MONITORING REPORT

CAMBODIA – KH – ECONOMIC AND SOCIAL RELAUNCH OF

NORTHWEST PROVINCES (ECOSORN) .
MR-20537.02 – 12/12/07

I. PROJECT DATA
Project Number: Responsible AIDCO:
ASIE/2004/016-793 André Chalmin
Date Financing Agreement signed: Responsible EC Delegation:
18/06/05 Delphine Brissonneau
Start date – planned: Monitor:
07/12/05 Nicolas Leroy
Start date - actual: Project Authority:
07/12/05 Ministry of Agriculture, Forestry and Fisheries
End date – planned: Sector/Subsector:
31/12/12 31120 – Agricultural development
End date - likely: Monitoring visit date:
31/12/12 From : 19/11/07 - To: 30/11/07

II. FINANCIAL DATA*

Primary commitment (project budget): € 25000000
Secondary Commitment (funds contracted): € 23407793
Funds Disbursed by the Commission: € 4931297
Expenditure Incurred by Project: € N/A
* As at: 12/12/07
III. SUMMARY OF CONCLUSIONS
1. Relevance and quality of design c
2. Efficiency of implementation to date c
3. Effectiveness to date b
4. Impact to date b
5. Potential sustainability b
Note: a = very good; b = good; c = problems; d = serious deficiencies

IV. EXPLANATORY COMMENTS

1. Relevance and quality of design.
As already noted in the first Monitoring Report (MR-20537.01) of December 2006, the project is highly
relevant and technically consistent. The implementation strategy still aims at developing integrated
interventions in three North-western provinces (area with high poverty rate) through a modular approach
combining technology adaptation; improvement of irrigation, roads and other infrastructures; better access
to credit; mines’ clearance and titling; organisational support and empowerment. The project is based on
two sets of actions: 27 important services contracts with a significant budget (over 15 million €) and a large
number of micro-projects called “Quick Implementation Projects” (QIP) for a total of less than one million
€. These micro-projects are important in terms of visibility of the action and direct contact with the local
population. The formulation and the choice of the QIP are based on a participative approach whereby the
local communities are mobilised to identify their own needs (building wells, animal raising, vocational
training and income activities for the disabled, latrines, rainwater jars, etc.). The main contract services
concern actions such as the rehabilitation of irrigation systems, construction of rural roads, promotion of
the economical sector (e.g. silk), support to micro-credit providers, implementation of mines’ risk
strategies, etc. In terms of project design most of the recommendations and remarks from the last MR
have been taken into consideration. The Logical Framework Matrix (LFM) has been simplified and the
number of outputs went down from 280 to 175, which still remains impressive. Now that all of the contracts
have been signed, some of these indicators will need to be fine-tuned. The limitation of 5.000 € for all the
service contracts is now about 10.000 €, which give more flexibility to the project. Meanwhile, the remark
concerning the fact that the design of the project does not stress enough the importance of institutional
strengthening for future sustainability of the expected result remains valid.

2. Efficiency of implementation to date.

Since the last monitoring report a year ago, some improvements in terms of implementation have been
made. One of the main achievements concerns the respect of deadline of 15 November 2007 for
contracting all the projects (based on the EC contractual rule of the decision date + 3 years). The project
and the EC delegation in Thailand have worked closely together to contract them on time, with a result of
92% engaged. So far, 185 QIPs have been implemented, while the 27 main service contracts have just
been signed (none of them have yet been started); thus, this monitoring (as the one from last year) still

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focuses only on the QIPs. The previous interruption of cash-flow, due to certain non-eligible expenses
highlighted by the first audit, has not re-occurred. Since then, five audits have been organised without
revealing any serious problems. However, the main problem remains. The implementation of the project is
supposed to be carried out by a strong and numerous Project Task Force (PTF) (four offices, a staff of
over 110 people), while so far the PTF is only in charge of the small direct projects (the QIP for a budget
below one million euro). Thus the 27 main service contracts are still centralised in the delegation in
Thailand where mainly one person is in charge of following the contracting process for all the contracts
(+/-15 million €). Even if collaboration between the staff of the delegation and the project was always
good, this distinction between centralised activities in Bangkok and the PTF is strongly hampering the
efficiency of the project and has created many tensions inside the staff of PTF. An important meeting is
planned for mid-December to solve this problem, while the EC has already decided to transfer the follow-
up of the project from the delegation in Thailand to its representation office in Cambodia. An extra
challenge for the future is the fact that almost all the international Technical Assistant contracts will be
coming to an end (+/- in a year). As soon as the new task and responsibilities of the PTF will be defined, a
clear hand-over strategy will therefore need to be addressed.

3. Effectiveness to date.
Since last year, no new implementation bottle-necks occurred and almost all the services contracts have
been concluded before the deadline of 15 November. These two elements mark a positive evolution
towards the achievement of the project purpose. Meanwhile, since none of the major service contracts
have yet started, the effectiveness to date is still potential. The follow-up of the purpose indicators in the
forthcoming six months will give a better view. As predicted in the last MR, one agriculture year has been
lost since the activities did not start earlier while another one may also be lost if the implementation suffers
any further delay.

4. Impact to date.
As mentioned last year, it is still too early in the project implementation stage to assess the impact of the
project produced to date. Meanwhile, considering the quality of its design, the project has the potential to
have a positive focused impact on poverty in target areas.

5. Potential sustainability.
The project is well embedded in local structures with satisfactory collaboration with the local government
even if their attendance to all the meetings is below expectation (the question of allowance remains a
problem). For the QIP, gender equality is taken into consideration in a satisfactory way. Regarding the
sustainability of agricultural activities fostered by the project, a concept paper on the value chain has been
developed in order to identify the potential for some economical “filiere” (vegetables, fruits, mushrooms).
As regards vocational training (e.g. TV repairman, hairdresser, sewing, animal rising), since the trainees
also received some equipment, there is a direct possibility for them to start their own activities. So far, the
exit strategy still need to be better defined including the hand over strategy to the national counterpart.
The question of future maintenance of the infrastructures built by the project also needs to be addressed.

V. KEY OBSERVATIONS, ACTION(S) RECOMMENDED AND BY WHOM (IN ORDER OF PRIORITY)

This project arrives at a critical turning point where it becomes imperative to clarify the role and
responsibilities of the PTS versus EC delegation as regards the follow-up of the main service contracts
implementation. Otherwise, each contract will be implemented as an independent project and the
numerous PTF staff will not be able to play their role, while the work of the contractors will not be followed.
To EC DEL:
Priority 1: During the up-coming meeting of mid-December, clarify the responsibilities of the PTF
(monitoring and follow-up) towards the 27 main service contracts. Priority 2: Ask for another monitoring
mission in 6 months when all the main service contracts will have undergone at least several months of
activity.
To Project Management:
Priority 1: Based on the new repartition of tasks (if agreed upon during the December meeting), organise
some training for the PTF staff corresponding to their new function (more monitoring oriented)
Priority 2: organise one meeting with all the different contractors to clarify with them how the PTF will
follow their activities and the type of support the PTF can offer. Priority 3: for some small QIPs, consider
the possibility to not disburse the money 50% at the beginning and 50% at the end, but in a more
progressive way, i.e.: 50%, 30%, and 20% in order not to put the QIP at risk of a cash-flow problem.
Priority 4: since all the contracts have now been signed, finalise the fine-tuning of LFM indicators
National Authorities/EC Delegation:
Priority 1: Give a clear answer to the project on the procedure to obtain the taxes exemption on all the
services contracts.

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