials, all health planning needs to be done in coordination with the Haitian Ministry of Health, which was consumed for significant parts of 2010 and 2011 by the cholera epidemic and uncertainty about the presidential election. USAID officials are working with the Ministry of Health to identify and prioritize health facilities for repair and construction.
section_title: • USAID Haiti mission’s lack of
paragraphs: staff: USAID’s AAD indicates  that several months following  the earthquake, the health  office was extremely short  staffed with only 11 of 21  positions filled. USAID officials  also said that delays in staffing  the Haiti mission, including the  Office of Infrastructure, Energy,  and Engineering have been  challenging and have resulted  in staff responding to demands  outside of their usual areas of  responsibility.
0
Estimated award date:
Estimated end date:  For activities where an award has not been made, USAID planning documents include a  "procurement sensitive" cost estimate which is not shown but is included in the table total.
Sustainability Plans  USAID plans to make infrastructure investments only where there is a  business plan agreed to with the Haitian Ministry of Health in which the  USAID portion of operations and maintenance costs is reduced to zero at  the end of 3 to 5 years. USAID’s plans state that U.S. investments in  infrastructure will likely include some support for post-construction  operation and maintenance costs.
Introduction  Before the earthquake, Haiti  already had one of the heaviest  burdens of hunger and malnutrition  in the Western Hemisphere: 40  percent of households were  undernourished (3.8 million people)  and 30 percent of children suffered  from chronic malnutrition,  according to the U.S. government’s  Haiti Strategy. To address this  need, USAID had several food  security activities under way in  Haiti.
Funding for Infrastructure  USAID allocated $42.6 million for activities with a construction  component in the food security sector.
section_title: Agriculture generates nearly 25 percent of Haiti’s gross domestic product, employs approximately 65 percent of the population, and serves as the primary source of income in rural areas. However, the earthquake exacerbated the already significant challenges in the agricultural sector by damaging distribution centers, food processing facilities, warehouses, irrigation canals, and the Ministry of Agriculture’s Natural Resources and Rural Development headquarters. Haiti’s post- earthquake Action Plan includes five agriculture-related programs, including building irrigation networks and rural roads to open up agricultural areas. Aligned with the Haitian government’s priorities, the U.S. government’s Haiti Strategy includes a goal of agriculture sector growth in the U.S. development corridors through improvements in (1) core infrastructure and management, such as rebuilding canals; (2) on- farm productivity, such as use of commercially produced seeds; and (3) post-harvest and market access support, such as farm-to-market roads.
paragraphs: Other funding is regular fiscal year appropriations. USAID plans to provide $55.5 million during fiscal  years 2011 through 2014 for these food security activities; however, we did not include this amount  because USAID did not provide the funding data by fiscal year.
Status  USAID plans two new activities with construction components. USAID  has additional activities with construction projects in the food and  economic security sectors that began implementation before the  earthquake. However, one of these activities, the Watershed Initiative  for Natural Environmental Resources (WINNER), received fiscal year  2010 supplemental funding.
Status of USAID Food Security Activities, as of September 30, 2011   Activity  Watershed Initiative for Natural  Environmental Resources  (WINNER)  Erosion prevention, irrigation  restoration, and rebuilding and  repair of transportation  infrastructure.
Production Plus  Erosion prevention, irrigation  construction and repair, and  farm-to-market road construction  and maintenance.
section_title: Selected Challenges • Land tenure: According to
section_title: USAID officials, many large tracts of land are owned by landlords who rent land tracts to farmers. However, many landlords cannot produce proof of ownership. Uncertainty over land ownership may reduce agriculture investment in Haiti due to the risk of losing that investment. Additionally, the renting of land provides little incentive for people to invest in their farms.
section_title: • Haitian government capacity:
paragraphs: amounts are being obligated incrementally.
section_title: According to USAID’s food security AAD, the role and mission of the Haitian Ministry of Agriculture, Natural Resources, and Rural Development has not been clearly defined, causing confusion over the ministry’s policy goals. Critical policy questions of whether the ministry should be focused on strengthening food security, increasing farm income, building and maintaining infrastructure, or focusing on another priority have not been answered.
paragraphs: Sustainability Plans  USAID’s plans state that the U.S. government and other donors regularly  meet with the Haitian government and private sector to discuss progress  and reforms needed to accelerate agriculture investments in Haiti. In  addition, the Haitian government has demonstrated commitment and  leadership in agriculture, food security, and economic security program  planning and coordination, according to USAID’s planning document.
Soil Conservation Project in Bassin Zim (Central Plateau)
section_title: • Local technical capacity:
paragraphs: Poor infrastructure, few  technically skilled companies  and people, lack of a  maintenance culture, and  health-related issues all pose  challenges to successful  reconstruction in Haiti,  according to USAID officials.
Introduction  Prior to the January 2010  earthquake, much of Haiti’s justice  infrastructure, including police  stations, police training facilities,  and prisons, were in need of repair.  Many facilities were too small to  meet the needs of Haitian law  enforcement and corrections  systems. The earthquake caused  additional destruction and damage,  increasing the need to rebuild  many facilities.
Funding for Infrastructure  State allocated $45.7 million in fiscal year 2010 INCLE supplemental  funds for governance and rule of law construction activities.
section_title: Haiti’s post-earthquake Action Plan states the need to rebuild correctional facilities, build and expand police stations, and complete construction of the National Police Academy. The Department of State (State) received fiscal year 2010 supplemental funding in the International Narcotics Control and Law Enforcement (INCLE) account to meet these reconstruction needs in Haiti. In the U.S. government’s Haiti Strategy, State presents plans to use some INCLE funds for post- earthquake infrastructure rehabilitation and construction activities in the democracy and governance sector, to be managed by State’s Bureau of International Narcotics and Law Enforcement (State/INL).
paragraphs: Status  State is planning several construction activities in the governance and  rule of law sector. Some activities are under way and others are still  being planned.
section_title: Selected Challenges  Lack of staff with relevant
section_title: technical expertise: State/INL has been involved in counternarcotics programs in Haiti for decades. However, during that period, it has focused on infrastructure activities and has had no U.S. direct-hire engineers or other personnel with construction expertise on its staff. State/INL’s programs have focused on institutional capacity building, such as training Haiti’s law enforcement and corrections personnel. For its post-earthquake infrastructure activities, State/INL plans to hire (1) private firms to develop infrastructure plans, designs, and estimates for costs, schedules, and scopes of work; and (2) contractors to provide construction; and (3) personal services contractors to monitor and oversee its activities.
paragraphs: Sustainability Plans  In the January 2011 5-year Haiti Strategy, State includes plans to provide  training programs, introduce needed procurement and maintenance  systems, and establish an independent Haitian Directorate of Prisons in  an effort to achieve sustainability.
However, State acknowledges that investments in construction and  rehabilitation of infrastructure will require some degree of U.S. commitment  to support operations and maintenance costs “in the out years.”
section_title: Appendix III: Comments from the U.S. Agency for International Development
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Leslie Holen (Assistant Director),  Michael Armes (Assistant Director), Sada Aksartova, Lynn Cothern,  Rachel Girshick, Leslie Locke, and George Taylor made key contributions  to this report. Ashley Alley, Douglas Cole, Martin De Alteriis, Cheron  Green, Courtney Lafountain, Jeremy Sebest, and Jena Sinkfield provided  technical assistance.