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Source: World Bank
30 June 2008

Gaza Emergency Water Project - Additional Financing

June 2008 - Since beginning operations in the West Bank & Gaza in 1994, the World Bank has committed a significant part of its development portfolio to develop Palestinian water and wastewater services. In 1996, the World Bank financed the first Gaza Water and Sanitation Services Improvement Project (GWSSIP) which was completed in 2001. The main objectives of this project were to improve the provision of water and sanitation services in terms of quality, quantity, and management and to explore appropriate institutional setups for the water service provision. By the closing of the GWSSIP, the municipalities of Gaza had agreed to establish the Coastal Municipalities Water Utility (CMWU). The Gaza Emergency Water Project (GEWP), launched in June 2005, was designed as a follow on project building on the success of the GWSSIP with a grant of US$ 20.0 million implemented by the recently established CMWU. Moreover and as a renewal of its commitment, in April 2008 the World Bank approved additional financing of US$ 5.0 million to GEWP in order to be able to finance the overrun costs associated with provisions of water and wastewater services delivery in Gaza; and strengthen the capacity of the newly established CMWU. The Gaza Emergency Water Project and its additional financing development objectives are to:

1. Improve the provision of adequate water and wastewater services in Gaza; and
2. Functionally, strengthen the newly established Coastal Municipalities Water Utility as independent well-run modern utility.
3. In addition, the project has a secondary objective to strengthen the PWA’s capacity to assume sector regulatory functions

The GEWP budget is allocated to finance four components including i) Management Contract (MC) fee; ii) Capital and Operating Investment Fund (COIF); Technical Assistance to support the newly established CMWU; and iv) Capacity Building to strengthen the PWA to play its role as the regulator of the Palestinian water sector. The management Contract was implemented by an international Operator which was entrusted the management of the COIF. The CMWU has appointed a multidisciplinary Project Management Unit (PMU) to oversee the implementation of the MC. The Management Contract has ended and the PMU will benefit from the capacity built in the local Operator team to continue the implementation of the Additional Financing and all remaining tasks under the original GEWP.

In terms of achievements, despite the extremely difficult conditions in Gaza, water and wastewater services continue to be provided. More than 50% of the water production wells have been rehabilitated, a significant number of wells newly drilled, the water systems almost 100% disinfected, old service connections and more than 30,000 meters and old asbestos main pipes were replaced, electro-mechanical equipment and sewer lines are regularly maintained, and the existing wastewater treatment facilities rehabilitated. The CMWU is also taking a leading role in dealing with emergencies resulting from Israeli military incursions, as well as in developing and implementing an Emergency Operational Plan for the North Gaza Wastewater Treatment Plant, in order to mitigate potential flooding risks associated with the accumulation of partially wastewater in Beit Lahiya, North Gaza.

Due to the political unrest in Gaza, the achievement of some institutional objectives, notably those related to the CMWU restructuring were delayed. The situation in Gaza has restricted the ability of international personnel to enter Gaza. However, significant progress has been made, most notably the  finalization of the CMWU organization structure, renting and furnishing the CMWU regional offices, finalization of the utility staff skills assessment, finalization of the utility financial manual, finalization of the water and wastewater billing system, opening the utility bank account, ongoing implementation of the customer services information system and ongoing procurement of the utility financial system. Moreover, the CMWU announced their readiness to start issuing the water bills for some areas from June 1, 2008. The entire Gaza region will be covered by October 2008. Despite it’s the fact that the CMWU is very new, it has attracted the attention of donors as a capable institution. More than US$ 50.0 million were pledged from different donors to finance parallel operations and investment projects in the water sector in Gaza.

Despite these project accomplishments since the project started in June 2005, the non-payment of staff salaries in 2006 and 2007 and the deteriorating economic situation in Gaza have adversely affected revenue collection and led to commercial losses in the distribution system. As a response, the CMWU Board of Directors has decided to transfer the billing and collection functions from the municipalities to the CMWU and to create an incentive-based system to motivate staff to improve collection efficiency. These measures, along with the resumption of payment of salaries to civil servants in the second half of 2007, are expected to improve the collection rates for water services in Gaza.

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