IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-74350) ON A LOAN IN THE AMOUNT OF US$30 MILLION. March 28, 2016

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1 Public Disclosure Authorized Document of The World Bank Report No: ICR Public Disclosure Authorized IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-74350) ON A LOAN IN THE AMOUNT OF US$30 MILLION Public Disclosure Authorized TO THE REPUBLIC OF AZERBAIJAN FOR A REAL ESTATE REGISTRATION PROJECT Public Disclosure Authorized March 28, 2016 Social, Urban and Resilience Global Practice South Caucasus Country Unit Europe and Central Asia Region

2 CURRENCY EQUIVALENTS (Exchange Rate Effective 10/01/2015) Currency Unit = Azerbaijan Manat (AZN) 1.00 AZN = US$ US$ 1.00 = AZN FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS ADCIS ADCP AM ASAN AZPOS CORS CPF CPS DCM GOA INTERLIS ITDMC KfW KOICA LADM LGAF MADAR MOJ NAPS NSDI PAC PSC Automated Document Circulation Information System Azerbaijan Agricultural Development and Credit Project Aide Memoire Azerbaijani Service and Assessment Network Service Azeri Continuously Operating Reference System Continuously Operating Reference System Country Partnership Framework Country Partnership Strategy Digital Cadastral Map Government of Azerbaijan Data Exchange Mechanism for Land Information System Information Technologies and Data Management Center Kreditanstalt für Wiederaufbau (The German Development Bank) Korea International Cooperation Agency Land Administration Domain Model Land Governance Assessment Framework Market Data Register Ministry of Justice National Automated Property System National Spatial Data Infrastructure Public Awareness Campaign Project Steering Committee

3 PSIA RECTIC RERCMS RERS SCMSP SCPI SECO SLCC SSRRE WAN Poverty and Social Impact Assessment Real Estate Cadastre and Technical Information Center Real Estate Registration and Cadastre Management System Real Estate Registration System State Committee for the Management of State Property State Committee for Property Issues Swiss State Secretariat for Economic Affairs State Land and Cartography Committee State Service for the Registration of Real Estate Wide Area Network Vice President: Cyril E. Muller Country Director: Mercy Miyang Tembon Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Sector Manager: Jorge Munoz Project Team Leader: Victoria Stanley ICR Team Leader: Victoria Stanley

4 REPUBLIC OF AZERBAIJAN REAL ESTATE REGISTRATION PROJECT 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 Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design Key Factors Affecting Implementation and Outcomes Assessment of Outcomes Assessment of Risk to Development Outcome Assessment of Bank and Borrower Performance Lessons Learned Comments on Issues Raised by Borrower/Implementing Agencies/Partners Annex 1. Project Costs and Financing Annex 2. Outputs by Component Annex 3. Economic and Financial Analysis Annex 4. Bank Lending and Implementation Support/Supervision Processes Annex 5. Beneficiary Survey Results Annex 6. Stakeholder Workshop Report and Results Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders Annex 9. List of Supporting Documents MAP

5 A. Basic Information Country: Azerbaijan Project Name: REAL ESTATE REGISTRATION Project ID: P L/C/TF Number(s): IBRD ICR Date: 03/24/2016 ICR Type: Core ICR Lending Instrument: SIL Borrower: Original Total Commitment: Revised Amount: USD 30.00M Environmental Category: B Implementing Agencies: State Committee for Property Issues Cofinanciers and Other External Partners: State Secretariat for Economic Affairs (SECO) REPUBLIC OF AZERJBAIJAN USD 30.00M Disbursed Amount: USD 29.09M B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 07/13/2006 Effectiveness: 09/17/ /17/2007 Appraisal: 12/04/2006 Restructuring(s): 06/26/ /14/ /29/2015 Approval: 03/21/2007 Mid-term Review: 11/13/ /13/2010 Closing: 02/28/ /01/2015 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Borrower Performance: Moderately Satisfactory Moderate Moderately Satisfactory Moderately Satisfactory i

6 C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Moderately Satisfactory Quality of Supervision: Moderately Satisfactory Implementing Agency/Agencies: Moderately Satisfactory Overall Bank Overall Borrower Moderately Satisfactory Performance: Performance: Moderately Satisfactory C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Performance (if any) Potential Problem Project at any time (Yes/No): Problem Project at any time (Yes/No): DO rating before Closing/Inactive status: No Yes Moderately Satisfactory Quality at Entry (QEA): Quality of Supervision (QSA): None None Rating D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration General agriculture, fishing and forestry sector 4 5 Sub-national government administration 8 5 Tertiary education 1 5 Theme Code (as % of total Bank financing) Administrative and civil service reform Land administration and management Personal and property rights State-owned enterprise restructuring and privatization Urban planning and housing policy E. Bank Staff Positions At ICR At Approval Vice President: Cyril E Muller Shigeo Katsu Country Director: Mercy Miyang Tembon D-M Dowsett-Coirolo Practice Manager/Manager: Jorge A. Munoz Juergen Voegele ii

7 Project Team Leader: Victoria Stanley Gavin P. Adlington ICR Team Leader: Victoria Stanley ICR Primary Author: Jonghyun Yoon F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project objective is to ensure that there is a reliable, transparent and efficient real estate registration system supporting the real property markets and suitable systems for the management and use of State-owned immovable property. Revised Project Development Objectives (as approved by original approving authority) N/A (a) PDO Indicator(s) Indicator Indicator 1 : Value quantitative or Qualitative) Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Percentage of customers very satisfied/satisfied with the speed of service of official and standard information supplied. 50% 75% (baseline + 25%) 79% Date achieved 09/01/ /28/ /01/2015 Comments (incl. % Achieved and exceeded. 79.2% very satisfied achievement) Indicator 2 : Automated systems developed and used by professional users Value quantitative or Qualitative) stand-alone outdated system ii) no professional users i) Systems in use, ii) 100 on-line users i) Automated systems developed, ii) Online services used by all 150 notaries and by banks. Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Achieved. Automated systems, including 18 e-services, online services and electronic payments, rolled out to all offices. All 150 notaries access to online system, also banks and others. Indicator 3 : Average speed of transaction following registration request to SSRRE Value quantitative or Qualitative) 30 days 3 days 12 days Date achieved 09/01/ /28/ /01/2015 iii

8 Comments (incl. % achievement) Indicator 4 : Value quantitative or Qualitative) Partially achieved. The number of days to register greatly reduced from 30 days to 12 days. For an additional fee, urgent registration in 7 days or less. Mortgages registered in 5 days or less. 3 day registration expected with rollout of new IT system Number of transactions registered at the SSRRE (annually) 87, , , ,288 Date achieved 12/31/ /28/ /31/ /31/2014 Comments (incl. % Achieved - more than doubled from the baseline. achievement) Indicator 5 : Numbers of mortgages issued (annually). Value quantitative or Qualitative) 11,515 50,000 40,000 45,619 Date achieved 12/31/ /28/ /31/ /31/2014 Comments Achieved - a 396% increase in the issuance of mortgages against the baseline (incl. % (from 11,515 to 45,619). achievement) Indicator 6 : Numbers of information requests received by the SSRRE (annually). Value quantitative or Qualitative) 90, ,561 Date achieved 12/31/ /31/2014 Comments (incl. % achievement) Indicator 7 : Value quantitative or Qualitative) No target was set due to the fact that this type of request is not predictable. The number of requests has risen rapidly since 2011, not least because of online services. Strategy agreed for coping with informal settlement issues. No strategy Strategy agreed The strategy was produced and agreed with SCPI. Date achieved 09/01/ /28/ /01/2015 Comments The strategy was agreed with SCPI but official government agreement is beyond (incl. % the scope of the project. achievement) (b) Intermediate Outcome Indicator(s) Indicator Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Indicator 1 : All regional offices and their branches renovated and operating under improved conditions. Value (quantitative or Qualitative) Date achieved 09/01/ /28/ /01/2015 iv

9 Comments (incl. % achievement) Indicator 2 : Value (quantitative or Qualitative) Achieved. A total 18 regional registration offices were constructed or renovated successfully under the Project. IT center established and operational. No building Established and equipped Established and equipped Date achieved 08/15/ /31/ /01/2015 Comments Achieved. The state-of-the-art IT Center and its Reserve Center were (incl. % successfully established and fully equipped and operational. achievement) Indicator 3 : Information system running in all regional offices and linked through a Wide Area network (WAN) and the Internet. Value (quantitative or Qualitative) none System in use System in use Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Indicator 4 : Value (quantitative or Qualitative) Achieved. The roll-out of the RERS to all regional offices was successfully completed in All regional offices were able to connect the central database through a WAN as well as the Internet. Over 100 Notaries connected on-line to the registration system Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Exceeded. All 150 notaries registered in Azerbaijan have been able to have online access to the registration system since March The end target was exceeded by 50%, from 100 to 150. Indicator 5 : No. of hectares of digital cadastre maps created. Value (quantitative or Qualitative) None 4,000,000 1,500,000 1,528,032 Date achieved 09/01/ /28/ /01/ /01/2015 Comments (incl. % Revised target achieved. achievement) Indicator 6 : No. of private sector surveyors available to amend or check REC records. Value (quantitative or Qualitative) 0% 90% 120 private surveyors 120 private surveyors Date achieved 09/01/ /28/ /31/ /01/2015 Achieved. As per two restructurings, the target was revised in 2012 from 90% to Comments 40% and again in 2015 from 40% of survey work completed by private (incl. % surveyors to 120 private surveyors registered due to delays in establishing the achievement) legal framework. Quality control checks completed by the SSRRE within 5 days of receiving the Indicator 7 : applications. Value 20 days 5 days 5 days v

10 (quantitative or Qualitative) Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Indicator 8 : Value (quantitative or Qualitative) Achieved. 5 days have been needed for the quality control checks since the end of No. of properties valued and results posted on line. i) 0 ii) Yes i) 600,000 ii) Yes i) 100,000 ii) Yes i) 155,793 ii) No Date achieved 08/15/ /31/ /01/ /01/2015 Comments Partially achieved. Valuations completed. Data will be available online once (incl. % RERCMS is rolled-out. achievement) Indicator 9 : Surveys show that 80% of respondents have heard of the SSRRE and 90% of these agree that registration is very important. Value (quantitative or Qualitative) No data 80%, 90% 79%, 72% Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Achieved. 79% of respondents have heard of SSRRE (meeting 80% target); and 72% of respondents consider registration very important and 20.1% consider it important - total of 92% Indicator 10 : Service standards and a business plan agreed and implemented Value (quantitative or Qualitative) No business plan Agreed and implemented Agreed and implemented Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Achieved. Service standards (and the Code of Conduct) were developed and implemented in In addition, three business plans for RECTIC, ITDMC and the SSRRE (within the SCPI) were developed. New automated system installed nation-wide and connected via a WAN in 26 Indicator 11 : offices and headquarters (for state property management). Value (quantitative or Qualitative) 0 Installed and connection to WAN NAPS installed and connection to WAN Date achieved 09/01/ /28/ /01/2015 Achieved. Automated NAPS system rolled out and connected to central system. Comments New automated system was merged into the RERCMS with the creation of SCPI (incl. % and will be rolled out in 2015, but automated systems are in place and centrally achievement) connected. Indicator 12 : Number of records converted into the new system. Value (quantitative or Qualitative) 0 150, ,545 Date achieved 09/01/ /28/ /01/2015 vi

11 Comments (incl. % achievement) Achieved. By the end of the Project, 176,545 state property records were fully digitized and loaded into the NAPS. Once the RERCMS is rolled out this data will be migrated to the RERCMS. Indicator 13 : Average time taken to process and register an application reduced. Value (quantitative or Qualitative) 90 days 30 days 45 days 45 days Date achieved 09/01/ /28/ /31/ /01/2015 Comments (incl. % achievement) Achieved. The average time to process a new state property registration was reduced by half by the end of 2014 (from 90 days to 45 days) due to the automated system (NAPS) and digital records. Indicator 14 : Number of enterprises registered in the new system online. Value (quantitative or Qualitative) 0% 50% 20% 0% (but 6,258 enterprises registered) Date achieved 09/01/ /28/ /31/ /01/2015 Comments Partially achieved. 6,258 enterprises were registered in the NAPS without on-line (incl. % service. Online services will be rolled out with the RERCMS. achievement) Indicator 15 : ADCIS development within SCPI and subordinated bodies. Value (quantitative or Qualitative) No Implemented Implemented Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Achieved. Automated Document Circulation Information System (ADCIS) was developed and is operational. Indicator 16 : Human Resources strategy developed and implemented. Value (quantitative or Qualitative) No Strategy developed and implemented Strategy developed and implemented Date achieved 09/01/ /28/ /01/2015 Comments Achieved. An HR strategy was developed and implemented under the SCPI's (incl. % strategic plan in achievement) Indicator 17 : 30 to 40 CORS stations installed Value (quantitative or Qualitative) Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Achieved. A total of 37 CORS stations and a control station were successfully constructed and fully equipped to provide customer services Indicator 18 : 20 Customers for the CORS system registered. Value (quantitative or Qualitative) Date achieved 09/01/ /28/ /01/2015 vii

12 Comments (incl. % achievement) Achieved. 198 users from 26 private companies and some public entities have been registered and contracted with the CORS system. Creation of ortho-photo maps and satellite imagery with the following specification: 15,000 sq. km at 1:10,000 scale based on satellite imagery; 8,200 Indicator 19 : sq. km at 1:10,000 scale; 37,000 sq. km at 15,000 scale; 3,000 sq. km at 1:2,000 scale; and 5,000 sq. km Value (quantitative or Qualitative) 0 sq. km National coverage National coverage Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Achieved. All digital ortho-photo maps and satellite imagery covering the country were successfully completed. Indicator 20 : Service Standards and a business plan agreed and implemented (SLCC) Value Agreed and Agreed and (quantitative none implemented implemented or Qualitative) Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Achieved. SLCC implemented service standards and a business plan. They are now abolished and relevant features of the business plan will be incorporated into SCPI. Indicator 21 : Training Center equipped and providing courses. Value (quantitative or Qualitative) 0 In use In use Date achieved 09/01/ /28/ /01/2015 Comments Achieved. The Training Center was established in 2008 and used throughout the (incl. % Project. It is now absorbed into SCPI as part of their new education center. achievement) Indicator 22 : Real Estate Law Center established and operational Value (quantitative or Qualitative) 0 In use In use Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Achieved. The Law Center established in 2009, was reopened with the name of Law and Education Center in Continues in operation. Indicator 23 : 10,000 person days of training courses completed. Value (quantitative or Qualitative) 0 9,000 10,000 26,515 Date achieved 09/01/ /28/ /31/ /01/2015 Comments (incl. % Exceeded. achievement) Indicator 24 : Average quality rating of training delivered. Value 0 90% 95% viii

13 (quantitative or Qualitative) Date achieved 09/01/ /28/ /01/2015 Comments (incl. % Achieved. achievement) Indicator 25 : IT strategy adopted by two implementing agencies. Value (quantitative or Qualitative) None Adopted Adopted Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Achieved. Due to institutional reorganizations, a new joint IT strategy was prepared in 2014 and is being implemented. Indicator 26 : Strategy for National Spatial Data Infrastructure (NSDI) prepared. Value Strategy (quantitative None Adopted Strategy prepared prepared or Qualitative) Date achieved 09/01/ /28/ /31/ /01/2015 Comments (incl. % achievement) Achieved. During the first restructuring in 2012, a typographical error was corrected, changing NSDI development to development of the NSDI strategy. Indicator 27 : Legal reviews of relevant laws completed and modifications recommended legal reviews Value continued (quantitative n/a continuous throughout the or Qualitative) project Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Achieved. Approximately 15 laws related to real property were amended or adopted during the Project. Indicator 28 : Project management assessed as successful by Bank supervision missions Value (quantitative or Qualitative) n/a S rating S rating Date achieved 09/01/ /28/ /01/2015 Comments (incl. % Achieved. The PMU activities have been rated as Satisfactory since achievement) Indicator 29 : Quarterly monitoring reports assessed as satisfactory by Bank Task Team. Value 4 quarterly reports 4 quarterly reports (quantitative No data annually annually or Qualitative) Date achieved 09/01/ /28/ /01/2015 Comments (incl. % achievement) Achieved. The PMU prepared and submitted all required quarterly monitoring reports to the Bank on time and were satisfactory ix

14 G. Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 08/06/2007 Satisfactory Satisfactory /17/2007 Satisfactory Satisfactory /04/2008 Satisfactory Satisfactory /30/2008 Satisfactory Moderately Satisfactory /03/2009 Satisfactory Moderately Satisfactory /06/2009 Satisfactory Moderately Satisfactory /31/2010 Moderately Satisfactory Unsatisfactory /22/2010 Satisfactory Moderately Satisfactory /18/2011 Moderately Satisfactory Moderately Satisfactory /27/2011 Moderately Moderately Unsatisfactory Unsatisfactory /22/2012 Moderately Moderately Unsatisfactory Unsatisfactory /17/2012 Moderately Moderately Unsatisfactory Unsatisfactory /24/2012 Moderately Satisfactory Satisfactory /08/2013 Satisfactory Satisfactory /05/2014 Satisfactory Moderately Satisfactory /21/2014 Moderately Satisfactory Moderately Satisfactory /15/2014 Moderately Satisfactory Moderately Satisfactory /20/2015 Moderately Satisfactory Moderately Satisfactory H. Restructuring (if any) Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring DO Amount Disbursed at Restructuring in USD millions 06/26/2012 N MU MU IP Reason for Restructuring & Key Changes Made Due to the institutional reorganization in 2009 (creation of SCPI) and the misprocurement (without cancellation of funds) in 2010, some indicators were revised and the closing date of the project was extended from February 28, 2013 to December 31, (PDO) Due to the impact of the global financial crisis on x

15 property, two PDO indicators were revised: (i) the number of transactions registered at the SSRRE reduced from 350,000 to 200,000; and (ii) the number of mortgages registered from 50,000 to 40,000. And the following Intermediated outcome indicators: 1. New indictors added: (i) construction and equipping of the new IT center for the SCPI, and (ii) valuation of an estimated 600,000 properties in Baku. 2. Target percentage of private sector surveyors was lowered from 90% to 40% to reflect delays in establishing the legal framework for cadastral maintenance. 3. The target time for processing applications submitted to the SCMSP was altered from 30 days to 45 days - a more realistic target. 10/14/2014 N MS MS /29/2015 N MS MS Increased target number of person days of training from 9,000 to 10,000. A nine-month extension of the closing date to October 1, 2015 was agreed to allow completion of the RERCMS and to meet other indicators related to activation of the IT system. To reflect the abolition of the SLCC (one of the original implementing agencies) and amend the results framework, as agreed in principle in September 2013, three intermediate outcome indicators were adjusted: xi

16 1. The target for creation of the digital cadastral map was reduced from 4 million to 1.5 million hectares (SLCC never had this amount of digital data available and the target was mis-estimated from the start). 2. Target for real properties valued was reduced from 600,000 to 100, Target for the private sector surveyors involvement in REC maintenance was also changed from 40% of survey work to 120 private surveyors registered, due to the great delays caused by the resistance of the SLCC. I. Disbursement Profile xii

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18 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. While land titling for state and collective farms was largely completed under the farm privatization program in the mid-1990s, no procedures were in place for registration of subsequent land transaction in Azerbaijan. The data on property rights was fragmented and the process of dealing with property was slow, expensive and subject to nontransparent processes. In addition, large areas of informal settlement had arisen because of non-enforcement of planning rules and demand from displaced people migrating to cities. Overall the formal real estate market was weak and the number of mortgages to raise capital using property as collateral was very low in comparison with other countries in the region. 2. There was a considerable body of general and real estate laws in Azerbaijan built up over the previous decade, including: the Constitution, a Civil Code (1999), a Land Code, and Laws on Land Reform, Land Markets, Land Leasing, Notaries, State Land Cadastre, and Land Use. In addition, the State Service for Registration of Real Estate (SSRRE) in 2003 and the State Committee for the Management of State Property (SCMSP) in 2005 were established to register private property and to maintain the real estate cadaster, as well as to deal with State-owned properties. 3. In 2006, the GOA and the World Bank developed a Country Partnership Strategy (CPS) FY07-10 outlining four higher level objectives for the country: public sector management and prevention of corruption; sustainable growth of the non-oil economy; improved quality and access to social services; and improved environmental management. The Project contributed to the goal of sustainable growth of the non-oil economy by providing support to the establishment of a real property registration system in Azerbaijan, further strengthening the security of private property rights and facilitating the property market and use of property as collateral. The Project was intended to contribute to the higher level objectives described in the previous CPS through improving the security, certainty and accuracy of land records, reducing impediments to access to land, improving land administration services, and enhancing transparency, and simultaneously reducing corruption opportunities. 4. The rationale for the Bank to become involved centered on two factors: the readiness of the country s legal and institutional framework for implementing the necessary reforms; and the Bank s considerable expertise in projects of this kind regionally, with similar projects in six neighboring countries at the time of preparation, and numerous projects in the Europe and Central Asia (ECA) region over the preceding 15 years. 1.2 Original Project Development Objectives (PDO) and Key Indicators 5. The Project Development Objective is to ensure that there is a reliable, transparent and efficient real estate registration system supporting the real property markets and suitable systems for the management and use of State-owned immovable property. The PDO level indicators are as below: Percentage of customers very satisfied/satisfied with the speed of service of official and standard information supplied. 1

19 Automated systems developed and used by professional users. Average speed of transactions following registration requests to the SSRRE. Number of transactions registered at the SSRRE. Numbers of mortgages issued. Numbers of information requests received by the SSRRE. Strategy agreed for coping with informal settlement issues. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification 6. The PDO was not revised during the Project. However, the restructuring in 2012 reduced the targets for two PDO indicators: the target number of transactions registered at the SSRRE was lowered from 350,000 to 200,000, and the number of mortgages was lowered from 50,000 to 40,000. The rationale for this reduction was that the global financial crisis was expected to have a negative effect on the property market and reduce the number of transactions. As this was beyond the control of the Project or SSRRE, it was agreed to adjust the targets downward. 1.4 Main Beneficiaries 7. The main beneficiaries were to be those people and businesses that wanted security of their land or property in order to invest labor or acquire capital through using real estate as security for loans, namely the property owners and those wanting to make use of information relating to real property, including real estate professionals (notaries, land surveyors, etc.), municipalities, banks. In addition, although not directly identified, all persons holding property were to benefit through greater security and certainty acquired from the legal documents produced by the Project. The citizens of Azerbaijan were to benefit by having more transparent systems operating and through the government s better use of State-owned immovable property assets. Improved use of State-owned assets would benefit the State, and indirectly citizens, through increased government revenue and capacity to deliver good services to population, and more efficient land management for use of property. 1.5 Original Components 8. The Project included four components: (1) Real Estate Registration; (2) State Property Management and Register; (3) Base Mapping and Land Cadaster; and (4) Training, Policy Development and Project Management. (a) Real Estate Registration. The objective of this component was to provide more effective and efficient customer services in the registration of property rights by improving the physical condition of the registration office premises and installing automated systems and on-line services. The activities included: (i) the development of new buildings and renovation of existing buildings; (ii) the supply of office equipment, furniture, and computer systems; (iii) the development of a unified registration and cadaster system that provides improved services, archiving, and on-line access to notaries and other professionals; (iv) providing a complete real estate cadaster and building inventory; (v) improvement of the property 2

20 valuation system; (vi) improving public awareness; (vii) improving the ongoing sustainability of registration services through strategic and business planning; and (viii) pilot activities to analyze the scope and inventory of illegal and unplanned development and preparation of a Formalization Strategy, acceptable to the Bank, for resolving these issues. (b) State Property Management and Register. The objective of this component was to support improvements in the management of state property. This was achieved by: (i) improving the administrative systems and service delivery; and (ii) improving the automated State Property Management System. (c) Base Mapping and Land Cadaster. The objective of this component was to provide the basic geodetic, mapping, and cadastral data for the automated property registration and state property management systems. Activities included: (i) establishing a series of Continuously Operating Reference Stations (CORS) to be used for current and future survey work in all disciplines; (ii) the production of a complete set of digital orthophoto maps through new satellite and aerial imagery; (iii) development of land parcel maps; and (iv) improving the ongoing sustainability of these services through strategic and business planning. (d) Training, Policy Development and Project Management. The objective of this component was to support project implementation and monitoring and to coordinate joint activities relating to: (i) training; (ii) developing a joint information technology and information management strategy; and (iii) policy and legislative development. A project management unit for the administration of project finances, production of procurement documents, and monitoring project activities would be funded. 1.6 Revised Components 9. No components were revised formally during the Project. However, due to the institutional change involving the SSRRE and the SCMSP (those implementing agencies were merged into the SCPI in 2009), the activities under subcomponent B1 (development of the State Property Management System for the SCMSP) and subcomponent A2 (development of the Unified Registration and Cadastre System) were subsumed into the single contract for development of the RERCMS and supervised together. 1.7 Other significant changes 10. In 2009, the Government of Azerbaijan (GOA) formally merged two of the implementing agencies, the SCMSP and the SSRRE 1, into the State Committee for Property Issues (SCPI), which is responsible for all State-owned property registration and management as well as private property registration. The immediate impact of this change was to delay project implementation by at least five months. However, the merger of the two agencies contributed to improving efficiency and removing duplications over the long term. This merger was also fully in line with the Project s PDO to improve information 1 SSRRE retained its separate identity and self-financing status but was now under the SCPI. 3

21 flows and rationalize operations in a single agency. However, due to the delays, this institutional reform was one of the reasons for the restructuring in 2012 and extension of the closing date from February 28, 2013 to December 31, 2014 (extension of 22 months). In September 2014, a second restructuring with an additional nine-month extension of the closing date (to October 1, 2015) was agreed to complete the development of the Real Estate Registration and Cadastre Management System (RERCMS). 11. In 2011 the bidding for creation of the Real Estate Cadastre Digital Index Map under Component C resulted in a mis-procurement 2 due to a difference in opinion between the Bank and SCPI on certain criteria for bid responsiveness. In the end this procurement was declared as mis-procurement, but the Bank characterized it as a legitimate difference in judgment, and it was not in any way related to malfeasance of corruption. 12. Afterwards, all digital cadastral mapping works under the Project were implemented with GOA funds. In addition, subcomponent C3 (production of cadastral data, parcel boundaries for the DCM) was implemented closely with subcomponent A4 (Creation of the digital Real Estate Cadastral Map) because it was understood that the procedure/approach to be used should be as simple as possible for the creation of the DCM using the existing maps without field works. 13. The SLCC, the final of the Project implementing agencies, was abolished as per the Presidential decree dated February 5, 2015 to ensure unified management in the regulation of ownership rights. Consequently, part of its functions and mandate was assigned to the SCPI. The SCPI is now the only implementing agency for all components of the Project. The Government s decision to close the SLCC is one of the most important institutional changes for land administration, improved efficiency, and customer service orientation of the SCPI. 14. A number of intermediate outcome indicators were modified or their targets changed. Indicators were adjusted as below: Construction and equipping of a new IT center (added as a new activity); Valuation of 600,000 properties in Baku and provision of the results on-line to the public (added as a new indicator); The target percentage of private sector surveyors was lowered from 90% to 40% due to delays in establishing the legal framework; 2 Mis-procurement. There was a concern in relation to the Procurement Contract for the creation of Real Estate Digital Index Map under the Component C of the Project from September 2010 to April There were a gap between the Bank and the SCPI on the interpretation of certain parts of the Bank s Procurement Guidelines regarding the criteria for bid responsiveness. In other words, it was a main concern that the bidder (the lowest priced bidder's) unsigned and incomplete bidding document should be considered as material or immaterial deviations to keep or fail in the bid evaluation process. However, even though this procurement was declared as mis-procurement by the Bank, the Bank characterized the result of the exchange of views as a legitimate difference in judgment. In conclusion, all digital cadastral mapping works under the Project were implemented by GOA funds, and the funds allocated for this contract were reallocated to other activities: establishment of IT center; valuation of 600,000 properties, and some activities for scaling-up, through the first restructuring in

22 The target average time taken to process and register an application was increased from 30 days to 45 days; and The target number of person days of training was increased from 9,000 to 10, In addition, there was a further restructuring in 2015 to reflect the abolition of the SLCC, and to amend the results framework, as agreed in principle at the September 2013, related to certain intermediate results indicators. Three indicators were revised as follows: The target coverage of Digital Cadastral Map (DCM) was reduced from 4 million to 1.5 million hectares (the original target was over-estimated and in fact this amount of data did not exist); The target number of property valuations was reduced from 600,000 to 100,000; and, The target number of private sector surveyors who amend or check Real Estate Cadastre records was reduced from 40% of all survey works by the private sector to 120 private sector surveyors registered (again due to delays with the legal framework for this activity). 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 16. The Bank has extensive experience with land registration projects in the region, and it drew on that experience during preparation. Lessons learned in the region showed that it is necessary as a first step in land administration to ensure that a suitable system is in place for recording and protecting citizens property rights be in place. Land administration and management are complex functions that involve locating all properties, assessing land boundaries and usages, privatizing or restituting property rights, improving rental markets, resolving disputes, increasing revenues through taxation, etc. While all of these issues existed in Azerbaijan, the Bank team recognized it was important to be selective; thus, the Project concentrated on the basic activities to establish a simple, inexpensive, and sustainable immovable property registration system that is trusted by the public for its accuracy and integrity. 17. The Project built on the experience gained from the pilot registration project in the Nakhchivan region under the Azerbaijan Agricultural Development and Credit Project (ADCP) funded by the Bank from 1999 to The ADCP, which was successfully completed in 2006, had provided the Government with a concrete initiative and blueprint for rolling out the unified cadastre and registration system nationwide to improve the transparency, speed and quality of services in land administration. Also, the basic prerequisites a viable single agency (the SSRRE) and a satisfactory legal framework were in place for implementing a national-level property registration project. 18. Project design was relatively standard for registration projects in the ECA region, drawing on more than 15 years of experience in land administration reform in the region. The PDO was of consistent with other projects in countries moving from command to market economies, but added a focus on the management of State-owned immovable 5

23 property. On the basis of lessons learnt from the ADCP, the project design focused on improving the existing registration system by adding cadastral mapping data (graphical data) and building the capacity of operational and maintenance staff. Three implementing Agencies (the SSRRE, SCMSP and SLCC) were responsible for project implementation at the beginning stage of the Project with each responsible for one component (plus a project management component). While the SSRRE and other agencies were competent organizations to implement a registration system over the coming years, they had insufficient experience implementing this kind of extensive, national-level land project funded by the Bank. The Government showed strong commitment, as demonstrated by their rapid appointment of a Director of the PMU for the Project and establishment of the Project Steering Committee (PSC) at the beginning of the Project. 19. The Swiss State Secretariat for Economic Affairs (SECO), an external partner, expressed their interest during project preparation in providing technical assistance and undertaking quality control for the technical aspects of the Project. Throughout implementation the SECO financed team (provided by the BSB+ company), provided exemplary technical assistance and supervision for activities including the CORS system, the orthophoto map production, the Absheron pilot result, installation of the geodetic reference system, the IT system development, and entry of the text information on property rights in the existing registry system. 20. Risks were realistically assessed at the time of preparation and appropriate mitigation measures were put in place. The following risks were identified during preparation: (i) fiduciary risk financial management was rated as substantial to moderate taking into account the mitigating measures of training in financial management and loan disbursements; (ii) institutional risk the disagreement/disharmony between the SSRRE and the SLCC concerning their respective roles in registration, especially in cadastral mapping. However, due to the final institutional arrangement among all agencies a single agency, SSRRE the risk was rated as low; (iii) corruption risk was considered substantial related to asset management and governance. Strength of project management and procurement capacity, and a tight internal control framework was designed for preventing from this risk; and (iv) development of a complicated and sophisticated IT system, for which the Project designed a modular approach for developing the IT system to prevent the failure of the whole works under a single contract. During the preparation stage, the Bank team and the PMU incorporated close monitoring and adequate technical advice as mitigation measures for each risk. 2.2 Implementation 21. An institutional reorganization in 2009 established the State Committee for Property Issues (SCPI) based on the SCMSP framework an effort that was not foreseen at the time of project preparation. While the SCMSP was completely merged into the SCPI, the SSRRE was merged but retained its separate identity and self-financing status, including the level of service provision. Therefore, the merger and appearance of the SCPI did not change the institutional arrangements under the Project. In the long term, it had a beneficial effect. There were many overlaps between the work and practices of the previous agencies, so the merger contributed to rationalization of administrative staff and 6

24 improvement in efficiency and removed duplications. In the short term, the institutional reform delayed project activities by at least five months. Many contractors could not be paid while the management changes were occurring because of the necessary changes in authorizing signatories, and new activities stalled while the new management took time to understand the project details, past activities, and the new work program. This reorganization became one of the most important grounds for the first restructuring in In addition, this reform had a major impact on the plan for the IT system development. Accordingly, the SCPI planned to establish a new, fully integrated IT system (RERCMS) with one contract, and the original plan using modular approaches was abandoned. Thus, the risks considered during the project preparation were realized with problems and delays encountered by the closing date of the Project. As a result, while the development phase of the RERCMS has been completed, the system had not reached the level of operational commissioning by the Project closing date of October 1, The impact of this delay is that the state property management and real estate registration functions are not integrated; however for users there is minimal impact as they are able to access the needed services online with the existing systems. 23. The Mid-Term Review (MTR) mission was implemented according to schedule in November At the MTR, the Bank team faced several urgent issues (e.g., delays in the cadastral works contract and in IT system development) in order to reach the Project s overall objectives. Also, it was agreed that some target figures in the results framework would need to be revised in light of the institutional reorganization in The Bank team continued to closely monitor progress and give timely practical advice to cope with these problems. 24. There were three project restructurings during the life of the Project to meet the PDO and its key indicators. In 2012, new activities were added, including the establishment of IT center and mass valuation for 600,000 properties, and some end targets were reduced to reflect the impact of the global financial crisis. In 2014, a nine-month extension of the closing date to October 1, 2015 (without any modification of the indicators) In 2015, more realistic target values were provided for: (i) creation of 1.5 million hectares of the DCM; (ii) 100,000 properties valued; and (iii) 120 private sector surveyors for REC maintenance. These continued efforts to monitor and adjust the PDO indicators by the Bank and the PMU contributed to successful implementation of the Project. 25. Throughout the Project, there was a lack of clarity on roles and responsibilities between the SCPI and SLCC, specifically related to cadastral surveying and property valuation. This lack of clarity created delays in implementing the Project and meeting the PDO and its indicators until the SLCC was abolished in This lack of clarity was particularly an issue in the areas of (i) creation of the DCM (due to the delays in the transfer of data and the over-estimation of 4 million hectares from the SLCC), (ii) development of the RERCMS (on the issue of the adoption of a data model), (iii) development of private 7

25 sector surveyors to conduct cadastral and mass valuation works, and (iv) enactment of the Law on Real Estate Cadastre as a unified law. 26. On the other hand, the constructive partnerships with SECO and KfW 3 were crucial to keeping the Project on track. Specifically, these were: (i) the technical assistance from SECO to the GOA and the Bank team on project supervision and quality control, including facilitating collaboration between the different implementing agencies; and (ii) the activities related to creating a modern and accurate DCM by KfW in areas, not covered by the Bank-funded Project. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 27. Design: The PAD s Results Framework included 7 PDO Indicators and 30 Intermediate Outcome Indicators. Most of indicators provided a quantifiable basis for assessing progress in meeting the PDO. The results framework in Annex 3 of the PAD provided a set of clear, specific indicators covering activities under each component, and clearly envisaged how the data would be collected and synthesized into useable reports for decision making. 28. Implementation: The SCPI did not report on all matters covered in the results framework in the early stages of the Project through In 2010, the new M&E specialist created a series of manuals and led training for various departments of the implementing agencies informing them of the importance of monitoring and evaluation. In 2013, improved M&E tables were able to provide a break down by sub-category so assessments could be made of all aspects of real estate market activity. Customer satisfaction surveys conducted in 2009 and 2014, also provided valuable data for monitoring the PDO indicators. Quarterly reports were prepared by the PMU after 2010 to a high standard. Some of the targets set were overly-ambitious leading to necessary changes and restructurings during implementation. However the M&E provided detailed information on what was being achieved and this provided useful inputs for the restructurings as well as day to day decisions. 29. Utilization: The monitoring reports were critically important to decision making and to reallocating project resources, as well as attention and focus, to reach targets. The quarterly reports, as well as discussions and field visits undertaken on supervision missions, reassured all parties that Project activities were progressing and, where they were not progressing, provided valuable input to making timely modifications. 2.4 Safeguard and Fiduciary Compliance 30. The Project was assigned an Environmental Category B. Accordingly, a partial Environmental Assessment (EA) was carried out to ensure that the building rehabilitation and modernization works were environmentally acceptable and would cause no, or minimal, damage to the environment. Other than construction and renovation of office 3 The German Development Bank (KfW) assisted with producing the cadastral data and improving the registration system in areas not covered by the Bank. KfW provided parallel financing in the amount of 3.5 million ( 2.5 million loan and 1.0 million grant) for the production of 225,500 ha of full cadastral data for the districts of Ganja and Shaki, with quality control financed by the RER project. 8

26 space, the Project did not support civil works, land conversion, resource extraction, or any activities that could potentially damage the environment. The EA stipulated that all renovation and rehabilitation contracts must include Environmental Management Plans (EMPs), and that the EMPs for each site include provisions that were fully implemented on minimizing the generation of dust and construction waste, waste water, noise disturbance, use of health damaging materials, damage to land due to excavation works, as well as provisions on chance findings of cultural or historical heritage. Safeguards, particularly EMP compliance, were monitored through regular supervision missions and were found to be satisfactory. 31. Overall, the financial management (FM), disbursement and procurement staff within the PMU performed capably and all audits had a clear opinion. The FM system recorded all transactions and balances and permitted clear and concise reports to be promptly issued. On the other hand, there were some delays in the submission of withdrawal applications for replenishment of the designated account, as well as inadequate management of fixed assets, delayed payments to consultants, absence of a properly prepared budget. The primary reason for these issues was the high/frequent turnover of FM staff and, as a consequence, an improper handover process. The final FM rating is Moderately Satisfactory and the final audit report (for CY 2015) is underway and is expected to be submitted well before the deadline of June 30, All assignments (consultancies, works and goods) as per the Procurement Plan were successfully completed. The final post review was conducted in February 2015 and the final procurement rating is Satisfactory. The project risk was rated Moderate both for Procurement and Contract administration. Overall the PMU procurement staff performed well. 2.5 Post-completion Operation/Next Phase 33. In the context of the new Country Partnership Framework for , there have been discussions on a follow-on project. Among the activities being considered are: further improvement to registration services and the national roll-out of the IT system; development of the electronic cadastral database; support for a National Spatial Data Infrastructure (NSDI); further implementation of mass valuation activities in other regions of the Republic; further support for the management of state property; and further development of the SCPI training institute in collaboration with national universities. The Bank team and the SCPI discussed the timing of a follow-on project and have continued to work on the basic project design. The future follow-on project ( Real Estate Registration repeater project ) is under the Economic Competitiveness section and is included in the CPF for FY16-20 to help improve the system of property rights registration. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 34. The objectives and design of the Project are still highly relevant and fully consistent with the country s needs and aspirations on poverty reduction and sustainable development. The government had clear and concrete approaches for reducing poverty with a national strategy: the State Program on Poverty Reduction and Sustainable 9

27 Development 4 ( / ), both of which meet the Bank s twin goals. Within this environment and following the rapid economic development due to the growth mainly in the oil sector, the Project was designed under the Country Partnership Strategy (CPS) for 2005 to 2007, under Pillar 1 Improving the Quality and Transparency in Public Sector Governance and Pillar 2 Sustainable Growth of the Non-Oil Economy. The CPS placed land administration as an integral element of the environment for sustainable and balanced economic development. There was a strong need for secure, transparent and efficient land registration to facilitate investment, economic growth, and social stability. 35. Azerbaijan s current development priorities focus on maintaining its development momentum and transforming itself into a sustainable upper-middle income economy through the strengthening of the non-oil economy and its competitiveness. To realize these priorities, two milestones related to land administration were clearly stated in the CPS under Core Outcome 3 (sustained improvement in business environment): reduction in the average length of time for land registration, and an increase in the use of mortgages for access to capital. These milestones have been monitored through the Project and will be further enhanced by the follow-on projects and the new CPF for FY The Project contributed to improving the country s competitiveness by increasing the security of real estate transactions and providing better access to credit. It also improved the accuracy of spatial data, making it easier to monitor land use and to plan the use of natural resources. 3.2 Achievement of Project Development Objectives 37. The PDO has been achieved. The PDO was to ensure that: (i) there is a reliable, transparent and efficient real estate registration system supporting the real property markets; and (ii) suitable systems for the management and use of State-owned immovable property. The Project focused on improving the quality of services by updating registration offices, automating systems for land administration, creation of the DCM using state-ofthe-art surveying methodologies, improving the policy and legal framework, and training and capacity building for staff. 38. Achievement of a reliable, transparent and efficient real estate registration systems supporting the real property markets. The number of transactions registered annually by SSRRE has increased from 87,461 to 256,357 and the number of mortgages issued grew from 11,515 to 45,619, (related to PDO 4 and 5). In addition, more than 620,000 information requests were processed in 2014 (PDO 6). At the same time customer satisfaction (PDO 1) increased from 75 percent in 2012 to 88 percent in The system of land administration in Azerbaijan has been completely automated with 18 e-services available to citizens, the private sector, and public sector; online data is provided to the tax authorities; and electronic bank payments have been integrated into the 4 The State Program on Poverty Reduction and Sustainable Development in the Republic of Azerbaijan ( , ) indicated that Access to Land and protection of Land ownership are essential pillars in protecting the rural population from poverty. 10

28 system. All 150 notaries, banks and citizens can have access to the system for on-line services (PDO 2). 40. The only PDO indicator not fully achieved is the average speed of transactions registered to SSRRE (PDO 3). The target (3 days) was overly ambitious; nevertheless, it was a remarkable achievement to reduce the number of days to register from 30 to an average of 12 days. Customers can request urgent registration in 7 days or less; mortgages are registered in 4 days or less. Furthermore, the online connection was established in 2014 allowing all 150 notaries to access the property registry. Since June 2015, new functionality has been installed allowing notaries to directly submit registration requests and contracts electronically. This requires customers to visit SSRRE only once to obtain the final extract which can be produced in minutes. This is a major achievement that exceeded the Project s expectations. 41. Suitable systems for the management and use of State-owned immovable property. While the indicators for this part of the PDO were included as intermediate indicators, the result was achieved. The existing State Property Management System NAPS was fully rolled out to all 17 regional and 67 local offices responsible for state property inventory and management. In addition, the 176,545 state property records were fully digitized and 6,258 enterprises were registered in NAPS. These data will be migrated to the RERCMS. The average time to process a new state property registration has been reduced by half from 90 days to 40 days due to this automation and digital records and the target met. In addition, increased efficiency of document management and workflow has contributed to strengthening oversight of the administrative activities, greater use of electronic documents and digital archiving, and more efficient HR management. The only result not achieved is the ability for online registration of state property which will be implemented with the new RERCMS within Efficiency 42. At appraisal, it was envisioned that a properly functioning real estate registration system could lead to significant increases in the value of property assets. As confidence in the market increased with better security of tenure and more efficient legal registration systems, so property would become a more attractive asset class for national and international investors (both private and institutional). Based on the impressive economic performance at appraisal, the PAD estimated that the potential increases in property prices in the period would increase by 5% per annum in the absence of the Project. The analysis at appraisal further assumed that a properly functioning registration system as created by the Project would add between 5 hundredths (conservative scenario, 0.05%) and half a percentage point (non-conservative scenario, 0.50%) to the 5% base property price growth rate. Based on an ex-post analysis of property value data, an increase in the property values for Residential, Land under Construction, and Agricultural Land between 0.05% and 0.50% is attributed to the Project s activities. 43. It should be noted that the use of property values is key to quantifying the economic benefits of the Project, and is in accordance with previous practice of Land Administration 11

29 Projects in the Bank 5, where the Economic and/or Internal Rate of Return (ERR/IRR) is based on an estimation of the expected impact on the overall land markets as a result of the improvements made to the public services provided by real estate registration agencies, particularly regarding title security and efficiency in market transactions. 44. Based on actual project data and an analysis that is consistent with similar Projects, the NPV and IRR values for the different categories of properties are presented below. Ex-Post Net Present Values (NPV) in million USD and Internal Rate of Return (IRR) Residential Land Under Construction Baku % Baku 2, % Non-Baku % Non- Baku % Commercial Agricultural Land Baku % Baku - Non-Baku % Non- Baku % For properties in Baku the project assumptions have been met and exceeded. It is likely that other factors contributed to this increase hence the assumption of 0.05% and 0.50% attributable to the Project s activities. For properties outside of Baku the results are more mixed in particular for agricultural land. However given the limited land marker for agricultural land across the region, this assumption perhaps was optimistic. 45. The Project has contributed to the achievement of significant output effects, efficiency gains, and fiscal impacts. On output effects, the enhanced real estate registration procedures have contributed to the increase of annual mortgage issuance from 11,515 in 2006 (baseline/appraisal figure) to 45,619 in 2014 (a 296% increase). On efficiency gains, there has been a significant decrease in the number of days required for registering property. In 2007 it took 30 days to register a property 6, while in 2015 it takes an average of 12 days; and the number of procedures required for registering property has decreased from 7 procedures in 2007 to only 3 in 2015, while the cost of registering property is 0.2% of the property value. 46. On the fiscal impacts, the SCPI is an increasingly self-financing agency, and its reliance on the national budget is progressively decreasing (in 2010 SCPI received 6.1% of its budget from the MOF, in 2015 it received 3.8% from State Budget). The SCPI revenue deriving from cadastral maps has increased substantially from AZN 380,100 in 5 Refer to Economic and Financial Analysis (Annex 3) of ICR for Serbia Real Estate Cadastre and Registration Project (P078311), p. 44. This analytical approach has been used for both urban and rural land/property tenure strengthening operations; refer to Paggiola, S., Economic Analysis of Rural Land Administration Projects (2004), pp Baseline data for RERP; the Doing Business report for 2007 suggests that it took 59 days to register property. 12

30 2010 (when the first data is available) to AZN 3.15 million in 2013 and AZN 2.37 million in 2014 (latest available data). Quite importantly for the achievement of fiscal objectives, registration of transactions is immediately transferred to the country s tax authority, and the Ministry of Internal Affairs, which allows for the better monitoring of transactions from a fiscal perspective. According to the Ministry of Taxes, there was a substantive increase in Land and Property Tax collection since 2007, without major changes in the taxation rates, partly due to the enhanced monitoring of property transactions. For a more detailed analysis of the output effects, efficiency gains, and fiscal impacts of the Project, please refer to Annex Justification of Overall Outcome Rating Rating: Moderately Satisfactory 46. The development rationale for the Project remained highly relevant throughout implementation and continued to be relevant under the CPS. The CPS included continued support to the Government s efforts to improve public financial management, investment climate, innovation, and governance through higher transparency, accountability and improved service standards. The future follow-on project ( Real Estate Registration repeater project ) is included in the CPF for FY16-20 to continue improving the system for property rights registration. As a result the overall relevance is considered substantial. 48. The Project targets were met and the real estate registration and cadastre services facilitated the land markets by providing security and efficiency. Efficiency improved as evidenced by the faster registration without any increase in the fees for registration. Increased transparency in the land markets was demonstrated through increased access to reliable data by a wide range of actors, particularly through internet access. There was a significant decrease in the amount of time that citizens spend to register property and at the same time an increase in customer satisfaction. The improved service and reduced transaction times were also met for the registration of state property thereby improving service for state entities. Moreover, the Project helped to put in place legal and operational frameworks, supplied state-of-the-art hardware and software, introduced measures to improve clients experiences and perceptions of the SCPI offices, and raised the professional skills and knowledge of staff throughout the organization. Overall the efficacy is considered substantial. 49. The Project has contributed to the achievement of significant output effects, efficiency gains, and fiscal impacts. On output effects, the enhanced real estate registration procedures have contributed to the increase of annual mortgage issuance from 11,515 in 2006 (baseline/appraisal figure) to 45,619 in 2014 (a 296% increase). On efficiency gains, there has been a significant decrease in the number of days required for registering property from 30 days to 12 days. However the NPV and ERR show a mixed picture, with Baku based properties meeting the target, while properties outside of Baku had lower gains in particular for agricultural land. As a result, overall efficiency is modest. 13

31 50. Overall, the Project's outcome rating is considered moderately satisfactory, as relevance and efficacy are considered as substantial, but the results on efficiency are modest. 51. According to the ICR guidelines 7, the Overall Outcome Rating was assessed against both the original and revised PDO indicators. Formal approval was obtained for changes of the two PDO indicators target values through the restructuring in 2012 with $9.14 million disbursed. The PDO rating was Moderately Unsatisfactory before the restructuring and Moderately Satisfactory at the end of implementation. Against Original Indicators Against Revised Indicators Overall Comments 1 Rating Moderately Unsatisfactory Moderately Satisfactory Improvement 2 Rating value Weight (% disbursed before/after PDO change 30.5% 69.5% 100% $9.14M out of $30M before change 4 Weighted value Final rating (rounded) Moderately Satisfactory 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 52. A social assessment that focused mainly on rural areas was carried out during Project preparation. The main findings on the land registration component were that the majority of land holders had titles to their properties and that the overwhelming majority of titles had been issued in the name of the head of household only, generally the man. A major study on gender and land issues in Bosnia-Herzegovina and Montenegro was completed in 2011 by the World Bank and the report was published the same year. One of the key lessons learned was that women s access to property rights needed to be addressed and monitored in land projects in the region. 53. Therefore, gender was integrated into the project design through raising public awareness on the legal rights of women, and producing disaggregated data on real estate ownership by gender. The Project began investigating the ownership of women in the first quarter of 2014 and found that 42.1 percent of the registered owners were women - which is comparable to, or higher than, neighboring countries. 7 The ICR guidelines indicated that for projects whose project objectives (as encompassed by the stated PDOs and key associated outcome targets) have been formally revised project outcome will be assessed against both the original and revised project objectives. 14

32 54. The improved land registration and administration services also benefited those seeking to acquire property. The immediate benefits of faster and more reliable service, less time spent waiting, and not having to make informal payments enabled citizens to spend more time and resources in more important economic and social activities. The impact of gaining quicker and more secure access to data on property to be acquired for housing or economic purposes will generally have a positive impact in terms of raising living standards and conditions. Continuing the reform and improving services, particularly through online access to information, is likely to further secure the advances made under the Project and thereby sustaining the benefits flowing to all segments of society and the economy. (b) Institutional Change/Strengthening 55. In 2009, the Government formally merged two of the implementing agencies the SCMSP and the SSRRE into the SCPI. While the SSRRE retained its separate identity within the SCPI, including its level of service provision, the SCMSP, which had a mandate to privatize and inventory state-owned property, was completely merged into the SCPI. This merger was fully in line with the Project s PDO to improve information flows and rationalize these operations as a single agency. In terms of the Project, the merger led to minor revision of some activities under Component B into Component A. 56. In addition, the SLCC, the third original Project implementing agency, was abolished by Presidential decree (dated February 5, 2015) to ensure unified management in the regulation of ownership rights. Consequently, part of its functions and mandate were assigned to the SCPI. The SCPI now is the only agency for registration, cadaster, state property management and valuation. The Government s decision was one of the most important changes for the institutional development, improved efficiencies and customer service orientation of the SCPI. (c) Other Unintended Outcomes and Impacts (positive or negative) 57. The Project designed a component for property valuation at the Project preparation to develop methodologies for assessing prices and assist the capacity for the SSRRE to keep track of real property prices on a national basis. However, as part of the restructuring in 2012, the scope of this component was expanded to implement a mass valuation pilot that would result in the valuation of 600,000 real properties (this target was lowered to 100,000 in the final restructuring in 2015). A first pilot was implemented in Sumgait and subsequently two additional areas were covered in Guba and Khachmaz. Through these three pilots, the SCPI has valued a total of 155,000 real properties. (80,000 in Sumgait and 75,000 in Guba-Khachmaz). This mass valuation was the first activity at the national level in Azerbaijan. International practice and standards were studied in this field so that valuation criteria relevant of the national economy were determined and applied. This mass valuation activity contributed to improving the economic approach to the real estate and supporting the state in more accurate formulation of the social-economic policy and purposes in regard with real estate. Appointment of official market price for the real estate from the pilots will play an important role in the field like social subsidies, mortgage, and insurance, investments in the real estate industry, purchase and sale transactions, conduction of state statistics in the property market. 15

33 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 58. There were two customer satisfaction surveys carried out in 2012 and in The methodology and survey questions remained the same for both surveys so results could be comparable. The main conclusions from the surveys are: Respondents were generally satisfied with services at the project closing, with some 88% of respondents saying that were very satisfied or partially satisfied with the speed of service of official and standard information supplied ; Recognition of the importance of the real estate registration increased from 65% (2012) to over 90% (2014); Customers awareness of SCPI services and access to data increased during the Project; Over 78% of respondents from the survey in 2014 were pleased with the renovated and newly built registration offices and level of service from the staff; From the professionals interviews, they noted that there were many improvements and achievements under the Project, particularly having online access for notaries and the launch of the mobile offices for people in remote areas; and Problems still remain, including the formalization process for illegally constructed houses and the property rights of women. 59. A Poverty and Social Impact Assessment (PSIA) was carried out to assess how and whether the Project affected vulnerable groups, and what lessons can be learned and applied to future projects or reforms. Even though the PSIA was performed in only 2.5 months with very limited access to socio-economic data related to property rights, it concluded that low income property owners are benefiting from the improved SCPI services. This was based on (i) satisfaction levels of lower income households (below 400 AZN), which are statistically indistinguishable from higher income households (over 400 AZN/month); and (ii) FGD findings that suggest that mobile services are highly popular and effective, saving individuals time and money. 4. Assessment of Risk to Development Outcome Rating: Moderate 60. The SCPI is now the sole agency responsible for all cadaster, registry and state land management functions. Significant capacity has been built over the past eight years through training, technical assistance and project activities. The IT Center has been created and staffed and will be responsible for finalizing, rolling out and maintaining the RERCMS. The IT Center team has built its capacity over the past several years but SCPI should consider that additional capacity will be needed particularly to finalize and rollout the RERCMS. The current capacity of the SCPI valuation team is sufficient for maintaining the Market Data Register (MADAR), which has been developed during the Project. SCPI should complete country-wide coverage of this register which supports not only the future mass valuation projects but allows also better access to the market 16

34 data and contributes to real estate market transparency. SCPI has a media relations/public awareness team and they have the capacity to continue public awareness events and campaigns, and plan to continue to do so on a smaller scale given budget availability. The Project financed training center has now been fully absorbed into SCPI and established as the SCPI Training and Education Center (TEC), which will continue the training programs and plans to enhance and add to them. The TEC has three staff currently, but a plan has been completed with costs and a detailed action plan for operationalizing the TEC in the coming year, and budget has been allocated from SCPI. SCPI is currently completing a DCM plan which will outline the requirements for completing the DCM country-wide. There is no doubt that this work will require additional resources. The AZPOS system is fully operational country-wide but again, the sustainability will require attention and a contract with the technology supplier. It should be clarified that SCPI only acquired this responsibility recently after the abolition of the SLCC. 61. The only significant potential risk relates to the RERCMS s operationalization and rolling-out to all registration offices with a full capacity and functionality. From the pilot tests, some problems in the system were found and it was recognized that it is needed to retain the RERS as a dual system for migration of a number of functionalities the RERCMS does not have (e.g. notaries access). This risk has been recognized by the SCPI and the strong commitment on this (i.e., dedicated staff with full authority and responsibility for the RERCMS) is needed. Thus, overall, the risk to the development outcome appears to be moderate. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Satisfactory 62. The Bank Team consisted of a number of well respected, knowledgeable, and capable specialists who were able to draw on local and counterpart knowledge to formulate the Project s objective, targets, and activities. At the preliminary stage, the team strived to identify what was needed to improve land administration and formulated a clear, measurable and realistic set of activities to deliver the improvements. In general, the project design matched the needs of country, identified the elements of a well-functioning land administration system, and matched them with appropriate components. The team drew on its long and varied experience in land administration, in the ECA region and elsewhere, and a thorough knowledge of best practice in land administration in Europe. Lessons 17

35 learned and experience from projects over the previous two decades were incorporated into the design, so that the elements and the mix were consistent with best practice. 63. However, the team underestimated the risks of the complex implementation arrangement with three implementing agencies and that continued to hamper Project implementation during the life of the Project. (b) Quality of Supervision Rating: Moderately Satisfactory 64. Bank supervision took place on a regular basis, providing appropriate and well targeted advice and observations. The Aide Memoires provided evidence of regular supervision and professional advice given by the Bank s experts throughout the Project. The supervision team was composed of skilled and experienced specialists who had both designed and supervised projects of this kind in the ECA region and elsewhere. The team also included key specialists from the Food and Agricultural Organization of the United Nations (FAO) utilizing the World Bank/FAO partnership program. The specialists provided by SECO greatly supported the Bank team and provided significant supervision in key technical areas (geodesy, cadastral surveying). The combined Bank and SECO team developed close working relationships with the counterparts at all levels, and the client stated that they were fully satisfied with the team, the guidance provided, and the level of cooperation and collaboration. 65. However, the Project had four changes of TTL (and three TTLs) and this impacted the continuity of supervision. The team also abandoned the modular approach to the IT system and agreed to a single system development. Supervision related to the IT system development could have been stronger in the final two years of the Project during which time the original IT expert left the team and the Bank TTL had a difficult time finding a replacement. Though these issues were eventually resolved, there were significant delays at a key moment. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory 66. The efforts of the Bank preparation and supervision teams ensured quality-at-entry of the operation and supported effective implementation, and in doing so, strongly supported and pushed forward the Project s activities for achieving the development outcomes. The Bank s performance was mostly adequate to the tasks and facilitated the success of the Project. However, the under-estimation of the complexity of the implementation arrangements and the lack of effective supervision of the IT system contract in particular result in an overall rating of Moderately Satisfactory. 5.2 Borrower Performance (a) Government Performance Rating: Moderately Satisfactory 18

36 67. The Government provided firm and prompt support and strong commitment during the design phase starting in The stage of Project preparation was relatively smooth and constructive compared to other Bank-financed projects in Azerbaijan. However, government decision making was sometimes slow during implementation resulting in delays, and the decision to abolish the SLCC, though welcome from a project implementation standpoint, came too late in to impact significantly on the Project outcomes and implementation. (b) Implementing Agency or Agencies Performance Rating: Moderately satisfactory 68. During preparation the implementing agencies were engaged and active in the design and preparation of the Project. However, as with all Bank-financed projects, the implementing agencies needed time to understand the Bank s procedures and policies. Overall the implementing agencies performed well but coordination between them was often lacking and this contributed to delays. The lack of clarity of roles and responsibilities related to certain activities valuation, cadastral surveying also contributed to delays and reductions in the targets for these activities. The advice given and the actions agreed upon in the Aides Memoires were followed up well and the PMU functioned well throughout, especially in the final years when the team was more experienced. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory 69. With completion of the establishment of automated systems, online services to notaries, creation of the DCM and the CORS network, and the general satisfaction demonstrated by the latest customer survey, the SCPI demonstrated its strong commitment to the Project. Cooperation between the SCPI and the Bank was satisfactory throughout the Project s execution. The Government s involvement at the design phase was strong, active and positive. The Borrower complied with all covenants and agreements, delivered on the actions agreed during supervision missions, put in place and actively supported the activities leading to achievement of the development outcomes. 70. However, the lack of inter-institutional coordination and the Government s speed of decision making during implantation and unwillingness to clarify roles and responsibilities between key implementing agencies led to delays in implementation. 6. Lessons Learned 71. For M&E, accurate targets are more of an art than a science. One of the aims of the Project was to create Digital Cadastral Maps (DCMs) with national coverage in order to provide reliable, transparent, and efficient property information. During implementation, it was realized that the 4 million hectares estimated during Project preparation was not achievable, as the SLCC never had this amount of data available. In addition, the target set for the number of days to process a transaction was overly optimistic. While 3 days for completing a subsequent transaction has been achieved in some countries, 7 days would 19

37 have been more realistic. While it is important that the Bank set ambitious targets this must be balanced with the complexity of the project, the number of activities and the capacity of the implementing agency(s). The Bank team and the implementing agencies used the MTR as a time for a realistic review of what had been achieved and still could be achieved, and properly adjusted targets. 72. Close monitoring and good collaboration with other donors had a strong impact on the Project. The support of the technical experts provided by SECO and the consultations with KfW working in the field prevented a duplication of work in the creation of the DCM. The Project and the KfW shared the methodology and data model and selected different target areas. The support of the SECO team supplemented Bank supervision and strengthened the support the Bank team was able to provide and was very well appreciated by the client. This type of model of working with donors was effective. 73. Provision of capacity building programs before the start of an IT system development would have been beneficial. Most capacity building programs related to IT system development tend to happen after the contract completion and implementation. However, if capacity development for an IT system is begun approximately six months or more ahead of its development and continues throughout this can contribute to the success of the IT system development and implementation. The client should be aware of the complexity of managing large ICT contracts and provided more training to support them in this task. The client can then be more critical in monitoring the content and progress of such contracts, look into the reports produced by the contractor, and take remedial steps if necessary. Moreover, interactions between the client and contractors needs to be strengthened, starting from the beginning of the contract. This type of capacity building program would have been beneficial for Azerbaijan, which lacked sufficient capacity at the start of the IT system development to properly manage the IT contractors as well as the Quality Control Company. The Bank already knows the importance of active participation with strong ownership from the Government for such a development, however it is also essential that the government counterparts have the capacity to manage the contract and the contractors on a day-to-day basis and this is often not the case. Building in the capacity development for contract management is difficult but essential for the success of these complex types of activities. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies Dear Ms. Leshchenko, In response to the letter, dated 18/02/2016, on the Implementation and Completion Report for Azerbaijan Real Estate Registration Project, implemented with the support of the World Bank, we would like to inform you that we have no comments or suggestions with the regards to the above report. Sincerely, Abid Sharifov Deputy Prime Minister 20

38 (b) Cofinanciers From the Swiss State Secretariat for Economic Affairs (SECO): First of all thank you very much for sending us this clear and comprehensive completion report regarding the RERP project in Azerbaijan. We have read the report with great interest and generally agree with its content and conclusions. We have included some comments directly in the document. From our perspective, the SECO financed TA provided by BSB was quite successful, permitted a continuity and contributed substantially to the good performance of the project. BSB+ consultants provided the technical assistance on project supervision and quality control, visited the country more than 30 times during project implementation, provided support even on issues that were not their direct responsibility (e.g. general guidance to the implementing agencies, coordination of and facilitation between the different institutions) and were highly valued and appreciated by the national staff. (c) Other partners and stakeholders 21

39 Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent) Components Appraisal Estimate (USD millions) Actual/Latest Estimate (USD millions) Percentage of Appraisal Component A. Real Estate Registration Component B: State Property Management and Register Component C: Mapping and Land Cadastre Component D: Training, Policy Development and Project Management Total Baseline Cost Physical Contingencies Price Contingencies Total Project Costs % Front-end fee PPF Front-end fee IBRD Total Financing Required % (b) Financing 8 Source of Funds Type of Cofinancin g Appraisal Estimate (USD millions) Actual/Late st Estimate (USD millions) Percentage of Appraisal Borrower % International Bank for Reconstruction and Development % 8 Swiss State Secretariat for Economic Affairs (SECO) provided CHF 1.22 million in parallel financing over the course of the Project for technical assistance and supervision support. 22

40 Annex 2. Outputs by Component Component A. Real estate Registration This subcomponent met its objective to support the SCPI with the continuing introduction of the new registration of title system. Over the course of the Project, the existing Real Estate Registration System (RERS) has been rolled-out to all SSRRE offices, new functionalities have been added, and the next generation system (RERCMS) has been developed and piloted. Notaries, banks and the tax authority now have on-line access to the RERS, payment can be made on-line, and the use of e-documents has increased. As a result, the time required to register a subsequent transaction has decreased from 30 to 12 days and customer satisfaction with SCPI services has increased from 75% in 2012 to 88% in SSRRE s local offices have been renovated with clean and professional customer reception areas, and a state-of-the-art IT Center was constructed. Private surveying services have been developed and the SCPI has also piloted mass valuation. This component consisted of ten sub-components: A1. The development of new buildings, or renovating existing buildings The objective of this sub-component was to provide transparent and efficient service delivery and customer reception areas for the public, notaries, and other users of the system. The Project has contributed to the improvement of the physical infrastructure of the local offices, so that customer services could be improved and greater transparency provided. The output of this sub-component was that a total of eighteen (18) regional registration offices and a state of the art IT Center 9 (in Baku and its Reserve Center in Shamakhi) were constructed or renovated successfully: five (5) local offices using Project funds; thirteen (13) others from the state budget funds or SSRRE resources. The Project also financed construction supervision, furniture, archives, office equipment and generators. Most buildings constructed newly under the Project had an identical layout, following the standard design guidelines, with a clear separation between the front office (for the public to check their documents and to pay the applicable fees) and the back office for the staff working in registration, cadaster and archive department. The SCPI now has a complete network of regional offices specifically designed to receive its customers and process service requests efficiently. The working procedures in all offices were made in line with service standards and the requirements of the legislation and regulation in use across the country. The list of the regional offices, which were constructed or renovated, is as follows: Bank funds - Gabala (2009), Lenkaran, Khachmaz (2010) 9 Following the cancellation of the funds for the production of the digital cadastral map under A4/C3 in 2009, these funds were re-allocated to co-finance the construction of an IT Center and a Reserve Center (for back-up and disaster recovery). 23

41 - Barda, Beylagan (2014) - IT Center & Disaster Recovery Center (2015) State/Regional office funds - Yevlakh, Shamakhy(2007) - Sumgait, Shamkir, Shirvan, Tovuz, Jalilabad, Zagatala, Ujar (2008) - Absheron (2009) - Baku (2010) - Ganja, Shaki (2013) Mobile office services (facilitated by 22 vehicles, laptops and other equipment) have been provided since April 2014 following an order from the SCPI Chairman. It has provided registration services to the handicapped, elderly and rural citizens in remote areas and by the end of the Project 14,715 people had been served. While the Bank team supported this initiative it was not financed by the Project but was a completely SSRRE driven activity. A2. Development of the Unified Registration and Cadastre System The main objectives of this sub-component were: i) to roll out the existing registration system (Real Estate Registration System, RERS), and ii) to develop and implement the new functionalities, including graphical part and its integration with the existing registration system. With the support of the Project, the rolling-out of the RERS to all SSRRE offices was successfully completed in 2008, so that a total of 20 regional offices and two Baku offices were in place with a full capability to implement and operate the RERS and provide citizens with services. The RERS was integrated with the tax authorities and allowed online payment. Since 2014, it can also be accessed on-line by notaries, bank and others. Furthermore, electronic signatures were successfully established to provide better customer-oriented. These improvements in the registration system have contributed to making SSRRE s services more efficient and transparent. Following the institutional reform in 2009 that created SCPI, it was decided to develop the Real Estate Registration and Cadastre System (RERCMS), a next generation system that would unify registry and cadastre, as well as offer the functionalities of the state property management system that was being developed under subcomponent B1. The RERCMS has eighteen (18) modules with the INTERLIS 1 data model (including AZCAD11/13 data model), and able to integrate with cadastral mapping works. Also, the Land Administration Domain Model (LADM) was used as part of component for system design as well as data sharing with key governmental registers such as address, personal and company register. In the institutional aspect, the ITDMC under the SCPI was established in 2009 to support and manage the development, implementation and maintenance of various IT systems such 24

42 as RERS, National Automated Property System (NAPS), Special reporting system, Auction system, Minicad, Address Registry system, Real Estate Valuation system, Document Management System, etc. In addition, a quality control department within the SCPI and quality assurance team were established for carrying out the quality control/assurance and acceptance of deliverables from software development, orthophoto maps and cadastral data on the basis of the international standards, ISO The development phase of the RERCMS was completed but its operationalization has been delayed due to the need match the new usability features of the RERS and develop additional functionalities related to transfer of responsibilities from the recently abolished SLCC to the SCPI. A3. On-line services to Notaries The main objective of this sub-component was to ensure that there is on-line access by Notary offices. The legal base was made to support on-line services to the notaries in late 2013 and early 2014, and the SCPI now provides eighteen (18) types of e-services through the SCPI web-site ( and the Multi-function center ( ASAN ). The on-line service for notaries commenced its operation on March 3, 2014, officially. All 150 notaries in Azerbaijan have access to the e-notariat web-based system and are able to obtain information from the SCPI database (RERS). In addition, since June 2015, new functionality has been implemented allowing notaries to directly submit registration requests and the contract electronically. As of September 2015, 90% of applicants requesting mortgage registration do so online. As a result, the public does not need to visit SSRRE s offices to obtain the registry documents and to submit a registration request, which means that they now have to go to SSRRE only once to obtain the final extract which can be produced in minutes. A4. Creation of the digital Real Estate Cadastral Map The expected output of this sub-component was: i) compilation and production of digital cadastral maps for 4 million hectares as well as data conversion from the implementing agencies as well as the BTI offices 10 ; ii) establishment of a commission from the implementing agencies; and iii) training. From the Project preparation period it was recognized that there were the inevitable discrepancies between the ground situation and the cadastral maps of the SLCC. In line with this, the Project sought to find the best methodology to establish the Real Estate Cadastral in digital form and to make a more concrete assessment of the costs and time for completing the REC across most of Azerbaijan. Two pilot were begun in Absheron region (Novkhani village and Khirdalan) during 2008 to During the period of the Pilot study, while a total of 983 properties were surveyed and investigated, only 498 properties 10 BTI is the Bureau of Technical Inventory and these offices were the pre-cursor to the SSRRE. SSRRE took over the data and functions of the BTIs and all of their paper records. 25

43 (50.9%) could be registered and received legal registration certificates. By the end of the Project, 329 properties have been registered additionally so that a total of 84.1% (827 properties) of property records from the Pilot sites has been registered. From the pilot works, new procedures and methodologies for data acquisition could be introduced so that two (2) types of mapping methodologies were implemented: 1) full cadastral data with the result of a complete cadastral survey (with WGS84 coordinates) for Baku, Sumgait (with Bank funds) and Ganja, Sheki (with KfW funds); and 2) light cadastral data through a combination of photogrammetric mapping and classical survey for the rest of country. During the project, the implementing agencies realized that the estimated 4 million hectares were not achievable as the SLCC never had this amount of data available. Therefore, the end-target was reduced to 1.5 million hectares (with a project restructuring in July 2015). A total cost of the DCM activities was estimated at US$9.6 and was expected to be financed by the Project, mostly to execute cadastral field work. However, following a misprocurement without cancellation, it was agreed that the government would directly finance the production of the map, and the corresponding project funds would be reallocated to other activities. Therefore, cadastral field work was financed through government funds and approximately US$0.6 million was used to purchase software, pilot the creation of the DCM, control the quality of the data produced through full cadastre survey, and prepare a strategy to expand the coverage of the cadastre map. A total of 1,527,759 hectares (by the end of the Project) of digital cadastral maps have been produced, including 251,585 ha of full cadastral data, 107,746 ha of light cadastral data, covering 53 regions without graphical data for the integration with the registry, and 1,168,428 ha produced by converting SLCC data without any field survey. The resulting maps covered 2,341,204 parcels. 781,224 women (42.1% of total 1,855,639 persons) were registered under the Project as landowners. A5. Document management This sub-component was to help the SCPI digitize and archive its paper records (estimated at more than 1.7 million pages). The conversion of paper documents from the Baku regional offices was successfully completed in April 2014, and these data have been one part of the wider program for establishment of the SCPI digital archive. The Project financed the preparation of a document management strategy, the data entry of the textual part of the existing legal rights held at local offices, the conversion of SLCC land rights data and quality control. As a result of these activities, the SCPI digitized records for some 1,597,864 land parcels in 2,453 villages and cities, and the real property rights of 2,966,989 owners. The works for verification and data quality improvement were also implemented for the legal-based registration data. Finally, a total of 387,230 folders (each folder consists of three documents: the last deed, the technical passport and an authorization document) were 26

44 investigated and scanned, including: 196,000 folders from 2006 to 2012 (new records); 191,230 prior to 2006 (old records). A6. Regularization of development Under this subcomponent, the Project intended to support regularization of illegal constructions, i.e. housing built without proper permits and in compliance with planning documentation. The approach from the Project envisaged during project preparation was to conduct a survey in two districts of Baku to gather information on the inhabitants and their real property rights, analyze the scope of the problem, and prepare a strategy for the regularization of these areas. In 2010, the survey on developing a policy paper to regulate illegal construction and to offer proposals for policy and legislative change was conducted and a background policy document was prepared. Additional field work was conducted and consultants were hired to review international best practices and formulate recommendations. A proposed strategy for the regularization was prepared and presented to the government, but it has not been adopted. In 2012 the Project documents were amended to delete reference to the results of building regularization work because the legal framework to protect those subject to possible resettlement is not fully in place. However, the indicator was not removed from supplemental Letter No. 2. Instead, its end target was revised and now indicates that the strategy should be agreed to by The strategy was produced and agreed to with SCPI, but never progressed further in government and is beyond the control of the Project. A7. Property Valuation The initial objective of this sub-component was to develop methodologies for assessing market prices and build the capacity of SSRRE to record real property prices on a national basis and to use this market data for mass valuation (potentially for property taxation purposes). In 2009, the valuation strategy was developed on the basis of the methodology from the final report made by international valuation consultants. This strategy covers the following areas: valuation rules based on international valuation standard; preparing value maps for Azerbaijan; obtaining accurate market values from notaries transactions; and creating an education strategy for valuation experts. As part of the restructuring in 2012, the scope of this sub-component was expanded to implement a mass valuation pilot for 600,000 properties and provision of the data online. However this target was lowered to 100,000 in the final restructuring in 2015, as this 600,000 figure was not realistic. A first pilot was implemented in Sumgait with 80,270 properties valued in 2014, and subsequently two additional areas in Guba and Khachmaz were covered with 75,523 properties. Through these three pilots, the SCPI has valued a total of 155,793 real properties. The provision of the mass valuation data could be expected once the operationalization of the RERCMS is in place. 27

45 Regarding the capacity building, a study tour to Vilnus, Lithuania in 2009 and to Finland, 2013 were conducted to see how the register centers operate and their experience on this topic, and a two-month valuation course was provided for building the capacity of the SSRRE for land valuation. A8. Maintenance of the Real Estate Cadaster and Private Sector development The expected output from this sub-component was: i) to promote the participation of the private sector; ii) to conduct the digital conversion of paper records from the BTI and SLCC offices; and iii) to establish a Training Center for capacity building. The cadastral works, including cadastral survey and maintenance, in Azerbaijan had been carried out by the government agency, the SLCC. As per the Presidential decision No. 308 Compiling and Conducting Single/Unified Sate Cadastre of Real Estate in the Republic of Azerbaijan on 27 July 2010, the private sector could carry out cadastral works on behalf of the government and citizens. Initially, results were being monitored as a percentage of REC maintenance work executed by the private sector. However, in view of the lack of clarity between the SCPI and the SLCC regarding the licensing and the role of private surveyors in REC maintenance, this indicator was revised to reflect the number of private surveyor contracted by the SCPI to execute REC maintenance activities. Under the restructuring in 2012, the original target was changed from 90% of survey work by the private sector to 40%. And finally this target was changed to 120 private surveyors registered. Developing private services for cadastral surveying and REC maintenance was slow due to the lack of clarity of responsibilities between the SLCC and the SCPI. However, by 2013 the SCPI had established a certification program and had trained, and subsequently contracted, 45 private surveyors to execute REC maintenance, and this number has increased to 120. The abolition of SLCC in 2015 means that there is no further impediment to creating a private surveying practice and SCPI has reiterated its commitment to this. A strategy and regulation for the role of the private sector, technical definition for the licensing procedures and the examination procedures for survey work produced by the private sector, and the data product definitions were prepared by the SSRRE to meet good international practice. Regarding the training for the private sector, a two-phase training program was offered during which involves training for staff of the SSRRE and candidates for private cadastral works. A9. Public Awareness The purpose of this sub-component was to inform and educate property owners, the professional community and others on the benefits and duties to register, and the procedures and the fees involved. 28

46 Two Public Awareness Campaigns (PAC) were successfully implemented in 2008 and In addition, to gain an overview of the public s awareness and opinion about the registration system, two customer satisfaction surveys were implemented in 2012 and The results from the two surveys were used for the baseline to assess the impact of the campaign and for making the necessary adjustment for further activities. The first PAC (in Baku, Ganja, Mingachevir, Lankeren, Sheki and Quba) was carried out to increase awareness of the population on property registration with a view to educate the public about their rights and responsibilities. The major outputs included: i) three Public Sector Announcements (PSAs) about the advantage of property registration via four TV channels; ii) six different posters (posted at bus stops, shops and other public locations, four billboards); iii) two information booklets (10,000 copies of each) and 20,000 copies of a brochure on cadaster and registration processes; and iv) detailed descriptions of procedures and forms posted on the SCPI website. The second PAC (for the areas which were targeted for digital cadastral map fieldwork in Baku, Ganja and Sheki cities) was implemented with the following activities: i) two advertisements for broadcast; ii) practical workshops in Ganja and Sheki; iii) web banners for promoting registration; iv) advertisements on buses and at metro stations in the area of Baku. The increase in awareness of registration and of SSRRE can be attributed to these campaigns as of the 2014 survey, 79% of respondents are aware of SSRRE and 92% understand that registration is absolutely important/important. Apart from the PAC, the SCPI regularly organized several workshops and public presentations to announce project activities, disseminate results, raise the public awareness on the importance of real property rights registration and present its growing number of e- services. In addition, there were the several key activities related to improving customer service and staff performance. The Guidelines (behavior code) for the awareness of staff working with customers were made and this was the basis for the norms included in Order No. RX-281 Instruction to educate employees serving applications applying for registration to the territorial offices of State Registry Services of Real Estate under the State Committee for Property Issues of the Republic of Azerbaijan. This order includes customer service standards, document receipt procedures, and signage for the reception area. Furthermore, a code of conduct was developed - The rule of Conduct of employees of territorial offices of Real estate State Registry Service under the State Committee for Property Issues of the Republic of Azerbaijan and has been approved and operationalized by the Order dated 19 January 2010 of the SSRRE in order to improve the quality of customer service. A10. Business Plan development This sub-component supported the development of a corporate strategy focused on the delivery of services (including service standards, human resource strategies, technical plans, and IT strategies) and overall financing options to achieve its core mandates and other tasks and overall plans for providing a sustainable and cost-effective service to the public. 29

47 Due to the institutional reform in 2009, the original plan for the establishment of a corporate strategy and business plan for SSRRE was merged with that of the SCMSP to include the activities of the new SCPI, of which the registration was a part. Therefore, the work was delayed until April of 2012 to produce a new unified business plan for land and property issues within the SCPI, with a sub-plan for the SSRRE. A commission to support the SCPI strategic plan and business plan development was established and internal working groups assigned specific tasks for each function of the SPCI activities. This objective was achieved in 2012 with adoption of five key outputs: i) a five-year strategic plan for the SCPI; ii) a three-year business plan for the SCPI s subordinate organizations, SSRRE, the Real Estate Cadastre and Technical Information Center (RECTIC), the Information Technology and Data Management Center (ITDMC) as well as an one-year action plan for the Apparatus of SCPI. The plans were prepared with the support of international consultants and resulted in the creation of SCPI s Department for Strategic Analysis and Planning. In particular, the strategic plan defined one overall mission for the SCPI, 24 statements that capture SCPI s vision for 2017, and 98 key actions which the agency has to execute to become what it envisions. Consequently, the strategic plan was the basis of developing the 2104 to 2018 State Program (adopted by the Government in 2013) for the SCPI. However, these strategic documents will have to be revised to reflect the abolition of the SLCC and the adoption of a new charter for the SCPI. In addition, a Concept for the development of a Unified Real Estate Cadastre and NSDI for the Republic of Azerbaijan ( ) was prepared as well as training provided for staff of all regional offices. Component B. State Property Management and Register The objective of this component was to support improvements in the management of the state property. This has been achieved by: (i) improving the administrative systems and service delivery in the management of state property; and (ii) automating the state property management functions 11. This component consisted of three sub-components: B1. State Property Management System (SPMS) This subcomponent was planned to support the development of a modern State Property Management system with automatic connections to its enterprises, regional and local offices. The business processes for the system will support continuous electronic updating of the new State Property Management system in order to improve both transparency and 11 At the time of appraisal state property management was the responsibility of the State Committee for the Management of State Property (SCMSP), however in 2009 the SCMSP was merged with the SSRRE to form the SCPI. 30

48 efficiency. When the SCMSP was merged into SCPI, this activity was merged into the design and development of the RERCMS (under A2). However, the existing state property management system NAPS - is fully rolled out to all 17 regional and 67 local offices responsible for state property inventory and management. Once the RERCMS is rolled out it will replace the NAPS system. The 176,000 state property records are fully digital in the NAPS and will be migrated to RERCMS. In addition, more than 6,000 state owned enterprises have been registered/updated. B2. SCMSP Administration Improvement The purpose of this activity was to automate the office procedures as much as possible. A management information system the Automated Document Circulation Information System (ADCIS) - was developed for document management and archiving, and for human resource management. The development of the ADCIS included development of user requirements and database architecture. It was also necessary to connect the headquarters office and the regional offices with fiber-optic and VPN connections. The system has been in operation in all regional offices since January In total, 160 users were trained. The business planning originally envisaged under this sub-component was completed under A10 for the whole of the SCPI beginning in B3. Technical Support (State Property Management System) The main output of this sub-component was to provide the Technical Assistance for the staff in charge of the management of the state owned land (in the SCMSP), focusing on strengthening management and transparency of the agency and for the human resource strategy and systematization of human resources. Although the institutional reorganization caused many changes to the Project, this sub-component has moved forward to the development of relevant educational courses in the field of valuation and state property management under the SCPI. The HR strategy was completed and the ADCIS supports HR management. A report on the development of state property management was completed by an international consultant in 2014 as one of the key outputs of this sub-component through which the SCPI receives technical support/assistance. The SPCI has implemented a number of the recommendations, including amendments to the legislation on minimum amount for leasing fees; and changes to the organizational structure of SCPI to streamline inventory and management of state property. Component C. Base Mapping and Land Cadastre The objectives of this component have been achieved. The Continuously Operating Reference Stations (CORS) Network AZPOS has been established and has more than 100 registered users. Meanwhile, the acquisition of new orthophoto-maps and the 31

49 production of 1.5 million ha of DCM has provided SSRRE with the basic data needed for the establishment and maintenance of the RER. This component consisted of four sub-components: C1. Continuously Operating Reference Stations (CORS) As per the plans for the establishment of CORS nationwide in the PAD, a total of 37 CORS stations were newly constructed; and all CORS stations fully equipped with the smart UPSs for the provision of power safely and with GPS units for measuring and networking. Also the communication system and networks between all CORS stations and two control centers were successfully established. Since early 2013, the CORS system (AZPOS) has been fully operational. The SPCI has provided the 198 registered users within the contracted 26 enterprises with the services, and 150 connections to the system daily for operating in geodesy and topographic fields. The AZPOS is successfully used for surveying all over the country and recognized as a great success for the upgrade of the surveying capacity. The user regulation on the use of the CORS for public and private purposes was developed in 2013 and the system is regularly maintained. C2. Production and delivery of digital orthophoto maps covering the whole country. This component in the PAD was designed to support the goal of having up-to-date cadastral mapping and to help with the development of an inventory of buildings and constructions across the country. This subcomponent financed the acquisition of hardware and software for the SLCC to manage the digital orthophotos and make them available to government and private users. On the basis of the establishment of geodetic infrastructure such as the ground targets/control points, some activities (scanning, aerial triangulation, digital aerial photography, etc.) had been implemented for creating the orthophoto maps with aerialphotos taken during 2008 to Satellite imagery for the border areas was recorded in Furthermore, since the server-based archiving system for safe storage of a huge amount of data was developed and installed at the SSRRE in 2009, all digital imagery and satellite data were transferred into the system as a reference to create cadastral maps under the sub-component A4. Over 70,000 sq. km of orthophoto maps by aerial photogrammetry and about 15,000 sq. km for the border areas with the High Resolution Satellite Imagery (HRSI) have been created at various scales: 8,200 sq. km orthophoto map at 1:10,000 scale in hilly and mountainous areas; 37,000 sq. km at 1:5,000 in rural; 3,000 sq. km at 1:2,000 in sub-urban; 5,000 sq. km at 1:1,000 in urban; and 19,000 sq. km at 1:10,000 scale based on satellite imagery. All orthophoto maps and raw data created under the Project were freely available to other governmental bodies and for public use. All activities under this sub-component were completed successfully. 32

50 A quality control center was established for checking and verifying the outputs of the orthophoto maps. In line with this, a joint quality control team appointed by the SSRRE and the SLCC was constituted and developed the procedures and specification for the Quality Control within a digital environment. In addition, the quality control manuals and the strategy on data management and archiving for the use of the orthophotos has been completed. The SLCC was planning on customizing the software and training its staff, but these plans were interrupted by the abolition of the SLCC. Finally, User Regulations for the use of orthophotos and concepts for the implementation of the data management and distribution infrastructure were made and are now being implemented. C3. Production and delivery of land cadaster data (parcel boundaries) to the SSRRE and the SCMSP The difference between sub-component A4 and C3 (both of them were related to the production of cadastral maps) was what kind of outputs could be produced. In other words, originally two sub-components were designed in the PAD: 1) creation of cadastral maps through the orthophoto maps and CORs under A4; and 2) production of their attribute data such as the parcel boundaries, the unique parcel number, the buildings and some additional technical and semantic information, as well as administrative borders under C3. Subcomponent C3 was planned to produce the cadastre data (parcel boundaries) for the DCM. Considering that the DCM was expected to cover 4 million ha, it was understood that the approach to be used should be as simple as possible, using existing maps without field work wherever possible. Therefore, the activities under C3 has been implemented closely with A4. C4. Business Plans (for the former SLCC) The main purpose of this sub-component was to support SLCC to prepare a corporate strategy for delivery of the mapping products and services, including such issues as service standards, fee structures (including for the use of the CORS), human resources, partnership with the private sector, etc. This subcomponent financed the preparation of a Business plan for the SLCC and therefore met its objective. The first plan was adopted in 2009 and a revised version was prepared in Now that the SLCC has been abolished, the SCPI will incorporate the relevant sections of SLCC s business plan in its own plan. Component D. Training, Policy Development and Project Management The objective of this component was to support project implementation and monitoring and to coordinate joint activities relating to: (i) training; (ii) developing a joint information technology/information management strategy; and (iii) policy and legislative development. 33

51 A Project Management Unit (PMU) was also funded from this Component. All activities under this component have been completed successfully. This component consisted of five sub-components: D1. Training The key outputs to be expected from the PAD were: i) to establish a training center fully equipped and staffed offering technical and IT courses; ii) to provide Study tours and foreign training programs for the staff to improve their capability; and iii) to establish a center for Real Estate Law to develop proposals or legislation for government to implement good real estate administration policies. Regarding a training center, it was established in the new building of the SSRRE in 2008 with a fully equipped computer training laboratory and a large room for seminars and conferences as well as a video-conferencing facility. A four-year training plan was produced including a detailed list of training and development courses such as: surveying methods, cadastral survey and record keeping, valuation, registration procedures, property management, IT management training, GIS, language courses as well as the basic courses on Bank project procedures, procurement methods, preparation of TORs and technical specification. The Project also provided assistance in obtaining educational materials for the training library like FAO s Land Tenure series. A distance learning approach using web-conferencing facilities was recommended by the Project and has been quite operating well. As part of the restructuring in 2009, the original project target (9,000 person day of training courses) increased to 10,000. Finally, a total of 26,515 training days was completed by the closing date of the Project so that the target of 10,000 person days of training was overachieved. Each training session was assessed at the end for the purpose of training monitoring, and the results were incorporated into the M&E report. The assessment of the training courses reveals a 99 percent satisfaction rate (against a target of 90%). Also gender disaggregated data were collected as part of the training monitoring to gauge whether project activities were benefiting female employees as well as male employees. At the end of the Project 2,423 individuals (363 female and 2060 male) have taken part in the training courses. The Project also financed study tours in 7 Europeans countries for staff of all agencies. The Law Center was established with 3 full-time legal specialists, equipment and books in 2009 for: i) reviewing policy and legislation relating to real estate administration and management; ii) the collection and analysis of land and property law; and iii) for policy development. The Center was closed temporally and reopened with the name of the Law and Education Center in 2010 for: i) assisting with drafting legislation, instructions, etc.; ii) for providing training; and iii) for assisting in drafting brochures. Its four main business areas were: legal support to SCPI staff; advice to the public and other government officials on registration issues; presentation of seminars on legal issues to staff; and advice and participation in policy and legal discussions. 34

52 The training center has now been formalized as part of SCPI as the Training and Education Center (TEC) and will continue to provide training across the many disciplines of SPCI registration, cadaster, law, geodesy, etc. D2. Development of an information technology/information management strategy This sub-component was designed for involvement of the key institutions on an ICT Strategy, including: i) the National Information and Communication strategy, the planned State Data Network, e-government and other initiatives; ii) the IT system logical framework and data model; iii) Communications channels between institutions, regional and district offices, the private sector involved in the professions relating to land administration and the public; iv) development of the required data dictionaries, data structures and models, classification systems and data exchange standards; and v) development of a NSDI policy according to current international standards. An initial draft Information Technology/Information Management (IT/IM) strategy was prepared during preparation, which proposed separate strategies for the two implementing agencies (the SSRRE and the SCMSP). However, following the institutional reform in 2009, only one IT/IM strategy for the SCPI was required. A working group and an IT committee under the SCPI were organized for preparation of the outline, planning and action plan for the IT strategy as well as capacity building for the SCPI IT center. A new ASAN service center was created in 2012 by the Presidential decree with the mandate of coordinate all government and municipal services. The MOU between the key institutions (the SLCC and the SCPI) for data sharing was signed as part of ICT Strategy implementation. The ICT strategy for Mid- ( ) and Long-term ( ) periods was developed, and adopted in 2014 together with two year detailed action plans and a training plan. The ICT strategy contains seven (7) Strategic Goals: - SG1. Development of NSDI for creating, sharing and accessing to geo-spatial data through distributed sites; - SG2. Promoting NSDI necessity and benefits; - SG3. Improvement of Geo-spatial e-services infrastructure; - SG4. Establishment of ITDMC services efficiency, effectiveness, security and sustainability; - SG5. Training and education, capacity building and increasing of ICT awareness; - SG6. Realization of the e-cadastre, e-registry and agree e-services for the SCPI; and - SG7. Developing an effective price policy for ITDMC. Furthermore, the concept of a National Spatial Data Infrastructure (NSDI) has been developed in 2014 as part of the ICT strategy above. In light of this, a national NSDI Council has been established by the Government of Azerbaijan for reviewing the NSDI 35

53 concept, developing a NSDI strategy and for implementing it. A roadmap for NSDI was presented to the Government in This sub-component was successfully implemented to meet the objective with the adoption of the ICT strategy, a two-year action plan, and a training plan. D3. Policy and legal development This sub-component was designed to provide continuous support for the review of relevant policies and laws. Support was provided through the law center, consulting services and the participation of a Land Law Expert in supervision missions. During the life of the Project, there were the some concerns about: i) the clarity and direction of the responsibility for preparation of cadastral plans/works for the public prior to registration; and ii) the harmonization of two different laws (the Law on Real Estate Cadastre and the Law on State Real Estate Register) by the SCPI and the SLCC, respectively, on the regulation of the use of the private sector for cadastral survey work. However, due to the abolition of the SLCC in 2015, one draft Law by the SCPI is pending in the Parliament to be approved and enacted. In addition, the major political issue was regarding illegal buildings (dealt with under A6). There had been a great deal of activity for developments in the policy and legal sphere since the commencement of the Project in Throughout the life of the Project, legislation was adopted or enacted such as i) two sets of amendments to the Civil Code and the Law on State Register of Real Estate, dated December 27, 2014; ii) an order regulating the system and relationship between the SCPI, MOJ and notaries regarding on-line access, dated February 14, 2014; iii) an order by SCPI s chairman regarding mobile offices for registration services, dated April 4, 2014; and iv) a decision of SCPI regarding its e- services, dated January 13, Approximately 15 laws related to real property were amended or adopted during the Project. In addition, the Charter for SCPI, regulations, and SCPI s orders, as well as many legal/legislative proposals/papers had been developed under the Project. Remarkably, the State Program on the Development of Real Estate Registration and Cadastre System in the Republic of Azerbaijan ( ) was prepared including some 18 activities to improve the legislative basis for SCPI s activities, plus 18 activities on technical modernization and 6 on human resources development. Moreover, legal awareness activities outsourced by the private company have been working well to provide legal analysis and awareness services since This legal awareness program has been recognized as a complementary approach to the public awareness campaign under A9. D4. Project Management Unit (PMU) The PMU for the Project was established in 2007 with the commencement of the Project, and was responsible for the following functions: i) planning and budgeting; ii) procurement; iii) financial management and disbursements; and iv) monitoring and 36

54 evaluation for the Project. At the beginning of the Project, there were some impediments caused by the frequent turnover of PMU staff in procurement and financial management (eventually, it caused some delays of the Project procurement) and by the lack awareness/experience of/with the Bank s project procedures. The Project coordination meetings were held regularly with coordinators, the PMU manager and the representatives of the MOF and other relevant ministries to monitor the project activities and progress. The PMU maintained and delivered accurate and up-to-date accounting records for the project through the quarterly IFRs and annual audit report (audited by external audit company). The 1C accounting system, which could automatically generate the required quarterly financial management reports and Statement of Expenditure forms, was installed. In addition, a new File Management System was developed in 2013 to store the digital archives produced by the Project on ITDMC s servers and these files could be accessed on the intranet by all staff. More than 160 items were procured during the Project. As planned at appraisal, the PMU reported to a Project Director and a Project Steering Committee chaired by the Minister of Finance regularly. D5. Monitoring and Evaluation The M&E, managed by the PMU, was responsible for monitoring the project implementation process and its outputs, and for reporting to the Steering Committee and the Bank on project progress. The M&E specialist under the Project provided regular and good quality quarterly progress reports on the project progress, and the statistics on the progress with meeting project outputs and outcome indicators. During the Project period, a new methodology was created - Guidelines on M&E Reporting Mechanism within WB RERP - to collect data and to measure project progress. The M&E specialist also provided support in the preparation of the customer satisfaction surveys and other M&E related activities. The customer satisfaction surveys in 2012 and 2014, respectively, were carried out to assess: i) the quality of services of the SSRRE; and ii) the perception by the public of the importance and quality of the services provided. Apart from the Bank s Core Sector Indicators from the PAD, a number of new indicators were added to better capture the many service improvements provided by the SCPI, including the mobile services and e-services. 37

55 Annex 3. Economic and Financial Analysis The main goal of the Azerbaijan Real Estate Registration Project was to build a reliable, transparent and efficient registration system supporting the real property markets and suitable systems for the management and use of State-owned immovable property. To achieve these objectives the Project included activities under four components, namely: (1) Real Estate Registration; (2) State Property Management and Register; (3) Base Mapping and Land Cadastre; and (4) Training, Policy Development and Project Management. These components focused on the improvement of the quality of services through improved registration offices, automated systems for land administration, creation of the digital cadastre map (DCM), improved policy and legal framework, and training and capacity building for the staff. The Project components were implemented by the State Service for the Registration of Real Estate (SSRRE) for Component 1, by the State Committee for the Management of State Property (SCMSP) for Component 2, and by the State Land and Cartography Committee (SLCC) for Component 3 until the merger of these institutions to form the State Committee for Property Issues (SCPI). It should be noted that SSRRE has maintained its legal character and self-financing status, yet it was subsumed under the SCPI, and that the SLCC was abolished in 2015.This Annex will present the original assumptions for the economic and financial analysis conducted at the appraisal stage, will perform a similar analysis using available data at the end of the Project, and will present additional economic benefits that were not directly envisaged by the original economic and financial analysis. Following the ex-post analysis of the original assumptions of the economic and financial analysis, this Annex will focus on the Project s contributions to: (i) Output Effects; (ii) Efficiency Gains; and (iii) Fiscal Impacts. Azerbaijan and Real Estate Registration in Azerbaijan at appraisal In the decade leading to Project appraisal ( ), annual economic growth averaged 13.6%. Reliance on the extractive sector had been substantial; at appraisal, 42% of GDP and 85% of exports were attributed to the oil and gas sector, yet the sector employed merely 1% of the country s labor force. The Bank-GOA partnership focused on sustaining economic growth rates and stimulating the development of the non-extractive sector, a feat that demanded investments in economic management and progressive structural policy measures. One of the selected structural policy areas related to the development of effective property registration and cadaster systems to support property markets. In that context, it was expected that the impact of the Project would be to build confidence in the registration and cadastre system and thereby in the property market, and in so doing, encourage active participation and investment in Azerbaijan. Despite the impressive economic performance in the period leading to the Project s appraisal, the economy of Azerbaijan was not insulated from the occurrence of exogenous shocks and the global financial crisis. Since 2006 the Azeri economy has been unable to sustain economic growth at previous levels. The global financial crisis, coupled with declining commodity prices, took a particularly strong hit on the Azeri economy. As the graph depicts, annual growth fell sharply from 25% in 2007 to 0.1% in Growth moderately increased subsequently, and the projection for growth in 2015 and 2016 is of 3%. 38

56 Original Assumptions and Ex-post Analysis The economic analysis at appraisal focused on increases in Real Estate Values. International experience suggests that a properly functioning real estate registration system can lead to significant increases in the value of property assets. As confidence in the market increases with better security of tenure and more efficient legal registration systems, so property becomes a more attractive asset class for national and international investors (both private and institutional). As investors demand for property assets increases, so too does the market value of that property. According to the 2005 World Development Report A Better Investment Climate for Everyone, this assumption, focusing on the investment climate impact of strengthening property rights and the efficiency of property transactions, is a plausible for a Real Estate Registration Project. It should be noted that this economic analysis is in accordance with previous practice on Land Administration and Real Estate Registration Projects 12, where the Economic and/or Internal Rate of Return (ERR/IRR) is based on an estimation of the expected impact on the overall land markets as a result of the improvements made to the public services provided by real estate registration agencies, particularly regarding title security and efficiency in market transactions. PAD Assumptions Revised PAD Assumptions in ICR Rationale for Revision Discount rate of 7% Discount rate of 10% Based on experiences with similar Projects in ECA, this is a more realistic discount rate for Real Estate Registration Projects 12 Refer to Economic and Financial Analysis (Annex 3) of ICR for Serbia Real Estate Cadastre and Registration Project (P078311), p. 44. This analytical approach has been used for both urban and rural land/property tenure strengthening operations; refer to Paggiola, S., Economic Analysis of Rural Land Administration Projects (2004), pp

57 Calculations of increases in Present Value for Residential and Commercial Properties are based on 1 million m2 assumption; and on 10,000 sot (1 million m2) assumption of property for Land Under Construction and Agricultural Land Calculations of Present Value based on 10,000 m2 for Residential and Commercial Properties, and on 100,000 m2 for Land Under Construction and Agricultural Land It is considered that 1 million m2 is an excessive area to be registered, and it is not realistic to conduct meaningful analysis based on such a vast area. A differentiated area unit for residential/commercial and for agricultural/land under construction is more appropriate for the economic analysis. Property Values Original Assumption: Based on the impressive economic performance at appraisal, the PAD estimated that the potential increases in property prices in the period would increase by 5% per annum in the absence of the Project. So as to indicatively demonstrate the value that can be added to property by even a small Project impact, the analysis assumed that a properly functioning registration system as created by the Project would add between 5 hundredths (conservative scenario, 0.05%) and half a percentage point (non-conservative scenario, 0.50%) to the 5% base property price growth rate. Although the base annual property value rate of 5% may have seemed plausible at appraisal, with the impacts of the global financial crisis and falling commodity prices, the original assumption is considered too optimistic. Although it was an optimistic assumption, as the Compound Annual Growth Rate analysis conveys below, the annual property value rate exceeded the non-conservative scenario (5.50%) in most cases other than for residential properties outside Baku and for commercial properties in Baku. Ex-Post Compound Annual Growth Rate (CAGR): Based on data made available by SCPI, the CAGR for the different property categories are the following: Ex-Post CAGR for Residential Property and Commercial Property/Land Residential Land Under Construction Baku 7% Baku 16.9% Non-Baku 3.1% Non- Baku 24.1% Commercial Agricultural Land Baku 2.7% Baku - Non-Baku 4.7% Non- Baku 18.5% Based on the figures in the table above and the original economic and financial analysis assumptions, an increase in the property values for Residential, Land under Construction, and Agricultural Land between 0.05% and 0.50% is attributable to the Project s activities. 40

58 Present Values Original Assumption: The original calculations showed that in the most conservative scenario (0.05%), the present value of residential property in Baku would increase by USD 360 million in the period as a direct result of the Project. In the case where the Project adds half a percentage point to the assumed growth rate, the value added to the housing stock in Baku was estimated to be USD 3.6 billion. For commercial properties, it was expected that for every 1 million m2 of commercial property in Baku the Project would increase its value by between USD 34 million and USD 0.35 billion, depending on the growth scenario. Likewise, for areas outside Baku, under the assumptions described above, the Project would increase the value of residential property by between USD 4 41 million (per 1 million m2) and commercial property by between USD 7 68 million. It should be noted these figures were calculated using an assumption of 1 million m2, an assumption that for the purposes of commercial and residential land is deemed too high. The ICR analysis uses 10,000 m2 as a reasonable assumption to calculate the Net Present Value (NPV) for Residential and Commercial Properties; and 100,000 m2 for Land under Construction and Agricultural Land. Moreover, the discount rate used in the original analysis was 7%, a percentage that is deemed low based on more than twenty years of World Bank experience in Real Estate Registration Projects in the ECA Region. For the purposes of this analysis, a discount rate of 10% is used. Ex-post Net Present Values (NPV) and Internal Rate of Return (IRR): Despite the higher discount rate and smaller, yet more realistic, area assumptions, the Project s NPV and IRR suggest that the RERP had a substantive positive contribution and that it added considerable value to the Azeri property stock. Based on actual ex-post project data and an analysis that is consistent with similar Projects, the NPV and IRR values for the different categories of properties are presented below. Ex-Post Net Present Values (NPV) in million USD and Internal Rate of Return (IRR) Residential Land Under Construction Baku % Baku 2, % Non-Baku % Non- Baku Commercial Agricultural Land Baku % Baku - Non-Baku % Non- Baku % Table 1: Key Economic and Fiscal Impacts (PAD Assumptions v. Project Outcomes) PAD Assumptions Project Outcome Substantial value added to the Azeri property stock (the value added to the property stock will substantially exceed the cost of the project) Indeed, substantial value was added to the Azeri property stock (please refer to section above). 41

59 Substantial increases in the aggregate value of state property Almost AZN 20 million revenue generated by the SSRRE by 2012 (in 2012 alone,azn 5.5 million per year in today s terms will be generated) Transaction costs on the property markets (i.e. the costs incurred in the process o f buying and selling property) will fall substantially as a result of the reduction in registration processing times and by the on-line access of the notaries to the system Please refer to the tables with the Ex-Post Net Present Values above. Although such data was not available for this ICR, the reliance of SCPI to the State Budget has decreased considerably. In 2010 SCPI received 6.1% of its budget from the MOF, in 2015 it received 3.8% from State Budget. This is a reasonable proxy that showcases the progressively self-financing character of the institution, which should be mainly due to an increase in its revenues. The cost of registering property in Azerbaijan is amongst the world lowest (0.2% of property value, top 15 cost-efficient countries for registering property). This is well below the ECA average of 2.6%, and the OECD high income countries average of 4.7%. Moreover, there has been a significant decrease in the amount of days required for registering property. In 2007 it took 30 days to register a property, while in 2015 it takes an average of 12 days. It should be noted that clients can register property in as little as 7 days through an expedited process, available from SSRRE. Also, the number of procedures required for registering property have decreased from 7 procedures in 2007 to only 3 in Increases in output in the banking (mortgage), construction, and other property related services (such as notaries, etc.) and better security for financial intermediation Increased property market activity will lead to increased revenues from cadastre maps for the SSRRE. Similarly, increased revenues can be expected from orthophotomaps for the SLCC. The planned values of these increases will be specified in the Corporate Strategy and Business Plans, to be prepared for both organizations The enhanced real estate registration procedures have contributed to the increase of annual mortgage issuance from 11,515 in 2006 (baseline/appraisal figure) to 45,619 in 2014 (a 296% increase). Please refer to Output Effects section below. The SCPI revenue deriving from cadastral maps has increased substantially from AZN 380,100 in 2010 (when the first data is available) to AZN 3.15 million in 2013 and AZN 2.37 million in 2014 (latest available data). Please refer to Fiscal Impacts section below. 42

60 Improved management of state property and better returns from privatization (as a result of improved market conditions). Increased taxes collected as a result of the higher market values of land and property as well as from larger number of property market transactions Potential for increased taxes arising from better monitoring of large-scale property transactions Potential for taxation reforms in relation to the property markets, offering increased revenues from property transactions Improved productivity of workers in the 3 recipient organizations Most of the mass privatization of State land occurred between the mid-1990s and before the commencement of the RERP. There are indications that the RERP through its State Property Management and Register Component improved practices in this field. For example, the revenues from State land leasing increased substantively from AZN 314,890 in 2007 to AZN 3,700,900 in 2013 (latest available data). There was a substantive increase in Land and Property Tax collection since 2007, without major changes in the taxation rates. Please refer to Fiscal Impacts section below. Please refer to point above. It is not clear to what extent the increase in Land and Property tax collection derives from better monitoring of large-scale property transactions. That said, registration of transactions is immediately transferred to the country s tax authority, SCPI, and the Ministry of Internal Affairs, which allows for the better monitoring of transactions from a fiscal perspective The tax code has not changed substantially since However, even if taxation reforms took place during RERP implementation, attributing these reforms to the Project would be difficult. Since the merger of the 3 institutions duplication of efforts has decreased. The RERP financed numerous activities that aimed at transforming SCPI to a more business-minded and customer oriented institution. I. Output Effects At Project appraisal it was argued that there would be output increases in the banking (mortgage), construction, and other property related services (such as notaries, etc.). Indeed, and despite the slowdown caused by the global financial crisis, the RERP, along with concurrent sectoral policies, produced significant output effects in the real estate finance sector. Most significantly, the number of mortgages issued annually increased dramatically since the beginning of RERP implementation. Whereas in 2006, prior to the Project, 7,476 mortgages were issued annually, in 2014 (the last full year of RERP implementation), a total of 45,619 mortgages were issued 13. Commercial bank 13 For the purposes of this Annex, 2014 figures are reported. The data for 2015 are extrapolated to annual estimated for the year, based on the data available up to Project closing. 43

61 representatives, interviewed by World Bank staff for the purposes of this ICR, attested that the effective demand for mortgages has grown notably since 2007, mainly due to the enhanced real estate registration procedures and the establishment of the Azerbaijan Mortgage Fund (AMF) in Similarly, the number of transactions registered in SCPI has a definitive upward trend, particularly for sales. Although there are fluctuations in the number of first registrations, there are substantially more first registrations 14 post-2010 in SCPI than in the early Project period. Over the long run, it is expected that initial registrations will decrease as the stock of unregistered property is finite. 14 By first registration we mean the initial registration of a property that had not been registered ever before. 44

62 During interviews with private-sector stakeholders, real estate agents observed that the increase in real estate transactions and the growth of the real estate market has been enabled by the ease of obtaining registration documents. The enhanced business environment, following the efficiencies gained in the real estate registration processes, has benefited both the real estate sector as well as citizens who gain access to credit by using property as collateral (confirming statements of the commercial bank representatives that were interviewed). Other than real estate services, real estate firms that were interviewed mentioned that they started offering valuation services and that they had benefited from Project-supported SCPI trainings. This is a new business area for real estate and other firms to enter. Finally, real estate firms added that SCPI real estate market data has allowed them to make better projections about the market, and in conjunction with valuation trainings, firms in this industry have begun producing reports with real estate market indices which are then sold to the Ministry of Economy and Industry, the Central Bank, and the AMF. II. Efficiency Gains The cost of registering property in Azerbaijan is amongst the world s lowest (0.2% of property value, top 15 cost-efficient countries for registering property). This is well below the ECA average of 2.6%, and the OECD high income countries average of 4.7% 15. Moreover, there has been a significant decrease in the number of days required for registering property. In 2007 it took 30 days to register a property, while in 2015 it takes an average of 12 days. Also, the number of procedures required for registering property has decreased from 7 procedures in 2007 to only 3 in It should be noted that clients can register property in as little as 7 days through an expedited process, available from SSRRE. The Graph below indicates the soaring interest of clients for the express registration procedure

63 Moreover, the RERP has contributed to the establishment of a firm registration culture across the country by making the institution more accessible and customer-friendly. Information requests about real estate registration procedures to the SCPI have increased remarkably; between 2007 and 2015 there has been a 157% increase in the number of information requests nationally. If one excludes Baku, information requests to SCPI have increased by 309%. It should be noted that customer surveys conducted in 2014 report increasing levels of satisfaction with regards to speed of service of official and standard information supplied; the satisfaction rates have increased from 75% in 2012 to 88 % in 2014 (the target value being 75%). Further efficiency gains have been achieved by the RERP activities that linked the Project with key players in real estate registration. Through interviews with private notaries at the multi-purpose service-providing ASAN Office, it was noted that notaries access to the Ministry of Justice s e-notariat (supported by the Project) has allowed them to render 46

64 registration services to clients more efficiently than ever before. Notaries can immediately issue a certificate online, and the certificate is more secure than before. Moreover, the application for registration of a sale or other transaction is immediately transferred to the country s tax authority, SCPI, and the Ministry of Internal Affairs, which allows for the better monitoring of transactions from a fiscal perspective. Notaries added that there has been a change in the registration culture and that citizens are interested in registering their property and transactions. Importantly, the cost of registration services have been kept constant since 2006, making these services accessible to most citizens. Quite importantly for the enhancement of the real estate registration sector as a whole, the banking sector can access key registration documents through e-services, creating significant efficiency gains. Prior to the Project, commercial bank employees had to visit SSRRE to gain access to these documents, while now they can access them through the internet and offer a mortgage to clients days or weeks faster than before. Commercial bank representatives that were interviewed noted that the changes in the real estate registration processes have created the conditions for property to be used more effectively as collateral, hence expanding credit access. III. Fiscal Impacts At Project appraisal, it was noted that the increase in the volume of property transactions registered at SSREE would enable the institution to become fully self-financing by the end of the RERP implementation. The reliance of SCPI to the State budget has been consistently decreasing since the merger of the three institutions. In % of SCPI budget came from the State Budget; this figure has since declined to 3.80% in Other than registration fees, SCPI collects an increasingly significant amount of revenue from cadastral maps. In 2010, SCPI collected AZN 380,100 from cadastral maps; by 2014 (latest year for which data is available), SCPI earned AZN 2,375,700 from cadastral maps (525% increase in four years). The impact of the RERP on tax collection featured prominently in the original economic and financial analysis. Although the exact attribution to the Project of more effective tax collection in Azerbaijan is difficult to quantify, it was envisaged that the Project s deliverables would help to improve the tax collection of the Ministry of Taxes. At appraisal, the Ministry of Taxes had expressed its interest to monitor activity in the property market, especially large-scale property transactions. Through the Project, the registration of transactions is immediately transferred to the Ministry of Taxes (along with SCPI and the Ministry of Internal Affairs). As the Graph depicts below, both Property Tax revenues (left y-axis) and Land Tax revenues (left y-axis) have a clear upward trend, despite the overall low economic growth during the same period. 47

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66 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Lending Names Title Unit Responsibility / Specialty Gavin P. Adlington Andrina A. Ambrose- Gardiner Lead Land Administration Specialist Senior Operations Officer GSURR OPSPQ Rufiz Vakhid Chirag-Zade Senior Operations Officer GFADR Shahridan Faiez Senior Social Development Specialist ECSSO Junko Funahashi Lead Counsel LEGEN Lynn C. Holstein Lead Land Administration Specialist ECSSD Ida N. Muhoho Consultant GGODR Gurcharan Singh Senior Procurement Specialist GTIDR Rumyana Tonchovska IT Specialist FAO Tony Lamb Victoria Stanley Land lawyer/registration Specialist Senior Rural Development Specialist consultant GSURR Vusala Asadova Program Assistant ECCAZ Hiwote Tadesse Operations Analyst GPSOS Supervision/ICR Rufiz Vakhid Chirag-Zade Senior Operations Officer GFADR Gavin P. Adlington Lead Land Administration Specialist GSURR Norpulat Daniyarov Sr Financial Management Specialist GGODR Tural Jamalov Financial Management Specialist GGODR 49

67 Alexandra Cristina Montea Hadzi-Vidanovic Junior Professional Associate ECSEN Gulana Enar Hajiyeva Senior Environmental Specialist GENDR Ida N. Muhoho Consultant GGODR Anne N. Ranasinghe Procurement Assistant GGODR Vusala Asadova Sr Program Assistant/Procurement ECCAZ Anu Saxen Senior Land Policy Specialist ECSEN Gurcharan Singh Senior Procurement Specialist GTIDR Deepal Fernando Senior Procurement Specialist GTIDR Victoria Stanley Senior Rural Development Specialist GSURR Camille Bourguignon- Roger Senior Land Administration Specialist GSURR Rumyana Tonchovska IT Specialist FAO Igor Popiv IT Specialist consultant Tony Lamb Land lawyer/registration Specialist consultant Aivar Tomson Valuation Specialist FAOconsultant Stamatis Kotouzas Land Administration Specialist GSURR Jonghyun Yoon Land Administration Specialist GSURR Sabina Majidova Program Assistant ECCAZ (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle Lending No. of staff weeks USD (including travel and consultant costs) FY06 115,580 FY ,933 50

68 FY08 00 Total: 377,510 Supervision/ICR FY ,000 FY ,492 FY ,689 FY ,554 FY ,455 FY ,845 FY ,191 FY ,902 FY ,435 Total: 1,299,151 51

69 Annex 5. Beneficiary Survey Results Two customer satisfaction surveys were undertaken in connection with the Project in 2012 and 2014 by private firms for all interested parties: notaries, real estate agents, land cadaster agents along with the ordinary citizens benefited from the services. The key findings are set out below. The survey found that, between 2012 and 2014, the respondents recognized the importance of real estate registration for the reasons of higher property prices, safety and protection of property, possibility of mortgage, etc. (91.8% in 2014 including absolutely important/important against 65% in 2012), and they were well aware of the services and registration procedures provided by the SCPI. Some 79.2% of respondents were very satisfied with the speed of the provision of official and standard data within 20 working days (stimulated by the Law) and 85.9%(against 74.8% in 2012) of them had experience to receive the information from the SCPI within one working day if they had faced suspended problems. The most well-known e-services from SCPI was to issue a digital reference on encumbrance for saving the time. 85.5% of respondents (against 72% in 2012) were satisfied with the accessibility of information from the SCPI and most of respondents (94%) were pleased to experience the new/renovated registration offices with the comfortable customer spaces and the staff s well-trained attitude. From the deepened interviews with professionals, they noted that the online acquisition of the encumbrance certificates (Form 1) played a role in reducing a time for property transaction from a number of days to hours and they were satisfied with the accurate and reliable data by the SCPI. In conclusion, the improvement and challenges noted by the respondents were as follows: The online connection to access the property registry/rers directly by notaries, launch of the mobile offices for persons with restricted mobility, the availability of the request of information on real estate via internet by property owners were mentioned as an advantage from the Project. On the other hand the challenges to be solved were the difficulty to obtain an application for sales of apartments/houses, the property rights on women who did not register their marriages officially, formalization process of illegal constructions. In the final months of the Project a Poverty and Social Impact Assessment (PSIA) was carried out to assess how, and whether, it has affected vulnerable groups, and what lessons can be learned and applied for future projects or reforms. The PSIA was performed in only 2.5 months with very limited access to socio-economic data related to property rights and relied on qualitative focus groups information. Based on the data analysis and FGD findings, the PSIA concluded that low income property owners are benefiting from the improved SCPI services. This was based on i) satisfaction levels of lower income (below 400 AZN) households which are statistically indistinguishable from higher income (over 400 AZN/month) households; and ii) FGD findings which suggest that mobile services are highly popular and effective, saving individuals time and money. 52

70 Annex 6. Stakeholder Workshop Report and Results (if any) N/A 53

71 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR The State Committee for Property Issues prepared and submitted to the World Bank Borrower s Completion Report (BCR). Summary of the BCR is presented in this section. Summary of the BCR Implementation Completion and Results reports (ICRs) are an integral part of the World Bank's drive to increase development effectiveness, through a continuous process of selfevaluation, lesson learning and application, sharing of knowledge, and being accountable for results. The project development objective is to ensure that there is a reliable, transparent and efficient real estate registration system supporting the real property markets and suitable systems for the management and use of state-owned immovable property. This objective is met. In overall, the project is considered to be a success. Impressive improvements in reduced time to register a property as well as the overall number of registrations has been reached. This is also reflected in the Doing Business Report 2015, issued by the World Bank, where Azerbaijan now is ranked number 10 in the world in property registration, as compared to number 63 when ranked in the corresponding report from Notaries are now using on-line services and business processes are increasingly being based on digital information. The document management system is in place. Of special importance is the e-services for notaries and other external parties. These services are used by a variety of professionals as well as individuals and demonstrate clearly the impact of the project. The final draft BCR highlights the following 1. The PDO was well focused on outcomes for which the project could reasonably be held accountable. It was clearly formulated and important for the country and sector. 2. The degree of user satisfaction has improved considerably as well as the number of registered transactions and issued mortgages (all well beyond target). The speed of transactions and have also improved considerable. A strategy for dealing with informal settlements has been developed. A unified corporative network was established covering the whole country. Registration data base was connected and commissioned over the country, at the same time online access of all notaries was established to state real estate registry database. The measures on the full roll out of the unified system for management of the cadaster and land register (RERCMS) in the country are underway is 3. The project has been well designed and the project development objective, outcomes and indicators are well consistent with each other. The design has also continuously been adapted to new requirements, for instance those caused by the abolishment of project partners. 4. The commitment to the project and its objectives by the government has been very high. This commitment is demonstrated in a variety of ways, for instance through the increased co-financing of the project and through the reorganisation at institutional level that has been made. 54

72 5. Several strategic results of the project are already put into operation, for instance the on-line services to the notaries, the document management system, the involvement of the private sector in the cadastre surveys, the CORS stations and the training centre. The digital cadastre map is completed according to the project goals, but still additional areas needs to be mapped and the quality of existing data needs to be improved and verified. It is also recognised that the orthophotomaps being produced are now starting to become too old. This is especially apparent in the larger cities like Baku, where there are frequent changes in land use and building structure. 6. The government has demonstrated a required commitment to achieving development objectives. It has made necessary reorganisation of the state real estate activities. In addition, the government has provided additional financial support. The government has also demonstrated support in adapting new legislations and institutional policies being proposed by the project. Considering the pan-european legislation, it would be reasonable for Azerbaijan to improve its legislation towards these standards, for instance through a law on NSDI. 7. The support of the WB has been very essential for the results achieved during the project execution. It is not only the financial support, but also the personal engagement and the attitudes of team leaders, the PMU and the international contractors. Sufficient focus has been spent on the project results and its impact. Recommendations being made were well motivated and treated with high priority. The WB team leaders also demonstrated high degree of flexibility in order to cope with changing requirements. 8. The post-completion of the project mainly address the issues related to cadastral mapping, mass valuation and the implementation of RERCMS. The main remaining activities here are related to a. Completion of a database with real estate objects with corresponding legal boundaries of properties. b. Completion and roll-out of the RERCMS with harmonised land registry, cadastral and state property data. c. Deployment of the method for mass evaluation to other regions in the country (pending on a decision by the government). 9. The strategic goals for future developments may be formulated as a. The cadastral data sets with real estate boundaries of realistic precision are covering the intensively used real estate objects (6.5 Mha) are complete and harmonised with the land register. b. Large scale topographic base maps in the scales 1:2000 and 1:5000 are complete and covers dense urban areas and semi urban areas in development c. The IT system is supporting all relevant business processes. Such IT systems are crucial when fulfilling the duties against citizens and other external stakeholders. d. There is a proper National Spatial Data Infrastructure (NSDI) established where public authorities share their data in a unified way. e. The SCPI contributes to the e-government initiative by providing e- services fulfilling needs of the citizens and other entities. 55

73 f. The processes for land administration and land management as well as the interests of various stakeholders in the real estate sector are supported by appropriate legislations. g. The real estate register is contributing to an efficient land management h. The management and organisation of SCPI is efficient and compliant with international standards. i. The SCPI has an efficient collaboration with external stakeholders at all levels, managerial as well as operational. This is manifested by a number of collaboration projects. j. The personnel at SCPI are well trained and can carry out their duties in an effective, efficient and client-oriented manner. 56

74 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders N/A 57

75 Annex 9. List of Supporting Documents Project Appraisal Document, Republic of Azerbaijan, Real Estate Registration Project, February 23, 2007 Report No AZ Loan Agreement, Amendment to Loan Agreement Country Partnership Strategy, Republic of Azerbaijan, November 8, 2006 Report No AZ Country Partnership Strategy, Republic of Azerbaijan, September 15, 2010 Report No AZ Customer satisfaction survey 2015, 2015, CAV INNOVATION GROUP ICT STRATEGY FOR MID ( ) AND LONG ( ) TERM RERIODS, March 2014 Project end report, Development of Service Standards and Code of Conduct for the Staff of State service for Registration of Real Estate, October 2014 Quarterly reports Aide Memories, ISRs, Restructuring Papers for the Project 58

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