Evaluation report : Santa Cruz municipal infrastructure program

480 Title II Food for Work (FFW) support to the Municipal Infrastructure Program in Santa Cruz, Bolivia. The program, an innovative response to the need to construct basic urban infrastructure, uses Title II cash and commodities to provide construction jobs to the unemployed. Fundamental to the program is that neighborhood residents pay the majority of the costs for residential pavement and sewage outlets, with the understanding that their property taxes will not be raised while they are making these payments. The private sector finances the remaining costs of main residential avenues and drainage canals, together with additional infrastructure that is beyond the means of neighborhood residents. FFW has played an important role in providing momentum to the start up of the Municipal Infrastructure Program. Food has been an incentive to the construction companies to contract unskilled and unemployed workers. Moreover, USAID participation in the Program has provided an element of confidence to neighborhood residents and participating institutions alike. One important problem has been the slow start-up and initiation of infrastructure projects, due principally to uncommonly heavy rains. Neighborhood residents were asked to begin payments immediately upon initiation of construction, and when long delays stopped construction, these residents began to complain. Another problem was the high start-up cost of construction and the first year payments by residents which reflected these high costs. When the costs first appeared on the water bills, they were unexpectedly high to many, and to some, impossible to meet. One innovative construction company tried to address these problems by talking and working closely with the neighborhood residents, assuring them that construction would continue. The company was able to reduce the late payments from 80% to 15% over a 7-month period. Nonetheless, many neighborhood residents continued to delay payments and to pressure the Municipal Government to reprogram their payments and even to find additional financing. Even stronger pressure has been applied to abolish the system of neighborhood resident repayments. Consequently, the Municipal Government is reevaluating the Program"s financial aspects. Key conclusions and recommendations are as follows. (1) There are 332,340 very poor people living outside the 4th ring of Santa Cruz without paved streets, sewage, drainage, hygienic facilities, clean water, or adequate housing. The FFW Program is not adequately reaching these groups. A.I.D. should continue FFW into 1993, until the projects started in 1992 are completed, and then refocus the Title II food and monetary program on the marginal groups outside the 4th ring. (2) Control and monitoring of food distribution and delivery to construction companies and workers have been tightened and adjusted; additional pressure will only add unnecessary burden. On the other hand, a fixed and limited number of rations per worker per project must be defined. (3) There is a serious question whether Santa Cruz"s municipal revolving fund will cover program costs in view of high construction costs and an overly burdensome administrative apparatus. It is recommended that experts in municipal infrastructure, finance, and low-cost urban pavement construction be hired to reorganize the fund. (3) There are too many organizations involved in the execution of the program. The number of organizations should be reduced. (4) Despite demands that it increase its staff, the Fondo de Desarrollo Municipal, which is running the Program, should try to meet program demands without expanding. Contracting out many of its functions and turning the promotion function over to neighborhood councils could solve this problem.