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Document of

The World Bank

Report No: ICR2522

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IBRD-80110)

ON A LOAN

IN THE AMOUNT OF US$485 MILLION

TO THE

THE STATE OF RIO DE JANEIRO

WITH A GUARANTEE FROM

THE FEDERATIVE REPUBLIC OF BRAZIL

FOR A

RIO DE JANEIRO METROPOLITAN URBAN AND HOUSING DEVELOPMENT

POLICY LOAN

May 29, 2013

Sustainable Development Department

Brazil Country Management Unit

Latin America and the Caribbean Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective May 29, 2013)

Currency Unit = Brazil Real

BR R$ 1.00 = US$ 0.47

US$ 1.00 = BR R$ 2.11

BRAZIL - Government Fiscal Year

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

ADF Agence Française de Développement

(French Development Agency)

AUIS Areas of Housing or Urban Special Interest

CAS Country Assistance Strategy

CEHAB Companhia Estadual De Habitacao E Obras,

(State Company for Housing and Public Works)

CEPS Comitê Executivo de Políticas Sociais

(Executive Committee for Social Policies)

CPS Country Partnership Strategy

DMR-RJ

Departamento de Recursos Minerais do Estado do Rio de Janeiro,

(Department of Mineral Resources of the State of Rio de Janeiro)

DRM Disaster Risk Management

DPL Development Policy Loan

DRM-RJ Núcleo de Prevenção e Análise de Desastres Geológicos

(Center for Analysis and Prevention of Geological Disasters)

EMOP Empresa de Obras Públicas do Estado do Rio de Janeiro

(Public Works Company)

FEHIS Fundo Estadual de Habitação de Interesse Social

(State Social Housing Fund)

FY Fiscal Year

GDP Gross Domestic Product

GoRJ Government of the State of Rio de Janeiro

IBRD International Bank for Reconstruction and Development

ICR Implementation Completion and Results Report

IADB Inter-American Development Bank

INEA Instituto Estadual do Ambiente

(State Institute of Environment)

ISR Implementation Status Report

ITERJ Instituto de Terras e Cartografia do Estado de Rio de Janeiro

(Land and Cartography Institute of Rio de Janeiro State)

KPI Key Performance Indicator

MCMV Minha Casa Minha Vida,

(My Home My Life)

M&E Monitoring and Evaluation

PAC Programa do Aceleramento do Crescimento

(Program of Accelerated Growth)

PDO Project Development Objective

PPA Plano Plurianual

(Multi-year Budget Plan)

PROTEJO Programa de Proteção de Jovens em Territorio Vulnerável

(Program for Youth Protection in Vulnerable Territories)

R$ Brazilian real

RJMR Metropolitan Region of Rio de Janeiro

SEASDH

Secretaria de Estado de Assistência Social e Direitos Humanos

(Secretariat of Social Welfare and Human Rights)

SEH Secretaria de Estado de Habitação

(Secretariat of Housing)

SEOBRAS Secretaria de Obras

(Public Works Secretariat)

SEFAZ Secretaria de Estado de Fazenda

(Finance Secretariat)

SIL Specific Investment Loan

TAL Technical Assistance Loan

TWC Technical Working Committee

UPP Unidades de Polícia Pacificadora

(Pacification Police Units)

ZEIS Zona Especial de Interesse Social

(Social Interest Housing Zone)

Vice President: Hasan A. Tuluy

Country Director: Deborah L. Wetzel

Sector Director: Ede Jorge Ijjasz-Vasquez

Sector Manager: Anna Wellenstein

ICR Team Leader: Alessandra Campanaro

BRAZIL

Rio de Janeiro Metropolitan Urban and Housing Development Policy Loan

CONTENTS

Data Sheet

A. Basic Information

B. Key Dates

C. Ratings Summary

D. Sector and Theme Codes

E. Bank Staff

F. Results Framework Analysis

G. Ratings of Program Performance in ISRs

H. Restructuring

1. Program Context, Development Objectives and Design ......................................................... 1 2. Key Factors Affecting Implementation and Outcomes ........................................................... 3 3. Assessment of Outcomes ........................................................................................................ 6 4. Assessment of Risk to Development Outcome ..................................................................... 15 5. Assessment of Bank and Borrower Performance .................................................................. 15 6. Lessons Learned .................................................................................................................... 17 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ....................... 18 Annex 1 - Bank Lending and Implementation Support/Supervision Processes ........................ 19 Annex 2. Beneficiary Survey Results ....................................................................................... 21 Annex 3. Stakeholder Workshop Report and Results ............................................................... 22 Annex 4. Summary of Borrower's ICR and/or Comments on Draft ICR ................................ 23 Annex 5. Comments of Co-financiers and Other Partners/Stakeholders .................................. 27 Annex 6. Achievement of Program Development Objectives .................................................. 28 Annex 7. List of Supporting Documents .................................................................................. 37

A. Basic Information

Country: Brazil Program Name: Rio de Janeiro

Metropolitan Urban and Housing Development

Program ID: P122391 L/C/TF Number(s): IBRD-80110

ICR Date: 05/20/2013 ICR Type: Core ICR

Lending Instrument: DPL Borrower: STATE OF RIO DE

JANEIRO

Original Total Commitment:

USD 485.00M Disbursed Amount: USD 485.00M

Revised Amount: USD 485.00M

Implementing Agencies: State Government of Rio de Janeiro’s Secretariat of Finance, Secretariat of

Public Works, and Secretariat of Social Action and Human Rights

Co-financiers and Other External Partners: N.A.

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 10/19/2010 Effectiveness: 09/01/2011

Appraisal: 12/15/2010 Restructuring(s):

Approval: 03/15/2011 Mid-term Review:

Closing: 12/31/2012 12/31/2012

C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Moderately Unsatisfactory

Risk to Development Outcome: Moderate

Bank Performance: Moderately Satisfactory

Borrower Performance: Moderately Unsatisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory

Quality of Supervision: Moderately Satisfactory Implementing Agency/Agencies:

Moderately Unsatisfactory

Overall Bank Performance:

Moderately Satisfactory Overall Borrower Performance:


C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance

Indicators QAG Assessments (if

any) Rating:

Potential Problem Program at any time (Yes/No):

No Quality at Entry (QEA): None

Problem Program at any time (Yes/No):

No Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:


D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

General water, sanitation and flood protection sector 19 19

Housing construction 12 12

Other social services 19 19

Sub-national government administration 38 38

Urban Transport 12 12

Theme Code (as % of total Bank financing)

Environmental policies and institutions 25 25

Natural disaster management 13 13

Personal and property rights 12 12

Urban planning and housing policy 25 25

Urban services and housing for the poor 25 25

E. Bank Staff

Positions At ICR At Approval

Vice President: Hasan A. Tuluy Pamela Cox

Country Director: Deborah L. Wetzel Makhtar Diop

Sector Manager: Anna Wellenstein Guang Zhe Chen

Program Team Leader: Alessandra Campanaro Ming Zhang

Sameh Wahba Alessandra Campanaro

ICR Team Leader: Alessandra Campanaro

ICR Primary Author: Cecilia Zanetta

F. Results Framework Analysis Program Development Objectives (from Project Appraisal Document) This operation provided support to the State Government of Rio de Janeiro (GoRJ) to: PDO 1. Strengthen policies for planning and managing territorial growth in the Rio de Janeiro Metropolitan

Region by: a. Strengthening metropolitan management through improved integration and coordination in

urban development and transport; b. Strengthening management of urban environment; c. Improving capacity in Disaster Risk Management (DRM);

PDO 2. Promote the provision of affordable housing by:

d. Enhancing low-income housing policy and financing mechanisms; e. Strengthening land management and titling; and

PDO 3. Provide targeted and integrated social development programs to the urban poor to:

f. Improve living conditions in most vulnerable social settings. Revised Program Development Objectives (if any, as approved by original approving authority)

N.A.

(a) PDO Indicators

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target

Values

Actual Value Achieved at

Completion or Target Years

PDO 1. Strengthen its policies for planning and managing territorial growth in the Rio de Janeiro Metropolitan Region

a. Strengthen metropolitan management through improved integration and coordination in urban development and transport

Indicator 1 : Metropolitan-wide plans for Rio de Janeiro Metropolitan Region (RJMR) in effect.

Value (quantitative or qualitative)

0 3 1

Date achieved 31 Dec. 2009 31 Dec. 2012 31 Dec. 2012

Comments (incl. % achievement)

Partially Achieved (33% achievement): Metropolitan Arco Master Plan has been concluded and is under implementation. The State Housing Plan has been prepared, although final presentation is pending. Substantial progress has been made toward updating the Urban Transport Master Plan, which is expected to be completed by March 2013.

Indicator 2 : Change in formatting of Multi-year Development Plan (PPA) taking into account the Integrated Program for Rio de Janeiro Metropolitan Region (RJMR).

Value (quantitative or Qualitative)

No Yes Yes



Achieved (100% achievement): The Multi-Year Development Plan 2012-2015 includes geographically-bounded budget allocations for Rio’s Metropolitan Region.

Indicator 3 : Number of passengers using smart-card with integrated fare.


0 550,000

An average of 505,240, of

passengers per week day, with peaks

hovering over 520,000



Substantially Achieved (95% achievement): The Single Ticket Smart Card (Bilhete Único) has been successfully implemented, reaching an average of roughly 505,000

passengers per day during weekdays, with the maximum number of passengers

hovering over the 520,000 mark (Dec. 3-21, 2012).

b. Strengthen management of urban environment

Indicator 4 : Increase INEA’s direct annual investment budget through State Environmental Funds excluding operational costs.


R$62.5 million1 R$170 million

R$175 and R$152 million in 2011 and 2012 respectively



Substantially Achieved (89% achievement): The share of state environmental funds

executed by INEA have increased substantially with respect to 2009—by a factor of 2.8 and 2.4 in 2011 and 2012, respectively. The execution of some of these funds is expected to further increase in 2013 once INEA begins transferring resources to newly established water management organizations.

Indicator 5 : INEA has increased number of watershed management organizations fully operationalized by contracting an Executive Branch (delegataria).

1 The original baseline (i.e., R$64 million) was modified to ensure its methodological consistency with the

reported outcomes, which reflect executed budgetary resources rather than just budgeted resources.


75% (6 out of 8 watershed

management organizations)

100%

88.9% (8 out of 9 watershed

management organizations)



Partially Achieved (89% achievement): Eight watershed management organizations are now fully operational, having signed management contracts with delegatarias. Another water management organization was created in 2011. All nine water management organizations are expected to be operational in 2013.

c. Improve capacity in Disaster Risk Management (DRM)

Indicator 6 : State-level geological landslide susceptibility map covering at least 75% of the municipalities in the RJMR


10% 75% 89.5%



Achieved (119% achievement): Seventeen out of the 19 municipalities in the RJMR have been mapped. The remaining two are expected to be mapped by June 2013.

Indicator 7: Identification of exposure to landslide risk in 10 prioritized areas

Value 0 10 15



Achieved (150% achievement): Fifteen out of 17 municipalities with significant exposure to landslide risk have been mapped for imminent risk, resulting in the identification of over 16,000 inhabitants living in high risk-prone areas.

Indicator 8: Population benefitting from real-time alarm system

Value 2.9m people (*) 4.9m people 4.97m people



Achieve (100% achievement): Almost 5 million residents living in flood-prone areas now benefit from the INEA’s early alert system (http://inea.infoper.net/inea/). (*) Note: The baseline was adjusted according to the 2010 Census data.

Indicator 9: Social rental program budgeted and, where applicable, disbursed within 30 days of disaster

Value No Yes Yes



Achieved (100% achievement): SEASDH has in place the institutional scaffolding

required to disburse payments under the social rent program within 30 days. This has been achieved by subscribing a number of institutional agreements with the federal and municipal governments, as well as the private sector.

PDO 2. Promote the provision of affordable housing

a. Enhance low-income housing policy and financing mechanisms

Indicator 10: Signature of 5 donation contracts of state owned land to FAR/CAIXA, benefiting approximately 5,000 families


1 5 additional land

donation contracts

3 additional land donation contracts



Partially Achieved (60% achievement): Three additional contracts have been signed and 9 are under analysis. SEH has completed the procedures under its control and is waiting for the CAIXA to finalize the remaining nine contracts.

Indicator 11: Implementation of at least one condominium self-management model in social housing at Complexo Batan (15,000 residents).


0 1 0


Comments (incl. % Not Achieved (0% achievement): Implementation in Batan proved unfeasible, as it is

http://inea.infoper.net/inea/

achievement) one of the most violent areas in Rio. Instead, a study was conducted, which is expected to provide the foundations for a future ownership management program..

b. Strengthen land management and titling

Indicator 12: Increase of land titling program for slum dwellers.


1,500 10,000 10,238



Achieved (102% achievement): ITERJ has completed all the required administrative procedures to issue 10,238 legal land titles, of which 2,050 are still awaiting official recognition at the municipal level. The results are particularly remarkable when considering that ITERJ’s average annual output during 2009-2011 was of only 1,249 titles. Thus, the 2012 output represents a drastic increase—almost over an eight fold increase with respect to the 2009-2011 period.

Indicator 13: Number of feasibility studies for identification of adequate areas to implement large scale developments for low income housing.


0 3

(one per growth pole)

0



Not Achieved (0% achievement): INEA has conducted environmental feasibility

studies for four tracks of land in the metropolitan region with estimated capacity of over 130,000 housing units. However, feasibility studies from a housing perspective to be conducted by SEH are still pending. They are programmed under the upcoming TAL.

Indicator 14: Develop an integrated housing development model for about 10 to 15 thousand families

Value No Yes No



Not Achieved (0% achievement): A large tract of land—so-called Manguinhos—was recently expropriated by the Governor to be used for an integrated housing development. No integrated housing development model has been yet developed.

Indicator 15: Issuing a public recruitment announcement to hire at least 20% more technical staff for ITERJ

Value No Yes Yes



Achieved (100% achievement): In 2011, ITERJ carried out the merit-based recruitment of 104 technical positions, equivalent to 20 percent of its technical staff. Of these, 98 candidates have been officially selected and, as of April 2013, 87 of them were already confirmed in their posts.

PDO 3. Provide targeted and integrated social development programs to the urban poor

a. Improve living conditions in most vulnerable social settings

Indicator 16: Number of favela territories benefiting from the UPP Social Programs.


0 20 24



Achieve (120% achievement): In January 2011, the UPP Social Program was transferred from the state level to the municipal level. A new state-level program—so-called Peace Territories—has been implemented in 17 favelas, while the

complementary municipal level program—the UPP Social Carioca—has been implemented in 24 favelas.

Indicator 17: Approval of new organization chart of Secretariat of Social Assistance by December 2012

Value No Yes No

Date achieved 12/31/09 12/31/12 11/26/12


Not Achieved (0% achievement): Approval of SEASDH’s new organizational structure was expected by end of December but it was delayed by a change in SEASDH political leadership. However, although the new organizational structure has not been officially approved, there has been considerable progress toward its implementation.

Indicator 18: Number of social development programs with M&E system established

Value 0 15 3



Partially Achieved (20% achievement): Progress has been made toward enhancing M&E of social programs under SEASDH’s responsibility. There is now centralized information of the progress being done in all programs with respect to their own M&E frameworks. Moreover, three programs are being subject to randomized impact evaluations.

G. Ratings of Program Performance in ISRs

No. Date ISR Archived

DO IP Actual Disbursements

(USD millions)

1 06/28/2011 Satisfactory Satisfactory 0.00

2 02/01/2012 Satisfactory Satisfactory 485.00

3 11/05/2012 Moderately Satisfactory Moderately Satisfactory 485.00

4 02/10/2013 Moderately Unsatisfactory Moderately Unsatisfactory 485.00

H. Restructuring (if any)

Not Applicable

1

1. Program Context, Development Objectives and Design

1.1 Context at Appraisal

The State of Rio de Janeiro is the third largest in Brazil, with the Rio Metropolitan Region

(RJMR) being the second largest metropolitan area in the country with a population of 12 million.

As the historical capital and a major tourism destination, the RJMR has special significance for

Brazil. While the region’s economy and urban growth suffered considerably since the 1970s as a

result of the relocation of the capital to Brasilia, industrial restructuring and social problems,

population growth has recovered significantly in recent years as a result of the discovery of

offshore oil reserves and the resurgence of industrial activity, including mining, petrochemicals,

metallurgical, port, logistics, and creative industries. The region has also been in the spotlight as

the host of important mega-events, such as the 2014 World Cup and the 2016 Summer Olympic

Games.

Proactive urban and housing development strategies and policies are urgently needed to ensure

the reemergence of a competitive and green metropolitan region that is environmentally

sustainable and offers a high quality of life as well as equitable access to opportunities and

services. Of particular concern is that future growth will be taking place in a fragile environment

that is highly vulnerable to natural disasters such as flooding and landslides, as highlighted by the

severe toll taken by natural catastrophes that occurred in 2010 and 2011. Recognizing the

challenges ahead, the Government of Rio de Janeiro (GoRJ) requested the Bank’s support to

strengthen its policies for planning and managing territorial growth in the RJMR, promoting the

provision of affordable housing, and providing targeted and integrated social development

programs to the urban poor

The state’s fiscal framework was deemed adequate for the purpose of a DPL operation, as fiscal

and debt trends were expected to remain sustainable over the medium-term, even in view of the

upcoming World Cup and Olympic Games. Fiscal arrangements between the federal government

and the state and between the state and the municipal governments were also deemed adequate

and expected to remain largely unchanged over the medium term.

1.2 Original Program Development Objectives (PDO) and Key Indicators (as approved)

This operation aimed to support the three development objectives, each of which was to be

attained by focusing on strategic areas of intervention. A battery of Key Performance Indicators

(KPIs) was identified to track progress toward the achievement of each PDO, as follows:

PDO 1 - Strengthen planning and management of urban growth in the metropolitan region

a - Metropolitan management

KPI 1 - Metropolitan-wide plans for RJMR in effect. KPI 2 - Change in formatting of Multi-year Plan (Plano Plurianual - PPA) taking into account the

Integrated Program for RJMR. KPI 3 - Number of passengers using smart-card with integrated fare. b - Management of the urban environment

KPI 4 - Increase INEA’s direct annual investment budget (through State Environmental Funds) excluding operational cost

KPI 5 - Rio’s State Institute of Environment (Instituto Estadual do Ambiente – INEA) has increased number of watershed management organizations fully operationalized by contracting an Executive Branch (delegataria).

c - Disaster Risk Management

KPI 6 - State-level geological landslide susceptibility map covering at least 75 percent of the municipalities in the RJMR.

KPI 7 - Identification of exposure to landslide risk in 10 prioritized areas. KPI 8 - Number of people benefiting from real-time alarm system.

2

KPI 9 - Social rental program budgeted and, where applicable, disbursed within 30 days of disaster occurrence

PDO 2 - Promote the provision of affordable housing with access to infrastructure and service

a - Low-income housing policy and financing mechanisms

KPI 10 - Signature of 5 donation contracts of state owned land to FAR/CAIXA, benefiting approximately 5,000 families.

KPI 11 - Implementation of at least one model of residents ownership in social housing at Complexo Batan (15,000 residents).

b - Land management and titling.

KPI 12 - Increase of land titling program for slum dwellers. KPI 13 - Number of feasibility studies for identification of adequate areas to implement large scale

developments for low income housing. KPI 14 - Develop an integrated housing development model for about 10 to 15 thousand families. KPI 15 - Issuing a public recruitment announcement to hire at least 20% more technical staff for ITERJ.

Policy Area 3 – Support the Implementation of a Targeted, Comprehensive Social Development program for the Urban poor

a - Living conditions in most vulnerable social settings

KPI 16 - Number of favela territories benefiting from the Pacification Police Units (Unidades de Polícia Pacificadora - UPP) Social Programs.

KPI 17 - Approval of new organization chart of the Secretariat of Social Assistance and Human Rights (SEASDH).

KPI 18 - Number of social development programs with M&E system established.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and

Reasons/Justification

Not Applicable

1.4 Original Policy Areas Supported by the Program

Policy Area 1 – Metropolitan planning and growth management

Within this policy area, the operation focused on the following strategic areas of intervention:

Metropolitan management: The operation supported the improved integration and coordination in urban

development and transport as a way to address the challenges of metropolitan management, including: i) establishing state level leadership on metropolitan planning and management issues; ii) designing a medium-term metropolitan strategy and program to be included in the state’s 2012-2015 development plan; iii) strengthening existing sector-specific metropolitan institutions and investment coordination; and iv) enhancing public transport governance and services through improved quality and affordability by integrating tariffs for intercity transportation.

Management of the urban environment: The operation supported a set of measures to address the

challenge of effectively coordinating environmental policy at the metropolitan level while meeting social demands, including: i) fostering the technical strengthening and financial independence of the state Environmental Agency (INEA); ii) establishing an appropriate mechanism to protect the state’s sensitive environmental assets, including the Guandu River Basin in the RJMR, which provides 80 percent of the region’s water supply; and iii) establishing a decentralized, rigorous and timely licensing process.

Disaster Risk Management (DRM): While the GoRJ had been moving toward a more proactive

approach to reducing risks, several issues remained to be addressed to increase the focus on prevention and mitigation. The operation supported a set of measures to address the challenges of disaster risk management, including: i) the establishment of a disaster risk program with an incentive system and funding source for municipal actions on disaster risk; ii) the identification of hydrological and geological risks at the state level and improvements to the information system; iii) implementation of a more effective early warning system and contingency plans; iii) the establishment of clear policies for reconstruction that include disaster risk components; and iv) the development of a state disaster risk management policy with a clear outline of the responsibilities of the different state agencies.

Policy Area 2 – Affordable housing

Within this policy area, the operation focused on two strategic areas of intervention:

Low-income housing policy and financing mechanisms: The operation supported a set of measures

to address the challenges hindering the supply of affordable housing, including: i) the implementation of effective private sector participation in low-income housing, providing land infrastructure as necessary

3

and coordinating the demand cadaster; ii) collaboration with municipalities in the RJMR to meet housing demand for households in the 0-3 minimum-wages income range; iii) improving the governance mechanisms of the State Housing Fund as dedicated funding for low-income housing; and iv) strengthening the management of common areas in existing housing complexes and creating conditions for sustainable housing projects in the future.

Land management and titling. The operation supported a set of measures to address the challenges

facing the regularization of land tenure, including: i) enhancing the framework and capacity for land tenure regularization; ii) scaling up land titling for dwellers in informal settlements; and iii) enabling efficient access to land and infrastructure services.

Policy Area 3 - Social Development

The operation supported a set of measures to address the challenge of providing targeted, integrated social programs for the poor, including: i) launching of UPP Social, an innovative and multi-dimensional approach to integrate favelas with the rest of the city by rolling out a comprehensive menu of social support programs following pacification interventions by the military police; iii) restructuring of SEASDH to enable it to play a catalytic role within the portfolio of social development program it oversees; and iv) establishing strong planning and monitoring and evaluation systems.

1.5 Revised Policy Areas (if applicable) Not Applicable

1.6 Other significant changes

Not Applicable

2. Key Factors Affecting Implementation and Outcomes

2.1 Program Performance

The Program was implemented as originally envisioned, with the two tranches being fully

disbursed on schedule. As noted below, however, one of the actions that had been taken as

indicative of progress toward SEASDH institutional restructuring was later reversed—i.e., the

merit-based hiring of SEASDH technical staff.

Tranche # Amount Expected

Release Date Actual Release

Date Release

Tranche 1 US$290 million Sept. 2011 9 Sept. 2011 (1) Regular

Tranche 2 US$195 million Dec. 2011 19 Dec. 2011 (1) Regular

Tranche 1

Policy conditions as stated in the Program Document Status

The GoRJ strengthened its leadership on metropolitan issues through the establishment of a Directive Committee for Metropolitan Strategy headed by the Vice- Governor of the State, and a Technical Working Committee.

Met

The GoRJ created the Single Ticket (Bilhete Unico) to improve the convenience and affordability of public transportation in the RJMR by integrating tariffs for intercity transportation.

Met

The GoRJ strengthened its capacity to protect environmental assets through the expansion of INEA’s human resources and financial capacity and the establishment of specific funding sources to finance INEA’s activities

Met

The GoRJ improved effective watershed management and decentralization by a) instituting a fee for all water rights holders and b) transferring the amount of collected fees to watershed management organizations.

Met

The GoRJ has established a state disaster risk policy which provides the following incentives for municipal participation: (i) creation of a housing scheme program prioritizing the population living in risk areas, (ii) creation of a social rental program for families affected by disasters, and (iii) provision of technical and financial assistance, and incentives for, municipalities to delineate risk areas.

Met

The GoRJ and at least one municipality sign an agreement on the structure of a housing scheme, including development regulations and financial incentives, in

Met

4

order to meet housing demand in the range 0-3 MW for families living in risk vulnerable areas.

The GoRJ enhanced framework for land titling programs, by 1) adopting a pilot scheme (Cantagalo) allowing state land donation to provide titles to low income families; 2) exempting low income families from payment of ITD in connection with such donation of land; 3) strengthening land titling capacity of seven municipalities through signing agreements for technical assistance.

Met

The GoRJ established the UPP Social Program, on a pilot basis, in the state slums of Borel, Cidade de Deus and Providencia.

Met

Tranche 2

Policy conditions as stated in the Program Document Status

The Directive Committee for Metropolitan Strategy strengthens key metropolitan governance mechanisms by issuing an Integrated Program for RJMR, for inclusion in the State’s Multi-year Plan 2012-2015.

Met

The GoRJ approves new operating rules for the State Housing Fund (FEHIS), to enhance governance and policy mechanisms of the low income housing sector, including use of FEHIS funds and strategic priorities for low income families (0-3 minimum wages)

Met

The GoRJ strengthens ITERJ’ land tenure regularization capacity by increasing the amount of financial resources available to ITERJ and initiating the recruitment process of personnel in order to expand ITERJ’s programs to double its capacity in land tenure regularization.

Met

The GoRJ restructures and operationalizes the Secretariat of Social Assistance and Human Rights (SEASDH) by establishing a transition from a silo structure to a horizontal organization of sectors, promoting coordination and integration and introduction of a monitoring and evaluation program.

Met, with one action later being

reversed

2.2 Major Factors Affecting Implementation:

Major Factors Affecting Implementation

Natural disasters as catalyst for action: Two events served to galvanized support on the part of Rio’s

authorities toward developing a systematic approach toward risk management as opposed to just emergency response. In January 2010, extreme weather resulted in floods and mudslides, leaving at least 85 people dead, many more have been injured, and more than 4,000 people were forced to evacuate their homes.

The worst affected municipality was Angra dos Reis, about 150 kilometers southwest of the city

of Rio de Janeiro. A second incident happened just three months later, in April 2010, when heavy rains once again caused floods and mudslides, resulting in 212 deaths, 161 people injured and at least 15,000 people made homeless. The flooding has particularly affected the city of Rio de Janeiro, and its surrounding area, including the cities of Niterói. A further 10,000 homes were thought to be at risk from mudslides, most of them in the favelas, the shanty town built on the hillsides above downtowns. Damage from the flooding was estimated at US$13.3 billion, about 8 percent of the GDP of Rio de Janeiro State. These events created a strong momentum toward developing a state-level disaster risk management strategy. The Bank’s fast response to the GoRJ’s request for support permitted to fully capitalize on such momentum. Effective articulation of Bank support at the policy level: This operation was one of several Bank

operations providing support in the State of Rio, including two other DPLs for the state of Rio de Janeiro, amounting to a total of US$785 million and a DPL for the Municipality of Rio in the amount of US$1,045

million.2 In addition, this operation was aligned with the sector policies being supported in transport, in

particular through the Rio’s Second Mass Transit Project (Project No. 111996, US$211.7 million; approved July 2009), which aimed at improving the level of service provided to the suburban rail transport users in the

2 The first DPL to the State of Rio (i.e., Rio State - Fiscal Sustainability, Human Development and

Competitiveness DPL; P117244) was approved on February 2010 for US$485.0 million to support the GoRJ’s strategic efforts to improve fiscal management, competitiveness and social service during the global economic slowdown. A third DPL for the State of Rio (Rio State - Fiscal Efficiency for Quality of Public Service Delivery DPLI; P 126465) was approved after this operation on August 2012 for US$300 million to support the strengthening its sector management tools and the quality of education and health services. A DPL to the Municipality of Rio (Rio Municipality - Fiscal Consolidation for Efficiency and Growth DPL; Project No. 111665) was approved on July 2010 for US$1,045 million, which aimed at creating fiscal space for investments to improve the quality and efficiency of public service delivery, especially in poor areas.

http://en.wikipedia.org/wiki/Favela

5

RJMR, including integrating mass-transport fares. This integrated, multi-sector approach toward lending helped generate a critical mass of financing incentives, create positive synergies among the various operations, and engage key actors at various levels of government and across sectors. Less effective articulation of Bank support in terms of advisory services. In theory, advisory services

to this DPL were to be provided under additional financing for an ongoing TAL in the amount of US$48.0 million.

3 However, the preparation took longer than anticipated due, in part to innate complexity multi-sector

TAL operations and, as a result, the envisioned TA support did not materialize, causing implementation delays, particularly in housing and the restructuring of SEASDH. To overcome this shortcoming, the Bank team proactively sought alternative funding sources—mainly trust funds—to finance critical technical assistance needs, partially ameliorating this shortcoming. This strategy required significant effort on the team’s part to identify funding sources and carry out their supervision. Conducive implementation environment: The implementation of Rio’s DPL II benefited from a stable

macroeconomic environment. Although at a rate lower than expected, Brazil’s annual GDP growth was 2.7 percent in 2011 and an estimated 1.2 percent in 2012, respectively, and an annual inflation hovering around 6 percent in 2011 and 2012.

4 The State of Rio continues to experience economic growth, as a result of the

discovery of new oil reserves and a resurge in industrial activity. The upcoming World Cup and Summer Olympics have also served as catalysts for mobilizing strong public and private investments. Impact of political economy factors. On the positive side, there was political alignment between

authorities at the three levels of government—i.e., federal, state, and the municipality of Rio— for the first time in several decades, which facilitated dialogue and coordination. The national elections also had positive impacts, including increasing the visibility of the favela pacification efforts and, consequently, increasing scrutiny and pressure to deliver results in UPP social. However, the presidential elections also had some negative impacts on the operation’s implementation, including focusing more narrowly on the achievement of the federal-supported Program of Accelerated Growth (Programa do Aceleramento do Crescimento – PAC) at the expense of, for example, focusing on addressing structural institutional weaknesses at the state level, including the housing and social secretariats. Together with the gubernatorial elections, presidential elections also had a role to play in changes in leadership at the secretariat level within the state. Institutional weaknesses as implementation bottlenecks. The institutional weakness and fragmentation

within the housing sector, which was identified as a risk at appraisal, was indeed a factor that hindered implementation. In addition, the high leadership turnover within SEASDH undermined the actions supported under this DPL that were aimed at the institutional strengthening of this Secretariat (i.e., organizational restructuring, development of an integrated M&E system). There were three different Secretaries in charge during the operation’s two-year lifespan. Changes in the responsibility of social programs supported under the operation. In January 2011, the

UPP Social Program was transferred from the state level to the municipal level, while a complementary program—so-called Territórios da Paz—was developed at the state level. This change proved to be beneficial, as both the state and the municipality of Rio now have a presence in recently pacified favelas in a coordinated manner, each jurisdiction focusing on the provision of services that are within their respective scope of responsibilities.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization:

Monitoring and Evaluation (M&E) Design

Overall, the DPL program benefited from a strong M&E system embedded in the operation’s Policy Matrix, with a robust set of tranche-release policy actions and KOIs that effectively focused on crucial areas where progress was needed. While the 18 KPIs included in the Policy Matrix focused on actions that were clearly linked to the policies being supported under the DPL, in retrospect they may have been too many. Moreover, they were uneven in terms of their relative importance, some of them being too specific in the context of a development policy operation. Likewise, some of them could have been more clearly defined. Finally, the achievement of some indicators depended not just on state agencies but also government agencies at the federal and municipal level, which added additional complexity. Some examples include: KPI 1 called for metropolitan-wide plans for RJMR to be in effect. “Being in effect” was not defined, and

it can be interpreted in various ways, such as being formally adopted or having capital investments that

3 Rio’s Public Sector Modernization Technical Assistance Loan (the Pró-Gestão TAL - P117244), which was

approved on 2010 for US$18.67 million, was envisioned as a vehicle for technical support to the state in the policy areas under the first DPL. 4 The World Factbook (Central Intelligence Agency, 2013; https://www.cia.gov/library/publications/the-world-

factbook/geos/br.html).

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are consistent with the plan. KPI 11 called for the implementation of at least one model of resident ownership in social housing at

Complexo Batan. As it turned out Batan is one of the most violent favela in Rio, which added unnecessary complexity to the task. More flexibility in the definition of the indicator would have allowed adjustments during implementation, such as the development of the model in other areas.

KPI 9 required that land donations for the Minha Casa Minha Vida program be reviewed and approved

at the federal-level by Caixa, clearly outside SEH’s direct control. Likewise, the final issuing of land titles under KPI 12 depended on the final approval on the part of municipalities, which exceeded ITERJ’s authority. While the program carefully considered these risks at design, they were deemed reasonable, since federal, state and municipal incentives to align action were in place. However, timing of execution in these occasions proved to be a challenge in the way of full execution.

Monitoring and Evaluation (M&E) Implementation

The Bank regularly monitored progress under the DPL series through periodic Bank supervision missions. The Secretariat of Public Works, which was responsible for overall coordination, provided effective overall leadership, as well as coordinated M&E of the actions included in the Policy Matrix, collecting data needed from the various participating agencies. A total of four supervision missions were conducted during the operations’ lifetime. Additional technical missions linked to the TF-sponsored TA were carried out, with a monthly or bi-monthly frequency. Progress toward the achievement of policy actions was closely monitored by the various sector specialists and clearly reported in the Tranche Release documents, Aide Memoires and Implementation Status Reports (ISRs).The operation’s M&E was enriched by additional evaluations commissioned by the GoRJ, including an impact assessment of the Billhete Unico carried out by the renowned Getulio Vargas Foundation. In addition, there are several studies focusing on the overall impact of the favela pacification interventions.

Monitoring and Evaluation (M&E) Utilization

The M&E system proved useful as a basic pulse-taking tool to assess progress toward implementation of this DPL. Also, as reported by representatives of the various participating agencies, it served to foster the exchange of information both across and within agencies and to give the various Secretaries as well as the Governor’s Office the opportunity to have a periodic, comprehensive updates on the progress being done in the policy areas supported under the operation, which were key priorities of the administration.

2.4 Expected Next Phase/Follow-up Operation:

A loan from the French Development Agency (Agence Française de Développement - AFD) will continue to

provide support to policy actions in urban transport and metropolitan governance. In addition, additional Financing for Rio’s Public Sector Modernization TAL operation (Pró-Gestão) for an additional US$48 million will continue to provide support to activities that are in line with the objectives of this DPL. Specifically:

Strengthening metropolitan management through integration and coordination in urban development, housing, and transport (US$13 million). This component will continue to support activities aimed at developing a framework for metropolitan governance. Through policy roundtables, strategic planning processes, workshops, study tours and sector studies, this component is expected to trigger a collective learning process among private/ public stakeholders in the metropolitan region, thus, generating a wider demand and political support for metropolitan management, including municipal governments. Strengthening the state's disaster risk management capacity (US$10.4 million). This component will continue to support activities aimed at further improving DRM capacity as well as the state's early warning system for high rainfall events. DRM activities will include support for the development of a disaster risk management policy/program, which will entail a participatory process to institutionalize DRM in the state. The activities will include preventive measures, institutional capacity improvements, technical support for risk reduction, and improved risk communication. Activities under this component will help ensure the fine tuning and sustainability of this DPL’s policy outcomes in the area of DRM. Improving living conditions in the most vulnerable social settings (US$9.9 million). This component will

support activities aimed at strengthening the SEASDH’s capacity to implement an integrated and data-driven medium-term social development strategy, including organizational restructuring and formulation of a strategic planning process; and support to the five strategic priorities of SEASDH. Activities under this component are expected to help SEASHD complete the implementation of an integrated M&E that was envisioned under this DPL.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

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Relevance: High

This operation’s objectives were and continue to be highly relevant in relation to the GoRJ’s priorities and the collaboration between Brazil and the Bank. The operation’s design and implementation that provided a sound operationalization of its development objectives; hence, supporting its overall relevance. Specifically:

The operation remains fully consistent with the GoRJ’s priorities as reflected in its 2012-2015 Development Plan (PPA), which has an overall focus on fostering economic development by creating, together with municipalities, an environment conducive to private investments with the ultimate goal of generating social benefits for the population as a whole. The 2012-2015 PPA explicitly acknowledges the importance of the RJMR and aims at reinforcing its role as a vital economic hub, not just for the State of Rio but for Brazil as a whole. Moreover, in line with one of the DPL’s tranche-release policy actions, the 2012-2015 PPA includes multi-year budget allocations and investment plans explicitly designated for the metropolitan region.

This operation was also fully aligned with both the previous and current IBRD Country Partnership Strategy (CPS) for Brazil. Specifically, the operation was fully aligned with the objectives of the Brazil CPS 2008-2011, being one of a number of operations that supported its pillars at the sub-national level. The operation’s focus was also highly relevant in the context of the current Brazil CSP 2011-2015, as it provided support within the State of Rio to Brazil’s priorities for its partnership with the Bank, namely: (i) increasing the efficiency of public and private investments; (ii) improving the quality and expand the provision of public services for low income households; (iii) promoting regional economic development through improved policies, strategic infrastructure investments; and (iv) further improve sustainable natural resource management and enhance climatic resilience.

3.2 Achievement of Program Development Objectives

PDO achievement has been mixed, reflecting the relative priority given to individual policy areas

by state authorities and the leadership and implementation capacity of individual agencies.

Progress within each Policy Area and corresponding PDOs is summarized below. (For a detailed

description of policy outcomes, see Annex 6).

Policy Area 1 - Planning and managing territorial growth in the Rio Metropolitan Region

Ranking: Satisfactory

The actions supported by under this Policy Area aimed to ensure that future urban growth meets

the spatial requirements of economic and structural changes by: a) enhancing coordination of

physical investments and service provision at the metropolitan level; b) enhancing the protection

of the region’s sensitive natural environment; and c) mitigating risks from natural disasters. The

specific achievements can be summarized as follows (see Datasheet for Result Framework and

Annex 6 for a detailed description of policy outcomes):

Policy Area I - Planning and managing territorial growth in the Rio Metropolitan Region

PDO 1.a. Strengthen metropolitan management through improved integration and coordination in urban development and transport

Overall progress made toward strengthening metropolitan management has been substantial, including: i) establishing and strengthening metropolitan institutions; ii) developing and implementing metropolitan strategy and plans; and iii) integrating regional public transport system. The main achievements can be summarized as follows:

i. Establishment and strengthening of metropolitan institutions. The GORJ has implemented a series

of actions aimed at institutional strengthening with a metropolitan focus, including: The establishment of a Directive Committee for Metropolitan Strategy headed by the Vice-Governor and

supported by a Technical Working Committee (TWC), with representation from key state secretariats, to work jointly with the municipalities on metropolitan planning, management, and investment issues. The TWC has been operational since May 2011.

The State’s 2012-2015 Multi-year Development Plan (Plano Plurianual – PPA) includes for the first time geographically delimited programs, targets, and budget for the RJMR. This is expected to significantly enhance the state’s ability and incentives to plan, implement, and monitor the progress of an integrated metropolitan program. Thus, the corresponding target was met as envisioned.

ii. Development and implementation of metropolitan strategy and plans. Several of the planning

instruments being developed at the state level now have metropolitan focus, as follows:

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The Metropolitan Arco Master Plan, which has been completed and is under implementation. The Arco corridor will connect the main growth poles in the metropolitan area and the Itaguai Port, greatly enhancing accessibility and mobility within the region. The Social Housing Plan has been completed but has not yet been formally presented. Finally, the Transport Master Plan is currently being updated.

Two of the anticipated three state plans with a metropolitan focus have been completed and only one is being implemented, thus, resulting in the partial achievement of the corresponding target. All three plans are expected to be completed and under implementation during 2013.

iii. Integration of regional public transport system. This operation has contributed toward enhancing

public transport governance and services through improved quality and affordability by integrating tariffs for intercity transportation (i.e., buses, metro, suburban rail, and ferries). Riders can now buy a single ticket (Bilhete Único) that can be used on several modes to complete a trip within a certain period of time. This ticket costs less than the sum of the individual tickets that would have to be purchased otherwise, thereby significantly benefiting low-income riders who, as research shows, take the longest trips with the most transfers. Implementation of integrated urban transport fares. The Bilhete Único is being successfully

implemented, with an average of roughly 515,500 passengers per day during weekdays and a maximum number of passengers hovering over the 520,000 mark (Dec. 3-21, 2012). This represents a substantial achievement of the corresponding target, approximating the 550,000 number of users specified at appraisal (95 percent achievement). There is evidence showing significant social impact of the newly implemented Single Ticket. For example, household savings in transport are being redirected toward food and housing. Likewise, since employers subsidize the travel of their employees, the Single Ticket has increased employability within the RJMR. The RJMR Single Ticket was chosen the Best Transportation Program in Latin America by the International Association of Public Transport in 2001.

PDO 1.b. Strengthen management of urban environment

Progress made toward strengthening management of urban environment has been substantial, including: i) strengthening the effectiveness of the GoRJ’s environment regulation functions; and ii) protecting key environmental assets, especially the main water source for RMRJ. Specifically:

i. Environmental regulation functions. This DPL has supported the GoRJ’s efforts to enhance its capacity

to protect environmental assets by strengthening the State Environmental Institute’s (INEA) and enhancing environmental licensing mechanisms. The main outcomes can be summarized as follows: INEA’s institutional strengthening: INEA’s technical capacity has been substantially strengthened by,

among other measures, the merit-based recruitment of about 240 additional environmental professionals in 2009, accounting for roughly 20 percent of INEA’s personnel. In addition, legislation was enacted to ensure that INEA has designated funding by earmarking pollution charges to its budget. As a result, there has been a substantial increase in INEA’s direct annual investment budget through other State Environmental from R$62.5 million in 2009 to R$151.9 million. Since this is slightly below the R$170 million target, the target is considered to have been partially accomplished. INEA’s executed budget is expected to increase in 2013 as water fee revenues start being transferred to the newly established decentralized water management entities.

Enhanced environmental licensing: The state and the municipalities have strengthened the legal framework and procedures for the effective decentralization of environmental licensing for activities with local impacts, Environmental licensing is now required for most economic activities—even those with minor impacts are subject to environmental licensing, guaranteeing that economic activities be under the control of environmental authorities. In addition, the GoRJ has delegated responsibility for low-impact licensing to municipal authorities. An agreement between the state government and individual municipalities established the activities that can be licensed at the municipal level. Finally, the state has established stringent criteria to be met by municipalities wishing to issue environmental licenses. In 2012, forty-two out of the 92 municipalities in the state are already issuing environmental licenses—an average of 2,500 to 3,000 licenses per year. INEA is still responsible for issuing licenses that affect water bodies, deforestation, and non-local environmental impacts. The criteria to determine local impact that has been used by INEA is consistent with federal regulations, which were issued after INEA’s decentralized licensing system was designed. It is one of the few states that did not have to adapt its licensing system to the newly issued regulations.

ii. Protection of key environmental assets: The GoRJ has taken important steps toward enhancing and

decentralizing watershed management, including Instituting a fee for all water rights holder and transferring collected fees to watershed management organizations (delegatarias) to undertake water protection activities. Decentralized, basin-level watershed management is considered a best practice, as it has the potential to enhance accountability and better capture the needs of end-users and other stakeholders. The specific outcomes include:

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Decentralized water management organizations: Since 2009, nine watershed management organizations have been established in the state. Out of them, eight are now fully operational, having signed management contracts with delegatarias to undertake water resources protection activities, including reclamation. This target is considered to have been partially accomplished. The target is expected to be met during 2013.

PDO 1.c – Improve capacity in Disaster Risk Management (DRM)

The progress toward improving capacity in Disaster Risk Management (DRM)1 has been high, including: i) establishing a state disaster risk program in collaboration with municipalities; and ii) building up mapping and information system for disaster risks.

i. Establishment of an inter-jurisdictional DRM program. In April 2010, the GoRJ created the Morar Seguro Program, which includes financial incentives for municipalities to carry out DRM activities. It also

includes: i) a housing program that gives priority to people living in risk areas; ii) a social rental program for families affected by disaster, and iii) technical assistance and financial incentives for municipalities to establish the boundaries of risk areas. Some of the main outcomes include:

The social rental program is fully operational, During 2012, 167.526 people received benefits as of

November. The state funds allocated to the program have experienced a sustained increased, with a budget allocation of R$44.187 million in 2011, R$51.3 million in 2012 and R$61.6 million in 2013. The program is designed as a inter-jurisdictional partnership involving the three levels of government (i.e., federal, state and municipal), including the utilization of the cadaster of beneficiaries and electronic payment cards utilized at the federal level (i.e., Bolsa Familia). It represents substantial progress in the GoRJ’s readiness to support disaster victims, including the disbursement of funds for temporary housing within 30 days of the disaster.

ii. Identification of hydrological and geological risks at the state level. There were notable outcomes in

this area, including:

Implementation of a more effective early warning system and contingency plans. The flood alert system was created in 2008 under the Program for Flood Prevention and Environmental Control (Programa de Prevenção e Controle Ambiental de Inundações) approved in the 2008-2011 PPA. The system issues low, medium, and high flood risk alerts and is directly linked to the Civil Defense system. The system sends notifications every 15 minutes to the central processing unit, which, in turn, sends daily reports to Civil Defense, municipalities, and other state hydro-meteorological institutions. The system currently benefits approximately 5 million people in 21 municipalities, covering the more risk-prone areas. Thus, the 4.9 million target for this indicator was exceeded.

Identification of geological risks at the state level. One of the new initiatives under the state’s DRM strategy aims to strengthen technical expertise in geology and geotechnical engineering, and provide guidance for the coordinated management of state actions regarding geo-hazards in order to focus the efforts of different stakeholders on reducing the mortality rate and material damages caused by landslides. One of key tasks was the creation a geological landslide susceptibility maps, including: State-level geological landslide susceptibility maps have been developed for 17 of the 19 municipalities in the RJMR—exceeding the original 75 percent target. The remaining two municipalities are expected to be mapped by June 2013. In addition, 15 out of 17 municipalities with significant exposure to landslide risk have been mapped for imminent risk, resulting in the identification of over 16,000 inhabitants living in high risk-prone areas. The target, which called for ten municipalities, has been amply exceeded.

Overall, Policy Area 1- Metropolitan Management shows a satisfactory level of achievement. A

total of six of the nine KPIs associated to PDO 1 have been substantially achieved or exceeded.

The remaining three KPIs were partially achieved and are expected to be fully achieved during

2013. They constitute only minor shortcomings given the overall achievements within PDO 1 -

Strengthening policies for planning and managing territorial growth in the Rio de Janeiro

Metropolitan Region and, thus, do not detract from an overall satisfactory rating for this PDO.

Specifically, the operation’s achievements in terms of disaster risk management were at high-end

of the performance spectrum, as the DPL effectively built upon the momentum and political

support that resulted from highly visible natural disasters to substantially strengthen DRM

capacity at the state and municipal levels. The operation also had substantial achievements in

urban environment management, as INEA’s strong leadership and improved implementation

capacity and regulations translated into enhanced capacity to protect natural assets. Finally, the

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consolidation of mass transit tariffs constituted the most significant step toward the development

of a metropolitan governance framework. The operation also contributed toward the development

of planning instruments with a metropolitan focus and the growing awareness of the need to

develop metropolitan institutions.

Policy Area 2 – Affordable Housing

Ranking: Moderately Unsatisfactory

The actions supported under this Policy Area aimed to promote the provision of affordable

housing with access to infrastructure and service, with a focus on: a) enhancing low income

housing policy and financing mechanisms; and b) strengthening land management and titling.

The specific achievements can be summarized as follows (see Datasheet for Result Framework

and Annex 6 for a detailed description of policy outcomes):

PDO 2.a - Enhance low-income housing policy and financing mechanisms

Progress toward enhancing low-income housing policy and financing mechanisms has been modest. While the GoRJ has adopted various strategies to expand the participation of multiple actors (i.e., federal and municipal governments, and the private sector) in the production of low-income housing, the number of housing units being produced under the various program is still very small relative to an estimated low-income housing deficit of 372,246 units in the RJMR (i.e., for households earning up to 3 minimum wages). The main policy action and corresponding outcomes included: i. Improving the governance mechanisms of the State Housing Fund. The Management Council for the

State Housing was constituted in 2009 according to the state law, with wide representation from the all major stakeholders in low-income housing, including relevant state secretariats, social organizations related to housing, municipalities, private sector associations, non-government organizations, and workers and employees associations. In September 2011, the GoRJ approved a new strategy for FEHIS, including use of FEHIS funds and strategic priorities for low-income families (0-3 minimum wages). FEHIS new strategy was subsequently incorporated into the latest State Housing Plan. Other actions aimed at enhancing the provision of low-income housing supported under this DPL included: Land donations for My Home, My Life (Minha Casa, Minha Vida – MCMV) Federal Housing Program.

Under the MCMV Program, the state is piloting a new model for low-income housing provision, in which it donates land and supports infrastructure improvements as needed, while municipalities provides infrastructure, and private developers build the housing with federal government subsidies. As originally envision, the state’s Housing Secretariat (Secretaria de Estado de Habitação – SEH) was expected to

donate five tracks of land. The process has been already completed for three of them and the other two are still under Caixa’s review, which is outside SEH’s influence. Thus, the target was partially achieved.

Partnerships with municipalities for low-income housing. The GoRJ has been seeking to expand

collaboration with municipalities in the RJMR to meet housing demand for households with an income of less than three minimum wages, including establishing regulatory measures and development incentives for building affordable housing on vacant land, including density bonuses, special zoning regulations, and more relaxed development regulations. The GoRJ signed a cooperation agreement with the municipality of Niterói to support a housing program benefiting 5,000 families with an income less than 3 minimum wages, victims of the recent landslides in Morro do Bumba, and other areas in the municipality. In addition, three additional housing complexes have been completed under agreements with other municipalities

Condominium management model. The GoRJ intended to test a condominium self-management model in Complexo de Batan. This activity was not implemented as envisioned, partly because the Batan housing complex, which remains one of the most violent favelas in Rio, did not provide favorable conditions. This target was not met.

PDO 2.b - Strengthen land management and titling

Overall progress toward strengthening land management and titling has been modest. While remarkable progress was done in scaling up land tenure regularization, performance was disappointing in terms of ensuring the adequate supply of land to be used for affordable housing. The main policy actions and corresponding outcomes can be summarized as follows: i. Enhancing land titling. The drastic increase in the land titling was the result of a series of convergent

policy actions aimed at enhancing the legal framework for land tenure regularization, enhancing the institutional capacity of the state’s Land Institute (Instituto de Terras e Cartografia do Estado de Rio de Janeiro - ITERJ) and providing technical assistance to municipalities. Enhanced legal framework for land

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tenure regularization. In 2009, the state enacted legislation enabling the donation of state land to low-income families that occupied it, making these donations tax-exempted. The new legislation constitutes a major breakthrough, as it has eliminated important barriers to land tenure regularization. Institutional strengthening of ITERJ. The state has supported ITERJ’s strengthening, allocating

resources to double its capacity in the area of land regularization. Among the various actions that were carried out were a major overhaul of processes, the tertiarization of cadaster and topography processes, and the simplification of administrative procedures required for conferring a title. In addition, ITERJI was provided with state-of-the art physical facilities. In 2011, ITERJ carried out the merit-based recruitment of 104 technical positions, equivalent to 20 percent of its technical staff. The target was achieved. INEA’s enhanced institutional capacity is reflected in the increase in the ratio of budgeted versus executed resources, which increased from 65 to 80 percent between 2009 and 2012.

Technical assistance to municipalities on land tenure regularization. ITERJ has successfully

implemented a pilot project providing technical assistance to municipalities to strengthen their capacity for land tenure regularization. It is estimated that the pilot project benefited over 10,000 people living in the parcels that were regularized. In accordance with the new legislation, beneficiaries were exempted from paying transfer taxes. This pilot program also served to test new operational and administrative procedures reflecting the newly approved legislation, which clearly assigns ITERJ the authority to approve the donation of state land for social housing purposes without any additional legal instrument.

Scaling up of land titling efforts. As a result of the additional technical and financial resources and new land regularization legislation and operational procedures, ITERJ was able to process 10,238 titles in 2012, of which 8,188 have already been approved at the municipal level. The 10,000 target was met. This is a remarkable achievement considering that the 2009-2011 average was only 1,249 titles per year. ITERJ’s implementation capacity is expected to continue to grow progressively to reach an annual production of 40,000 titles.

Other actions aimed at enhancing the provision of low-income housing that were supported under this DPL included: Feasibility studies. INEA has conducted environmental feasibility studies to assess the suitability of four

land areas in the metropolitan region that could potentially hold more than 130,000 housing units. SEH’s, however, has not made any significant progress in this regard and is planning to perform these studies under the upcoming TAL, which is still under preparation. Thus, the target was not met.

Integrated housing development model – SEH is in the process of defining a model for Manguinhos, a

large track of land with a central location that was recently expropriated by the Governor. However, the definition of the integrated housing model to be applied for this area is still at a preliminary stage. Thus, the target was not met.

Overall, the achievement of outcomes under this Policy Area is considered to be moderately

unsatisfactory. Only two out the six KPIs associated to PDO 2 have been achieved or exceeded.

These two KPIs were under ITERJ’s responsibility. Progress was below target and often

negligible in the case of the remaining four KPIs, which were under SEH’s responsibility. They

constitute significant shortcomings in the operation’s achievement of PDO 2 - Promoting the

provision of affordable housing. Specifically, progress toward enhancing low-income housing

policy and financing mechanisms was below expectations. While the GoRJ has undertaken

several initiatives to expand the participation of multiple actors (i.e., federal and municipal

governments, and the private sector) in the production of low-income housing, the results so far

have been modest in relation to the existing low-income housing deficit. Progress toward

enhancing land management and titling has been uneven, including ITERJ’s notable institutional

strengthening, which, in turn, has led to a drastic increase in the number of titles being

regularized each year. However, progress was disappointing in terms of increasing the supply of

serviced land for low-income housing. Performance weaknesses in this Policy Area signal to the

institutional weakness and fragmentation within the housing sector, including SEH.

It is important to note that SEH’s limited performance does not translate into the state’s weak

performance in addressing the challenges associated with low-income housing. In this context, it

is fundamental to underscore the remarkable impact of the federal PAC that is being implemented

by the state’s Public Works Company (Empresa de Obras Públicas do Estado do Rio de Janeiro

– EMOP), which has supported the integrated slum upgrading programs of five favelas in the

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RJMR with a population of more than 350,000 people. These actions were not included under this

DPL.

Policy Area 3 – Social Development

Ranking: Moderately Unsatisfactory

The specific achievements under this Policy Area can be summarized as follows (see Datasheet

for Result Framework and Annex 6 for a detailed description of policy outcomes):

Policy Area 3. Social Development

PDO 3.a - Improve living conditions in most vulnerable social settings

Actions under this Policy Area aimed to improve living conditions in most vulnerable social settings by: establishing an integrated social program for the urban poor; ii) reforming SEASDH with a mandate for social development; and iii) developing an evidence-based approach to policy making and strengthen M&E. The specific policy actions and corresponding outcomes can be summarized as follows:

i. Social Pacification Police Units Program - UPP Social. The GoRJ launched the UPP Social Program to

institutionalize the territorial integration of social interventions in favelas. The program has an innovative and multi-dimensional approach to integrate favelas to the rest of the city by rolling out a comprehensive menu of social support programs following pacification interventions by the military police. The program was hosted under the SEASDH until December 2010 and was transferred at the municipal level at beginning of January 2011. The GoRJ then created a similar program at the state level—so-called Peace Territories (Território da Paz)—to complement the municipal level UPP program—now called UPP Social Carioca. The main outcomes include: The Peace Territory and UPP Social Carioca Programs have been implemented in 17 and 24 favelas in the

city of Rio de Janeiro, respectively. The target was met. While it is difficult to isolate the impact of these programs from that of the pacification itself, as well as from PAC investments targeted to these areas, there are indications that beneficiary favelas are gradually showing signs of improvement, such as a reduction in the number of violent crimes and deaths, an increase in the reporting of crimes that before went unreported, such as theft, domestic violence, and rape. According to several studies, the impact of these interventions goes well beyond a drop in crime and includes, among others, improvement in health and education indicators, higher birth rates, housing appreciation, and expanded access to water and electricity. Moreover, these positive impacts spill beyond the pacified favelas to affect the surrounding areas and the city as a whole.

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ii. SEASDH’s restructuring - SEASDH was created in 2007 to absorb three former secretariats, which

were never integrated into a fully coherent entity. Although SEASDH’s new organizational structure was not officially adopted as called for under the Policy matrix, progress was made toward enhancing the agency’s transversal coordination and integration and its overall institutional capacity. Specifically: At the state level, an Executive Committee for Social Policies has been established to enhance cross-

agency coordination and the overall effectiveness of the state’s agencies in pacified territories. Within SEASDH, a Technical Committee for Institutional Integration has been established to enhance

inter-agency coordination of interventions targeting specific groups, such as children, youth, persons with disabilities, women, racial and ethnic groups.

In addition, territorial plans have been developed for all favelas with Territórios da Paz/UPP Social to coordinate sectoral, social and urban initiatives from the state and municipal levels.

A new organizational structure has been developed, and roughly 75 percent of the so-called Emergency Restructuring has been implemented. SEASDH’s activities have been substantially consolidated, resulting in a significant reduction in their number—from 90 to 42 activities. Although the new organizational structure was expected to be formally adopted by end-2012, its approval has been delayed due to a new change in the agency’s leadership. This target was not met.

Unfortunately, some of the progress achieved was subsequently reversed. As mentioned earlier, the merit-based recruitment process of 95 technical staff, 57 of which had already been formally hired, was later declared invalid due to a technicality in the recruitment process. While SEASDH authorities have expressed their intention to repeat the merit-base selection process, this reversal also represents a serious step backwards in the context of this DPL, as it was one of the key actions taken into

5 Based on various studies quoted in the Borrower’s Final Report (February, 2013).

13

consideration in assessing progress toward SEASDH’s restructuring, which was conditions for the release of the 2

nd tranche.

iii. Strengthening of SEASDH’s M&E systems. Although an M&E unit has been established within

SEASDH, the integrated, agency-wide M&E system that was originally envisioned is still under preparation. It is important to note that, as the development of the M&E system was originally envisioned to be financed under the TAL. As the preparation of this operation took longer than expected, the activities conducted so far were financed with SEASDH’s own resources. This target was partially met. Some of these actions include: Establishment of a standardized M&E protocol for SEASDH programs, which was formally adopted

under Decree No. 43,217 of October 3, 2011. An M&E Unit has been created within SEASDH’s organizational structured and is now operational.

An inventory of the M&E framework of each of the 12 programs and 52 actions within SEASDH’s sphere of action has been completed. The M&E unit now centralizes the information and monitors progress regularly. This constitutes an improvement, as in the past there was no centralized information on the performance of individual programs. Three programs under SEASDH are being subject to randomized impact evaluations. One of them is for the PROTEJO program (Programa de Proteção de Jovens em Territorio Vulnerável), a federal protection program for at-risk youth managed by SEASDH.

Overall achievement within this Policy Area has been moderately unsatisfactory. One of the three

KPIs associated to PDO 3 has been fully achieved; there was partial progress toward the

achievement of the other two. They constitute a significant shortcoming, affecting the

achievement of PDO 3 - Providing targeted and integrated social development programs to the

urban poor. Nevertheless, that there were significant achievements under this Policy Area,

particularly the implementation of a new integrated social services program in recently pacified

favelas. These interventions have not only succeeded in reducing violent crimes but have also

increased social capital, academic performance, entrepreneurial activity and business

formalization, training, cultural activities, and access to basic services. While progress was made

toward strengthening SEASDH’s technical and institutional capacity, it has not been at the levels

that were originally envisioned. Initial momentum toward its reorganization and the development

of an integrated M&E system has been hindered by repeated changes of the agency’s top

administrators. Moreover, some of the progress shown at the time of the release of the 2nd

tranche

was actually reversed, as the appointment of merit-based recruited technical staff has been voided

due to a technicality (i.e., the announcement was not published in the State’s Official Bulletin as

required).

3.3 Justification of Overall Outcome Rating

Rating: Moderately Unsatisfactory

The operation continues to be highly relevant, particularly in view of the fast economic and

population growth prospects for the RJMR. This DPL effectively capitalized on a window of

opportunity to shape future urban growth into more efficient, sustainable and safer patterns.

Overall, the operation’s overall effectiveness is considered to be moderately unsatisfactory, given

the mixed PDO achievement. Achievement of PDO 1 was satisfactory. As envisioned under

Policy Area 1 - Strengthening GoRJ’s policies for planning and managing territorial growth in the

RJMR, this DPL has helped strengthen GoRJ’s ability to meet the challenges associated with the

present and future growth in a way that development not only meets the spatial requirements for

the region’s economic transformation, but also provides a better quality of life to all residents by

protecting the environment and reducing the risk of environmental disasters. Specifically,

substantial progress was made towards: a) strengthening metropolitan management through

improved integration and coordination in urban development and transport; b) strengthening

management of urban environment; and c) improving DRM capacity. Achievement of PDO 2 was

moderately unsatisfactory. Progress under Policy Area 2 – Promoting the provision of affordable

housing has been uneven. Substantial progress was made toward strengthening titling, including

the notable institutional strengthening of ITERJ, which, in turn, has led to a drastic increase in the

number of titles being regularized each year. However, progress has been weak in terms of land

14

management and enhancing low-income housing policy and financing mechanisms. Achievement

of PDO 3 was also moderately unsatisfactory. Progress under Policy Area 3 - Providing targeted

and integrated social development programs to the urban poor has also been mixed. Although the

newly established social program aimed at promoting the integration of recently pacified favelas

into the city shows great promise, the pending restructuring of SEASDH, including the

development of a sound monitoring and evaluation agency-wide system remains a barrier to the

GoRJ’s efficient provision of social services to improve living conditions in most vulnerable

social settings.

The policies supported under this operation can be expected to have substantial economic

efficiency given the strong economic impact of enhancing urban efficiency through sound urban

growth patterns, better provision of services—urban transport and low income housing in

particular—and proactive risk management that support both urban and household productivity.

3.4 Overarching Themes, Other Outcomes and Impacts

Overarching Themes, Other Outcomes and Impacts

a) Poverty impacts, gender aspects, and social development

Even though not all the policy actions envisioned under this DPL were implemented as originally envisioned, those that did are expected to have significant positive poverty alleviation and social development impacts in the State of Rio, and the RMRJ in particular. The operation’s poverty impact is particularly important given the historically high poverty levels and social inequality in the RMRJ. Some of the operations’ specific impacts on the living conditions of the poor include: Increased access to job opportunities through the Billhete Unico - Poor families living in peripheral areas in the RJMR are more affected by transportation costs, which hamper their ability to secure formal sector jobs located in central metropolitan areas. It was estimated that 46 percent of low-income residents of peripheral municipalities traveled daily to the capital, with the share of transportation in family budgets reaching 17.3 percent in 2009, being second only to food (i.e., 17.9 percent). A study from the prestigious Getulio Vargas Foundation (2010) shows that the implementation of the Billhete Unico has had substantial positive impacts among the poor, including up to 50 percent cost reduction in transport fares as a result of state subsidies, which in turn has contributed to the growth in employment in the RJMR. Settlements in at-risk areas – Policy actions supported under the operation, including the risk susceptibility

mapping, housing relocation programs targeting families living in risk areas, the early alert emergency system and the social rent program, are expected to have a particular impact on low income households, which are more likely to live in risk-prone areas. Increased access to affordable housing - The policies and reforms successfully supported by this DPL

have removed many of the constraints faced by residents of informal settlement, particularly those related to securing land titles of regularized parcels through a stronger ITERJ. In addition, the operation supported the revamping the State Social Interest Housing Fund and strengthened its management committee, which now includes representatives from housing related social movements, NGOs, and unions; thus, ensuring the Fund’s participatory, transparent governance. Targeted social development program - In the short term, the Peace Territories Program and its municipal counterpart are expected to contribute to the consolidation of the peace process in recently pacified favelas through the creation and strengthening of channels for civic engagement and collective

action, including local facilitators, forums, citizen oversight mechanisms. In the medium-term, these programs are envisioned as the main venue to establish a medium- and long-term agenda for fostering a wide battery of social development programs, including poverty reduction, social services and infrastructure development, with a strong territorial, multi-sector focus.

(b) Institutional change and strengthening

As described in detail above, this DPL has effectively supported institutional reform and capacity building across a wide range of state agencies, INEA and ITERJI in particular. The stronger institutional capacity of these two agencies has allowed them to fully capitalize on newly enacted legislation, resulting in remarkable improvements in environmental management and land tenure regularization. Likewise, the GoRJ now has in place an inter-jurisdictional DRM strategy, which has strengthened the State’s ability to better manage the impact of possible natural disasters. In addition, the operation has also supported important steps toward the development of an metropolitan governance framework, most notably the integration of mass-transit fares. The operation’s institutional impact would have been high if the SEASDH’s restructuring had been completed.

15

(c) Other unintended impacts

Cross-fertilization among other Brazilian states - Rio’s successful approach toward DRM has served as

a model that is being replicated in other states with Bank support. Economies of scale – When INEA requested support to define technical standards for the purchase of

radar equipment to be utilized in the early alarm system, the Bank team used the opportunity to engage federal authorities and define a country-wide standards to ensure the compatibility of the various state systems as a potential first step toward the development of a federal radar network.

3.5 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

N/A

4. Assessment of Risk to Development Outcome Rating: Moderate

The sustainability of the achievements under this DPL varies significantly across the three policy areas as well as across the individual agencies that participated within each policy area, as follows:

Planning and managing territorial growth in the RJMR – Moderate risk Metropolitan governance – Substantial risk. The main factor undermining the sustainability of the progress been done so far is lack of a strong demand for metropolitan governance institutional framework on the part of political actors, both at the state and municipal levels. While the enhanced technical coordination of state-level actions that was achieved under this operation constitutes an important first step, further progress will depend on the inclusion of key municipal actors, the mayor of the Municipality of Rio in particular, and strong leadership on the part of the GoRJ. Management of urban environment – Low risk. The progress made so far toward strengthening INEA’s capacity to manage environmental resources within the RJMR is likely to be sustained as a result of the strong leadership within this agency, together with the substantial technical and institutional capacity that has been generated. The merit-based recruitment of technical staff is an important determinant of INEA’s ability to sustain strong performance in the future. Disaster risk management – Low risk. While the tragedies that resulted from natural disasters in 2010

served to galvanize efforts to develop a well-coordinated, inter-jurisdictional RDM strategy its sustained in the medium term depends on the ability of municipalities to maintain the personnel that has been already trained, particularly after municipal elections. The state, on the other hand, has taken a strong leadership role and assigned sound technical resources through the DRM DRM-RJ.

Affordable housing – Moderate risk Low-income housing and financial mechanisms – Substantial risk. The weak implementation capacity exhibited by SEH so far has hindered the provision of affordable housing solutions by the GoRJ and is likely to continue to do so in the future. Land management and titling – Low risk. Assuming the continuous allocation of adequate budgetary resources, ITERJ’s enhanced performance is likely to be sustained in, as the result of the newly enacted legislation as well as merit-based recruitment of a critical mass of ITERJ’s technical staff. To further enhance sustainability at the municipal level, it would be important to formalize the technical assistance being given to municipalities in the area of land tenure regularization.

Social development – Substantial risk Improve living conditions in most vulnerable social settings – Substantial risk. The weak institutional capacity of SEASDH, including coordination and leadership to deliver results for improved living conditions in most vulnerable social settings, poses a significant risk.

5. Assessment of Bank and Borrower Performance

Bank’s Performance

a. Bank’s Performance in Ensuring Quality at Entry (QAE)

Rating: Moderately Satisfactory

The performance of the Bank in assisting the Borrower to identify, prepare and appraise the operation is deemed moderately satisfactory, as the operation’s QAE exhibited both strengths and weaknesses that affected implementation and overall PDO achievement. While the project was trying to achieve an innovative, cutting edge multi-sector approach, defining a reasonable balance of objectives proved to be a difficult task given the large number of stakeholders at various level of government, the legacy of the state’s historically weak public sector, and the broad set of demands faced by the GoRJ. Among the various strengths was the Bank’s ability to offer a swift response to the GoRJ’s request for support, thus, effectively capitalizing on the window of opportunity that opened as a result of highly visible

16

and costly natural disasters. Two factors permitted the Bank to provide a quick response. First, a well-articulated Bank support strategy for the State of Rio was already in place, which included a combination of large operations at the state and municipal levels. Second, the operation benefitted from the Bank’s extensive policy dialogue and analysis in the urban, housing, and social development sectors in Brazil, as well as robust operational experience in Brazil’s housing sector, including support for the development of the National Housing Policy and the National Housing Plan. A cross-sector Bank team succeeded in developing a comprehensive approach focusing on key policy areas to foster not just DRM management, but also sound housing and urban development within RJMR. In terms of its design, the operation was grounded on a multi-sector approach, which was appropriate given the multi-sector nature of the interventions being supported—i.e., metropolitan management, housing, DRM, and social programs. The Bank team did not shy away from the challenges of adopting a multi-sector approach, including the need to strengthen collaboration among various Secretariats within the state and different networks within the Bank. The team did not shy away either from tackling potentially controversial issues such as the involuntary resettlement of families living in areas at very high risk of massive landslides. Likewise, the team recognized the inter-jurisdictional nature of the policy areas to be supported by the operation—i.e., housing, transport, and DRM—and adequately conceived the operation as a territorially bounded, metropolitan intervention. There were also some weaknesses in the operation’s design. The Bank’s team appears to have underestimated the implementation risks associated with what, in retrospect, now appears to have been an overly ambitious program, including the high demands it placed on the GoRJ authorities in terms of coordination and political support over a broad and diverse policy agenda. In addition, the operation’s Result Framework included too many KPIs that depended on the performance of agencies with a recognized low institutional capacity. In this regard, the Bank also failed to recognize the risk of not having vital advisory services delivered in a timely manner under a separate TAL operation, which further exacerbated the risk posed by institutional weaknesses. Although, to its credit the Bank team succeeded in providing some technical assistance through Trust Funds and its supervision budget, it was an inadequate substitute for the TAL. Finally, the operation’s M&E system had some weaknesses, including having too many KPIs, some of which were too specific in relation to the broader policy objectives supported under the operation.

b. Quality of Supervision


The project was well supervised, with a total of four field missions having been conducted during the operation’s lifetime. Sector and CMU managers followed project implementation closely. A team of ten sector specialists from various networks were involved in supervision, contributing valuable expertise and technical assistance. The Bank team was well coordinated and there was fluid internal communication between the specialists and the TTL. The operation also benefited from technical assistance provided through various sources, including the Bank’s field office, particularly in the area of environmental management and DRM. The Bank team also procured additional technical support through trust funds to provide technical support through local consultants in the area of housing, which was identified as being particularly weak at appraisal. This required significant efforts on the part of the Bank team in terms of identifying additional sources of funding and their supervision. For example, a total of USD 350,000 was received from SFLAC and used for TA in areas of housing and metropolitan governance. In retrospect, it is now clear that an earlier more aggressive downgrading of the operation’s rating would have been appropriate to flag implementation weaknesses to both managers as well as GoRJ’s authorities.

c. Justification of Rating for Overall Bank’s Performance

Rating: Moderately Satisfactory Overall, the Bank’s performance is considered moderately satisfactory to reflect the moderately satisfactory ratings for QAE and supervision.

Borrower’s Performance

a. Government’s Performance


During preparation, the operation had a significant level of support from top state authorities, including the Vice Governor, SEOBRAS, and SEASDH, as the policy areas supported under this DPL were important priorities in the State’s Development Plan. During implementation, however, it proved challenging to align priorities within the GoRJ to ensure the across-the-board achievement of the policy goals supported under the operation.

17

b. Implementing Agencies’ Performance


The performance of implementing agencies was uneven; thus, it is deemed moderately unsatisfactory as it negatively affected the operation’s implementation and overall achievement of objectives.. With support from the Finance Secretariat (SEFAZ), SEOBRAS played a key role overseeing the overall implementation of this operation and coordinating activities with the other sector agencies. Specifically, it facilitated the implementation of the various activities, particularly those that required inter-agency coordination, tracked their progress, prepared consolidated reports on outcome indicators and provided evidence justifying the achievement of the individual conditions specified under the first and second tranches. It also maintained fluid and effective communication with the Bank team.

The level of commitment as well as institutional capacity varied greatly among participating agencies. Among the various participating agencies, INEA distinguishes itself by having both a strong leadership and implementation capacity. It is also important to underscore the role played by ITERJI and DRM-RJ, which successfully carried out the policy actions that were under their responsibility. Conversely, SEASDH’s and SEH’s performance was below expectations and negatively affected the achievement of outcomes. In the case of SEASDH, changes in leadership hindered the progress being done at the technical level toward enhancing horizontal integration of the agency’s programs and its M&E functions. In the case of SEH, it was unable to fully achieve any of the four actions that were exclusively under its responsibility, including some that presented no technical or political challenges, such as carrying out feasibility studies.

c. Justification of Rating for Overall Sub-Borrower’s Performance


Overall, the Borrowers’ performance is deemed moderately unsatisfactory to reflect the moderately satisfactory and moderately unsatisfactory ratings for Government’s and implementing agencies’ performance, respectively.

6. Lessons Learned

Lessons of wide general application

Natural disasters and highly visible world events can be catalysts for positive change. The operation

capitalized on the tragic window of opportunity that opened with the natural disasters that took hundreds of lives and steep economic losses, effectively building on the momentum to develop an inter-jurisdictional DRM strategy. Under regular circumstances, attaining the incorporation of such a wide array of institutional actors at the federal, state, and municipal levels would have proven much more difficult. Likewise, the operation capitalized on the heightened desired for enhancing investment coordination at the metropolitan level given the flow of investments being channeled into the RJMR as a result of the upcoming Summer Olympics, the Soccer World Cup, and the ongoing industrial restructuring of the region, fueled partly by the recent discovery of oil reserves. These circumstantial events play a determinant role in the relevance and effectiveness of lending operations.

Strong institutional leadership and implementation capacity were key determinants of the level of achievement across the various policy areas. The areas that exhibited the greatest achievements were

the ones with a strong leadership and implementation capacity at the agency level. In this regard, it is interesting to note that the two agencies that undertook large scale merit-based recruitment of technical staff (i.e., INEA and ITERJ) were the strongest performers. This is both cause and effect, as strong leadership and vision within an agency is needed to undertake a major restructuring of human resources, which, in the case of technically weak agencies, is also a prerequisite for their sound performance. In the case of cross-sector actions, such as the development of an inter-jurisdictional DRM strategy, the strong support from the Vice-Governor’s office was a key factor of success.

While buy-in within individual agencies is a necessary condition for successful institutional development, so is political leadership from top government authorities. Strong leadership from top

GoRJ authorities would have been required to effectively align priorities within the government with the goals set for the operation. However, other political economy determinants, such as national elections, at times took priority, compromising the cohesive delivery of the actions supported under the operation.

Ensuring the non-reversibility of tranche release conditions poses a difficult challenge. In the case of

this DPL, together with other actions, the issuing and publication of a decree authorizing the competitive recruitment of SEASDH staff provided at the time reasonable evidence of the progress being made toward its restructuring. The later annulment of the recruitment process after the majority of the hiring had been completed was almost impossible to anticipate.

Engaging multiple agencies with uneven institutional capacity presents a clear challenge. While the

18

nature of some operations, such as regional development interventions, require engaging with multiple government agencies, the implementation experience of this operation illustrates the difficulties of working with agencies that present uneven levels of institutional maturity, technical competency, and leadership.

Metropolitan development operations require working with municipal, as well as federal entities and programs, adding further complexity. Key policy actions under this DPL were linked to federal programs, ranging from federal housing programs to the favela pacification programs. This articulation with federal

programs had both positive and negative implications. On the positive side, it helped created positive synergies between this DPL and federal programs, including building a critical mass of financial incentives in support of a consistent set of policy initiatives, which, in turn, prevented the GoRJ from spreading even further its already limited institutional capacity. On the negative side, it resulted in some policy outcomes being outside the GoRJ’s direct sphere of influence, thus affecting the operation’s overall effectiveness. Working with municipalities in such type of operation is also a challenge since it may be unwise to have conditions linked to municipal performance that are beyond the state’s span of control. The pragmatic approach taken by this DPL, which implicitly built upon the existing level of support among municipalities for the various policy actions, proved to be effective for this operation.

The use of complementary lending instruments has potential advantages. However, they could not be

reaped in this DPL operation due to delays in processing the TAL . As originally envisioned, advisory services to support the implementation of actions included as conditions under this DPL were to be provided under a TA loan supporting this and another DPL for the State of Rio. However, delays in the preparation of the TAL operation resulted in the lack of adequate technical support for the institutional restructuring activities that were envisioned under this DPL (e.g., SEASDH’s restructuring). While the team labored to secure other TA support through Trust Funds, including South-South exchanges, the void left by the TAL operation substantially hindered the overall effectiveness of this DPL. The experience of this operation underlines how the effectiveness of a DPL can be enhanced by a TA instrument in a low institutional capacity environment.

Sub-national operations offer great potential for cross-fertilization and economies of scale. As

illustrated by this DPL, successful innovations supported under sub-national operations can be easily replicated in other states. Likewise, there is potential for economies of scale and homogenization by interacting with state and federal actors simultaneously.

Project-specific lessons

There are often trade-offs between defining a thematically consistent Policy Matrix and maximizing the accountability of implementing agencies. PDO 2.2 – Land Tenure Regularization correctly included

actions focusing on increasing the supply of serviced land for low-income housing, which clearly constitutes an important step toward reducing further growth of informal settlements. However, the two types of actions—i.e., land tenure regularization and provision of serviced land—were the responsibility of two different entities—i.e., ITERJ and SHE—which exhibited uneven levels of performance. Thus, SEH’s weaker performance pulled down the level of achievement of this PDO, somewhat obscuring ITERJ’s strong performance.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/Implementing agencies See Annex 4.

(b) Co-financiers

(c) Other partners and stakeholders

19

Annex 1 - Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/

Specialty

Lending

Ming Zhang Lead Urban Specialist LCSUW Co-Task Team Leader

Sameh Wahba Sector Leader LCSSD Co-Task Team Leader

Alessandra Campanaro Infrastructure Finance Special LCSUW Co-Task Team Leader

Rodrigo Serrano-Berthet Senior Social Development Spec

LCSSO Senior Social

Development Spec

Thadeu Abicalil Sr Water & Sanitation Spec.

LCSUW Sr Water & Sanitation

Spec.

Yaye Seynabou Sakho Economic Adviser LCSPE Economic Adviser

Anaclaudia Rossbach Consultant

LCSUW Senior Housing

Specialist

Joaquin Toro Senior Disaster Risk Management

Specialist LCSUW Senior Disaster Risk

Management Specialist

Catarina Portelo Senior Counsel LEGLA Senior Counsel

Alberto Coelho Gomes Costa Consultant

LCSSO Social Development

Specialist

Augusto Ferreira Mendonca E T Consultant

LCSEN Environmental

Specialist

Garo Batmanian Lead Environmental Specialist

LCSEN Lead Environmental

Specialist

Joseph Mubiru Kizito Senior Financial Management Specialist

LCSFM Senior Financial


Jose Guilherme Reis Lead Trade Economist PRMTR Lead Trade Economist

Georges Bianco Darido Senior Transport Specialist

LCSTR Senior Transport

Specialist

Andresa Lagerborg LCSPE

Cintia Silvia Vega Junior Professional Associate LCSUW Operations Support

Eri Watanabe Consultant LCSUW Operations Support

Ole Hagen Jorgensen Economist LCSPE Economist

Aires Zulian Nunes Da Conceicao Consultant LCSUW DRM Analyst

Catherine Lynch Operations Officer OPSPQ Operations Officer

Fabio Pittaluga Senior Social Development Spec

LCSSO Senior Social

Development Spec

Christine Kessides Practice Manager WBIUR Peer Reviewer

Richard Clifford Lead Urban Specialist SASDU Peer Reviewer

Alexandre Marc Lead Social Development Specialist SDV Peer Reviewer

Supervision

Alessandra Campanaro Senior Infrastructure Finance Specialist LCSDU Task Team Leader

Sameh Wahba Sector Manager LCSSD Team member

Thadeu Abicalil Sr Water & Sanitation Spec.

LCSWS Senior Water & Sanitation Spec.

Joaquin Toro Senior Disaster Risk Management

Specialist LCSDU Senior Disaster Risk


Rodrigo Serrano-Berthet Senior Social Development Spec

LCSSO Senior Social

Development Spec

Juan Carlos Parra Social Development Specialist SDV Social Development

Specialist

Flavia Carbonari Consultant LCSSO Social Development

Analyst

Anaclaudia Rossbach Consultant LCSDU Senior Housing

http://intranetnca.worldbank.org/servlet/main?pagePK=86100&piPK=86133&theSitePK=86006&unitNum=07633



20

Specialist

Tereza Herling Consultant

LCSDU Senior Housing

Specialist

Monica McDonough Junior Professional Associate LCSDU Operations Support

Cecilia Zanetta Consultant LCSDU ICR Preparation

(b) Staff Time and Cost

Stage

Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including travel

and consultant costs)

Lending

Total: 71.23 408,092.95

Supervision/ICR

Total: 30.5 262,528.56

21

Annex 2. Beneficiary Survey Results

Not Applicable

22

Annex 3. Stakeholder Workshop Report and Results

Not Applicable

23

Annex 4. Summary of Borrower's ICR and/or Comments on Draft ICR

25

ENGLISH TRANSLATION

Government of the State of Rio de Janeiro

Office of the Governor

Official Communication GG No. 358/2013

Rio de Janeiro, June 14, 2013

Ms. Alessandra Campanaro

Senior Infrastructure Finance Specialist

International Bank for Reconstruction and Development – IBRD

SCN Quadra 02 – Lote A

Ed. Corporate Financial Center – 7th floor

CEP 70712-900

Brasília – DF

Subject: Project Implementation Completion Report – Sustainable Metropolitan Urban

and Housing Development Program – PROHDUMS (DPL II)

Dear Ms. Campanaro,

With respect to the Project Implementation Completion Report – ICR, concerning the

closing of the execution phase of the Sustainable Metropolitan Urban and Housing Development

Program – PROHDUMS - DPL II, which was financed by a loan agreement signed on August 9,

2011 between the State of Rio de Janeiro (ERJ) and the International Bank for Reconstruction

and Development – IBRD in the amount of US$ 485,000,000.00, following are the comments by

the State of Rio de Janeiro concerning the results of the program.

Under the aforementioned transaction, the ERJ sought to strengthen its provision of

public services, especially in the areas of metropolitan urban development, social interest

housing, and social assistance, more specifically the following components:

(i) Urban development:

Strengthening metropolitan management through improved integration and

coordination in urban development and transport;

Strengthening management of urban environment; and

Improving capacity in Disaster Risk Management.

PALÁCIO DA GUANABARA – RUA PINHEIRO MACHADO S/N – LARANJEIRAS, RIO DE JANEIRO – RJ

CEP – 22.231-090-TELS: (55 21) 2299-5053 E (55 21) 2553-1030-FAX: (55 21) 2553-6247

26

Government of the State of Rio de Janeiro

Office of the Governor

(ii)

Enhancing low-income housing policy and financing mechanisms; and

Strengthening land management and titling.

(iii)

Actions to improve living conditions for the population in vulnerable social

settings.

I emphasize that the analysis of the achievement of the targets and indicators, as well as the

results obtained in each program, were the subject of the evaluation report of the State of Rio de

Janeiro, sent via Official Communication No. 69/2013 GAB/SEFAZ on January 31, 2013.

Lastly, although the general results of the evaluation of the ERJ, as presented in the ICR, were

moderately unsatisfactory, special note should be taken of the efforts made by all the agencies

involved in the actions called for in the financing matrix. Although some indicators did not

achieve the targets initially agreed to, the operation encouraged expansion of the implantation of

strategic public strategies and the provision of services in several essential areas, thus serving as a

framework for future contracting that would make possible the continuity of measures directed to

investments in areas of development and infrastructure.

I take this opportunity to reiterate to Your Excellency my assertions of high esteem and

consideration.

Very truly yours,

[signature]

SERGIO CABRAL

Governor

PALÁCIO DA GUANABARA – RUA PINHEIRO MACHADO S/N – LARANJEIRAS, RIO DE JANEIRO – RJ

CEP – 22.231-090-TELS: (55 21) 2299-5053 E (55 21) 2553-1030-FAX: (55 21) 2553-6247

27

Annex 5. Comments of Co-financiers and Other Partners/Stakeholders

Not Applicable

28

Annex 6. Achievement of Program Development Objectives

Policy Area I - Planning and managing territorial growth in the Rio Metropolitan Region

Policy Objective

This DPL provided support to the GoRJ’s objectives of: i) ensuring that future urban growth meet the spatial requirements brought about by economic and structural changes provide a higher quality of life in the RJMR, and protect the region’s sensitive natural environment and mitigate disaster risks.

Policy Framework

The Metropolitan Region of Rio de Janeiro (RJMR) is the country’s second largest metropolitan area and includes 19 municipalities. It dominates the region and is home to 53 percent of the area’s 11.7 million people. The ongoing structural transformation of the metropolitan economy and the associated demographic growth are increasing demand for infrastructure and amenities. In this context, the establishment of a metropolitan governance framework in Rio is of critical importance, particularly in view of the fast pace of economic growth currently been experiencing. Metropolitan-wide planning and coordination are required for sound urban development, including housing, transport, environmental protection, and disaster risk management.

Some of the specific challenges included: The lack of effective area-wide institutions to plan and oversee urban development. A fragmented mass transport city within the RKMR, with roughly half of the RJMR’s 20 million daily

trips being on multiple modes of public transportation operated by a wide array of public and private operators.

The need for sound environmental regulations as a crucial element of urban development policy in view of the region’s unique and fragile environment.

RJMR’s susceptibility to natural disasters and their high costs in terms of lives and the state’s economy.

PDO 1.a - Strengthen metropolitan management through improved integration and coordination in urban development and transport

Major Actions Implemented

Policy dialogue – Several events were supported under this DPL that have contributed toward building awareness of the importance of developing a metropolitan perspective and providing a vision of various institutional mechanisms for metropolitan coordination. Among the most important activities were an international seminar on metropolitan governance issues, study tours to North America and Asia, and ongoing internal workshops exploring various aspects of the metropolitan agenda (Diálogos Metropolitanos).

6 Trust funds and other sources of funding identified by the Bank team were critical in

supporting these activities. Enhanced coordination of public investments in the RJMR – The GORJ has strengthened its

coordination on metropolitan issues through the establishment of a Directive Committee for Metropolitan Strategy headed by the Vice-Governor and supported by a Technical Working Committee (TWC), with representation from the Secretariats of Public Works, Housing, Social Assistance, Transport, Environment, Planning and Finance. The mandates of the Directive Committee and the TWC include: i) engaging in policy dialogues and establishing partnerships with the municipalities about metropolitan planning, management, and investment issues; ii) undertaking the review of the State Complementary Law No. 87 of 1997 in consultation with the municipalities and other stakeholders, and drafting a reform proposal for institutional arrangements for metropolitan management, including revisions to the Law; and iii) overseeing and monitoring the implementation of metropolitan-wide investment programs, such as the Arco Expressway and other programs with federal financing. The TWC has met on a monthly basis since May 2011

Steps toward metropolitan integration – Several actions have been implemented that gradually built

toward a more integrated approach toward metropolitan planning and service delivery, including:

6 For a detailed description of the activities carried out in this area, see Palladini, E. (2011), “Creating More

Livable Cities: The Case of the Rio de Janeiro Metropolitan Area,” En Breve, December 2011 Number 172, The World Bank, Washington, D.C.

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For the first time, a medium-term metropolitan strategy and program was included in the State’s 2012-2015 Multi-year Development Plan (Plano Plurianual – PPA). In collaboration with the

municipalities, the GoRJ included a metropolitan development and strengthening program in the medium-term plan and multi-year budget and investment plans.

Several of the planning instruments being developed at the state level now have metropolitan focus.

The GORJ created the Single Ticket (Bilhete Unico) to improve the convenience and affordability of public transportation in the RJMR by integrating tariffs for intercity transportation.

Key outcomes

Policy dialogue – There is now greater awareness of the need for metropolitan governance and

various alternative models. However, it remains confined at the technical level within the state. The challenge is to build this support among the political leadership. Medium-term sustainability will depend on building political demand for metropolitan management on the part of municipalities.

Enhanced coordination of public investments in the RJMR – There have been some concrete

actions toward enhancing the coordination of public investments at the metropolitan level, including: The State’s 2012-2015 PPA includes geographically delimited programs, targets, and budget for

the RJMR. This is expected to significantly enhance the state’s ability and incentives to plan, implement, and monitor the progress of an integrated metropolitan program.

The Directive Committee is coordinating metropolitan-focused development activities among various state agencies, including the development of the Transport Master Plan, which is currently being updated, and the Social Housing Plan, which is currently under preparation, as well as the implementation of the Arco Corridor Transport Plan.

The Metropolitan Arco Master Plan has been completed and is under implementation,. The construction of this corridor will connect the main growth poles in the metropolitan area and the Itaguai Port, greatly enhancing accessibility and mobility within the region.

As only one of the anticipated three state plans with a metropolitan focus has been completed, resulting in the partial achievement of the corresponding target. Also, the alignment of planning instruments with a metropolitan focus could to be further enhanced by, for example, aligning the geographic boundaries of the sub-regions defined by the various agencies within the RJMR and ensuring that municipal planning instruments take into consideration the metropolitan plans.

Tariff integration for intercity mass transport –This operation has contributed toward enhancing

public transport governance and services through improved quality and affordability by integrating tariffs for intercity transportation (i.e., buses, metro, suburban rail, and ferries). Riders can now buy a single ticket (Bilhete Único) that can be used on several modes to complete a trip within a certain period of

time. This ticket costs less than the sum of the individual tickets that would have to be purchased otherwise, thereby significantly benefiting low-income riders who, as research shows, take the longest trips with the most transfers. The Bilhete Único is being successfully implemented, with an average of roughly 515,500

passengers per day during weekdays and a maximum number of passengers hovering over the 520,000 mark.

7 This represents a substantial achievement, almost meeting the 550,000 target

specified at appraisal. There is evidence showing significant social impact of the newly implemented Single Ticket. For

example, household savings in transport are being redirected toward food and housing. Likewise, since employers subsidize the travel of their employees, the Single Ticket has increased employability within the RJMR.

The RJMR Single Ticket was chosen the Best Transportation Program in Latin America by the International Association of Public Transport in 2001.

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PDO 1.b – Strengthen management of urban environment

Major Actions Implemented

Institutional strengthening - The GoRJ strengthened its capacity to protect environmental assets by

strengthening the State Environmental Institute’s (INEA), including expanding its human resources and financial capacity. Specifically: INEA’s technical capacity has been substantially strengthened by, among other measures, the

merit-based recruitment of about 240 additional environmental professionals in 2009, accounting for roughly 20 percent of INEA’s personnel.

7 Data reported for the week of December 3-7, 2012.

8 59th Congress and Exhibition of Mobility Transport in Cities, held in Dubai in April 2011.

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In addition, legislation was enacted to ensure that INEA has designated funding by earmarking pollution charges to its budget.

9

There has been a substantial increase in INEA’s direct annual investment budget through other State Environmental Funds (i.e., FECAM, FUNBIO, FUNDHRI), from R$62.5 million in 2009 to R$151.9 million in 2012—a substantial increase equivalent to 2.4 times but slightly below the R$170 million target.

Table 1. INEA’s execution of state environmental funds – 2009-2012

TOTAL (FMA, FECAM, FUNDRHI) 2009 2011 2012

Budgeted for INEA R$ 84,701,479 R$160,804,623 R$ 205,839,986

Executed R$ 62,447,323 R$175,937,772 R$151,919,608

Source: INEA (2012).

Improved watershed management - The GoRJ has taken important steps toward enhancing and

decentralizing watershed management, including: Instituting a fee for all water rights holders. Recently enacted state legislation allows INEA to

charge user fees to the State Sanitation Company and water rights holders for the water that they use.

10

Transferring collected fees to watershed management organizations to undertake water protection activities. State Law No. 5.639 of 2010 authorized INEA to transfer these funds to the state watershed committees through nonprofit entities called delegatárias, which, in turn, are responsible

water resources management and protection.11

Enhanced environmental licensing – Several actions have been carried out to ensure a rigorous and

timely licensing process, including: Required environmental licensing - State Decree 42.159 of 2009 mandated that most economic

activities—even those with minor impacts—be subject to environmental licensing, guaranteeing that economic activities be under the control of environmental authorities.

Decentralized licensing - To avoid adding additional cost and time to the process of starting new small businesses and overtaxing INEA’s capacity with a large number of applications for relatively small activities, the GoRJ has delegated responsibility for low-impact licensing to municipal authorities. An agreement between the state government and individual municipalities established the activities that can be licensed at the municipal level.

Quality assurance mechanisms - The state has established stringent criteria to be met by

municipalities wishing to issue environmental licenses.

Main Outcomes

Institutional strengthening - Having a technically strong, adequately funded environmental regulatory

agency was a pre-requisite for sound management environmental management of the RJMR. INEA is now well prepared to fulfill its strategic role in the RJMR’s development agenda. INEA’s stronger institutional capacity is illustrated by its improved execution capacity, which

increased from R$64 to R$152 million between 2009 and 2012. (see Table 1). INEA’s executed budget is expected to continue to increase in 2013, as INEA begins transferring water fees revenues under FUNDRHI to the newly established decentralized water management entities.

Improved watershed management – Since 2009, nine watershed management organizations have

been established in the state (see Table 2). Out of them, eight are now fully operational, having signed management contracts with delegatarias to undertake water resources protection activities, including reclamation. The Bahia de Guanabara is the only water management organization that is not yet fully operational as it has opted for creating its own technical/executive branch, which is a more complex procedure. as opposed to contracting with an already existing entity, Decentralized, basin-level watershed management is considered a best practice, as it has the

potential to enhance accountability and better capture the needs of end-users and other stakeholders.

9 State Laws 5.438 (April 17, 2009) and 5.629 (December 29, 2009).

10 State Law No. 4.247 of 2003, amended by State Decree No. 41.974 of 2009.

11 As watershed committees lack executive powers and legal personhood and, as a result, cannot open

bank accounts, hire staff or enter into contracts). Under the new legal framework, the can do so through the delegatarias, which are entities with “executive” capabilities to collect the water fees and carry out watershed management interventions using the water fees as their source of funding.

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One of the newly established delegatarias is for the Guandu River basin, which now has a management contract in place with the Guandu watershed management organization comprising 15 municipalities. It has the potential of improving management of the important body of water in the RJMR, which provides 80 percent of the region’s water supply and that is endangered by pollution from uncontrolled urban growth.

Enhanced environmental licensing – The state and the municipalities have strengthened the legal

framework and procedures for the effective decentralization of environmental licensing for activities with local impacts. Specifically: In 2009, INEA processed 90 percent of all licensing applications and reduced decreased the

backlog of pending applications by 50 percent. Forty-two out of the 92 municipalities in the state are already issuing environmental licenses—an

average of 2,500 to 3,000 licenses per year. INEA is still responsible for issuing licenses that affect water bodies, deforestation, and non-local environmental impacts. The criteria to determine local impact that has been used by INEA is consistent with federal regulations, which were issued after INEA’s decentralized licensing system was designed. It is one of the few states that did not have to adapt its licensing system to the newly issued regulations.

PDO 1.c – Improve capacity in Disaster Risk Management (DRM)

Key Actions Taken

Establishment of an inter-jurisdictional DRM program – In April 2010, the GoRJ created the Morar

Seguro Program, which includes financial incentives for municipalities to carry out DRM activities. It includes: i) a housing program that gives priority to people living in risk areas; ii) a social rental program for families affected by disaster, and iii) technical assistance and financial incentives for municipalities to establish the boundaries of risk areas.

The Morar Seguro Program has received strong attention on the part of state authorities. It is coordinated by the Vice-Governor, in partnership with municipalities, a cross-sector working group that includes the Governor’s Office and several state secretariats (i.e., Public Works, Health and Civil Defense, Social Assistance and Human Rights, Housing, and Environment) and flagship federal programs.

Identification of hydrological and geological risks at the state level – One of the new initiatives

under the state’s DRM strategy aims to strengthen technical expertise in geology and geotechnical engineering, and provide guidance for the coordinated management of state actions regarding geo-hazards in order to focus the efforts of different stakeholders on reducing the mortality rate and material damages caused by landslides.

Implementation of a more effective early warning system and contingency plans. The flood alert

system was created in 2008 under the Program for Flood Prevention and Environmental Control (Programa de Prevenção e Controle Ambiental de Inundações) approved in the 2008-2011 PPA. The

system issues low, medium, and high flood risk alerts and is directly linked to the Civil Defense system. The system sends notifications every 15 minutes to the central processing unit, which, in turn, sends daily reports to Civil Defense, municipalities, and other state hydro-meteorological institutions.

Establishment of clear policies for reconstruction that include disaster risk components. After

the intense rains in the first quarter of 2010, which led to devastating landslides in Rio de Janeiro, the state government realized that there is a need for clear ex-ante reconstruction policies following the events. The government is preparing a comprehensive reconstruction policy that will include damage assessments and the collection of data from affected persons to clearly establish who will receive benefits. Key activities will include: (a) a proposal for a state reconstruction policy; (b) mechanisms to identify and cadaster those affected; (c) the identification of potential short- and long-term shelters; and (d) mechanisms for post-disaster housing.

Main outcomes

Establishment of an inter-jurisdictional DRM program – Prior to the establishment of the Morar Seguro Program, SEASDH lacked a disaster intervention methodology as well as a strategy to provide agile support to disaster victims. Customarily, the GoRJ would transfer resources to the municipalities, which, in turn, would be responsible for the payment of benefits. Designed as a inter-jurisdictional partnership involving the three levels of government (i.e., federal, state and municipal), the Morar Seguro program is now and represent substantial progress in the GoRJ’s readiness to support disaster victims. Some of the characteristics include: The social rental program is operational, with 115,767 people having received benefits as of

September 2012. The state funds allocated to the program have experienced a sustained increased, with a budget

allocation of R$44.187 million in 2011, R$51.3 million in 2012 and R$61.6 million in 2013.

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The GoRJ now has in place the necessary institutional and logistical scaffolding to disburse funds within 30 days of the disaster. This was the result of a series of inter-agency agreements at various levels of government, including the utilization of the cadastre of beneficiaries and electronic payment cards utilized at the federal level (i.e., Bolsa Familia).

Identification of hydrological and geological risks at the state level - One of key tasks was the

creation a geological landslide susceptibility maps, including: State-level geological landslide susceptibility maps have been developed for 17 of the 19

municipalities in the RJMR—exceeding the original 75 percent target. The remaining two municipalities are expected to be mapped by June 2013.

A diagnosis was conducted in 2010, including field visits to 68 municipalities. Fifteen out of 17 municipalities with significant exposure to landslide risk have been mapped for imminent risk, resulting in the identification of over 16,000 inhabitants living in high risk-prone areas. The target, which called for ten municipalities, has been amply exceeded.

By June 2013, Rio is expected to be the first state to have geological landslide susceptibility maps for all the municipalities in the state and imminent risk maps for all high-risk municipalities.

Early alarm system

The state has implemented an effective monitoring and real time alarm system for flooding. It currently covers approximately 5 million people in 21 municipalities, covering the more risk-prone areas. Thus, the 4.9 million target for this indicator was exceeded.

The system is available online (http://inea.infoper.net/ and sends out text and twitter notifications when risk is high to registered users.

Table 3. Number of people and municipalities with early alert system – 2009-2012

Source: INEA (2012)

Policy Area 2. Affordable housing

Policy Framework

Policy Objective

This DPL provided support to the GoRJ’s objective of promoting the supply of affordable housing with reasonable access and quality to meet growing new demand in the RJMR, while at the same time significantly reducing the existing housing deficit. In particular, the government’s aim was to help the poorest (families earning up to 3 minimum wages per month) to gain access to housing solutions.

Policy Framework

The GoRJ’s low-income housing strategy adopted a segmented market approach that offers differentiated measures according to income group as a means to provide the necessary support for households with limited income to gain access to adequate housing in line with housing policies at the national level.

Some of the main challenges included: The lack of access to affordable, well-serviced, and adequately located land, which was one the

main constraints on the supply of low-income housing. The burden of onerous land development and building regulations that increase the cost of land per

unit, as well as high transaction costs of development permits. The need to strengthen ITERJ as a pre-requisite for scaling up land tenure regularization.

PDO 2.a - Enhance low-income housing policy and financing mechanisms

Major Actions Taken Land donations for My Home, My Life (Minha Casa, Minha Vida – MCMV) Federal Housing

Program – Under the MCMV Program, the state is piloting a new model for low-income housing

provision, in which it donates land and supports infrastructure improvements as needed, while municipalities provides infrastructure, and private developers build the housing with federal government subsidies.

Partnerships with municipalities for low-income housing – The GoRJ is seeking to expand

collaboration with municipalities in the RJMR to meet housing demand for households with an income of less than three minimum wages, including establishing regulatory measures and development incentives for building affordable housing on vacant land, including density bonuses, the application of the ZEIS (social interest housing zone) or AUIS (areas of housing of urban special interest) zoning, and relaxed development regulations.

Improve the governance mechanisms of the State Housing Fund as a dedicated funding for low-

2009 2010 2011 2012 Target

Municipalities 7 7 10 21

Population 3,052,879 3,052,879 3,683,231 4,965,678 4.9 millions

http://inea.infoper.net/

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income housing. To ensure funding for low-income housing, the Management Council of the State

Housing Fund was established in 2009 and a new strategy for FEHIS’ operation was defined.

Condominium management model - The GoRJ still manages a significant stock of social housing

units, but lacks a system to transfer ownership of the property as well as the management of common areas (condominium). This situation creates a significant burden for the state, which must maintain the buildings and common spaces so that they do not become deteriorated. The GoRJ intended to test a condominium self-management model in Complexo de Batan, which has 15,000 residents.

Main Outcomes Land donations for MCMV Federal Housing Program – The GoRJ signed an agreement with Caixa,

Brazil’s public development bank, to undertake a major effort to promote the MCMV program in the state, enacted enabling legislation to provide land donations. The GoRJ has already submitted 13 areas to for donation to the Caixa, 12 of which are in the

RJMR. A call for proposals from private developers has already been completed for nine of these 12 tracks of land, with an estimated capacity of 13,074 housing units. A total of 3,749 housing units are currently under construction.

Five tracks of land were expected to be donated during the DPL lifespan. The process has been completed for three of them (i.e., Frei Caneca, Cidade de Deus, and Urucânia) and the other two (i.e., Costa Barros, and Antares) are still under Caixa’s review.

While the number of housing units being produced under this program is still very small relative to an estimated low-income housing deficit of 372,246 units in the RJMR (i.e., up to 3 minimum wages), it has the potential to increase the supply of affordable housing in the medium term.

Partnerships with municipalities for low-income housing

The GoRJ signed a cooperation agreement with the municipality of Niterói to support a housing program benefiting 5,000 families with an income less than 3 minimum wages, victims of the recent landslides in Morro do Bumba, and other areas in the municipality. This agreement represents a joint effort by the state, the municipality, and the federal government to establish housing alternatives for people living in high risk areas. The state has made a financial contribution of R$80 million, with the municipality contributing R$4 million and the federal government providing subsidies through the MCMV program.

As a result of other agreements that were subsequently signed with other municipalities in the Região Serrana, three housing complexes have been completed and delivered to victims from Morro do Bumba in Niterói.

State Housing Fund – The GoRJ has taken steps toward securing financing for low-income housing

and enhancing the governance of the state’s housing fund, including: The Management Council for the State Housing has been constituted according to the state law,

with wide representation from the all major stakeholders in low-income housing. It has 12 members, including: four representatives from the relevant state secretariats (i.e., public works, housing, land institute and social action); three representatives of social organizations related to housing; one representative from the municipalities; one representative from private sector associations; one representative from non-government organizations, and one from workers and employees associations. The 12

th member is a representative of the State Secretary of Housing,

who acts as the Council's president. In September 2011, the GoRJ approved a new strategy for FEHIS, including use of FEHIS funds

and strategic priorities for low-income families (0-3 minimum wages). FEHIS new strategy was subsequently incorporated into the latest State Housing Plan.

Condominium management model – This activity was not implemented as envisioned. As mentioned earlier, the Batan housing complex is still one of the most violent favelas in Rio, which provided

unfavorable conditions to test the condo management model. Instead, the SEH identified existing housing complexes exhibiting better than average maintenance of common areas, Dom Jaime Barros Câmara in particular. The aspects that were identified as contributing toward effective self-management were linked to a former program that supported the development of residents’ associations. SEH is considering adopting a similar condominium management system, but no formal actions have been taken so far.

PDO 2.b - Strengthen land management and titling

Key Actions Taken

Enhanced framework for land tenure regularization – In 2009, the state enacted legislation enabling

the donation of state land to low-income families that occupied it, making these donations tax-exempted. The new legislation constitutes a major breakthrough, as it has eliminated important barriers to land tenure regularization.

Institutional strengthening of ITERJ - The state has supported ITERJ’s strengthening, allocating

34

resources to double its capacity in the area of land regularization. Among the various actions that were carried out were a major overhaul of processes, the tertiarization of cadaster and topography processes, and the simplification of administrative procedures required for conferring a title. In addition, ITERJI was provided with state-of-the art physical facilities.

Technical assistance to municipalities on land tenure regularization – ITERJ has successfully

implemented a pilot project providing technical assistance to municipalities to strengthen their capacity for land tenure regularization. The first pilot project was carried out in Cantagalo where the administrative process for regularization through donation and titling to resident families has already taken place.

Enabling access to land and infrastructure services - The operation supported the SEH’s intentions

to play a more active role in ensuring the supply of serviced land for low-income housing as a way to attracting private developers.

Main Outcomes

ITERJ’s institutional strengthening – ITERJ has received the needed support to drastically enhance

its performance, including: The agency's executed budget increased from R$9 million in 2009 to R$20 million in 2012, with a

R$68 million budget allocation for 2013. Likewise, its execution ability has also increased, as illustrated by the increase in the ratio of budgeted versus executed resources, which increased from 65 to 80 percent between 2009 and 2012.

In 2011, ITERJ carried out the merit-based recruitment of 104 technical positions, equivalent to 20 percent of its technical staff. Of these, 98 candidates have been officially selected and, as of April 2013, 87 had already been confirmed in their posts. An added advantage of merit-based selected technical staff is that they cannot be transferred to other state agencies.

As a result of the additional technical and financial resources and new land regularization legislation and operational procedures, ITERJ was able to process 10,238 titles in 2012, of which 8,188 have already been approved at the municipal level. This is a remarkable achievement considering that the 2009-2011 average was only 1,249 titles per year. ITERJ’s implementation capacity is expected to continue to grow progressively to reach an annual production of 40,000 titles.

Technical assistance to municipalities on land tenure regularization

It is estimated that the pilot project benefited over 10,000 people living in the parcels that were regularized. In accordance with the new legislation, beneficiaries were exempted from paying transfer taxes.

The pilot experience in the Pavão Pavãozinho / Cantagalo Complex served to test new operational and administrative procedures reflecting the newly approved legislation, which clearly assigns ITERJ the authority to approve the donation of state land for social housing purposes without any additional legal instrument.

Enabling access to land and infrastructure services – As part of its efforts to ensure an adequate

supply of serviced land, SEH was expected to identify potentially adequate areas to implement large scale housing developments, conduct feasibility studies, and develop a new integrated housing development model for about 10,000 to 15,000 families Feasibility studies - INEA has conducted environmental feasibility studies to assess the suitability of

four land areas in the metropolitan region that could potentially hold more than 130,000 housing units. SEH’s, however, has not made any significant progress in this regard and is planning to perform these studies under the upcoming TAL, which is still under preparation.

Integrated housing development model – SEH is in the process of defining a model for Manguinhos, a large track of land with a central location that was recently expropriated by the Governor. However, the definition of the integrated housing model to be applied for this area is still at a preliminary stage.

Policy Area 3. Social Development

Policy Framework

Policy Objective

In the area of social development, this DPL provided support to the GoRJ’s core objective of improving the quality of life in favelas to ensure that residents enjoy similar opportunities for development and access to public services as those living in the rest of the state.

Policy Framework

While social indicators of education, health, poverty and inequality in the RJMR had been improving in recent decades, these improvements had taken place at a lower rate than expected, lagging behind the advances made by some other Brazilian states.

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To confront this challenge, the GoRJ’s aimed to enhance the provision of social programs to the low-income urban population under the coordination of SEASDH, striving for a more effective, transparent and integrated approach.

Some of the main challenges included: The need to reassert the state’s presence in the favelas, as crime and violence in these areas

posed the most significant barrier to development and social integration. The lack of integration and coordination between social policies and programs managed by

different agencies at different levels of government, as well as with NGOs and private sector interventions.

Gaps in social services for specific population groups, such as youth involved in serious crime and violence.

The need to enhance SEASDH’s institutional capacity and establish strong planning and monitoring and evaluation systems as a prerequisite for improving the provision of social services.

PDO 3.a - Improve living conditions in most vulnerable social settings

Key Actions Taken

Social Pacification Police Units Program - UPP Social – The GoRJ has launched the UPP Social Program to institutionalize the territorial integration of social interventions in favelas. The program has an innovative and multi-dimensional approach to integrate favelas to the rest of the city by rolling out a

comprehensive menu of social support programs following pacification interventions by the military police. The UPP Social operates with complete independence from the UPP Program,12

having as a

main objective to facilitate the territorial coordination and monitoring of programs from government, private sector, and civil society that can support projects contributing to integrate these slum areas with the rest of the city.

SEASDH’s restructuring - SEASDH was created in 2007 to absorb three former secretariats, which

were never integrated into a fully coherent entity. Some actions were undertaken in preparation to SEASDH’s restructuring, including: A strategic planning process was conducted to refine the agency’s overall mission, goals, and

objectives and develop an action plan. An internal diagnosis was carried out to identify the main operative bottlenecks and challenges, particularly in the attainment of social integration objectives.

A new organizational structure was defined, based on five strategic, cross-cutting areas of work to guide the agency’s activities according to horizontal organization principles. This constitutes a drastic departure from the previous silos-based organizational structure and is expected to encourage coordination and operational integration.

Authorization of the merit-based hiring of 95 personnel to increase the capacity of SEASDH, the M&E unit in particular (Decree No. 43,294 of November 11, 2011). As noted below, this action was later reversed.

Strengthening of SEASDH’s M&E systems – Most SEASDH programs lacked a basic M&E

framework, which seriously hindered the agency’s ability to produce timely and reliable information to inform planning, assess performance, and modify interventions accordingly, Thus, a key component of SEASDH’s restructuring was the establishment of a M&E unit as well as the development and implementation of agency-wide M&E protocols and practices. Some of the actions that were include: Establishment of a standardized M&E protocol for SEASDH programs, which was formally adopted

under Decree No. 43,217 of October 3, 2011. An M&E Unit has been created within SEASDH’s organizational structured and is now operational

and two staff members have been appointed. An annual budget of R$600,000 was allocated to the unit in 2012,.

As mentioned above, the M&E protocols were formally adopted in 2011. The M&E system is being developed, including M&E methodologies, procedures, manuals, as well as implementation plan.

Three programs under SEASDH are being subject to randomized impact evaluations. One of them is for the PROTEJO program (Programa de Proteção de Jovens em Territorio Vulnerável), a

federal protection program for at-risk youth managed by SEASDH.

Main Outcomes

Social Pacification Police Units Program - UPP Social – The UPP Social Program was hosted under

the SEASDH until December 2010 and was transferred at the municipal level at beginning of January 2011. Some of the main outcomes include:

12 The UPP is a law enforcement and social services program pioneered in the state of Rio de Janeiro in

2008, which aims at reclaiming favelas controlled by gangs of drug dealers (Wikipedia, 2013; http://en.wikipedia.org/wiki/Pacifying_Police_Unit).

http://en.wikipedia.org/wiki/Pacifying_Police_Unit

36

The GoRJ then created a similar program at the state level—so-called Peace Territories (Território da Paz)—to complement the municipal level UPP program—now called UPP Social Carioca.

The Peace Territory and UPP Social Carioca Programs have been implemented in 17 and 24 favelas in the city of Rio de Janeiro, respectively. They constitute an important step toward developing the institutional scaffolding needed to support it, including coordination mechanisms within the various state agencies and between the federal, state and the municipal levels of government.

While it is difficult to isolate the impact of these programs from that of the pacification itself, as well as from PAC investments targeted to these areas, there are indications that beneficiary favelas are gradually showing signs of improvement, such as a reduction in the number of violent crimes and deaths, an increase in the reporting of crimes that before went unreported, such as theft, domestic violence, and rape.

According to several studies, the impact of these interventions goes well beyond a drop in crime and includes, among others, improvement in health and education indicators, higher birth rates, housing appreciation, and expanded access to water and electricity. Moreover, these positive impacts spill beyond the pacified favelas to affect the surrounding areas and the city as a whole.

13

SEASDH’s restructuring – Although SEASDH’s new organizational structure was not officially adopted

as called for under the Policy matrix, progress was made toward enhancing the agency’s transversal coordination and integration and its overall institutional capacity. Unfortunately, some of the progress achieved was subsequently reversed. Specifically: At the state level, an Executive Committee for Social Policies (Comitê Executivo de Políticas

Sociais – CEPS) has been established to enhance cross-agency coordination and the overall effectiveness of the state’s agencies in pacified territories, This Committee is constituted by 13 state secretariats under SEASDH’s leadership.

Within SEASDH, a Technical Committee for Institutional Integration (Câmara Técnica de Integração Institucional) has been established to enhance inter-agency coordination. Specifically, this committee includes the different units in SEASDH that are responsible for the implementation of federal and state-level programs targeting specific groups, such as children, youth, persons with disabilities, women, racial and ethnic groups.

In addition, territorial plans have been developed for all favelas with Territórios da Paz / UPP Social to coordinate sectoral, social and urban initiatives from the state and municipal levels.

A new organizational structure has been developed, and roughly 75 percent of the so-called Emergency Restructuring has been implemented. SEASDH’s activities have been substantially consolidated, resulting in a significant reduction in their number—from 90 to 42 activities. A final restructuring is planned for 2013 with support from the TAL operation. Although the new organizational structure was expected to be formally adopted by end-2012, its approval has been delayed due to a new change in the agency’s leadership.

As mentioned earlier, the merit-based recruitment process of 95 technical staff, 57 of which had already been formally hired, was later declared invalid due to a technicality in the recruitment process. While SEASDH authorities have expressed their intention to repeat the merit-base selection process, this constitutes a serious step backward given the agency’s institutional weakness. This reversal also represents a serious step backwards in the context of this DPL, as it was one of the key actions taken into consideration in assessing progress toward SEASDH’s restructuring, which was conditions for the release of the 2

nd tranche.

Strengthening of SEASDH’s M&E system – Progress has been made toward enhancing M&E of

social programs under SEASDH’s responsibility, although more modestly than anticipated. Specifically: An inventory of the M&E framework of all the programs within SEASDH’s sphere of control has

been completed. The M&E unit now centralizes the information and monitors progress regularly. This constitutes an improvement, as in the past there was no centralized information on the performance of individual programs.

Three programs are being subject to randomized impact evaluations. Although an M&E unit has been established within SEASDH, the integrated, agency-wide M&E

system that was originally envisioned is still under preparation. It is important to note that, as the development of the M&E system was originally envisioned to be financed under the TAL. As the preparation of this operation took longer than expected, the activities conducted so far were financed with SEASDH’s own resources.

13 According to various studies quoted in the Borrower’s Final Report (February, 2013).

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Annex 7. List of Supporting Documents

Estado do Rio de Janeiro (2013), Relatório de Conclusão - Programa de Habitação e

Desenvolvimento Urbano Metropolitano Sustentável – PROHDUMS – DPL II, January 31,

2013, GECAR/SUCAR/SUBFIN/SEFAZ, Rio de Janeiro.

INEA (2012), INEA – 2 Anos: Novas Ideias, Novas Atitudes Pelo Desenvolvimento Sustentável,

Instituto Estadual do Ambiente - INEA, Rio de Janeiro State Government, Rio de Janeiro.

Palladini, E. (2011), “Creating More Livable Cities: The Case of the Rio de Janeiro Metropolitan

Area,” En Breve, December 2011 Number 172, LAC Urban Development and Water Unit,

The World Bank, Washington, D.C.

World Bank (2009-2013), Documents in Project’s Electronic File, including Credit Agreement,

Aide Memoirs, Back-to-Office Reports, Project Status Reports, Project Financial

Assessments, and Project Procurement Assessments; Washington, D.C.

World Bank (2011), Brazil - Country Assistance Strategy Document 2012-2015, Report No:

63731-BR, September 21, 2011, Washington, D.C.

World Bank (2011), Rio de Janeiro Metropolitan Urban and Housing Development Policy Loan,

Program Document, Report No. 58227- BR, February 14, 2011, Washington, D.C.

World Bank (2008), Brazil - Country Assistance Strategy Document 2008-2015, Report No:

42677-BR, May 1, 2008, Washington, D.C.

Meetings Conducted during ICR Mission

Secretariat of Finance

Pablo Villarim Concalves

Secretariat of Public Works

Paulo Costa Vicente de Paula Loureiro

Secretariat of Housing

Reginaldo Balieiro Diniz Maria Cecilia Bodas Maria Clara Borges de Menezes Marcia Lana Guimaraes

SEACDH

Luis Gustavo Vieira Martins Enzo Mayer Tessarolo

INEA

Marilene de Oliveira Ramos Rosa Maria Formiga Johnsson Silvia Marie Ikemoto

ITERJ

Silvia Sprei Madlene Orterio Mayumi Sone

Other institutions

Claudio Amaral, DRM-RJ Sergio Muros, Transport Secretariat Andrezza Knauer, Coordinator Bilhete Unico, Transport Secretariat Eduarda La Rocque, President, Instituto Pereira Passos Sergio Guimaraes Ferreira, Instituto Pereira Passos Ruth Jurberg, EMOP Rossana Bastos, SEDRAP Daniele Marino Lelles, Casa Civil Juliana Azevedo Cruz, State Secretariat Daniel G. Gaudencio Moreira, Supervia Paulo Targa, Supervia

38

World Bank

Alessandra Campanaro, TTL Sameh Wahba Juan Carlos Parra Osorio Thadeu Abicalil Joaquin Toro Monica McDonough Flabia Carbonari Anaclaudia Rossbach, Consultant Tereza Herling, Consultant Jerome Klink, Consultant Luis Valverde Salandía, Consultant

Rio ClaroRio Claro

ItatiaiaItatiaia ResendeResende

Porto RealPorto Real

SeropédicaSeropédicaNova IguaçuNova Iguaçu

NilópolisNilópolis

MagéMagé

ItaboraíItaboraí

SaquaremaSaquaremaArraial do CaboArraial do Cabo

Silva JardimSilva Jardim

Rio BonitoRio Bonito

AraruamaAraruama

São Pedro da AldeiaSão Pedro da Aldeia

Armação dos BúziosArmação dos Búzios

Casimiro de AbreuCasimiro de Abreu Rio das OstrasRio das Ostras

MacaéMacaé

Cabo FrioCabo Frio

IguabaIguabaGrandeGrande

NiteróiNiterói

JaperiJaperi

ParacambiParacambi

MendesMendes

Barra do PiraíBarra do Piraí

VassourasVassourasPaty do AlferesPaty do Alferes TeresópolisTeresópolis

Nova FriburgoNova Friburgo

ValençaValença

Rio dasRio dasFloresFlores

ParaíbaParaíbado Suldo Sul

Três RiosTrês Rios

Comendor LevyComendor LevyGasparianGasparian

SumidouroSumidouroDuas BarrasDuas Barras

CantagaloCantagalo

Trajano de MoraisTrajano de MoraisConceiçãoConceiçãode Macabude Macabu

PinheiralPinheiral

Angra dos ReisAngra dos Reis

ParatiParati

MangaratibaMangaratiba

ItaguaíItaguaí

VoltaVoltaRedondaRedonda

QuatisQuatis

Barra MansaBarra Mansa

PiraíPiraí

Engenheiro PauloEngenheiro Paulode Frontinde Frontin

Miguel PereiraMiguel Pereira

ArealAreal

São José do ValeSão José do Valedo Rio Pretodo Rio Preto

SapucaiaSapucaia

CarmoCarmo

CordeiroCordeiroMacucoMacuco

São SebastiãoSão Sebastiãodo Altodo Alto

Santa Maria MadalenaSanta Maria Madalena

CarapebusCarapebus

QuissamãQuissamã

Campos dosCampos dosGoytacazesGoytacazes

São JoãoSão Joãoda Barrada Barra

São FranciscoSão Franciscode Itabapoanade Itabapoana

Cardoso MoreiraCardoso Moreira

AperibéAperibé

Santo AntônioSanto Antôniode Páduade Pádua

MiracemaMiracema

ItaperunaItaperuna

NatividadeNatividade

ItalvaItalva

CambuciCambuci

São José de UbáSão José de Ubá

Laje do MuriaéLaje do Muriaé

PorciúnculaPorciúncula

Varre-SaiVarre-Sai

Bom Jesus doBom Jesus doItabapoanaItabapoana

ItaocaraItaocara São FidélisSão Fidélis

Bom JardimBom Jardim

PetrópolisPetrópolis GuapimirimGuapimirim

Cachoeiras de MacacuCachoeiras de Macacu

TanguáTanguá

QueimadosQueimadosBelford RoxoBelford Roxo

MesquitaMesquitaDuque de CaxiasDuque de Caxias

São GonçaloSão Gonçalo

MaricáMaricá

São João de MeritiSão João de Meriti

RIO DERIO DEJANEIROJANEIRO

M I N A S G E R A I SM I N A S G E R A I S

S Ã O P A U L OS Ã O P A U L O

E S P Í R I T O S A N T OE S P Í R I T O S A N T O

Rio Claro

Itatiaia Resende

Porto Real

SeropédicaNova Iguaçu

Nilópolis

Magé

Itaboraí

SaquaremaArraial do Cabo

Silva Jardim

Rio Bonito

Araruama

São Pedro da Aldeia

Armação dos Búzios

Casimiro de Abreu Rio das Ostras

Macaé

Cabo Frio

IguabaGrande

Niterói

Japeri

Paracambi

Mendes

Barra do Piraí

VassourasPaty do Alferes Teresópolis

Nova Friburgo

Valença

Rio dasFlores

Paraíbado Sul

Três Rios

Comendor LevyGasparian

SumidouroDuas Barras

Cantagalo

Trajano de MoraisConceiçãode Macabu

Pinheiral

Angra dos Reis

Parati

Mangaratiba

Itaguaí

VoltaRedonda

Quatis

Barra Mansa

Piraí

Engenheiro Paulode Frontin

Miguel Pereira

Areal

São José do Valedo Rio Preto

Sapucaia

Carmo

CordeiroMacuco

São Sebastiãodo Alto

Santa Maria Madalena

Carapebus

Quissamã

Campos dosGoytacazes

São Joãoda Barra

São Franciscode Itabapoana

Cardoso Moreira

Aperibé

Santo Antôniode Pádua

Miracema

Itaperuna

Natividade

Italva

Cambuci

São José de Ubá

Laje do Muriaé

Porciúncula

Varre-Sai

Bom Jesus doItabapoana

Itaocara São Fidélis

Bom Jardim

Petrópolis Guapimirim

Cachoeiras de Macacu

Tanguá

QueimadosBelford Roxo

MesquitaDuque de Caxias

São Gonçalo

Maricá

São João de Meriti

RIO DEJANEIRO

M I N A S G E R A I S

S Ã O P A U L O

E S P Í R I T O S A N T O

Ilha Grande

A T L A N T I C O C E A N

A T L A N T I C

O C E A N

Baía de Sepetiba

Baía da Ilha Grande

Rio Piraí

Rio

Mac

acu

Rio

P

iabanha

Rio Macaé

Rio Paraíba do Sul

Rio Muriaé

Rio Itabapoana

To São Paulo

To São Paulo

To Belo Horizonte

To BeloHorizonte

To BeloHorizonte

To BeloHorizonte

To Vitória

To Vitória

To VitóriaTo GovernadorValadares

To GovernadorValadares

To GovernadorValadares

To SãoPaulo

23° S

44° W

BRASÍLIA

Area of MapArea of MapArea of Map

COLOMBIA

P E R U

BOL I V I A

B R A Z I L

PARAGUAY

URUGUAY

ARGENT INA

CHILE

GUYANASURINAME

French Guiana (Fr.)R.B. DEVENEZUELA

ATLANTIC

OCEAN

ATLANTIC

OCEAN

PACIFIC

OCEAN

BRAZIL

RIO DE JANEIRO METROPOLITAN AREA

HIGHWAYS

HIGHWAYS UNDER CONSTRUCTION

NATIONAL ROADS

NATIONAL ROADS UNDER CONSTRUCTION

RAILROADS

PLANNED RAILROADS

MUNICIPAL CAPITALS

STATE BOUNDARIES

MUNICIPAL BOUNDARIES

Source: www.dnit.gov.br

0 25

KILOMETERS

50

B R A Z I LRIO DE JANEIRO METROPOLITAN AREA

Th is map was produced by the Map Des ign Uni t o f The Wor ld Bank. The boundar ies , co lo rs , denominat ions and any other in format ion shown on th is map do not imply, on the par t o f The Wor ld Bank Group, any judgment on the lega l s tatus o f any te r r i to r y, o r any endorsement or acceptance of such boundar ies .

IBRD 38295

DECEMBER 2010