ASIAN DEVELOPMENT BANK PPA: INO 22066

PROJECT PERFORMANCE AUDIT REPORT

ON THE

SECOND LAND RESOURCE EVALUATION AND PLANNING PROJECT

(Loan 1099-INO)

IN

INDONESIA

August 2002

CURRENCY EQUIVALENTS

Currency Unit - Rupiah (Rp)

At Appraisal (March 1991)

At Project Completion (May 1999)

At Operations Evaluation (May 2002)

Rp1,000 = $0.510 $0.120 $0.107 $1.00 = Rp1,960 Rp8,325 Rp9,340

ABBREVIATIONS

ADB - Asian Development Bank Bakosurtanal - Badan Koordinasi Survei dan Pemetaan Nasional (National

Coordinating Agency for Surveys and Mapping) Bappeda - Badan Perencanaan Pembangunan Daerah (Provincial or District

Development Planning Agency) BAPPENAS - Badan Perencanaan Pembangunan Nasional (National Development

Planning Agency) BPN - Badan Pertanahan Nasional (National Land Agency) BPTP - Balai Proteksi Tanaman Perkebunan (Institute for Agricultural Technology Assessment) CSAR - Center for Soil and Agroclimate Research (Puslittanak) DGRD - Directorate General of Regional Development (Bangda) EA - executing agency GIS - geographic information system GLRIS - geographic land resource information system ha - hectare ILUD - Indonesia Land Use Database LREP - Land Resource Evaluation and Planning (Project) OEM - Operations Evaluation Mission PCR - project completion report PCRM - Project Completion Report Mission RePPProT - Regional Physical Planning Program for Transmigration TA - technical assistance

NOTES

(i) Prior to 2000, the fiscal year (FY) of the Government ended on 31 March. For 2000, the FY covered 1 April to 31 December; for 2001 onward, the FY covers 1 January to 31 December.

(ii) In this report, “$” refers to US dollars.

Operations Evaluation Department, PE-597

CONTENTS Page

BASIC DATA ii EXECUTIVE SUMMARY iii MAP v

I. BACKGROUND 1 A. Rationale 1 B. Formulation 1 C. Purpose and Outputs 1 D. Cost, Financing, and Executing Arrangements 2 E. Completion and Self-Evaluation 2 F. Operations Evaluation 2

II. PLANNING AND IMPLEMENTATION PERFORMANCE 2 A. Formulation and Design 2 B. Achievement of Outputs 3 C. Cost and Scheduling 4 D. Procurement and Construction 4 E. Organization and Management 5

III. ACHIEVEMENT OF PROJECT PURPOSE 5 A. Operational Performance 5 B. Performance of Operating Entities 8 C. Efficiency and Cost-Effectiveness 9 D. Sustainability 10 E. Other Development Impacts 10

IV. OVERALL ASSESSMENT 11 A. Relevance 11 B. Efficacy 11 C. Cost-Effectiveness 11 D. Sustainability 12 E. Institutional Development and Other Impacts 12 F. Overall Project Rating 12 G. Assessment of ADB and Borrower Performance 12

V. ISSUES, LESSONS, AND FOLLOW-UP ACTIONS 13 A. Key Issues for the Future 13 B. Lessons Identified 15 C. Follow-Up Actions 16

APPENDIXES 1. Project Accomplishments 18 2. Summary of Project Costs 25 3. Compliance with Loan Covenants 27

BASIC DATA Second Land Resource Evaluation and Planning Project (Loan 1099-INO)

Project Preparation/Institution Building TA No.

TA Project Name

Type

Person-Months

Amount

Approval Date

1195 Second Land Resource Evaluation and Planning

PPTA 20 $323,000 10 Aug 1989

Key Project Data ($ million)

As per ADB Loan Documents

Actual

Total Project Cost 95.0 83.7 Foreign Exchange Cost 52.0 48.3 Local Currency Cost 43.0 35.4 ADB Loan Amount/Utilization 57.0 52.4 ADB Loan Amount/Cancellation 4.6

Key Dates Expected Actual Appraisal 11–22 March 1991Loan Negotiations 22–23 August 1991Board Approval 19 September 1991Loan Agreement 14 November 1991Loan Effectiveness 12 February 1992 28 January 1992Project Completion 31 December 1996 31 March 1998Loan Closing 30 June 1997 5 June 2000Months (effectiveness to completion) 59 74 Borrower Republic of Indonesia Executing Agencies National Coordinating Agency for Surveys and

Mapping National Land Agency Center for Soil and Agroclimate Research Directorate General of Regional Development

Mission Data Type of Mission No. of Missions No. of Person-Days Appraisal 1 36 Project Administration Review 5 99 Midterm Review 1 60 Project Completion 1 40 Operations Evaluation1 1 60

ADB = Asian Development Bank, PPTA = project preparatory technical assistance, TA = technical assistance. 1 The Operations Evaluation Mission comprised T. Kondo, Senior Evaluation Specialist (Mission Leader); J. Cook

(International Consultant); I. Afwan (Domestic Consultant); and A. Anabo, Senior Evaluation Analyst (Mission Member).

EXECUTIVE SUMMARY

The Second Land Resource Evaluation and Planning Project (LREP2) was intended to increase institutional capacity in three key government mapping agencies and to improve physical planning processes. Its purpose was to enhance the planning and management of Indonesia’s land resources in the 18 Indonesian provinces that had not been assisted under its predecessor (LREP1). While some of the problems faced under LREP1 were taken into account in the design of LREP2, the need for phasing and the problems of map distribution and cost recovery by the government mapping agencies were not adequately addressed.

LREP2 was implemented as planned. Mapping at 1:50,000 was completed on 3.8 million hectares of priority areas, equivalent to 3% of Indonesia’s land area excluding Sumatra, which was covered by LREP1. Systems were developed to allow extension of digital thematic mapping to other areas. Delays in the development of base mapping by the National Coordinating Agency for Surveys and Mapping (Bakosurtanal), the lead executing agency (EA), initially caused the other two central EAs—the National Land Agency (BPN) and the Center for Soil and Agroclimate Research to develop their own base maps, resulting in duplication and waste of resources. Nevertheless, standard Bakosurtanal base mapping was ultimately distributed and used.

LREP2 was completed in March 1998, 15 months behind schedule. The total project cost was $83.7 million, 12% below the appraisal estimate of $95.0 million. The Asian Development Bank loan amount was $52.4 million, net of cancellation of $4.6 million.

Technical assistance inputs through the project feasibility study were generally satisfactory. The study highlighted a number of key issues based on the experience gained with LREP1, but did not fully provide solutions to the key issues of capacity in the provinces, or data distribution and marketing.

LREP2’s purpose was not clearly defined at appraisal and it is therefore difficult to evaluate it against expected outcomes. The capacity to undertake digital mapping for a variety of applications has increased in the central EAs and some of the provincial agencies. Acceptance of and reliance on digital mapping as a basis for physical planning is now well established in many sectors. Provincial Development Planning Agency (Bappeda) staff attribute their confidence and competence largely to the training and experience provided under LREP1 and LREP2. Use of standard Bakosurtanal base mapping is now widespread, though a number of agencies are still developing their own mapping due to issues of scale, accuracy, or availability of Bakosurtanal data. Technical outputs appear to have been reasonably cost effective, but when the project cost is compared with the limited outcomes on the ground, LREP2 is considered to have represented less than efficient use of national resources.

LREP2 was relatively weak in establishing sustainable capacity in the provinces. Under the national decentralization program, responsibility for physical planning has now passed to the districts, where LREP2 had little impact. While some provincial Bappeda offices have maintained reasonable capacity, others have allowed it to decline as equipment becomes obsolete and staff leave. Even where capacity has been maintained, most of the work on mapping and geographic information system (GIS) development is now undertaken by consultants. Sustainability of project outcomes in the provincial offices of BPN is limited, due mainly to lack of funding for equipment and training.

Data and map availability remains limited, though the situation has improved since project commencement. The 18 provincial data centers established under LREP2, that were

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intended to improve access, closed at—or shortly after—project completion. While some provinces are developing electronic data centers which should improve access in the future, hard copy and digital maps are difficult to obtain in the provinces. Although the improved standard of data and mapping resulting from LREP2 is likely to have enhanced land resource planning and management, specific examples are difficult to identify. Overall, LREP2 is considered to have been partly successful, confirming the judgment made in the project completion report.

Issues which the mapping and GIS sector will need to address in the future include (i) how to assist the districts to develop their physical planning capacity and capability; (ii) how to improve access to hard copy and digital maps and data, both in Jakarta and in the provinces; and (iii) how to improve data management, integration, and quality in the project EAs and in other data providers.

A number of lessons were learned during project implementation, including (i) the need to fully incorporate lessons from earlier or ongoing projects into the design; (ii) the desirability of a phased approach for projects where the outputs from one component are to be inputs in other components, in order to avoid delay to the latter; (iii) the need to define the mechanisms for extending pilot activities to full-scale implementation; (iv) the need to establish systems for upgrading and replacing equipment, and for ongoing staff training; (v) the difficulty of introducing major changes in the Indonesian bureaucracy (in this case with respect to cost recovery and data marketing); and (vi) the complexities that result from multiple EAs.

Digital mapping and GIS have the capacity to further enhance physical planning and land resource development in future. This will require close collaboration between the project EAs and other data providers. Further analysis of the market for data is warranted, followed by the establishment of systems in provinces and major urban centers to market and distribute maps and GIS data. Work will be required to develop reasonably secure systems for digital data transfer.

One of the major challenges for the future is how to develop physical planning capacity and capability in the districts. A number of models for this may be considered, but in many cases, one building on the approach of LREP2 will be appropriate. This would involve the provincial Bappedas providing coordination and technical services to the district planning offices. Other models, with districts developing their own skills and capacity, would also be feasible for the more affluent districts.

I. BACKGROUND

A. Rationale

1. Until the 1970s, land resource evaluation and planning were given little attention in Indonesia. This led to unplanned exploitation of the country’s land resources, including large-scale clearing of forests to meet the increasing demands of agricultural settlement and production. Intensive cultivation of critical watersheds in Java was leading to soil erosion and the siltation of rivers and reservoirs. Policy guidelines during the preparation of the national development plan Repelita IV (FY1984/85–FY1988/89), stressed the need to prepare land use plans and develop accurate and up-to-date databases for effective planning. Repelita V (FY1989/90–FY1993/94) emphasized the need to improve database and physical planning systems to ensure the systematic and efficient development of Indonesia’s land resources. Land use planning and decision-making were constrained by the lack of accessible data, inadequate coordination between agencies, and limited physical planning capability. The Second Land Resource Evaluation and Planning Project (LREP2) was intended to facilitate rational resource utilization among competing land uses and limit further environmental degradation.

B. Formulation

2. In 1983, the Government of Indonesia requested Asian Development Bank (ADB) assistance for land resource evaluation and planning. ADB approved a project preparatory technical assistance (TA),1 which resulted in a loan to finance the Land Resource Evaluation and Planning Project (LREP1)2 covering Sumatra’s eight provinces. Based on the experience gained under LREP1, the Government requested ADB assistance in 1988 to extend project activities. Project preparatory TA3 consultants recommended assistance to 15 additional provinces (later expanded at the request of the Government to all 18 provinces not covered under LREP1) and the upgrading of national institutional capability. Based on the consultants’ report, the appraisal mission’s findings, and discussions with the Government and representatives of funding agencies, LREP2 was formulated.4

C. Purpose and Outputs

3. The objectives of LREP2 were to (i) extend the geographic information system (GIS) at national and provincial levels; and (ii) improve physical planning processes, natural resource management, and the use of land resources. LREP2 had four components that aimed at strengthening: (i) the national geographic land resource information system (GLRIS); (ii) land use mapping capability; (iii) soil resource mapping capability; and (iv) provincial physical planning capability. These components involved the provision of (i) buildings for operational offices, data storage, and laboratories; (ii) aerial photography, and radar and satellite imagery; (iii) compatible hardware and software platforms and image analysis and mapping equipment; (iv) consulting services to assist in training and implementation; and (v) local and overseas training.

1 ADB. 1983. Technical Assistance to the Republic of Indonesia for the Preparation of the Land Resource Evaluation

and Planning Project. Manila. 2 ADB. 1985. Report and Recommendation of the President on the Proposed Loan to the Republic of Indonesia for

the Land Resource Evaluation and Planning Project. Manila. 3 ADB. 1989. Technical Assistance to the Republic of Indonesia for the Preparation of the Second Land Resource

Evaluation and Planning Project. Manila. 4 ADB. 1991. Report and Recommendation of the President on the Proposed Loan to the Republic of Indonesia for

the Second Land Resource Evaluation and Planning Project in Indonesia. Manila.

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D. Cost, Financing, and Executing Arrangements

4. Project cost was estimated at $95.0 million, including $52.0 million in foreign currency. ADB was to finance $57.0 million ($52.0 million in foreign currency and $5.0 million in local currency) out of its ordinary capital resources, with the Government funding the balance.

5. There were four executing agencies (EAs): (i) the National Coordinating Agency for Surveys and Mapping (Bakosurtanal) for the GLRIS; (ii) the National Land Agency (BPN) for land use mapping; (iii) the Center for Soil and Agroclimate Research (CSAR) within the Ministry of Agriculture for soil resource mapping; and (iv) the Directorate General of Regional Development (DGRD) within the Ministry of Home Affairs for the physical planning component. Much of the responsibility for implementation of the land use mapping and physical planning components was expected to devolve to the provincial offices of BPN and the Provincial Development Planning Agencies (Bappedas), respectively. At the national level, interagency coordination and monitoring was to be undertaken by the National Development Planning Agency (BAPPENAS) assisted by Bakosurtanal, where the project management office was located. Project implementation units were established in the other three EAs.

E. Completion and Self-Evaluation

6. LREP2 was completed in March 1998, 15 months behind schedule. An ADB Project Completion Review Mission (PCRM) visited Indonesia in April–May 1999 and prepared a report that contained useful analysis and sound recommendations. The PCRM concluded that LREP2 was partly successful,5 based on EAs’ project completion reports (PCRs) prepared for each component and consultation with the EAs. LREP2 satisfactorily delivered equipment, software, and facility improvements and provided extensive staff training. These have enhanced the capacity of the EAs and Bappedas to undertake GIS-based land resource evaluation and planning. However, physical accomplishments at completion were often below appraisal expectations in terms of quantity or quality. The PCRM made several recommendations to enhance project impact, many of which have been implemented. A number of relevant lessons were drawn from project experience. They were mainly technical in nature, and did not fully reflect the range of institutional issues encountered.

F. Operations Evaluation

7. This report presents the findings of an Operations Evaluation Mission (OEM) that visited Indonesia in April–May 2002. It assesses LREP2's effectiveness in achieving its objectives and generating sustainable benefits. It is based on a review of the PCR, appraisal report, and material in ADB files, and on discussions with the EAs, concerned government agencies in seven provinces, and ADB staff. The OEM also interviewed a number of private and public sector users of LREP2 outputs. Comments from concerned departments and offices in ADB and the EAs were taken into consideration in finalizing this report.

II. PLANNING AND IMPLEMENTATION PERFORMANCE

A. Formulation and Design

8. LREP2 commenced before project frameworks became mandatory for ADB-funded projects. This contributed, perhaps, to a lack of analysis of intended outcomes (purpose and goal) and of their links to project outputs. It resulted in a focus on production rather than on institutional capacity, sustainability, and outcomes on the ground. Project design documents 5 Based on the three-category rating scale then in use of generally successful, partly successful, and unsuccessful.

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contained limited institutional analysis and underestimated the difficulty of achieving institutional change, e.g., to a more open and commercial approach to map distribution. Project design correctly identified the need for a phased approach, particularly in relation to the appointment of consultants and the production of base mapping by Bakosurtanal. However, the solutions proposed (such as advance action to recruit Bakosurtanal consultants) proved to be inadequate and delivery of base mapping was delayed. The design of LREP2 coincided with the completion of LREP1, and the lessons learned during LREP1 could have been adopted by the designers in relation to (i) the need for more formal phasing, and (ii) the problems relating to commitment to LREP2 objectives by the Bappedas and the resulting sustainability of the provincial data centers.6 While it was expected that the EAs would establish cost-recovery mechanisms within 2 years, in practice the legal basis for such fees has yet to be established, except in Bakosurtanal. The design did not examine this issue in sufficient detail to allow practical solutions to be developed.

B. Achievement of Outputs

1. Part A: Strengthening the National Geographic Land Resource Information System

9. Bakosurtanal was responsible for Part A and for overall LREP2 coordination (in association with BAPPENAS). Its main initial task was to acquire imagery and prepare base mapping for the other two main map production EAs, BPN, and CSAR to use. This task was accomplished but took substantially longer than anticipated. Aerial photography or radar imaging was completed on a total of 3.8 million hectares (ha) of priority areas (around 3% of Indonesia’s total land area excluding Sumatra). Photomaps and 1:50,000 digital base maps were prepared. Delays stemmed from (i) a prolonged tendering process, (ii) longer than expected completion time of aerial photography due to the scattered priority areas, (iii) a change in methodology to add land contour to the base maps, and (iv) slow digitizing due to limited staff capacity (PCR, para. 14). The late fielding of consultants was also a factor. The delay led the other EAs to develop their own base maps, resulting in duplication of effort and waste. Eventually, both BPN and CSAR started using Bakosurtanal base maps and achieved successful data integration. The extent of completion of planned outputs for all components is summarized in Appendix 1.

10. The other main task under Part A was the development of cataloguing systems and user services at the other national EAs and in the Bappedas. This was achieved in the three national-level EAs.

2. Part B: Strengthening Land Use Mapping Capability

11. BPN completed its land use mapping task on LREP2’s priority areas, except in East and West Kalimantan. The approach, based on air photo interpretation with ground truthing, represented a significant step forward for BPN, which had previously relied on ground surveys. While consultant appointment was delayed (in common with other components) the impact was least severe in BPN since the systems for digital mapping were already established. BPN staff consider that LREP2 sequencing (e.g., of consultant appointment, equipment procurement, and training) resulted in operational problems. These were exacerbated by frequent changes of senior staff in the project implementation unit, with four managers in 5 years. BPN developed the Indonesia Land Use Database (ILUD) under LREP2 and used it to produce land suitability maps. It can also produce spatial land use management plans similar to those produced by the 6 The project performance audit report for LREP1 (para. 20) noted that: “The implementation of LREP1 components

should have been phased over time rather than started simultaneously. …. Land evaluation and physical planning activities in the provinces should have started in year three”.

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Bappedas. BPN was supposed to update its land use maps using information from new satellite imagery acquired under LREP2. By project completion, land use maps were still largely the digitized version of Regional Physical Planning Program for Transmigration (RePPProt) maps with minor updating through local field surveys, due partly to lack of clarity at design as to which agency was to be responsible for this output.

3. Part C: Strengthening Soil Resource Mapping Capability

12. Soil and land suitability maps were prepared for the priority areas. These have been useful in the planning activities of the local governments in those areas. Due to the late delivery of base maps by Bakosurtanal, CSAR used its own digitized base maps for some areas. Thus transfer of soils data to Bakosurtanal’s base maps was not possible—but this was finally rectified in 1997. Identification of soil types was completed but correlation activities (such as grouping of soil samples from different sites according to, for instance, specific purpose) have continued. The land evaluation computer system—the software introduced under LREP1 for matching site and soil characteristics with specific crop requirements—was replaced by the automated land evaluation system introduced under LREP2. Crop suitability maps at a scale of 1:50,000 were completed for the priority areas. The soil stations at Maros and Yogyakarta were upgraded with the construction and rehabilitation of laboratories and office buildings as well as the provision of necessary equipment and laboratory materials. By the time of the OEM, the soil stations had been transferred to the Institute for Agricultural Technology Assessment (BPTP) of the Agency for Agricultural Research and Development.

4. Part D: Strengthening Provincial Physical Planning Capability

13. At project completion, land zoning and policy option maps based on RePPProt maps had been completed for around 62% of the target area. Several Bappedas commented on the inadequate capacity of the consultants appointed to the regions in vector-based digital mapping. This led to low levels of technology transfer to the Bappedas. The provincial data centers were expected to be a one-stop shop for spatial and land resource data in the provinces. Although the centers were established, they stopped operating after project completion, with the staff and equipment transferred to other Bappeda units.

C. Cost and Scheduling

14. The project cost totaled $84.0 million compared with $95.0 million estimated at appraisal (Appendix 2), with most savings resulting from lower than expected expenditure under Part D. ADB financed $49.0 million and $4.0 million of foreign and local currency costs, respectively. The Government funded the balance of $31.0 million. LREP2 was to be implemented over 5 years from January 1992 to December 1996, but was actually completed in March 1998. Delays resulted from a number of project-specific factors outlined in paras. 9 and 15, as well as from the 1997 financial crisis and resulting security problems in many parts of the country. Loan cancellation was $4.6 million.

D. Procurement and Construction

15. Delays in consultant recruitment for all four components ranged from 6 to 15 months. They were attributable to the longer time needed to invite proposals and for consultant evaluation. Actual total consulting inputs were higher than expected at appraisal due to the need to undertake additional tasks not included in the original terms of reference, such as the digitizing of base maps by BPN, CSAR, and the Bappedas. The delayed delivery of base maps coupled with the rapid changes in computer technology and trouble shooting for equipment led

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to a longer than expected implementation period and a need for additional consulting inputs. However, the Project Management Office satisfactorily coordinated the procurement of aerial photographs (including pre-project photography on 2 million ha), satellite/radar imaging, and the provision of training and equipment. Procurement experienced a number of difficulties including (i) delayed release of funds and the need to complete government expenditures within a particular budget year, (ii) inadequate understanding of ADB’s procurement guidelines and procedures by EA staff, and (iii) lack of flexibility due to a centralized procurement system.

E. Organization and Management

16. The large number of EAs complicated coordination. Coordination activities undertaken by BAPPENAS were not adequately implemented due to the complexity of the implementation arrangements. Implementation consultants were retained for a total of 1,644 person-months, including international inputs of 937 months, 20% more than planned. They were mainly employed for systems development and training, with most performing well. However, under Part D, the GIS skills of the team were limited, resulting in a slow start. The team leader for Part C was replaced at the request of CSAR as the consultant lacked the qualifications needed to effectively carry out his terms of reference. Field interviews indicated that the greatest impact of LREP2 was in strengthening the capability of staff at the government agencies involved, particularly in the Bappedas. As a result of the training programs under LREP2, staff increased their understanding and appreciation of maps, and developed confidence in performing their tasks. A problem mentioned by two major training providers to LREP2 was that over 20% of trainees did not to meet course entry requirements. Some Bappedas were reported to have sent low-caliber staff or older people without computing skills.

17. Of LREP2’s 18 loan covenants, three were only partly complied with (Appendix 3). In relation to the covenant on access to information, the quality and availability of data from Bakosurtanal, BPN, and CSAR still need improvement. Only Bakosurtanal and a few Bappedas have established a legal basis to comply with the covenant relating to fees and charges for the sale of data. The covenant on the preparation of annual monitoring and evaluation reports for 5 years after project completion was partly complied with as the reports after completion were not submitted to ADB.

III. ACHIEVEMENT OF PROJECT PURPOSE

A. Operational Performance

1. Map Production and Use

18. The major project outputs—the aerial photography, orthophotomaps,7 and 1:50,000 topo-graphic and thematic maps—have proved to be of limited use in most areas. The prioritization or “hotspot” areas that were mapped provided coverage of around 3.8 million ha out of an area of 147 million ha for the project provinces. In the seven provinces visited by the OEM, the 1:50,000 maps were widely used only in East Kalimantan. In Bali, Java, Nusa Tenggara, and South Maluku, the main Bakosurtanal topographic map series is on a 1:25,000 scale. This is considered to be more useful for semi-detailed planning by the Bappedas at both provincial and district levels. In more developed areas, such as Bali, Yogyakarta, and West Java, substantial mapping at scales of 1:2,500 to 1:12,500 has been prepared, either independently or using the

7 These are maps with contours and color-enhanced cartographic treatment, presented in a standard quadrangle

format and related to standard reference systems. Orthophotomaps are derived from orthophotographs, which are photographs showing images of objects in their true plan positions.

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resources of other projects (such as the ADB-financed Flood Control Project in South Java).8 In this context, project map outputs have had little relevance to the needs of the Bappedas. Although the priority areas were selected in discussion with the Bappedas, in retrospect many feel them to have been poorly selected in relation to need. However, all acknowledge the major contribution made by LREP1 and LREP2 to the development of demand for mapping and GIS data among managers within the EAs. Bakosurtanal is continuing its digitizing program and hopes to complete its 1:50,000 program in Kalimantan, Sulawesi, and Sumatra within 5 years. The 25,000 digital series (covering Bali, East Nusa Tenggara, Java, and South Maluku) is reported to be complete, though the Bakosurtanal web site indicates less than 50% coverage.

19. BPN has continued its digital land use mapping program since project completion and has now digitized 110 of the country’s 300 rural districts. A number of the BPN provincial offices visited by the OEM are operating effectively and continuing to develop their land use information systems, including South Sulawesi, and East and Central Java. In Bandung (West Java) computers and computer parts were stolen in 2000, resulting in the loss of about 75% of BPN’s digital database. In Yogyakarta, the equipment provided under LREP2 has not operated for the last 2 years due to lack of budget for operation and maintenance. The plotters are particularly prone to breakdown, with minor parts such as belts not readily available.

20. The 1:50,000 scale mapping has not been very relevant to the needs of many provincial BPN offices. In Yogyakarta, BPN initially took the 1:50,000 maps produced under LREP2 and expanded them to 1:25,000. Subsequently it obtained Bakosurtanal 1:25,000 scale mapping, which was then expanded to 1:12,500. In South Sulawesi, BPN digitized 65% of the provincial area based on hard copy army 1:25,000 base maps, and no longer makes use of the 1:50,000 scale maps produced under LREP2. Provincial BPN offices have little interaction with the public and no program to produce, promote, and sell maps. Some potential users have sought to obtain BPN electronic data to assist them in project planning but have not been successful. As a result of this and reported accuracy problems in Bakosurtanal base mapping (with some Sumatran islands several kilometers out of place), an ADB-funded environment sector project9 is developing its own 1:250,000 scale base mapping, using Landsat 7 imagery.

21. It has not yet proved possible to achieve standardized map classification among many non-project map producers. Bakosurtanal continues to promote this goal, defined in Law 24 of 1994 supported by Decree 10 of 2000. These require agencies to use a standardized classification and base mapping system, as promoted through the national Spatial Coordination Committee (which meets on an ad hoc basis).

2. Land Use and Soil Resources Databases and Mapping

22. A major BPN activity under Part B was the development of ILUD. Land use data collected under LREP2 continues to be used and has been supplemented with satellite imagery in many areas to provide reasonably complete and up-to-date land use mapping. Development of ILUD is undertaken mainly in BPN’s head office and skills are declining in provincial offices as staff leave and equipment breaks down. The database is not easily integrated with the systems of other data users and to some degree duplicates thematic mapping produced by CSAR and the Bappedas. Where the Bakosurtanal base maps are used to record land use, good consistency is reported, with some Bappedas using BPN data as a layer in their thematic map preparation. However, many Bappedas report that they do not have access to ILUD data.

8 ADB. 1996. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and

Technical Assistance Grant to the Republic of Indonesia for the South Java Flood Control Sector Project. Manila. 9 ADB. 1996. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and

Technical Assistance Grant to the Republic of Indonesia for the Bapedal Regional Network Project. Manila.

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23. CSAR has continued its soil mapping and classification program since project completion, though much remains to be done to develop a coherent and simplified national soils classification system. CSAR soils and land classification data were developed for the Project’s 3.8 million ha priority areas after completion, and have been extended to a national level at 1:250,000 scale. The soils and land suitability databases integrate satisfactorily with the Bakosurtanal and Bappeda thematic maps, and can be overlaid on the 1:25,000 scale base maps with reasonable consistency (i.e., limited boundary overlap).

3. Provincial Physical Planning and Decentralization

24. Together with BPN, the provincial Bappedas (under DGRD, their Jakarta parent agency) represented the main intended link between the activities of the central mapping agencies and development on the ground. In practice, application in the provinces was the weakest part of LREP2. Little use is made in any of the Bappedas visited by the OEM of the 1:50,000 scale maps produced under LREP2, none has a cataloguing system in place (though some state that they are working to develop one), and there is no formal mechanism to provide or sell maps or digital data to the public. The in-house capacity to undertake physical planning, produce maps, or maintain databases is limited in most provinces, with the technical aspects of physical plan development usually contracted out to consultants. However, all Bappedas consider that the level of acceptance of and demand for accurate mapping to support local governments’ physical planning is a highly positive project outcome. In at least two Bappedas visited by the OEM, staff spoke of the greater level of confidence engendered by LREP2 and the training provided, in relation to developing and promoting physical planning.

25. LREP2’s activities in the provinces were largely overtaken by Indonesia’s decentralization program, which accelerated under Law 22 of 1999 (implemented in 2001). This resulted in the provinces losing their overall responsibility for planning, which has now passed to the districts (kabupaten). Because LREP2 activities focused on the provinces, they had little impact on the districts. Two models are evolving for physical planning at the provincial and district levels. In some provinces, capacity in the provincial Bappedas is low and declining as staff leave and equipment deteriorates. In these provinces, the districts are taking over the reins of physical planning, as in Badung district in Bali, which commissioned aerial photography and has digitized and mapped the entire district at 1:5,000 scale.

26. In other provinces, such as West Java and the special area of Yogyakarta, the provincial Bappeda is responsible for all mapping and database management and supports its four districts and one municipality through providing hard copy maps. The capacity and performance of Bappedas of the two classes is markedly different: in the first case, equipment is generally run-down with little evidence of upgrading or the replacement of out-of-date hardware. In the second, an operational budget is available to maintain equipment and recruit consultants for major mapping tasks. The OEM considers that the provinces need to undertake a strong coordinating role, particularly on issues such as catchment development that crosses district boundaries and in prioritizing infrastructure developments such as ports, trunk roads, and airports. Mechanisms for this need to be developed.

4. Marketing and Cost Recovery

27. Bakosurtanal has significantly improved its marketing systems and the availability of its maps over the period since project completion. Its headquarters is at Cibinong, about 40 km from Jakarta, which is inconvenient for potential map purchasers. Contact was made by the OEM with a number of the sales outlets listed on the Bakosurtanal web site, but except for the Agricultural Institute in Bogor they had closed or were not operating. One sales outlet was visited

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in Jakarta but has now closed. A more accessible center in Jakarta (and in other major centers) could be a useful approach to improving map utilization.

28. Bakosurtanal supplies maps mainly by courier or mail to clients throughout Indonesia. Over the period August 2001 to April 2002, an average of 160 orders for maps were received per month, with an approximately even division between the private sector and government agencies. Total revenues from map sales amounted to almost Rp900 million ($95,000) in 2001, which suggests total sales of around 30,000 maps at an average price of Rp30,000. While topographic and other Bakosurtanal maps are available on request, its maps are difficult to obtain in the provinces. None of the Bappedas interviewed by the OEM had a stock of maps for sale or a catalog to indicate availability and source to potential purchasers.

29. Mapping at the provincial level tends to be seen mainly as an aid to government resource management and control rather than as a vital tool in economic development for society as a whole. Agencies do provide maps to the public on an ad hoc basis. This often involves finding the map in a cabinet where the maps are often stored out of sequence and without easily visible numbering. It must then be transported to a photocopy shop in town and copied in black and white. This approach is inefficient, produces an inferior product, and contributes little if anything to operation and maintenance costs. Demand for maps in the Bappedas averaged around 10 maps per month, mainly from students, suggesting a low level of public awareness. An encouraging development has been the establishment of commercial map shops by Gadjah Mada University in Yogyakarta and the Agricultural Institute in Bogor, which may offer a model for other provinces and assist in cost recovery. In both East and Central Java, the Bappedas are working with the governor’s office to establish electronic data centers, which should improve data distribution at least to government agencies.

5. Organization and Management

30. A reorganization of Bakosurtanal in 2001 established a number of new centers, including the Center for Network System and Spatial Data Standardization and the Center for Topographic and Spatial Planning and Base Mapping. This is considered by Bakosurtanal to be a positive, if indirect, outcome of LREP2. The establishment of a new division under a newly designated Deputy for Spatial Data Infrastructure is also seen as a positive development.

31. One outcome of LREP2 was improved coordination between the Bappeda and BPN offices in the provinces. An example was the preparation in 1999 of a forest management plan for South Sulawesi, shortly after project completion. This was a joint activity between Bappeda, BPN, and the Forestry Department and was undertaken in consultation with “all stakeholders” though, this meant government stakeholders. The private sector, the public, nongovernment organizations, and environmental groups were not involved. Ways to introduce this type of dialogue into land use planning need to be developed in all provinces and districts.

B. Performance of Operating Entities

32. The financial impact of LREP2 on the EAs reflects their operational performance. Bakosurtanal has improved its financial management and cost recovery over the period of LREP2 and subsequently, and estimates that it now recovers about 10% of the operating and overhead costs of map production from sales. BPN is adequately funded at the national level, but this does not extend to its divisions in the provinces. Little budget is available for operation and maintenance, and in most cases capacity for the development and digitizing of land use maps is declining or non-existent. No mechanisms exist for cost recovery and in most cases interaction with the public is limited. Provincial BPN offices appear to place more emphasis on

9

their land status and land titling (cadastral) responsibilities, which are being digitized progressively. BPN is also decentralizing to the districts, raising questions about the role of the province-level land use planning divisions.

33. The Bappedas have yet to develop cost-recovery programs. The provincial data centers established under LREP2 ceased to operate at or shortly after project completion and were subsumed into other Bappeda divisions. Project design did not analyze how the centers would fit into the Bappeda structure, nor how they would operate. In retrospect, it can be seen that there was little incentive for the Bappedas to provide services to the public, in the absence of an appropriate regulatory framework. “Ownership” of the data center concept was low, primarily because of the changed environment resulting from decentralization (which was not envisaged at appraisal). While some Bappedas are keen in principle to develop marketing systems, an often-heard attitude is that the provision of mapping is a public service and should therefore be free. One advantage of decentralization is that provincial and district Bappedas can now establish their own regulations governing sales and cost recovery, which may increase the chance of positive future developments.

C. Efficiency and Cost-Effectiveness

34. Although LREP2 was intended to have an economic impact through improving development outcomes, no economic analysis was undertaken, either at appraisal or completion. Efficiency therefore needs to be estimated based on cost-effectiveness. In terms of the cost of inputs, there is no reason to believe that costs of photography, training, and equipment were particularly high or low. Aerial photography of 3.8 million ha cost approximately $7.4 million or $2.0 per ha, a reasonable rate. It is of interest to compare this cost with photography undertaken on 42,000 ha for Badung district in Bali province in 2000. This cost around Rp2.0 billion, including the production of 1:5,000 scale photo and contour maps by consultants, or around $5.0 per ha.

35. While unit capital costs were reasonable, the overall impact has been limited in relation to project cost. This is evident in a number of areas: (i) the new mapping undertaken has been of limited relevance; (ii) the priority areas were small, sometimes poorly located (in the view of the Bappedas seen in retrospect), and the scale was inappropriate, at least for the more highly developed provinces; and (iii) independent base mapping by other agencies developed, such as the forestry inventory offices (Biphut). No mechanisms for extending from priority area mapping to a national scale were identified. In practice, more cost-effective and potentially replicable systems for semi-detailed mapping would have been more relevant. The extent of reliance on consultants is reflected in the $22.0 million cost of consulting services.

36. Overall, LREP2 is considered to have represented a relatively inefficient use of national resources. Priority area mapping was limited in extent and maps have not been widely used. In terms of directly attributable benefits and improved resource utilization at the provincial or district level, it is considered that improved outcomes could have been achieved at lower cost. A more focused project could have assisted Bakosurtanal to produce base maps at scales appropriate to each province and developed physical planning, mapping, and GIS systems in the provincial Bappedas. BPN and CSAR could have been considered in common with other users of base mapping, and would have benefited through Bakosurtanal extension activities rather than through direct project interventions. The narrower model would have allowed more focus on the development of sustainable systems at provincial (and district) level. Nevertheless, while overall efficiency was low, LREP2 has resulted in gains in comparison with the “without project” situation. In particular, the capacities of staff, the acceptance of digital mapping and of GIS, and

10

the coordination between agencies are substantially better than they were at the start of LREP2, largely because of project activities.

D. Sustainability

37. At one level, project outcomes are sustainable. The use of Bakosurtanal standard base mapping is well entrenched in the project EAs. It is expected to extend into other mapping agencies over time, though this will require continuing efforts by Bakosurtanal to establish its standard and periodic updating to ensure that the maps are accurate and relevant. The standard interchange format developed under LREP2 continues to allow the transfer of data between GIS systems in different agencies. However, where agencies move to independent base mapping or a new scale of mapping (such as the 1:12,500 scale mapping by BPN Yogyakarta) the capacity to interchange data may be lost.

38. At other levels, sustainability is limited. The 1:50,000 scale mapping which consumed a large share of project resources has been superseded in Bakosurtanal and BPN by 1:25,000 mapping in Bali, East Nusa Tenggara, Java, and South Maluku which, between them, account for perhaps 70% of national gross domestic product. In most provinces, equipment is running down or unserviceable and many staff have transferred to other activities or agencies. Little upgrading of equipment or staff is occurring. While LREP2 attempted to introduce mechanisms to promote sustainability at the provincial level (such as cost recovery), these were not successful and sustainability is limited in terms of capacity, capability, and the availability of serviceable equipment and an operating budget.

39. Decentralization has made the role of many provincial Bappedas uncertain and is threatening the sustainability of project outcomes. The physical planning units in the Bappedas typically have a range of functions apart from the maintenance and development of GIS and mapping systems. Only where management sees the latter as a priority are resources made available; in other Bappedas, limited staff and resources are provided, resulting in loss of capacity. Only highly motivated agencies (such as Badung district in Bali, where 10 staff have undertaken 3-month GIS courses) have provided a budget for staff training. Even in a successful provincial Bappeda such as Yogyakarta, only two staff with well-developed skills remain in the physical planning unit. If one or both leave, Yogyakarta would become entirely dependent on consultants for the development of its data and mapping programs.

E. Other Development Impacts

40. LREP2 was intended to improve the national and provincial physical planning process and maximize the benefits from the optimal use of land resources and natural resource management. It was intended to assist regional planners in preparing spatial plans and in improving land resource utilization and conservation. In the planning process, a range of stakeholders are involved and plans are affected by a large number of issues. As LREP2 was only a small part of the planning process, its impact cannot be separated from other factors.

41. LREP2 did not have any direct environmental impact. Nonetheless, the database and maps produced—and in particular the maps of environmentally sensitive areas, land suitability, and land use—are essential tools for the formulation of sustainable long-term development plans in the provinces. These maps will help prevent the adoption of development initiatives (such as cropping, forest, and mining concession allocation) that are likely to lead to environmental degradation through erosion, loss of soil fertility, siltation of water bodies, and downstream flooding.

11

42. Knowledge gained through training programs and work experience is being applied in a variety of ways. Many project staff have been promoted and moved to other duties or agencies. However, their skills, knowledge, and capacity are assisting in entrenching the use and application of digital mapping and GIS in many sectors of the Indonesian economy. Project-trained staff are continuing to expand the pool of trained staff through working as trainers in provincial training institutions.

IV. OVERALL ASSESSMENT

A. Relevance

43. At the time of design, the Government afforded high priority to LREP2. Better physical planning was required, particularly to improve the utilization of the country’s natural resources. Growth in agricultural productivity was partly at the expense of environmental sustainability. Better knowledge of natural resource potential was highly desirable to ensure continued and sustainable growth in production and productivity of agricultural and forestry resources. LREP2’s approach of working with both national and provincial agencies was appropriate.

44. At one level, LREP2 and its outcomes remain highly relevant—in relation to the development of compatible systems for digital mapping. LREP2 promoted the wide adoption of ArcInfo GIS software, which continues to be used in the three national-level implementing agencies, promoting easy transfer of data. Without LREP2, they would probably have continued on separate GIS development pathways and would have achieved substantially less compatibility.

45. By the time of postevaluation, Indonesia’s decentralization program had passed responsibility for development planning to the districts, reducing the need for physical planning at the provincial level. To be fully relevant in 2002, LREP2 would have needed to lay a foundation for district-level planning. While some districts have received support from their provincial Bappedas and/or developed their own digital mapping capability, these are few in number.10 However, overall LREP2 is considered to have been relevant.

B. Efficacy

46. LREP2 largely met its national-level objectives of capacity improvement and coordination among the central implementing agencies. While this is a useful outcome in its own right, it appears to have had limited impact in the provinces, where the main benefits of LREP2 were intended to be realized. Few examples of improved land use outcomes due to GIS and improved map development can be identified. Limited access to mapping and data represents a significant barrier to wider application. Although the problems of the Bappedas were recognized in the evaluation of LREP1,11 they were not adequately addressed by LREP2. Overall, LREP2 is rated less efficacious.

C. Cost-Effectiveness

47. LREP2’s overall cost-effectiveness is also considered to be relatively low. In part, this was due to activities undertaken by the EAs independently of LREP2 (e.g., the development by 10 Five out of 24 districts in West Java, 3 out of 29 in East Java, none out of 26 in South Sulawesi, 2 out of 8 in Bali,

and the 5 Yogyakarta districts. 11 “The success of LREP1 was mixed in terms of institutionalizing these new methods and techniques within all the

Bappedas. There exists a wide gulf between the expectation that at completion the mapping activities of Bappedas would be self-sustained by an equipped and experienced staff, and the reality that further support is still required, without which the facilities in most of these institutions cannot come to fruition“ (PE-478, para. 69).

12

Bakosurtanal of 1:25,000 scale base mapping) and to the decentralization program promoted by the Government, which accelerated after project completion. LREP2’s outcomes could probably have been achieved at less cost by applying a more focused approach, with fewer EAs. A more flexible approach, taking account of the needs of end users, could have produced improved outcomes for less cost. Considering the expenditure of over $80.0 million, the outcomes, which mainly relate at the field level to improved capability and awareness, are considered to have represented a less than efficient use of resources.

D. Sustainability

48. At one level, LREP2’s outcomes are sustainable. Bakosurtanal has been allocated full responsibility for digital base mapping, and it is likely that over time more map producers will convert to its base mapping. In BPN, the systems developed under LREP2, such as ILUD, continue to be used for land use mapping. However, many provincial BPN offices have limited capacity and budget to operate, maintain, upgrade, or replace equipment and sustainability is marginal. Within Bappedas, outcomes are mixed. Many provincial-level Bappedas retain the capacity to work with digital data, though consultants are responsible for the majority of mapping activities. In Bappedas where senior management has a strong commitment to spatial planning and demonstrates interest in and support for digital mapping and data management, sustainability is likely to be high. In other Bappedas and in most provincial BPN offices, capacity appears to be eroding quite rapidly. The provincial data center concept was not institutionalized and little progress has been made in cost recovery. Overall, the sustainability of project outcomes is less likely.

E. Institutional Development and Other Impacts

49. The capacity of the three main national-level agencies (Bakosurtanal, BPN, and CSAR) increased significantly under LREP2. Staff capability increased through the wide range and large number of training programs. The organization structure improved in Bakosurtanal, in part due to LREP2’s initiatives, and the linkages between all three agencies improved as well. While LREP2 made a significant contribution to the current drive for standardized base mapping in Indonesia, it made less contribution to the institutional development of the provincial Bappedas or BPN offices. The impact on the Bappedas has been limited by the decentralization of planning responsibilities to the districts. However, the increase in knowledge, capacity, and awareness of the potential for GIS and digital mapping to assist in spatial planning has had a significant and sustainable impact. The agencies that demonstrated facility with GIS and digital mapping during the OEM were those that saw a direct benefit to their activities. Overall, LREP2 is assessed as having had a significant institutional impact.

F. Overall Project Rating

50. Overall, LREP2 is rated partly successful.12

G. Assessment of ADB and Borrower Performance

51. Overall, the performance of ADB was adequate. Review missions were reasonably regular and contributed to the implementation performance of a complex and demanding project. In retrospect, it can be seen that many of LREP2’s difficulties stemmed from its design. The OEM considers that insufficient analysis was made of the difficulties faced by LREP1 in Sumatra, resulting in a top-down approach that did not reflect the needs of the main intended users of the mapping and GIS outputs. A more flexible and demand-driven approach, probably 12 Using the four-category rating scale of highly successful, successful, partly successful, and unsuccessful.

13

with a narrower focus and extending to the district level, would have potentially had a substantially greater impact on planning capacity and capability in the regions. More detailed institutional analysis at the time of design might have led to more innovative solutions to data marketing, such as the map marketing enterprises established by universities in Bogor and Yogyakarta.

52. The EAs provided necessary resources and support during implementation. The three technical agencies performed creditably, particularly given the difficulties faced in consultant recruitment and procurement and the major demands made for surveying, digitizing, and analyzing. Equipment provision and training were satisfactory, though the choice of trainees was mostly inappropriate. DGRD had little technical capability and was poorly placed to support and coordinate activities in the provinces. BPN has found it difficult to provide funding to its provincial offices after completion, resulting in issues of sustainability in provincial land use mapping.

V. ISSUES, LESSONS, AND FOLLOW-UP ACTIONS

A. Key Issues for the Future

1. Decentralizing Geographic Information System and Digital Mapping Capacity

53. The decentralization of responsibility to the districts has raised issues relating to the optimal approach to spatial planning. As identified by the PCR, mechanisms need to be developed to promote resource planning at the district level. District Bappedas in more affluent areas are developing capacity rapidly, often assisted by consultants. However, in poorer areas, the district Bappedas have limited capacity and often receive little or no support from their provincial Bappedas. Based on the limited research undertaken by the OEM, it would appear that the model adopted in West Java and Yogyakarta is the most appropriate, with provincial Bappedas developing and maintaining the digital information in collaboration with the districts, and supplying the hard copy or digital mapping and information that the districts require. The alternative model (as found in Bali and South Sulawesi), with a number of district Bappedas developing their in-house capability and undertaking their own spatial planning, may also be appropriate in some provinces.

54. BPN appears to face particular issues in relation to budget availability and sustainability at the provincial level. This may be due to the limited demand for its data, combined with inadequate budget allocation from Jakarta for staff training and equipment upgrading. It may therefore be preferable to pass responsibility for land use mapping to other agencies. Bakosurtanal is one possibility, since it already owns substantial data as well as its base maps, and has the capacity to analyze satellite imagery and update land use mapping on a reasonably regular basis. These data could be supplemented by data from (for example) the departments of agriculture and forestry. No firm recommendation is possible without detailed examination of the range of issues involved, but at the minimum, a review should be undertaken of options for the future development of land use mapping.

2. Strengthening Spatial Planning Processes

55. ADB’s long-term commitment aiming at strengthening the Government’s spatial planning has contributed to a more effective management of natural resources. ADB has financed a total of six projects in the Indonesian land and marine resource evaluation sector over the past 17

14

years, beginning with LREP1.13 Four of these projects have been completed, two are ongoing, and a further project was being designed at the time of the OEM.14 The completed projects have laid a sound base for improved physical planning in the provinces, but have not yet achieved a great deal on the ground. Progress made is being undermined by the current decentralization program. Ways to underpin past investments and develop spatial planning performance at the district level need to be developed. Consideration should be given to designing a new project for possible ADB funding, to assist provinces develop the capacity to act as advisors to the districts and to accomplish district mapping. Any intervention should be demand driven and respond to the needs of particular districts and provinces. Assistance could be provided in terms of training, computer hardware and software, aerial photography, and mapping (at scales determined by the users). Mechanisms could be developed for the resulting map outputs to be integrated into the Bakosurtanal base map database, to progressively update and upgrade the national (rupabumi) base map series.

3. Access to Data, Cost Recovery, and Sustainability

56. In almost all cases, data in Indonesia is difficult to obtain. However, the situation has improved over the past decade, and many agencies are prepared to release data to other government agencies and the public. This willingness to share has not translated into easier access to mapping and information by the public, business, and government. The central agencies will need to continue to encourage the provincial agencies to develop their interface with the public. The provincial agencies can do this through (i) gaining approval for the sale of data and maps from provincial councils; (ii) developing the map catalogs and price lists required to formalize marketing; (iii) establishing the budget and systems to allow them to maintain stocks of maps or the materials to allow maps to be printed on demand; (iv) developing mechanisms for the sale or provision of digital data to private and government agencies; and (v) publicizing the availability of maps and GIS data through a range of media including advertising, annual reports, and web sites.

57. While some Bappedas will have the capacity to develop the systems suggested, others will find it difficult to obtain the support and budget needed from their provincial councils. New ways need to be developed to promote the ready availability of hard copy and digital maps and GIS data. The model being developed by Gadjah Mada University in Yogyakarta, with the establishment of a map and data sales center, may be appropriate in some provinces. In others, a private sector model or a private/public sector partnership may prove most appropriate. The centers would take on many of the functions planned for the provincial data centers under LREP2. They would (i) maintain map catalogs of local, regional, and national maps; (ii) keep hard copy stocks of commonly demanded base and thematic maps and atlases for sale; (iii) provide digital data, together with a system for authorizing use or access; (iv) promote awareness of the need for and availability of maps and data; and (v) establish a map-selling center open to the public.

4. Improving Data Management

58. Efforts are needed to continue the program initiated under LREP2 to improve the quality and management of data generated by the EAs and other data providers. Compatibility between data providers and users needs to be further enhanced, through publicity campaigns,

13 Loans 730-INO: Land Resource Evaluation and Planning; 1099-INO: Second Land Resource and Evaluation

Planning; 1203-INO: Marine Resource Evaluation and Planning; 1570/1571-INO: Coastal Community Development and Fisheries Resource Management; 1316-INO: Coral Reef Rehabilitation and Management; and 1770-INO: Marine and Coastal Resources Management.

14 Coral Reef Rehabilitation and Management Project (Phase II).

15

newsletters, professional association activities, and regular conferences and workshops. Methods for reasonably secure digital data dissemination need to be developed to encourage the wider use of GIS in planning and managing resource development. Ways of compensating data providers for acquiring, analyzing, and distributing data need to be found.

59. Since the quality of data in many applications is low, systems are required to improve data accuracy over time. The many users of the data are often able to identify errors (e.g., on maps) but have no formal means of reporting the problem. BPN staff state that under LREP2 and subsequently, numerous errors have been reported to Bakosurtanal, but (as far as they are aware) these reports have not been used to improve database quality. Systems need to be developed to allow data users to report back to data providers, who in turn need to establish processes to verify the changes and incorporate them into their databases. By this means, GIS data owners should be able to ensure that customers return periodically to purchase updates, thus providing some control over the use of the data.

B. Lessons Identified

60. The preparation of a detailed project framework should provide for a clearer understanding of objectives and their links to project outputs. More focus would be placed on institutional aspects and sustainability and less on the procurement, data acquisition, and production activities. The top-down approach, e.g., with respect to map scales and (to some degree) to the selection of priority areas would probably be replaced by a more participatory and flexible system, which should make the project outputs more relevant to provincial needs. LREP2 implementation performance and outcomes highlight a number of lessons that may be relevant in a range of natural resource evaluation and mapping projects in the future, both in Indonesia and in other ADB developing member countries.

1. Project Design

(i) When designing follow-on projects, more effort needs to be made to understand the lessons from the earlier project(s), both completed and ongoing, to ensure that they are fully incorporated.

(ii) Where the outputs from one component represent inputs to another, a phased project should be considered. LREP2 would have benefited greatly from such an approach, with Bakosurtanal base mapping produced under the first phase and supplied to other agencies at or shortly after the commencement of the second phase.

(iii) Multiple EAs complicate project design. In practice, project management did well to coordinate project activities and achieve the majority of planned outputs. However, a smaller number of EAs would allow more focus on improving outcomes, and less on procurement, logistics and coordination.

(iv) A more realistic implementation schedule should be considered when designing a project. Given the multiple EAs, the scattered priority areas, the delayed release of funds due to rigid centralized and bureaucratic system, project implementation took longer than expected under LREP2. Also, a thorough assessment of the capability of the staff of concerned government agencies should be undertaken at project design. For LREP2, the slow digitizing process was attributed to limited staff capability while the delay in procurement was also a result of the inadequate understanding of ADB’s procurement guidelines by the EAs’ staff (on top of the delay in the release of funds).

16

(v) Flexibility in design and implementation, and responsiveness to user demand in defining project activities through a more participatory manner are important to meet stakeholders’ needs. The top-down approach employed in LREP2 resulted in outputs being considered irrelevant in most provinces. A bottom-up approach with areas and scales defined and contracts undertaken at the provincial (or district) level would probably have ensured that the outputs would be useful and used as well as providing more capacity in the provinces to expand from the pilot areas using their own resources.

2. Pilot Projects, Sustainability, and Bureaucratic Inertia

(i) The mechanisms for extension from pilot to other areas need to be clearly defined. Under LREP2, it was anticipated that mapping the priority areas would promote expansion to other areas. In practice, only limited expansion has occurred.

(ii) Projects in sectors with rapidly evolving technology require the inclusion of systems which promote allocation of budget (or cost recovery) for equipment upgrading and replacement and the training of existing and new staff following project completion.

(iii) Introducing change to bureaucratic procedures is difficult in Indonesia, as in many developing countries. Where a project seeks to introduce major changes (such as a user pays principle for a service that has previously been provided free), the mechanisms need to be assessed in detail and accompanied by adequate institutional analysis and policy dialogue at the time of project design. A loan covenant may not be sufficient to ensure that the objective is achieved.

(iv) It is worth the effort of ADB and concerned agencies to develop support for new technical systems among senior management in government agencies concerned (and the private sector). One of the successes of LREP2, reported in all provinces visited by the OEM, was its generation of interest in and support for digital mapping, GIS, and improved physical planning among management at all levels and in a range of agencies.

C. Follow-Up Actions

61. A number of the issues raised call for follow-up actions by the Government. Some require changes in institutional culture and incentive structures. The following actions should be considered to promote the further achievement of project benefits and their sustainability.

Suggested Action

Institution Responsible

Suggested Timing

Monitoring

Strengthening Spatial Planning Processes

1. The four LREP2 EAs (and other concerned agencies) should continue to meet at least annually on a formal basis to assess progress in enhancing project impacts. Mechanisms to promote high-level participation and commitment are required.

All EAs Commencing 2002 annually for 5 years

SERD for the first 2 years

17

Suggested Action

Institution Responsible

Suggested Timing

Monitoring

2. An awareness campaign is required for all digital mapping

institutions on the need to harmonize base mapping to the maximum possible extent if national economic benefits are to be realized.

Bakosurtanal Continuous BAPPENAS

3. A national conference should be held, open to all providers of mapping and GIS data (but not for GIS applications), to examine how to extend the use of standardized base mapping as well as the sharing of digital mapping and GIS data.a

Bakosurtanal 2003 with organization commencing in 2002

SERD

Enhancing Data Quality and Management

1. Mechanisms should be developed to allow maps produced by the Bappedas and other agencies to be integrated into Bakosurtanal base mapping and (where relevant) into other agencies’ databases. Payment mechanisms should be established to provide incentives to the Bappedas to provide the data.

Bakosurtanal End-2003 Bakosurtanal management

2. Mechanisms for error checking and data upgrading should be formalized. Thus, when a map user identifies a problem (e.g., with a base map) it should be reported to the map publisher for incorporation in the next edition of the map. A formal reporting system should be established, possibly using the Internet.

Bakosurtanal End-2003 Bakosurtanal management

3. Although CSAR has lost responsibility for its provincial soils centers, it would be desirable for it to establish stronger linkages to the centers. Classification and nutrient data from the centers should be transferred to CSAR to assist in updating the national soils database.

CSAR End-2002 AARD

Enhancing Access to Data and Cost Recovery

1. Further efforts are needed to promote cost recovery and financial viability/sustainability at the provincial level, particularly for the Bappedas but also for BPN. Provinces should assess on a case-by-case basis the optimal approach to improving accessibility and awareness and to commercializing map and data sales.

Provincial Bappedas/BPN

End-2003 Bakosurtanalmanagement/ DGRD

2. The maps and data developed under LREP1 and LREP2 need to be made more available. For example, the aerial photography and photomaps produced represent a valuable resource, and mechanisms should be established to permit access to them by the public.b

Bakosurtanal and Bappedas

End-2003 Bakosurtanal management

3. BPN should provide its maps to Bakosurtanal to market on a revenue-sharing basis. Revenues generated could be applied to improving its database and map quality.

BPN and Bakosurtanal

Mid-2003 BPN management

AARD = Agency for Agricultural Research and Development, Bakorsurtanal = National Coordinating Agency for Surveys and Mapping, BAPPEDA = Provincial or District Development Planning Agency, BPN = National Land Agency, CSAR = Center for Soil and Agroclimate Research, DGRD = Directorate General of Regional Development, EA = executing agency, GIS = geographic information system, SERD = Southeast Asia Department of ADB. a Under Loan 1770-INO(SF): Marine and Coastal Resources Management Project, the internal procedures of Bakosurtanal

will be streamlined to enhance its own digital data products. b Also under Loan 1770-INO(SF): Marine and Coastal Resources Management Project, the Bakosurtanal map distribution

outlets will be expanded to the provinces, including on-line ordering.

Appendix 1 18

PROJECT ACCOMPLISHMENTS (as of May 2002)

Estimated Degree of

Completion (%) Component

Status PCR PPAR Part A: National Coordinating Agency for Surveys and Mapping (Bakosurtanal) 1. Strengthening Catalog System and Information Network 1.1 Develop catalogs and

user services in Bakosurtanal, provinces, and associated agencies

Bakosurtanal Catalog System

Extended to the other geographic information produced by Bakosurtanal, e.g., Geodetic, Topographic, Bathymetric thematic maps (synthetic land and marine).

100

100

A new center called PUSJASINFO (Pusat Jasa dan Informasi) was established in early 2001 that provides information on Bakosurtanal products, distribution (sales), pricing, and procedures including legal aspects.

90 100

The local area network is operational, nodes and networks within Bakosurtanal office have expanded from three nodes and one center into more than 10 nodes and several centers (now called Pusat Sistem Jaringan and Standardisasi Data Spasial, SJSDS). Intra- and Internet technology has developed.

100 100

1.2 Establish standard

exchange formats Standard exchange formats is complete. 100 100

1.3 Develop and impose

information service fee

Besides hard copy maps, Bakosurtanal has established price and distribution mechanisms for digital spatial data products. Prices reflect the reproduction and users’ format cost only (geographic information system [GIS] or other formats).

50 100

1.4 Study further catalog

system development

The concept of a national catalog was replaced by a system of information on individual agency databases.

90 90

2. Acquisition of Imagery and Base Maps 2.1 Complete aerial

photography and process to photomaps and digitize

Remaining priority areas (Kahayan river basin in Central Kalimantan) have been mapped by using Radarsat mapping technology. Processing of aerial to photomaps was taken only for 11 provinces. The photomaps were not needed since line maps became available. The digital topographic maps resulted from digital plotting.

90

60

100

100

PCR = project completion report, PPAR = project performance audit report.

Appendix 1 19

Estimated Degree of Completion (%)

Component

Status PCR PPAR Base maps for priority areas in Nusa Tenggara were

completed by a digital mapping project financed by a Norwegian Government loan.

100 100

3. Institutional Strengthening 3.1 Construct buildings The map store is used to store the Bakosurtanal‘s map

products. 100 100

3.2 Purchase equipment Most of the units have been upgraded in order to support

the new technology in networking, database and maps digitizing into GIS format.

100 100

3.3 Consulting services Consulting services were extended to provide additional

support in database management, catalog systems, and image analysis.

100 100

3.4 Carry out local and

overseas training Training Unit in Bakosurtanal (Balai Diklat) still carries out GIS and remote sensing courses both for internal and external needs, for operators, analysts, and managers.

100 100

Part B: National Land Agency 1. Land Use Mapping of Priority Areas 1.1 Determine legends

and systems, and make preliminary aerial photograph interpretation

Development of new methodology in land use mapping and classification was implemented in the form of a computerized system under the designation Indonesia Land Use Database (ILUD). Aerial photograph interpretation was completed for all the priority areas. Ongoing analysis is being undertaken using satellite imagery, e.g., from Ekonos/Citra.

100

100

100

100

1.2 Carry out field surveys Field surveys were completed for 3.85 million ha.

Surveys are ongoing. 100 100

1.3 Prepare and digitize

land use maps 270 land use map sheets covering 3.85 million ha in 18 provinces at a scale of 1:25,000 were prepared, digitized, and consolidated into a land use atlas. In the absence of digitized base maps from Bakosurtanal, many are overlaid on National Land Agency’s (BPN) own digitized base.

100 100

BPN has now finalized the digital land use mapping of 110 districts/cities.

Appendix 1 20

Estimated Degree of Completion (%)

Component

Status PCR PPAR 2. Land Use Monitoring 2.1 Prepare revised

provincial land use maps at a scale of 1:250,000

Revision of existing land use maps at a scale of 1:250,000 (from Regional Physical Planning Program for Transmigration) was completed over an area of 43 million ha. BPN is currently attempting to finalize provincial land use maps in 12 provinces using Landsat imagery.

30

50

2.2 Monitor land use and environment in selected areas

The proposed system for detailed monitoring based on small-format photography and videography was pilot-tested by Bakosurtanal and the Institute of Technology, Bandung, and considered to be inappropriate. BPN therefore did not pursue this methodology further. A methodology for land use monitoring at a scale of 1:50,000 using the Earth Resource Data Assessment System was developed and integrated within the ILUD system. As this is based on satellite imagery, the level of detail is limited and accuracy of boundary delineation is a function of the scale of the imagery. ILUD development has continued at headquarters as the basis for the land use GISs, which are being established in 2002.

—

100

—

100

3. Institutional Strengthening 3.1 Construct buildings All regional centers are fully operational. Telephone and

facsimile facilities are available but are not always in working condition.

100 100

3.2 Purchase equipment Computer equipment and peripherals were procured and installed. Many computers and peripherals are operational, though some (such as backup systems) are not functioning due to lack of spare parts.

100

100

3.3 Engage consulting services

Consulting services were engaged and extended to provide additional support to the establishment of ILUD and provide continuity in the services to the end of the extended project implementation period.

100 100

3.4 Carry out local and overseas training

All local and overseas training was completed. 100 100

— = not applicable.

Appendix 1 21

Estimated Degree of Completion (%)

Component

Status PCR PPAR Part C: Center for Soil and Agroclimate Research 1. Soil Resource Mapping of Priority Areas 1.1 Carry out pre-field

studies and aerial photograph interpretation

Pre-field studies and aerial photograph interpretation were completed on all priority areas by the Center for Soil and Agroclimate Research (CSAR) and selected contractors. For those areas not covered by aerial photography provided under the Project, photography was obtained from other sources.

100 100

1.2 Undertake field work and laboratory analysis

Field work and laboratory analyses were completed. 100 100

1.3 Prepare and digitize soil and climatic maps

Soil maps were prepared for the priority areas covering a total of 3.8 million ha. In some areas, CSAR used its own digitized base maps due to late delivery of base maps by Bakosurtanal. The size of priority areas relative to the availability of climatic data made climate mapping impossible. General climatic data was taken into account in defining the overall priority area characteristics; modified if necessary within an area according to altitude, aspect, etc.

100 100

1.4 Develop database, and conduct soil correlation

Database software development was completed with the implementation and interfacing of the SHDE4 and SSA3 database software and all data were inputted. For soil series classification, soil correlation was carried out as extensively as time permitted given the large area covered. Further correlation work is required to reduce the number of soil series to a manageable level.

100

90

100

90

2. Strengthen Regional Soil Stations 2.1 Construct and equip

laboratories The expansion and equipping of the soil station at Maros (South Sulawesi) and Yogyakarta were completed. Much of the analysis of soils from the priority areas of eastern Indonesia was undertaken at Maros, which continues to provide analytical services to the public and private sectors. Upgrading of the soil station at Malang (East Java) was dropped because of the World Bank’s involvement. It was therefore decided to upgrade the soil station at Yogyakarta instead by providing equipment.

100 100

2.2 Develop analytical and

data management facilities

Facilities and systems for soil analysis were established to give Maros a capacity of 200–300 samples per month. Computer equipment was initially installed in Maros but as this station did not carry out the entry or analysis of its own data, the computer was moved to CSAR.

100 100

Appendix 1 22

Estimated Degree of Completion (%)

Component

Status PCR PPAR 3. Development of Land Evaluation Systems 3.1 Review and update

the land evaluation computer system

The original intention to upgrade the land evaluation computer system was changed in favor of the automated land evaluation system (ALES). The system has been adapted to local conditions and successfully applied. Land suitability maps for the priority areas covering 3.8 million ha were completed. The automated land evaluation system has been used to undertake agro-economic zone mapping at 1:50,000 and 1:250,000

100

100

100

100

3.2 Assist the Bappedas

in applying land evaluation processes

Training of Bappeda staff was carried out through a series of training workshops. In-depth training was provided to 72 staff from the Bappedas and Institute for Agricultural Technology Assessment.

100 100

4. Institutional Strengthening 4.1 Construct buildings All buildings were completed. 100 100 4.2 Purchase equipment Soil analysis equipment, computers, and peripherals were

procured and installed. 100 100

4.3 Engage consulting

services Consulting services were modified and extended to meet the requirements of the Project including the revision of the loan closing date.

100 100

4.4 Carry out local and

overseas training 172 persons received local training and 10 persons were trained overseas. Many trained staff have been promoted.

100 100

Part D: Directorate General of Regional Development 1. Provincial Data Centers 1.1 Identify and acquire

all relevant data The provincial data centers (PDCs) have been established in all provinces. PDC identified and acquired data relevant to the immediate needs for spatial planning, but not necessarily comprehensive geographical data for the province. Collection of data is completed for all the initial areas selected for land zoning and at least one priority area per province. This process needs to be continued for all remaining land zoning and priority areas.

70

50

1.2 Develop facilities,

catalogs, and user services

PDCs generally combine the functions of data identification and cataloging with the management and manipulation of data within a GIS. There has been a good adoption of GIS technology in Project and non-project work. PDC catalogs, in general, only provide reference to a Bappeda’s own data rather than a comprehensive listing of all spatial data

70

50

Appendix 1 23

Estimated Degree of Completion (%)

Component

Status PCR PPAR

available in a province. User services are offered but there is no formal structure for these services nor has a system of user fees been agreed to.

2. Development of Provincial Land-Use Zoning 2.1 Prepare revised land

status map at a scale of 1:250,000

Updated land status and land allocation maps are available for 151 of the 188 map sheets at a scale of 1:250,000.

80 80

2.2 Make evaluations and prepare, print, and digitize land-zoning maps

Land-zoning methodology was introduced in all provinces and 99 map sheets were brought to the stage of digitized maps of land zones with at least two sheets per province in 16 provinces. Land-zoning manuals were distributed.

62 62

3. Formulation of Physical Plans in Priority Areas 3.1 Acquire all relevant

data on priority areas Locally available data was assembled and digitized for the first phase priority areas comprising 19 of the 42 priority areas in the 18 provinces. Problems of data compatibility persist through the use of different base maps by different agencies. Bappeda staff were trained in the use of a data check macro routine designed by the consultants.

50 50

3.2 Integrate data to

produce preliminary physical plans

In all 19 first-phase priority areas, draft outline plans were completed.

45 45

3.3 Review with the

physical planning teams (PPTs) and finalize physical plans

The PPTs were established in all provinces, but since 1996 six of these have never met, and with only two exceptions, none of the others have met more than twice. Only one of these has finalized the semi-detailed physical plans; the rest remain in draft form. The PPTs have now been formally disbanded. The lack of progress was due to the current administrative arrangements whereby responsibility for semi-detailed planning should pass to the district level. Therefore, the responsibility for the formal review and finalization of the physical plan needs cannot be undertaken at the provincial level alone.

— —

4. Institutional Strengthening 4.1 Construct buildings New buildings were constructed in 6 provinces and

renovated in 12 provinces. 100 100

4.2 Purchase equipment Equipment including computers and peripherals were

procured and installed. 100 100

Appendix 1 24

Estimated Degree of Completion (%)

Component

Status PCR PPAR 4.3 Engage consulting

services Consulting services were engaged and assignments completed. The original estimated requirements were extended to allow for additional support in Maluku and Irian Jaya, and to maintain the core team until the revised closing date.

100 100

4.4 Carry out local and overseas training

All local and overseas training was completed. Total overseas training increased 70% and local training increased 7% in terms of person-training months.

100 100

Appendix 2 25

SUMMARY OF PROJECT COSTS ($'000)

Appraisal Actual Cost Over-Item Foreign Local Total Foreign Local Total or Under-

Currency Currency Cost Currency Currency Cost run (%) A. GLRIS Civil Works 38 112 150 39 337 376 151 Equipment and Materials 1,990 94 2,084 2,336 184 2,520 21 Consulting Services 3,074 1,462 4,536 3,917 2,184 6,101 35 Training 480 56 536 637 603 1,240 131 Survey and Mapping 5,202 3,017 8,219 4,463 3,016 7,479 (9) Computer Equipment and

Maintenance 442 442 884 42 59 101 (89) Project Operation and Administration 0 1,242 1,242 0 2,521 2,521 103 - Base Cost 11,226 6,425 17,651 11,434 8,904 20,338 15 - Physical Contingencies 1,068 639 1,707 - Price Escalation 1,259 1,352 2,611 - Taxes 0 2,014 2,014 0 2,034 2,034 1 Subtotal (A) 13,553 10,430 23,983 11,434 10,938 22,372 (7) B. Land Use Mapping Civil Works 117 350 467 133 416 549 18 Equipment and Materials 3,493 274 3,767 4,787 0 4,787 27 Consulting Services 3,578 1,984 5,562 3,865 2,318 6,183 11 Training 1,200 621 1,821 1,296 716 2,012 10 Computer Equipment and

Maintenance 368 368 736 249 329 578 (21) Project Operation and Administration 0 2,715 2,715 0 4,692 4,692 73 - Base Cost 8,756 6,312 15,068 10,330 8,471 18,801 25 - Physical Contingencies 853 628 1,481 - Price Escalation 1,174 1,910 3,084 - Taxes 0 1,512 1,512 0 1,771 1,771 17 Subtotal (B) 10,783 10,362 21,145 10,330 10,242 20,572 (3) C. Soil Resource Mapping Civil Works 56 167 223 100 104 204 (9) Equipment and Materials 2,029 122 2,151 2,467 93 2,560 19 Consulting Services 1,613 601 2,214 1,927 356 2,283 3 Training 180 264 444 267 228 495 11 Survey and Mapping 283 851 1,134 433 1,179 1,612 42 Computer Equipment and

Maintenance 230 230 460 193 125 318 (31) Project Operation and Administration 0 2,612 2,612 0 2,985 2,985 14 - Base Cost 4,391 4,847 9,238 5,387 5,071 10,458 13 - Physical Contingencies 416 462 878 - Price Escalation 573 1,433 2,006 - Taxes 0 982 982 0 1,046 1,046 7 Subtotal (C) 5,380 7,724 13,104 5,387 6,117 11,504 (12)

Appendix 2 26

Appraisal Actual Cost Over-Item Foreign Local Total Foreign Local Total or Under-

Currency Currency Cost Currency Currency Cost run (%) D. Provincial Physical

Planning Civil Works 96 288 384 91 170 261 (32) Equipment and Materials 2,541 248 2,789 3,296 252 3,548 27 Consulting Services 4,738 2,785 7,523 4,513 2,598 7,111 (5) Training 1,800 480 2,280 2,447 594 3,041 33 Computer Equipment and

Maintenance 250 250 500 215 202 417 (17) Project Operation and Administration 0 4,621 4,621 0 2,625 2,625 (43) - Base Cost 9,425 8,672 18,097 10,562 6,441 17,003 (6) - Physical Contingencies 892 858 1,750 - Price Escalation 1,367 2,932 4,299 - Taxes 0 2,022 2,022 0 1,700 1,700 (16) Subtotal (D) 11,684 14,484 26,168 10,562 8,141 18,703 (29) E. Project - Base Cost 33,798 26,256 60,054 37,713 28,888 66,601 11 - Physical Contingencies 3,229 2,587 5,816 0 0 0 (100) - Price Escalation 4,373 7,627 12,000 0 0 0 (100) - Taxes 0 6,530 6,530 0 6,551 6,551 0 Subtotal (E) 41,400 43,000 84,400 37,713 35,439 73,152 (13) F. Interest During Construction 10,600 0 10,600 10,600 0 10,600 0 Total 52,000 43,000 95,000 48,313 35,439 83,752 (12) ADB Loan 57,000 52,400 Percent of Project Cost Funded 60.0% 62.6% GLRIS = geographic land resource information system. Source: Project Completion Report, Appendix 6.

Appendix 3 27

COMPLIANCE WITH LOAN COVENANTS

Status of Compliance Loan Covenant PCR PPAR

Availability of and Access to Information 1. The Borrower shall ensure the

expeditious collection and assembly of the data required to enable the Bappedas to improve their physical planning process. The Borrower shall also ensure that the data stored in both the national and provincial data centers are made available for application and use by any interested data user (LA, Schedule 6, para. 12).

Partly complied with. The availability and quality of data distributed by Bakosurtanal, National Land Agency (BPN), and Center for Soil and Agroclimate Research to the Bappedas need to be improved.

Partly complied with. The quality and availability of data from Bakosurtanal, BPN, and Center for Soil and Agroclimate Research still need improvement. The provincial data centers ceased operations after project completion.

Schedule of Fees and Charges for the Use of Land Resource Data Centers

2. The Borrower shall, within 2

years from the effective date and in consultation with the Asian Development Bank (ADB), impose and implement a schedule of fees and charges for the use of these data centers by all users. The fees and charges shall be fixed to fully recover, at the minimum, labor cost allocated in accordance with the time spent for the performance of the particular services, depreciation cost of equipment used for the services and cost of materials provided under the services (LA, Schedule 6, para. 13).

Partly complied with. A sales mechanism was not put in place for BPN and the Bappedas.

Partly complied with. BPN has prepared a proposal covering the marketing/pricing of its services, approval of which is still pending. The Bappedas have yet to develop cost recovery programs. The provincial data centers, although established, stopped operating after project completion, with staff and equipment integrated with other Bappeda units. With decentralization, provincial and district Bappedas can now establish their own regulation governing sales and cost recovery. For instance in Makassar, the Bappeda has been allowed to charge Rp50,000 for map reproduction since February 2002. This is in line with a new local regulation setting an annual revenue target of Rp10.0 million for this Bappeda.

Appendix 3 28

Status of Compliance

Loan Covenant PCR PPAR Project Monitoring and Evaluation 3. The project management office

shall prepare the project monitoring and evaluation reports on an annual basis and the Borrower, through Bakosurtanal, shall ensure that copies of said reports are annually transmitted to and for the information of ADB up to a period of 5 years after completion of the Project (LA, Schedule 6, para. 15[b]).

Complied with. Partly complied with. Copies of the PME reports (from 1999 to 2001) were not transmitted to ADB.

4. The Borrower shall (i) maintain

or cause to be maintained, separate accounts for the Project; (ii) have such accounts and related financial statements audited annually, in accordance with sound auditing standards by auditors acceptable to ADB; (iii) furnish to ADB, as soon as available but not later than 9 months after the end of each related fiscal year, certified copies of such audited account and financial statements and the report of the auditors relating thereto, all in English language (LA, Article IV, Section 4.06[b]).

Partly complied with. Statements for FY1996/97 and FY1997/98 were not in English.

Complied with. Bakosurtanal has advised that the two financial statements had been translated and presented to ADB.

LA = loan agreement, PCR = project completion report, PPAR = project performance audit report. Note: Only covenants not complied with or where compliance has changed since the PCR are included.