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LESSONS:

Water Supply and Sanitation Project

sector: Water and Other Urban Infrastructure and Services | country: Micronesia, Federated States of

1. In FSM, the readiness of essential legislative support and project cofinancing by the state and national governments should be confirmed at project appraisal or the loan negotiation stage to avoid implementation delays.

2. Land acquisition remains a difficult challenge in all states. Future projects must attempt to resolve such issues at appraisal to minimize land issues. Where land acquisition is necessary, the acquisition process should be established early at appraisal stage.

3. For works such as wells, reservoirs, water tanks, and other capital assets constructed on land belonging to third parties, such transactions should be properly documented with lease registers and approved minutes. These should be reflected in the annual financial statements of the utility corporations. The financial statements should clearly explain the procedure in dealing with leases to ensure fair valuation of the assets.

4. Necessary design changes and construction variations with major cost implications should be discussed and agreed with ADB early to avoid implementation delays.

5. Where a single utility corporation (UC) is responsible for both water and power, the UC must maintain separate records for the water supply operations and power operations to assist in cost recovery.

6. A review of variations for the expansion of distribution systems should, in future, include the legal requirements for connection, particularly where the extension involves use of leased land.

7. Comprehensive connection programs should be developed to include targeted areas, businesses, compliance and enforcement, connection maintenance, and connection targets. Such programs are especially relevant in places such as Chuuk. An associated public education and awareness program should be developed to improve community understanding of the benefits of connection, availability of lifeline block supplies, and payment methods. Customer data and performance indicators must be reported properly to the management in a timely manner to allow necessary adjustments in operation and maintenance, budgets, and connection programs; and to improve administration and customer relations.

8. Establishment of suitable and appropriate indicators is important to properly monitor and evaluate the effectiveness of the Project during implementation. These should include water quality baseline data to evaluate improvements in quality under the Project.

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