Public Disclosure Authorized Document o f The World Bank FOR OFFICIAL USE ONLY Report No: T7709-AF Public Disclosure Authorized TECHNICAL ANNEX FOR A PROPOSED GRANT IN THE AMOUNT OF SDR 12.60 MILLION (US$20 MILLION EQUIVALENT) Public Disclosure Authorized TO THE THE ISLAMIC REPUBLIC OF AFGHANISTAN FOR THE AFGHANISTAN S K I L L S DEVELOPMENT PROJECT January 4,2008 Public Disclosure Authorized Human Development Unit South Asia Region Ths document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents mav not otherwise be disclosed without World Bank authorization I CURRENCY EQUIVALENTS (As o f November 30 2007) Currency Unit - Afghani u $1 s - 49.8 AFN SDRl - U S $1.59007 FISCAL YEAR March 2 1-March 20 ABBREVIATION AND ACRONYMS ANQA Afghanistan National IRC International Rescue Committee Qualification Accreditation ISDS Integrated Safeguards Data ARDS Afghanistan Reconstruction And Sheet Development Services ISN Interim Strategy Note ARTF Afghanistan Reconstruction IV Instrumental Variables Trust Fund JICA Japan International Cooperation BP Bank Procedures Agency BDS Business Development Services KOICA Korean Organization for CDP Capacity Development Program International Cooperation CESP Committee o n Education and Assistance Skills Policy LCEP Learning and Community cso Central Statistics Office Empowerment Project DA Designated Account LMIAU Labor Market Information and DAB D a Afghanistan Bank Analysis Unit DAC Development Assistance M&E Monitoring and Evaluation Committee MAIL Ministry o f Agriculture and DOC Department o f Construction Irrigation and Livestock DOP Department o f Planning MIS Management Information DTVET Department o f Technical and System Vocational Education Training MOE Ministry o f Education EC European Commission MOF Ministry o f Finance EMIS Education Management MOHE Ministry o f Higher Education Information System MOLSAMD Ministry o f Labor, Social Affairs EQUIP Education Quality Improvement and Martyred and Disabled Program MOU Memorandum o f Understanding ESMF Environment and Social NGO N o n Government Organization Management Framework NIMA National Institute o f FM Financial Management Management and Administration GDP Gross Domestic Production NPP National Priority Program GOA Government o f Afghanistan NQF National Qualifications GTZ German Agency for Technical Framework Cooperation NRVA National Risk and Vulnerability IBRD International Bank for Analysis Reconstruction and NSDP National Skill Development Development Program ICT Information and Communication NSP National Solidarity Program Technology NVETB National Vocational Education IDA International Development Training Board Association OP Operational Policy IP Implementation Partners PACBP Public Administration Capacity IROA Islamic Republic o f Afghanistan Building Project FOR OFFICIAL USE ONLY PDO Project Development Objective SDR Special Drawing Right PED Provincial Education SDU Special Disbursement Unit Department TA Technical Assistance PEFA Public Expenditure and TOT Training o f Trainers Financial Accountability TVET Technical Vocation and PFM Public Financial Management Education Training PID Project Information Document UN United Nations PIU Project Implementation Unit USAID United States Agency for PPU Procurement Policy Unit International Development PSO Productive Skills Officer VET Vocational Education Training QF Qualification Framework VT Vocational Training sc Steering Committee WE? World Bank Vice President : Praful C. Pate1 Country Director : Alastair McKechnie Acting Sector Director : John A. Roome Sector Manager : Michelle Riboud Task Team Leader : Venkatesh Sundararaman This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents mav not otherwise be disclosed without World Bank authorization THE ISLAMIC REPUBLIC OF AFGHANISTAN AFGHANISTAN S K I L L S DEVELOPMENT PROJECT SOUTH ASIA, HUMAN DEVELOPMENT UNIT Date: January 4,2008 Team Leader: Venkatesh Sundararaman Country Director: Alastair J. McKechnie Sectors: Vocational training (100%) Sector ManagerDirector: Michelle R i b o u d Themes: Education for the knowledge economy John A. Roome (P);Education for all (S) Project ID: P102573 Environmental screening category: B Lending instrument: Emergency Recovery Safeguard screening category: B Loan Source Local Foreign Total Borrower lBRD/IDA 7.7 12.3 20 Trust Funds 0 6 6 Total 7.7 18.3 26 FY 2008 2009 2010 2011 2012 2013 Annual IDA 2.74 5.33 5.44 3.71 1.98 0.80 Annual Trust Funds 1.oo 1.82 3.18 Annual Total 3.74 7.15 8.62 3.71 1.98 0.80 Cumulative (IDA) 2.74 13.51 8.07 17.22 19.20 20.00 Cum. (total) 3.74 10.89 19.51 23 -22 25.20 26.00 Percentage Cumulative (IDA) I13.68 I 40.35 67.54 I I 86.08 I 95.98 I 100.00 Project implementation period: March 1,2008 - February 28,2013 Expected effectiveness date: March 1, 2008 Expected closing date: February 28, 2013 Does the project depart from the CAS/ISN in content or other significant oYes 0 No respects? Does the project require any exceptions from Bank policies? Yes o N o Have these been approved by Bank management? Yes o N o I s approval for any policy exception sought from the Board? o Yes 0 N o Does the project include any critical r i s k s rated "substantial" or "high"? 0 Yes o N o Does the project meet the Regional criteria for readiness for e Yes o N o implementation? Significant, non-standard conditions, if any, for: NIA Board presentation: Streamlined Loadcredit effectiveness: Covenants applicable to project implementation: 1. The Recipient shall establish for the implementation o f Part 1 o f the Project, a Skills Development Mission (CESP) to be chaired by the vice president o f the Recipient's Government and consist o f representatives o f MOE, MOHE, MOLSAMD, other relevant line ministries, the private sector and the donor community, to be responsible for overseeing the development and implementation o f the policy, legal and regulatory framework for the establishment o f ANQA. 2. CESP shall be assisted by NSDP which, through the NSDP PIU, shall be responsible for the administrative, financial management, procurement and day-to-day management o f the implementation o f Part 1 o f the Project and shall, in this respect, act as an implementation unit for CESP. 3. Upon the establishment o f ANQA, all policy and other functions performed by CESP under Part 1 o f the Project, including the development and institutionalization o f the national qualifications framework under Part l(b) of the Project, shall be vested in ANQA. 4. The Recipient shall vest responsibility for overseeing the implementation o f Part 2 o f the Project in M O E which, through DTVET, shall be responsible for coordinating the activities o f the various M O E line departments and units in the implementation o f Part 2 o f the Project. 5. M O E shall be responsible for performing the procurement, financial management and reporting functions under Part 2 o f the Project, 6. MOE's department o f construction shall be responsible for carrying out all construction activities under Part 2 o f the Project including overall technical guidance on institute rehabilitation and construction. 7. The Recipient shall vest responsibility for the implementation o f Part 3 o f the Project in M O L S A M D through NSDP which shall be responsible for a l l financial management, procurement, disbursement, monitoring and evaluation and other administrative aspects o f Part 3 o f the Project 8. MOE through DTVET and M O L S A M D through NSDP shall be responsible for monitoring and evaluating the implementation o f Parts o f the Project that are within their lines o f responsibility, as required under Part 4 o f the Project. 9. Anti-Corruption: The Recipient shall ensure that the Project i s carried out in accordance with the provisions o f the Anti-Corruption Guidelines. ISLAMIC REPUBLIC OF AFGHANISTAN Skills Development Project TABLE OF CONTENTS COUNTRY. SECTOR AND PROGRAM BACKGROUND ................................................ 1 Background................................................................................................................................ 1 Key Issues ................................................................................................................................... 1 Supply Issues ........................................................................................................................... 1 Demand Issues ........................................................................................................................ 4 Government Strategy ............................................................................................................... 6 The Rationale for B a n k Involvement ...................................................................................... 7 Development o f TVET System ............................................................................................... 8 Proposed Project Development Objective ............................................................................. 10 Project Description.................................................................................................................. 10 R i s k s .......................................................................................................................................... 14 Financial Management, Disbursement and Audit Arrangements ...................................... 17 Procurement............................................................................................................................. 18 : Annex 1 MAJOR RELATED PROJECTS FINANCED BY THE BANK AND/OR OTHER AGENCIES ...................................................................................................................... 20 Annex 2: RESULTS FRAMEWORK AND MONITORING ............................................. 22 Annex 3: DETAILED PROJECT DESCRIPTION ............................................................ 28 Annex 4: ESTIMATED PROJECT COSTS ...................................................................... 43 Annex 5: IMPLEMENTATION ARRANGEMENTS ........................................................ 44 Annex 6: FINANCIAL MANAGEMENT AND DISBURSEMENT ARRANGEMENTS ..52 Annex 7: PROCUREMENT ARRANGEMENTS .............................................................. 64 Annex 8: ECONOMIC ANALYSIS ................................................................................... 80 Annex 9: SAFEGUARD POLICY ISSUES ........................................................................ 83 Annex 10: PROJECT PREPARATION AND SUPERVISION.......................................... 98 Annex 1 : DOCUMENTS IN THE PROJECT FILE....................................................... 1 100 Annex 12: STATEMENT OF LOANS AND CREDITS ................................................... 101 Annex 13: COUNTRY AT A GLANCE ........................................................................... 103 Annex 14: MAP IBRD 33358 ................................................................................................... 105 COUNTRY, SECTOR AND PROGRAM BACKGROUND Background 1. Afghanistan was devastated by three decades o f conflict which destroyed physical and institutional structures and tore the social fabric o f the nation. The education and training infrastructure in the country was at the frontline o f this devastation both in terms o f physical infrastructure and ideology. The situation reached i t s lowest point under the Taliban regime. 2. Since the ousting o f the Taliban in 2002, the Government o f Afghanistan (GOA) has begun to formulate new policies and rebuild institutions. The social sectors have been placed at the top o f the reconstruction agenda o f the country with particular emphasis given to education, training and slulls development. 3. The first four years o f reconstruction have been marked by significant developments in political, economic and social spheres despite the worsening security situation in parts o f the country. Elections, which witnessed larger turnouts than even before in the history o f the country (particularly female), brought in a parliament, with representation from a wide spectrum o f society. Economic growth has been vigorous with the real value o f GDP (excluding illicit opium production) increasing by about 29% in 2002, 16% in 2003,8% in 2004, 14% in 2005, and 8.0% in 2006, albeit from a l o w base in 2002 (IMF 2007). Most o f this growth was fueled by a significant influx o f foreign capital for reconstruction. O n the social front, access to health care (including immunization services and pre- and post-natal care) and school services have improved significantly during this period. School enrollments have increased from about 1 million to nearly 6 million since 2002, with enrolments o f girls increasing to about 35% o f this total from a negligible base. 4. Despite these impressive strides, Afghanistan remains at a critical stage in i t s transition, facing numerous challenges: institutionalization o f the political system, concerns o f security and the r u l e o f law, weak institutional capacity, a lack o f defined market structures, poorly skilled labor force, non- responsiveness o f the s k i l l and capacity-building infrastructure to market demands, and persistent poverty (annual per capita GDP 300 U S $ in 2005/06)'. 5. As a key step in responding to these challenges, especially in the area o f l o w capacity o f the labor force, G O A has requested the World Bank for technical and financial assistance in the area o f Technical Vocational Education and Training (TVET). T h i s request was aimed at improving the s k i l l levels and educational profile o f the country's human resource, while simultaneously laying the policy and institutional framework for further human resource development. The Bank developed a policy note in 2006 entitled `Skills Development in Afghanistan' in response to the GOA'Srequest and the proposed project builds on the findings therein. Key Issues Supplv Issues 6. The present TVET system's ability to meet the s k i l l demands referred above depends on two elements: (i) current and future educational profile o f labor market participants and entrants (i.e., the the trainability o f the labor force) which will condition the type o f training to be provided (e.g., remedial; broad scoped; specialized) and affect the means o f access (formal or non-formal), and (ii) ability o f the ' IMF, July 2007. 1 existing technical, vocational education and training providers, both public and non-public, to do so efficiently and effectively. f Human capital base o the current and potential labor force 7. The current education profile o f adults i s low. Adult literacy (ages 15-49) i s very low, with estimates o f male and female literacy at about 43% and 13% respectively. Educational attainment, as measured by years o f schooling o f the population, i s also extremely l o w with school life expectancy o f j u s t over two years for the 2001/02 school year (Global Education Digest, 2004), and less than 1 year for girls2. 8. Though the potential number o f labor market entrants with basic literacy and numeracy slulls i s expected to increase over the medium- to long-term as schooling cohorts have grown in size in recent years3, in the short-term the majority o f participants will continue to display l o w literacy and numeracy skills. This will continue to hamper the supply o f skilled labor needed for reconstruction and rehabilitation activities. Thepotential o TVET to meet skill demands f 9. The existing TVET system has little capacity to train current participants or prepare new entrants for the labor force with the needed s k i l l sets. Four factors contribute to this inability to provide the requisite training: (i) l o w number o f opportunities for training, (ii) poor quality o f existing the the training, (iii)relevance o f training to the needs o f the labor market, and (iv) weak institutional arrangements for planning, managing, regulating and financing o f training opportunities. 10. Provision: TVET provision occurs through both public and private institutions in Afghanistan. Table 1 summarizes the array o f current training opportunities and their providers. An indeterminate, but perhaps the largest, number o f trainees acquire skills through informal apprenticeships offered by small and micro enterprises. Very l i t t l e information i s available on the how these apprenticeship programs are developed and implemented, but most use private channels to access them. Under the more formal set- up, two ministries play a critical role in the provision o f TVET: (i) Department o f Vocational the Education under Ministry o f Education (DTVET) under the MOE which oversees vocational education at a post-Grade 9 level through about 45 centers around the country; and (ii) vocational training the programs under the MOLSAMD, which manages 18 vocational training centers, and with the support o f the NSDP facilitates training programs in numerous other centers around the country. Given the large presence o f NGOs, NGOs too play an important role in the provision o f training directly, or through facilitation by various government entities. Given the overall lack o f capacity within government it i s expected that NGOs will continue to play an important role in the provision o f training services in the short- to medium terms. There i s a small but growing private sector in training in the country4 and efforts need to be focused on developing the needed mechanisms to improve the opportunities for private training. This private training opportunity i s particularly dominant in English Language and Computer Literacy training. Afghanistan's school life expectancy i s the lowest in the w o r l d and in the region Bangladesh and Pakistan have life-expectancies o f 1.8 years and 2.5 years respectively for girls. These gains mask considerable system-wide inequities, for example, girls and women are under-represented in the schooling system. This i s m u c h more so in the formal and general schooling system, than in non-formal training mostly delivered by NGOs, where women's participation is often mandated by the provider. The Afghanistan T e c h c a l Vocational Institute i s one example o f such a nascent and growing private sector, established through public private partnership arrangements and managed privately. 2 MOE MOLSAMD NGOs & Private Sector Dept. o f Technical and 18 new Vocational Training This sector i s the largest provider o f Vocational Education Centers (VTCs), in addition to s k i l l s training and includes: small provincial VTCs and 42 Vocational Schools contracted NGOs A small number (10-20) o f (mostly mono-tech intentional/dedicated VTCs institutions) About 12,000 trainees enrolled A relatively small number (approx. About 11,000 students are Shorter-term basic s k i l l s 600) o f private training schools. enrolled in these schools courses offered (Eng., computing etc.) Technical and higher Literacy & numeracy form the A large number (many hundreds) of technical courses are offered entry requirements for these NGOs involved in basic s k i l l s through these institutions programs development Class 9110 entry requirement A large number o f private i s imposed on prospective apprenticeships offered by small and students medium businesses largely in the informal sector . I 1. Quality: The quality o f current TVET provision i s generally poor. Training access i s both formal and non-formal, which to some extent depends upon the level at which training services are pitched with higher level programs typically being more formal in provision. Typical programs are plagued by high number o f trainees to trainer ratio, time-based programs and not programs that are based on competencies acquired, given the lack o f limited resources, most training tends to be theoretical and not applied, teaching tends to be rote in nature, finally, the infrastructure for training i s dilapidated, with obsolete and non-functioning equipment the norm. The poor quality o f these inputs i s further compounded by the very l o w academic levels o f entrants to training programs given the poor quality or complete lack o f prior schooling, leaving most o f them with little literacy and numeracy skills. The complete absence o f mechanisms for quality control (either an accreditation system for the providers or a qualifications framework for the establishment and adoption o f curriculum reforms). This makes it difficult for employers to gauge the competencies o f people seeking employment. 12. Relevance: The relevance o f publicly-provided TVET i s undermined because courses offered have little to n o relationship with the needs o f the labor market. The system i s very supply driven and provides the wrong incentives for participation in training programs. The curriculum in many trades tends to be overly theoretical, outdated, and has few links to the realities o f the workplace. Industry, private sector and the public sector have little input in the formation o f curriculum or courses and this results in choosing training sectors on the basis o f tradition rather than any analysis o f the economic environment. As a consequence curriculum development and standardization i s very limited, essentially focused on the pre-determined trades. It appears that training provided by NGOs i s more closely linked to s k i l l demands given the decentralized manner o f implementation. However, a lack o f training standards makes it difficult to assess competencies and limits the ability o f the worker to change jobs. The information system (monitoring and evaluation; research) does not contribute to decision making by individuals on the options that are available to them for training. The most effective information system i s private channels. These are limited in their ability to provide an over-all picture o f trends and developments that could inform beneficiaries o f the menu o f options available and the likelihood o f returns from various training programs. M a n y o f these apprentices are underage - an issue that needs to be addressed through a comprehensive education and social policy. 3 13. Institutional Structures: Afghanistan currently possesses a number o f institutions which are concerned with Technical and Vocational Education and Training. However, the roles and responsibilities o f these institutions need to be more clearly defined and the expected outcomes need to be better articulated. The existing institutional underpinning o f the TVET system fails also to recognize and sustain the crucial link o f specific demand to supply o f specific, quality skills. There i s poor coordination across public providers in terms o f what their exact roles and responsibilities are, and what they should be. This fragmentation o f responsibilities further reduces the efficiency o f the use o f available resources, as organizations tend to duplicate efforts. 14. Another key limitation o f the current system i s that there are very few opportunities for public training providers to experiment and configure their training to labor market needs. This i s because these institutions are severely constrained in their functioning by a highly centralized administrative mechanism and lack o f operational and financial autonomy. This l i m i t s the opportunities for partnerships to leverage the strengths o f the private sector in planning and delivering demand-driven training programs. 15. The legislative framework for TVET provision in the country helps to support and maintain the n current supply driven system o f training. I i t s current form, it does not allow for the inclusion and participation o f industry and the private sector in many o f the decisions made regarding the sector. The current system does not provide legal recognition for implementing agencies, and does not help promote private and Non-Government Organizations (NGO) provision o f training using public resources. Finally, the existing legislation centralizes financing mechanisms, restricts decision making at the level o f the training provider, and offers n o incentives for new approaches and training modules to be experimented with and for putting in place training programs that are demand-driven. T h i s limits the possibility o f cost- recovery or cost-sharing, and eventually developing sustainable, cost-effective training programs. Demand Issues 16. Demand side issues pertain to recent trends in the economy, the structure o f the labor market, and economic growth prospects to assess the h t u r e demand for slulls. There has been significant growth in the last four years as mentioned earlier, but this has not led to changes in the structure o f the economy. The primary sector (of agriculture and mining) continues to dominate the secondary and tertiary sectors (of industry and construction, trade and services). Agriculture has been driving growth in rural parts o f the country while construction, trade and services have been spurring urban growth. 17. In terms o f the labor market structure, it i s estimated that 80 to 90 % o f economic activity i s informal in nature consisting mostly o f small, family-owned enterprises which are typically characterized as being labor-intensive and o f l o w productivity. Formal sector employment i s largely public, though there has been undocumented growth in the private sector since 2002, particularly in the form o f small and medium enterprises. Additionally, aid agencies and NGOs which play an important role in rehabilitation and reconstruction, also account for a significant portion o f formal sector employment. 18. Reliable estimates o f unemployment rates, identification o f s k i l l s gaps and mismatches, development o f detailed labor market needs, etc., are difficult in Afghanistan, given the overall lack o f credible statistical information. Years o f conflict, consequent economic instability and flux in the labor force since 2002 with large internal movement o f displaced persons, make it difficult to estimate key indicators as mentioned above. However, evidence from localized surveys suggests an increasing demand for skilled and semi-skilled labor. There i s widespread perception among policy makers that the demand for skilled labor i s currently being met through the influx o f foreign workers. T h i s i s particularly true at jobs requiring higher order skills, such as, financial management, accounting, procurement, HR, contractor and supervisory skills in engineering related trades, etc. Assuming that reconstruction efforts 4 continue, it i s likely that the demand for skilled labor in these areas will increase and the pressure on the government will mount to ensure that there are a sufficient number o f Afghans in position to take these opportunities as they emerge. This i s particularly true for formal sector employment in urban areas o f the country. 19. In rural areas, three decades o f conflict have constrained productivity and efficiency in farm and non-farm production, limit opportunities for diversification o f production activities, make it more difficult to take advantages o f mechanization, post-harvest technologies, and access quality inputs, processing, transportation and marketing o f produce. T h i s i s compounded by the l o w levels o f education and training, and lack o f skills, knowledge and understanding o f more productive and effective farming methods. Provision o f training in this context i s more difficult as even the demand side i s weak and not very clearly defined. 20. Against this background, the G O A i s aiming to promote investments and generate employment6, develop a National Employment Strategy, and expand access to quality education and training at all levels. 21. The proposed project falls within this overall approach, which i s also the rationale b e h n d the government's request for support to TVET. To summarize, the four principal issues that will need to be addressed if TVET i s to be transformed into a demand-driven system are: f Lack o a TVETframework that could promote, oversee and maintain a demand-driven provision f o training. Such a framework would require several elements: the capacity to cross ministerial borders; create partnerships with industry and the private sector; and the legal and institutional authority to play the above roles. This project intends to build on existing TVET elements, but re-orient and reposition these elements and bring in structural coherence through programs that are directly derived from a demand driven model. This i s perhaps the most cost-effective approach available to the GOA at present. Weak incentives are in place, making it difficult to orient training programs towards a demand driven approach. This program provides for such incentives whereby training provision i s contracted out to only those providers who are capable o f ensuring close linkages both to the labor market and to the needs o f trainees. Key elements associated with high quality and relevant training provision are not present or brought together in a coordinated manner to achieve the highest valuefor resources. The institutional changes envisaged in the proposed project will address the issues o f coordination, standard setting,certification, and regulation. The proposed project aims to provide a range o f s k i l l s training to meet the critical needs in the labor market as assessed by policymakers, training experts and professionals, and employers. f The stakeholders o the TVET system (including government and non-government training providers, employers, potential entrants to the labor market, etc.) are operating in the absence o f useful and timely information to make the right choices at the right time. There are two levels at which information will be gathered and utilized through this program. Firstly, information will be collected on labor market demand and supply through activities undertaken by the NSDP/MOLSAMD. Secondly, the project will monitor enrollment, attendance, drop-outs and pass-rates in all institutions supported through this effort. In addition, tracer studies will be ~ For example, through the establishment of the industrial parks and estates under the authority o f the Afghan Investment Support Agency (AISA). 5 conducted t o determine labor market outcomes o f graduates and comparable control groups to determine program impacts. Furthermore, under Component 2 and 3, placement cells e x i s t h i l l be established at the institute levels, and this too will provide a wealth o f information. Government Stratem 22. The GOA i s in the process o f putting in place longer term policies and strategies for education and s h l l s development as a whole, and specifically in the area o f TVET. It i s cognizant o f the need for a full range o f skills in the country - from developing training programs t o improve productivity at the small farm or cottage industry levels, to developing programs aimed at mid- to senior-management level and for large industry levels. The GOA understands that a full range o f providers will be needed to cater to s k i l l s needs in the country, and that the service providers need to be themselves distributed across the skills-provision matrix in terms o f a well developed scheme. 23. With this understanding, the GOA launched the National Skills Development Program (NSDP) in 2004 as one o f four National Priority Programs (NPPs) designed to provide targeted social protection for vulnerable groups throughout the country and to provide training to build the capacity o f the labor force. n I the last two years, the NSDP has grown rapidly and today provides training to a wide range o f participants, with nearly 15,000 trainees currently under training in programs facilitated by, and formatively monitored and assessed by the NSDP. 24. Though the NSDP strategy envisages a much broader role for itself, with the NSDP eventually emerging as an independent authority for TVET in the country, this vision has not been fully realized. There are two factors that have contributed to this: (i) fiagmentation o f provision across numerous ministries and other providers, and (ii) NSDP being closely linked with a specific provider ministry, the M O L S A M D . The Steering Committee established to help coordinate programs over nearly 11 Ministries, has had only limited success in helping to develop such a coordinating and institutional role for the NSDP. This has made it difficult for the NSDP to emerge as an independent authority t o oversee TVET provision. 25. The London Conference (January 2006) concluded on the Afghan Compact, a significant feature o f which are 27 identified benchmarks to be achieved by 20 10. The benchmarks are drawn from the government's Interim Afghanistan National Development Strategy (IANDS), with the a i m to "provide tangible benefits to the population." The benchmarks specifically related to vocational education and training simply states that "150,000 persons are to be trained by the end o f 2010". The benchmark does not specify the nature, thematic area, public versus private sector provisioning, pre- or in-service training, level o f training, or any other aspect o f the training to be provided. Thus, different ministries have seen in this benchmark a role for them to fulfill, though in a manner not well coordinated. 26. The Afghanistan National Development Strategy (ANDs) will be finalized by March 2008. This process has compelled the key education and s k i l l s development related ministries (viz., MOE, MOHE and M O L S A M D ) t o work together in an effort to develop a meaningful and implementable sector strategy. The W o r l d Bank and other donors have contributed to this process, and through dialogue with the government, have suggested means by which the sector strategy can be made more effective. It has been suggested that a comprehensive TVET strategy should be developed as part o f the proposed project and further contribute to the goals the GOA has set for itself through the ANDs process. This i s currently under discussion with various entities within the GOA. 6 27. Essentially, the Government realizes that: persistent l o w level o f s k i l l s in the labor force will not only retard the pace o f development and reconstruction but will also open the door for foreign labor to enter the market and create a vicious cycle whereby local labor and local skills will always be overlooked dealing with this problem will necessitate building s k i l l s across a whole spectrum o f trades and professional skills in such a way that employers may choose a specific set o f s k i l l attributes (from elementary to expert levels) within a particular trade or profession and be assured o f a supply pool nevertheless this can be done when (1) there i s a framework which standardizes s k i l l s and provides a reliable certification and licensing (where needed) institutional arrangement, and (2) there i s a concomitant regulatory mechanism in place, and when the structure and interlinking o f service providers itself i s aligned t o the overall institutional arrangement. 28. Recognizing the importance o f this sector, the Government has acknowledged the need t o underpin their TVET strategy by best international practice as i s related to effective TVET provision. The proposed project takes as i t s premises the above set o f parameters and aims to: strengthen and make relevant the present regulatory institutional structure and to, where necessary, develop new institutional structures with such legislative support as may be needed in order to bring in a standardized framework o f qualifications covering the complete range o f skills with specific requirements o f certification and licensing, strengthen existing service providers and bring in new service providers as necessary for the relatively advanced level o f skills while simultaneously providing for and strengthening existing mechanisms and service-provision structures for lower level skills that are intrinsic t o village and local level farming and industries. 29. I t i s proposed to address (a) to (c) above in terms also o f an overriding set o f K e y Guiding Principles which the Bank team, together with intense consultations with the GOA, has identified to govern project preparation, design and implementation. These are: Demand Driven System: Develop a demand-driven TVET system to replace the current supply driven approach in selected trades and institutions 0 Competency Based Modular Approach: Adopt competency based modular approach to deliver training programs instead o f the current time based system Institutional Autonomv: Give training institutions autonomy t o plan and customize their programs based o n sectoral and clients' needs Contracting-Out Training: Establish partnerships for effective delivery o f training with experienced national and international training providers t o improve service delivery and quickly produce graduates with qualifications that are globally competitive Industry and Private Sector Leadership: Industry leads in terms o f vision, sectors, curriculum, and certification to ensure a demand-driven training system The Rationale for Bank Involvement 30. While the W o r l d Bank has been extensively involved in the education in Afghanistan since 2002 (with three IDA projects - Emergency Education and Rehabilitation, Education Quality Improvement Project and the Strengthening Higher Education Project), i t s involvement in the TVET sector has been more limited, with a JSDF financed Youth Entrepreneurship Empowerment and Development Project 7 with the M O L S A M D . This has helped build four centers around the country and has trained about 4500 youth in select trades. The proposed project o f the W o r l d Bank will be the first major effort focused o n TVET. 3 1. The Bank's involvement in both research and financing i s based o n direct requests from senior policymakers in the MOF, MOE, MOHE, and M O L S A M D . The counterpart ministries are aware o f the issues, the scale o f the problem, and the scope o f the proposed response o f the Bank through this project. As such, these ministries have committed themselves to introduce and implement difficult reform measures in an effort to transform the landscape for TVET in the country. 32. The rationale for Bank support for the Skills Development Sector i s very compelling. First, the W o r l d Bank's Interim Strategy Note (ISN) recognizes skills shortages in the country and the impact this has had on the recovery process in many sectors. 33. Secondly, the I S N identifies three strategic pillars under which the Bank proposes to work in the years 200712008: (i) Building the capacity o f the state and its accountability to its citizens to ensure the provision o f services that are affordable, accessible and o f adequate quality, (ii) Promoting growth o f the rural economy and improving rural livelihoods, and (iii) Supporting growth o f a formal, modem and competitive private sector. 34. This proposed project has been designed to fit under all three pillars. It addresses the concerns o f the first pillar by establishing an institutional, legislative and regulatory framework for TVET, which enhances accountability to the citizens and provides services that are affordable, accessible and o f quality. The second pillar i s addressed by providing support for training with a predominantly rural focus and thus helping to promote growth in the rural economy. The final pillar i s supported since the proposed project will prepare graduates for absorption in the modernizing industrial sector, thus supporting growth o f a formal and modem private sector. 35. Thirdly, the Bank and other donors are already supporting the achievement o f high quality elementary education and this has began to place increasing pressure o n increasing access t o quality post secondary education and s k i l l s which are likely t o have a significant impact o n economic development. Finally, while there are other Development Partners who can contribute financially to support the Government o f Afghanistan in this area, the Bank i s acknowledged for i t s ability t o bring in comparable global experiences, a constructive critique, and technical assistance for defined areas o f focus. 36. The Government's specific stakes and interest i s expressed in this project through (i)s it willingness to commit the resources o f more than one Ministry to the project, (ii) involvement o f the i ia some o f i t s highest h c t i o n a r i e s in oversight and other functions related to the project, and ( i ) stated commitment to bring in the necessary legislative changes to strengthen the institutions. Government i s also committed to providing the funds for the sustenance o f the institutions covered by this project on an enduring basis. Development o f TVET System 37. The development o f a TVET program in Afghanistan will require a careful balance between meeting the short-term training priorities o f the country to hasten the recovery process through targeted TVET provision in focus sectors, with the development o f a medium- to longer-term vision for TVET provision. The proposed project aims to achieve this balance by simultaneously focusing o n both meeting 8 immediate training needs, while simultaneously developing a modern system o f TVET provision, management, and regulation. 38. Given the years o f conflict, it i s necessary to develop priorities in all VET sub-sectors simultaneously, as Afghanistan tends to span several centuries simultaneously in terms o f i t s training needs. Since limitedresources prevent the GOA from exerting efforts in all directions, the proposed project identifies priority areas and guidelines for investment. By prioritizing and articulating the governments' goals and programs, achievable goals can be set and put into place in a manner that provides the greatest returns on investment. Coordination o f donor efforts i s important to achieving such a transformation since donor efforts sometimes are equally fragmented. Thus, making it difficult to contribute towards the overall strategic development o f the sector. 39. The development o f a high-quality, equitable, cost-effective, responsive and sustainable TVET system in Afghanistan i s not expected to be achieved in the life-time o f this proposed project. T h i s i s long-term vision, which however requires the GOA to put into place the basic building blocks o f an efficient system which could take as long as 12-15 years to achieve, as originally estimated by framers o f the NSDP. Efforts to understand long t e r m needs o f the country will be a function o f demographic changes, economic change and growth, and the rapidity with which newer technologies and business practices are absorbed in the country over this period. 40. This project helps lay the foundations for a demand dnven training system to evolve over time. This, the first stage, would focus on meeting short-term training needs while putting into place the basic design for a TVET regulatory and institutional framework that would allow for the development o f a demand driven TVET system. In this first phase, the project will on the one hand: (i) provide rural- markets oriented training for youth, destitute women, and marginal farmers aimed at diversifying income sources, improving productivity, and developing market-linkages in rural Afghanistan without any pre- condition o f prescribed schooling levels, and on the other hand: ( iprovide training in focused areas o f i) the economy at the post-secondary level to prepare a cadre o f potential employees for entry- and mid- management (such as, accounting technicians, procurement officers, supervisors and site engineers, etc.), i ia and embed both in ( i )vocational education and training system that i s demand driven, responsive to the needs o f the economy and improves the employability o f all beneficiaries. 41. There will be a need to ensure that a Stage I1will help further develop the regulatory framework even more, evolve incentives programs to enhance private participation, and strengthen the systems for standards, certification and monitoring and evaluation. Development o f regulatory frameworks for development o f curriculum, quality assurance mechanisms, standards for various trades and methods o f assessing whether standards are being met will continue in this stage and be expanded to more economic sectors and trades. Stage I1i s likely to witness a significant scaling up o f activities based on the results o f the rigorously evaluated pilot interventions o f Stage I . 42. Stage I11will place greater emphasis on assessing the sustainability o f various interventions introduced in earlier stages. This will allow the government to make course corrections, drop failed interventions, and scale-up and replicate successful efforts. Afghanistan i s emerging from three decades o f conflict and thus there i s a need to balance the need for immediate training and the need to develop appropriate systems for future benefits. Failure to develop systems in an effort to provide immediate training could result in costly investment in programs that fail to be sustainable and have little or no value a few years from now. Failure to provide immediate training could result in larger cohorts o f youth and others with n o options either in the labor market or for further studies, and this can have other undesired consequences. 9 43. The following section provides a brief description o f the activities to be undertaken in this first stage o f rebuilding o f the TVET system. The key guiding principles identified in an earlier section underpin the key components and put in place the needed reform measures. Proposed Project Development Objective 45. The project development objective (PDO) i s to increase the number o f immediately-employable graduates by building, in stages, a high quality TVET system that i s equitable, market responsive, and cost-effective. T h i s above project development objective i s to be operationalized through the project components described below. Project Description Lending Instrument 46. The proposed project will be financed by an IDA Grant in the amount o f U S $20 million equivalent. The lending instrument for this proposed project i s the Emergency Recovery Loan (OP 8.50), which has been used for all projects in Afghanistan for which the request fkom Government was received prior to March 1,2007. Although IDA'Snew Operational Policy o n Rapid Response (OP 8.00) i s in effect, the previous OP 8.50 i s applied to ensure continuity in project processing. The proposed project has received the necessary exceptions from OPCFC for the use o f OP 8.50 though the project duration (5 years) exceeds what i s stated under OP 8.50 guidelines. The project will involve the three key public sector ministries engaged in education and training, viz., Education (MOE), Higher Education (MOHE), and the Labor, Social Affairs, Martyrs and Disabled (MOLSAMD), with a specific focus on MOE and M O L S A M D . In addition, the Government o f Norway and USAID will finance Sub-Component 2.1 in the amount o f U S $ 6 million each. Proi ect Components 47. The project components are: Component 1: Develop Regulatory and Quality Assurance Framework for TVET (Total $1.5 million, I D A $1.5 million) 48. This component will create the necessary institutional conditions for a quality TVET system that i s demand driven and oriented towards labor market needs. This will be achieved through the establishment of: (a) an appropriate regulatory structure and quality assurance system; and (b) a Qualifications Framework. This component will have three sub-components and will be developed in parallel to Components 2 and 3 (see below). There i s sufficient information for the priority sectors (Administration and Management, Accounting, Information and Communications Technology (ICT), Basic Engineering Trades, and Agriculture) for the project to be able to move on Components 2 and 3, while it puts in place new institutions to help manage and run a modern TVET system. Sub-component 1.1: Establish the Afghan National Qualification Authoritv (Total $0.3 million, IDA $0.3 million) 49. This sub-component will establish an independent policy body known as the Committee o n Education and Skills Policy (CESP), to be chaired by the Vice President. The CESP will be tasked with putting in place the necessary legal and regulatory foundations to establish the Afghan National Qualifications Authority (ANQA) as an independent, statutory Authority, with i t s own staffing and budget line. Similarly, the legislation will also allow for the development o f the Qualification Framework 10 and several awarding boards. The CESP will be the apex policy body for education and training in the country and will frame and execute necessary policies and provide required prescription until the establishment o f the ANQA. The NSDP o f the M O L S A M D will initially act as the Secretariat for this committee through an agreement reached between MOE, MOHE, MOF, and M O L S A M D . The Secretariat o f the CESP (initially NSDP PIU) will cany out all administrative and management functions o f the CESP. The CESP will thus also serve as a meeting point for the various interests in this project, and it i s envisaged that many o f the issues o f coordination will be resolved through the meetings o f this body. Sub-Component 1.2: Establish the Afghan National Qualifications Framework (Total $0.8 million. IDA $0.8 million) 50. This sub-component will be implemented by the A N Q A which will oversee the design, development, and institutionalization o f a National Qualifications Framework (NQF). The N Q F will provide a levels-based structure needed to map all education and training course provision in the country and to allow for appropriate, coherent and meaningful certification and accreditation processes. Sub-component 1.3: Establish Awarding; Boards (Total $0.4 million. IDA $0.4 million) 5 1. The A N Q A will establish several Awarding Boards that will regulate and quality assure programs within specific levels o f the NQF. In particular, for TVET, the A N Q A will establish a National Vocational Education and Training Board (NVETB) as an independent, statutory Board, with a formal charter, staffing and budget line. In addition to the NVETB, the Government has expressed an interest in establishing a Board for Secondary Education, an Islamic Education Board, and a Higher Education Board'. The establishment o f the Awarding Boards as stated earlier i s not a new effort. There have been plans for the establishment o f such independent Boards on several different fronts (e.g., MOE wanting to establish a Board for Secondary Education, NSDP/MOLSAMD wishing to establish an independent authority for TVET) and the proposed project provides an opportunity to do so in a manner that i s coordinated, comprehensive and inclusive. Component 2: Improve Relevance, Quality and Efficiency of TVET (Total $18.5 million, IDA $12.5 million and Norway $6.0 million') 52. The objective o f this component i s to improve the relevance, quality and efficiency o f TVET programs, and to increase the number o f graduates from these programs, through the establishment o f a new institute, and by undertaking rehabilitation and reforms o f a select number o f other institutions. Initially, training programs will be contracted out to experienced, national and international training institutions through partnership arrangements. The partners will develop and implement comprehensive training packages, using competency-based approaches in selected sectors, and simultaneously develop indigenous capacity so that over a medium-term, the institutions involved may become academically self- sufficient. These training packages will be designed in such a way as to allow them to be fitted onto the N Q F once it i s established. There i s sufficient information regarding the priority sectors to allow for the Component 2 to be implemented simultaneously with Component 1. Programmed activities will focus on both direct teaching o f students and on the critical area o f training o f TVET teachers. T h i s component i s envisaged as a broad-based one which will allow multi-trade, multi-center as well as specialized vocational training and education centers to be established under i t s various sub-components. ' The Higher Education Board over time could be further expanded to include a General Board for Higher Education, a Board for Technical Education, etc. 8 Expected contributions from Borrower (US $ 3 million) and U S A I D (US $ 6 million) not reflected here as these are frnanced directly. Only co-financing from Government o f Norway i s administered through the ARTF. 11 Sub-component 2.1 : Establish the National Institute o f Management and Administration INIMA) (Total $11.O million, IDA $5.0 m i l l i o n and Government o f Norwav $6.0 milliong) 53. This sub-component i s aimed at establishing a new National Institute o f Management and Administration which will offer programs in three key areas: (i) Management and Administration, ( i i) i iInformation Technology. The Institute will cater to student at Grades 13 and 14. Accounting, and ( i ) Management and activities within the Institute will be contracted out t o international training providers. A new, fully equipped, campus will be developed. This sub-component will be executed in a partnership with USAID (parallel financing) and the Government o f Norway (co-financed with IDA through the Afghanistan Reconstruction Trust Fund, ARTF). A Memorandum o f Understanding (MOU) signed between the MOE, U S A I D and the Government o f Norway, identifies the specific roles o f the various parties, with Norway committing to financing the establishment o f new, physical infrastructure and goods needed for the school and to finance the rehabilitation o f existing facilities to serve as temporary accommodation, with U S A I D committing to supporting the `software' needs o f the new Institute, such as, technical assistance and some o f the operating costs for the first three years. I t i s anticipated that the contribution from USAID, particularly in terms o f direct technical assistance will decrease over time and the Institute will be run more and more by Afghans. The MOE/GOA has also committed to take o n an increasing share o f the operating budget and cover all local costs by the end o f Year 3. IDA proposes to also finance the establishment o f the new institute and the rehabilitation o f temporary facilities. In addition, IDA will finance scholarship support to the students and goods and equipment, such as, computers, dormitory and classroom furniture, books, and a few vehicles. Sub-component 2.2: Institution-Based Reform Package (Total $7.0 million IDA $7.0 million") 54. This sub-component aims to support reforms and rehabilitation in the remaining institutions within the DTVET mandate. These include the 42 institutions currently operating in Afghanistan and which have not received support from other donors. Institutes under the DTVET, seeking financial and technical assistance, will self-select into the program by expressing a willingness t o undertake the reforms needed to improve their relevance, quality and efficiency. Reform measures would include inter alia: (i) administrative and management process reforms, specifically by expanding stakeholder participation in institute management, (ii) focusing o n priority training sectors (administration and management, accounting, ICT, basic engineering and agriculture), and (iii) committing to a decentralized TVET management framework in which at the end o f five years the institute i s operationally and financially autonomous. 55. The MOE will develop a detailed guidance document o n what the reforms and rehabilitation package will include and state the initial conditions and undertakings that have t o be met by institutions intending to participate in the program. The MOE will then review the responses o f the individual institutions and decide upon institution specific strategies and action programs within the institute. The project will finance such support, including process consulting and technical assistance, physical upgradation, appropriate purchase o f new equipment, and faculty training and support as may be identified. Sub-component 2.3: Management Reforms in DTVET (Total $0.5 million, IDA $0.5 million) 56. This sub-component aims t o support reforms within the DTVET which will ensure that: (i) the various departments and personnel within DTVET develop a better understanding o f the structure and 9 All o f USAID's expected contribution o f U S $ 6 million w i l l be focused on Sub-component 2.1. loBorrower's expected contribution o f U S $ 3 million i s likely to be spent on Sub-component 2.2. 12 functioning o f modem TVET systems and become more responsive to market needs and accountable for effective vocational training delivery for institutions under their control, (ii) concerned staff and officer understand and implement the imperatives o f the whole project and address internal capacity building issues as necessary, (iii) administrative procedures within DTVET are re-oriented in terms o f the the wider responsibilities that the implementation o f the project will entail. In as much as the DTVET i s a major driver o f the whole project, it i s the responsibility o f this directorate to ensure that there i s a seamless integration between internal DTVET reforms and external structural changes brought about through the creation o f the ANQA, the Qualifications Framework and the NVETB. Therefore, internal reforms shall be designed and implemented in such a manner that the overall project objectives are always fully supported. Simultaneously with these visualized changes, capacity will also be built within the DTVET to frame administrative and other policies based on the information that i s received from the monitoring and evaluation u n i t s and agencies. Lastly, this sub-component will also focus on the Management Information System (MIS) needs o f the DTVET and the IT infrastructure needed to support it. Component 3: Skills Development Program and Market Linkages with a Rural Focus (Total $5.0 million, I D A $5.0 million) 57. This component aims to support a slice o f the on-going activities by the National Skills Development Program, and build the capacity within NSDP and MOLSAMD to undertake reforms in technical and vocational training, labor market assessments, and to strengthen industrial and market linkages. The three program subcomponents are: Sub-Component 3.1 : Contracted Vocational Training Packages (Total $ 3.0 million. IDA $3.0 million) 58. This component will contract out to training providers market driven training for waged and self employment, with a focus on (i) youth, (ii)`Chronically Poor Women' , and ( i ) i imarginal farmers and landless farm laborers. Training providers will be chosen competitively and their performance formatively monitored. Training will be based on localized labor market studies and will typically cover trades in the agnculture (including horticulture, animal husbandry, apiculture and market gardens), construction sector and fabrication, etc. Where training relates to self-employment, Business Development Services (BDS) training and facilitative links to micro-finance will be provided. Sub-Component 3.2: Training; o f Trainers Program (Total $1.5 million, IDA $1.5 million) 59. Contracted training for Productive Skills Officers (PSOs), BDS trainers, and selected trade trainers; and the development o f a menu o f 15-20 contextualized productive skills curriculum materials, through competitively selected public and private/NGO training providers, or consortia o f providers, to support the USAID-fundedLearning and Community Empowerment Project 2 (LCEP2) Sub-Component 3.3 : CaDacitv Buildinp for N S D P M O L S A M D (Total $0.5 million, IDA $0.5 million) 60. This sub-component will build the capacity within NSDPhiOLSAMD in the following areas: (i) curriculum and materials development, (ii) capacity building in these organizations to collect, collate, analyze and interpret labor market information. T h i s will also focus capacity building efforts on carrying i itraining up to 10 key out a labor force survey jointly with the Central Statistics Officer (CSO) and ( i ) personnel from the N S D P M O L S A M D in TVET planning, management and outreach. 13 Component 4: Research, Monitoring & Evaluation (Total $1.0 million, I D A $1.0 million) 61. The objective o f this component i s to develop a program monitoring and information system that will provide routine, timely, and accurate information o n program implementation and allow for the measurement o f longer term impacts and independent research. Sub-Component 4.1: Monitoring and Decision Support (Total $0.4 million, IDA $0.4 million) 62. This sub-component will put in place monitoring and information systems to measure program progress. Information generated by the monitoring system (and other relevant data) will be used as input for a decision support mechanism which will identify alternatives and recommend course-corrections in program implementation. Sub-Component 4.2: Impact Evaluation (Total $0.6 million, IDA $0.6 million) 63. This sub-component will conduct impact evaluations o n specific sub-components in relationship to stated program objectives and identified key performance indicators. Risks 64. This i s a challenging project for the following reasons: (a) complicated design involving several ministries and numerous institutions, (b) weak implementation capacity, and in general, weak capacities in both public and private sectors, and (c) the near in-conflict environment in which the project i s being designed and which makes supervision more complicated and difficult. However, a key mitigation strategy employed by the team has been to design the components in manner that ensures that Components 2 and 3 are ring-fenced against the other. This ring-fenced structure allows for Components 2 and 3 to be implemented simultaneously without the risk o f weak implementation in one, affecting the other. 65. n I most other post-conflict countries, s k i l l s development or W E T type projects have been relatively slow to come onto the pipeline. That such a project i s being considered within a few years o f a return to some semblance o f normalcy in Afghanistan, reflects the learning that has taken place within IDA o n what works and what does not in post-conflict settings. The two main problems in such settings are: (i) scant resources for such training and (ii) limited employment prospects after the training. And, yet i s in exactly these conditions when even though vocational training provides a chance for education and training opportunities for youth and young adults who have missed regular schooling due t o conflict. 66. In general, the project has risks that are associated with l o w management capacities leading to administrative and policy level decisions that may not be in step with: (a) established timelines, (b) stated priorities, (c) agreed upon processes. This i s largely due to the complexity o f the project and the very large number o f technical issues that need to be at least partially understood by the members o f the policy-malung bodies. Thus a major part o f inception level activities should focus o n ensuring that risks arising out o f delayed or ambiguous decisions or decisions that do not match assumptions and are determined apriori, are minimized. Risk mitigating strategies provided in Table 2 have been developed to address these specific issues. 67. The various risks identified have been allocated to the various actors o n the basis o f an evaluation as to who i s best equipped to manage these risks. Table 2 shows the potential impact o f each o f the identified risks. This i s combined with a risk-specific mitigation plan. 68. The overall project risk rating i s Substantial. 14 B -1 n cn I) E e r I v) I I E: le e Financial Management, Disbursement and Audit Arrangements 69. A Public Financial Management (PFM) performance rating system has been recently developed for Afghanistan by the Public Expenditure and Financial Accountability (PEFA) multi-agency partnership program, which includes the W o r l d Bank, IMF, EC, and other agencies. Afghanistan's ratings against the PFM performance indicators portray a public sector where financial resources are, by and large, being used for their intended purposes as authorized by a budget that i s processed with transparency and has contributed to aggregate fiscal discipline. 70. Financial management and audit functions for proposed project will be undertaken through the agents contracted under the Public Administration Capacity Building project. This i s the primary instrument for continuing to strengthen the fiduciary measures put in place for ensuring transparency and accountability o f funds provided by the Bank and other donors. Under these contracts, two advisers- Financial Management and Audit-are responsible for working with the government and line ministries to carry out these core functions. The Financial Management Agent (FMA) i s responsible for helping the MOF maintain the accounts for all public expenditures, including IDA-financed projects and for building capacity within the government offices for these functions. 7 1. At the project level, the Ministry o f Education Grants Management Unit and the Finance Department o f the National Skills Development Program will undertake full responsibility o f the financial management functions. The GMU has gained enormous experience from previous and currently implemented Bank and other donor funded projects. I t has in its staffing qualified and experienced international and national consultants and there are plans to engage additional staff t o strengthen the capacity. The N S D P Finance Department also has adequate financial management arrangements and i t s capacity will be strengthened with the engagement o f additional staffing for this project. 72. Quarterly Financial Monitoring Reports will be prepared by the GMU and NSDP Finance Department. Consolidated project reports will be prepared, reviewed, and approved by the MOF, supported by the FMA. 73. A Designated Account (DA), will be opened at D a Afghanistan Bank (DAB, Central Bank) in the name o f the project o n terms and conditions satisfactory to IDA. The DA will be maintained by the MOF. Withdrawal applications for replenishment will be submitted monthly. Financial management arrangements for the project are stated in details in Appendix 7. Disbursement Method 74. Disbursements from the IDA grant will make use o f advances, reimbursement, direct payment, and payments under Special Commitments including records or against summary reports (statements of expenditures), as appropriate. Audit o f Project Funds 75. The Auditor General, supported by the Audit Agent, i s responsible for auditing the accounts o f a l l IDA-financed projects. Annual audited project financial statements will be submitted within six months o f the close o f GOA'S fiscal year. 76. The Bank-funded projects already or currently being implemented by the Ministry o f Education and Ministry o f Labor, Social Affairs and Martyred and Disabled, have n o over due audit reports; key issues raised in these projects previous audit reports are being resolved. 17 Procurement 77. With donor assistance, Afghanistan has made considerable efforts to establish the Legal and Regulatory Framework for public procurement over the last five years. A new Procurement Law, reflecting international best practice in public procurement was enacted in November 2005 replacing the earlier procurement regulations. While it provides a very modem legal system for procurement, effective implementation o f the l a w may encounter difficulties in the current weak institutional structure and capacity o f the Government. A Procurement Policy Unit (PPU) has n o w been established under MOF to ensure the implementation through the creation o f secondary legislation, standard bidding documents, provision o f advice and creation o f the necessary information systems for advertising and data collection. "Rules o f Procedure for Public Procurement" which details the better implementation o f the Procurement L a w has been issued by MOF as circular number PPU/COO5/1386 dated April, 12 2007. The Procurement Appeal and Review mechanism i s in place and the Manual o f Procedures for "Procurement Appeal and Review" has been issued by MOF as circular number PPUM001/1385 o n March 18,2007. 78. The special Procurement Commission, comprising Ministry o f Justice and Ministry o f Economy, under the chairmanship o f Minister o f Finance approves high value contracts. The current thresholds Goods more than U $100,000; ( i ) levels for: (i) i v i l works more than U S $500,000, (ii) C S i iConsultants more than U S $200,000 and all contracts following Direct Contracting or Single Source Selection Procedure independent o f value. These thresholds are n o w being reviewed with consideration for an upward revision thus decentralizing the authority t o MOF. 79. n I the absence o f adequate capacity to manage procurement activities effectively, some interim arrangements have been put in place t o improve the procurement management o f the country. A central procurement facilitation service, Afghanistan Reconstruction and Development Services (ARDS-PU) has been established under the supervision o f Ministry o f Economy. 80. The Bank and the Government have agreed o n a program for country wide procurement reform and capacity building, leading to the transition from centralized to decentralized procurement services. The Bank funded Public Administration Capacity Buildingproject (PACBP) i s the primary instrument for implementing the program to strengthen capacity o f the line ministries to manage public procurement in an effective, transparent and accountable manner. The envisaged radical changes t o the procurement management environment expected from the new l a w also require the urgent implementation o f a comprehensive human resources and capacity development program. The implementation o f the procurement reform component o f the PACBP should be considered with due priority to ensure that fiduciary standards are further enhanced and that capacity i s developed in the Government to maintain these standards. A three year contract for procurement capacity building i s in place under PACBP. T h i s assignment should result in development o f critical mass o f procurement professionals through intensive and extensive training. The consultant's TORSinclude the development o f an accreditation system for procurement professionals. In addition, the law, procedures, procurement appeal, and review mechanisms need wide dissemination to the c i v i l society to enhance transparency and accountability. 8 1. The Ministry o f Education (MOE) and National Skill Development Program (NSDP) will have overall responsibility for all procurement under the project. B o t h the implementing agencies will implement procurement action as requested by the Afghanistan Skill Development Project. Procurement will be in accordance with the W o r l d Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" (dated M a y 2004; revised October 2006); "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers" (dated M a y 2004; revised October 2006); and the provisions n stipulated in the Development Grant Agreement. I addition, the W o r l d Bank's "Guidelines o n Preventing and Combating Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants" (dated October 15,2006), has been shared with the recipient. Bank's Standard Bidding Documents, 18 Requests for Proposals, and Forms o f Consultant Contract will be used. Civil works and goods following National Competitive Bidding (NCB) procedures shall be procured using the agreed Standard Bidding Documents (SBDs) for Afghanistan. In case o f conflictkontradiction between the Bank's procurement procedures and any national rules and regulations, the Bank's procurement procedures will take precedence as per the Article 4(3) o f the Procurement L a w o f the Islamic Republic o f Afghanistan (IROA) dated October 2005. The summary o f the procurement capacity assessment o f the implementing agencies and precise arrangements are presented in Annex 7. 19 Annex 1: MAJOR RELATED PROJECTS FINANCED BY THE BANK AND/OR OTHER AGENCIES . . mancedPrOJect s T a ble 11 : IDAF· ISRJIEG Ratings (As of September 6, 2007) Project Cr. No. Sector Issues Development Implementation lEG Ob.iective Progress Rating Emergency Education Rehabilitation and · Lack of school materials Development Project (P077896) · Lack of a sound policy framework H0080 · Gender and social disparities MS MS MS Date Approval: 06/0612002 · Lack of access to education Date Closed : 06/3012006 · Lack of relevance with the labor market Education Quality Improvement Program · Poor quality of education (P083964) · Gender and regional disparities H1190 · Weak role of communities and schools S MS N/A Date Approval: 07/29/2004 · Ambiguous role of the Ministry and Date Closed : 0313112009 (Expected) its weak capacity Strengthening Higher Education Program · Poor quality of education (P089040) · Fragmented and inefficient institutions · Lack of appropriate physical facilities Date Approval: 05/1912005 Date Closed : 06/3012010 (Expected) H1620 · Lack of relevance and linkages with MS MS N/A the economy · Inefficient and insufficient financing · Outdated governance and management 20 O T a ble 12 : P ro ect s F mancedb»y Other A ° 1gencles Project Development Project Description Partner The program aims to develop physical and human capacity in the public sector, private sector and civil society, both in Kabul and the provinces. USAID invests as much as US $ 125 million for this initiative over the next five years, and anticipates additional investments of US $ 25 million or more from universities and other ABC partners. The Capacity Development Program (CDP) USAID ABC program provides scholarships in order to improve the skill of key personnel in the Afghan public and private sectors. It has also established Education Quality Alliance between Afghan universities, US and third countries in order to improve teaching methods and running researches on capabilities of all Afghan universities. This project aims to support the development of vocational training under the MOLSAMD. The project has constructed 9 training centers across Afghanistan and Basic Vocational Training Project JICA fall under the Ministry's jurisdiction. The center offer a range of trade training courses currently at the basic vocational training level. The trades include plumbing, sheet metal work, electrical wiring, tailoring, computer literacy. KOICA established a US $ 10 Million VT Centre (Afghan-Korea VTC) under the MOLSAMD in 2005/6. There are 6 departments: construction, computer training, Afghan Korea Vocational Training Center KOICA electrical wiring, plumbing, automotive, welding and tailoring. KOICA staff has now left Afghanistan. GTZ developed a small computer training centre at the MOLSAMD in 2003/4. This Computer training and TA support GTZ operated until 2007 but has now been closed. During this period GTZ provided TA related to VT, to the MOLSAMD. KfW will rehabilitate the Technikum built with German support in 1938. The project Technical School Rehabilitation in Kabul KfW will finance civil works, equipment and technical assistance to reform and modernize the institute. The institute will be used as key teacher training center. The Spanish Government established a TVET centre in Chaikhar Town under the Support for TVET Spain MOE The WB established 4 small Youth Development Training Centers in Kabul, Mazar, Youth Empowerment Project JSDF Fariab ad Khandahar. The Iranian Government renovated a small VT center in Kabul City, operated by the Iranian Basir Association. The Iranians also constructed a new centre in Khandahar Vocational Training Center Iran utilizing Japanese funding. The Iranians have also built a VT centers in Nirnroz, managed by the Immam Komani NGO, and two further centers are being built in Heart and Farah. 21 Annex 2: RESULTS FRAMEWORK AND MONITORING Table 2.1: Results Framework PDO Project Outcome Indicators Use of Outcome Information Increased number of immediately- · POI I: Increase in the number of pass-outs from project financed · Demonstrate to relevant Afghan employable graduates is produced institutions and training centers as compared to baseline of non- stakeholders that a demand oriented by building, in stages, a high reformed institutions. TVET contributes to better labor quality TVET system that is · POI 2: New institutional framework for TVET is in place and market results equitable, market responsive, and functioning, which includes the establishment of an independent · Measure program impacts cost-effective. qualifications authority (ANQA), an independent training authority · Given the substantial risk nature of the boards (e.g., NVETB), and a national a qualifications framework (NQF) project, all intermediate information · POI 3: Labor market outcomes, both in terms of employment and will allow for mid-program course earnings of trainees, are superior to the outcomes of comparable control correction and plan for future groups expansions · POI 4: % of employers of trainees supported by institutional framework or piloted training facilities agree that employee productivity has increased since training compared to baseline as measured by a satisfaction survey. Intermediate Outcomes Intermediate Outcome Indicators Use of Project Outcome Information Component 1: Develop Regulatory and Quality Assurance Framework for TVET Sub-Component 1.1: · The statutes have been developed and submitted to parliament Demonstrate to Afghan stakeholders that Establish the Afghan National a new institutional framework is being Qualifications Authority (ANQA) established that has the capacity to successfully promote demand-oriented TVET Sub-Component 1.2: · The framework and the generic learning outcomes (knowledge, skills, Demonstrate to Afghan stakeholders the Establish the Afghan National and competences) associated with each level developed value of developing coherence across Qualifications Framework various levels of education and training Send signals to potential employer of graduates with an outcome-oriented -~~~--- qualifications standards 22 Intermediate Outcomes Intermediate Outcome Indicators Use of Pro.ject Outcome Information Sub-Component 1.3: · In FY 2012 and FY 2013, Boards administer To prepare intermediate strategies for Establish A warding Boards seamless integration of courses with the assessment/examinations/tests, publish results, and issue certificates NQF Component 2: Improve Relevance, Quality and Efficiency of TVET Sub-Component 2.1: · Number of graduates from National Institute of Management and · Determine the extent to which Establish the National Institute of Administration imported skilled-manpower can be Management and Administration replaced by well-trained Afghans · Assess the sustainability of the institution Sub-Component 2.2: · Number ofDTVET institutions who have self-selected into reform · Demonstrate the importance of Institution-Based Reform Package program market orientation for TVET · Percent of girls emolled (course specific) institutions Sub-Component 2.3: · Number of staff and officers trained on modern TVET systems · Gauge the effectiveness of a Management Reforms in DTVET decentralized governance system · Demonstrate appropriate role for the public sector in the management of TVET effective institutions Component 3: Skills Development Program and Market Linkages with a Rural Focus Sub-Component 3.1: · Average earnings of trainees self-employed or wage employed 9 month Demonstrate the effectiveness of Contracted Vocational Training after completion of training compared to control groups contracted demand-driven training Package Sub-Component 3.2: · Number of BDS trainers trained · Provide the ability to gauge Training of Trainers Program · Number of PSOs trained effectiveness of vocational and BDS training oriented to rural areas · Demonstrate synergies across programs Sub-Component 3.3: · Number of certified TVET managers graduated through on-line, Indicate the effectiveness ofDL Capacity Building at distance-learning training on TVET management methodologies to build core competences NSDPIMOLSAMD in this sector 23 Intermediate Outcomes Intermediate Outcome Indicators Use of Project Outcome Information Component 4: Monitoring and Evaluation Sub-Component 4.1: · Baseline survey conducted within 6 months of project effectiveness · Monitor project progress Monitoring and Decision Support MIS in place and regularly updated Sub-Component 4.2: · Follow-up surveys and evaluations undertaken in Y3 and Y5 · Provide for evidence-based policy Impact Evaluation elaboration, public debate and program refinement · Inform stakeholders of program impacts 24 . Ta ble 22 : A rrangements Iior Resu1Momtonng ts -~ Target Values Data Collection and Reportin2 Outcome Indicators Baseline YRI YR2 YR3 YR4 YRS Frequency and Data Collection Responsibility for Reports Instruments Data Collection Project Development Ob· ectives Outcome Indicators POll: Increase in the Annually EMIS MOE and NSDP number of graduates from BL-MOEi project fmanced institutions 1468 1500 2000 2500 3000 718 and training centers as BL_NSDpii 3000 3000 3000 3000 3000 compared to baseline of non- 2435 reformed institutions. POI 2: New institutional framework for TVET is realized and functioning, N.A. Established including the establishment ANQAand NQF of the ANQA, independent training boards (e.g., NVETB), and the NQF POI 3: Labor market MOE Tracer Annually - 6-9 Tracer Survey to MOE EMIS and outcomes, measured by in Year 1 months after every be completed in Tracer Study to be employment status of NSDP Tracer graduating cohort Year I by conducted by study independent independent agency trainees, are superior to the currently agency contracted selected competitively; outcomes of comparable underway by MOE control groups NSDP M&E Team Ongoing NSDP survey POI 4: % of employers of Satisfaction Year 1,3 and 5. Satisfaction Independent agency trainees graduated from surveys to be surveys for both reformed institutions agree carried out in MOE and NSDP that employees have Years 1,3 and 5 in a targeted improved their productivity manner through training relative to a baseline Notes. i: The baseline for Component 2 focuses only on the four schools that are being rationalized to fonn NIMA and not schools under Component 2.2 that are yet to be identified. u: The baseline for Component 3 focuses only on current enrollment in trades that have a rural focus including horticulture, bee-keeping, animal husbandry, flowers and fruits, etc. 25 .-~--.-~--- ..- Target Valu~ Data ColI~ction and Reporting YR4-~'-- YRI YR2 YR3 YR5 Frequency Data Responsibility Outcome Indicators Baseline and Reports Collection for Data Instruments Collection Component 1: Develop Regnlatory and Quality Assurance Framework for TVET o Regulations and legislation Develop Enact Establish CESPI developed for the formation of legislation legislation theANQA NSDP-PIU an independent Afghan needed to National Qualification establish the Authority (ANQA) ANQA N/A o Establish the ANQA through an ACT of Parliament o The framework and the Occupational Terms of NQF CESPI generic learning outcomes and training reference for developed NSDP-PIU N/A (knowledge, skills, and standards the competences) associated with developed for development each level developed focus sectors ofaNQF o Boards administer tests, Board is CESPI Board is publish results and award N/A operatio NSDP-PIU and operational certificates nal Boards Component 2: Improve Relevance, Quality and Efficiency of TVET o Number of graduates from Annual M&E reports, DTVET National Institute of 718 1000+ 1250+ 1500+ EMIS. Bursary 718+750 750+750 Management and 1000 1250 1500 payments Administration o Number ofDTVET 5 In Year 2 DTVET institutions awarded reform package upon meeting reform 0 conditions o Percent of girls enrolled in 8% 15% 20% 24% 27% 30% Annual M&E reports, DTVET post-basic programs under EMIS. Bursary DTVET payments 26 Component 3: Skills Development Program and Market Linkages with a Rural Focus Target Values Data Collection and Reporting Outcome Indicators Baseline YRI YR2 YR3 YR4 YRS Frequency Data Collection Instruments Responsibility for Data and Reports Collection o Average earnings of Tracer Study Tracer studies surveys of M&E Cell within the NSDP trainees self-employed or for previous graduates of training programs together with independent wage employed 9 month cohort being and control group selected entity. after completion of initiated generated randomly at the time of training compared to entry into training program for control group each cohort. o Number ofBDS trainers N/A Satisfaction surveys from village Independent agency trained shouras and other stakeholders contracted by NSDP o Number ofPSOs trained N/A through a competitive manner Component 4: Monitoring and Evaluation o MIS in place and regularly Baseline Annual EMIS MOE is responsible for updated conducted and EMIS and NSDP conduct data being Annual or NSDP trainee selection surveys trainee selection surveys cleaned more and tracking surveys and updated annually (or frequent other) o Follow-up surveys and Follow Evaluation evaluations undertaken in up Y3 and Y5 27 Annex 3: DETAILED PROJECT DESCRIPTION Background 1. The GOA has recognized the importance o f skills development in the process o f recovery and rehabilitation o f a country that had been in c i v i l strife for a period o f nearly three decades. Early o n in this recovery process the GOA identified slulls development as an essential ingredient and began to lay the groundwork for a major thrust in this area. 2. K e y line ministries were identified and mobilized, a new National Priority Program - the National Slulls Development and Market Linkages Program was established, and the government, through the support o f key donors, began to build new infrastructure (e.g., the Afghan Korea Vocational Training Institute and vocational training institutes supported by JICA, Government o f Iran, and the W o r l d Bank), and rehabilitate some existing institutions in the country. Furthermore, an increasing number o f NGOs were encouraged to offer vocational training programs around the country. The GOA i s keen to increase the number o f people undergoing labor market relevant training and has set a target o f 150,000 people to be trained as stated in the Afghan Compact. T h i s does not take into account the fact that thousands o f people continue to receive most o f their career related training through informal and traditional apprenticeship programs, though this i s very difficult to quantify and document. 3. The strategies adopted by the GOA to implement their vision for s k i l l s development are predicated o n a two pronged approach: (i) increased access to technical vocational education and training opportunities around the country, and (ii) enhanced relevance o f the programs to the needs o f the labor market. The GOA has also identified and recognized the need for a variety o f providers (public, private and non-government), the need for modular competency-based and assessed programs (instead o f programs that are defined purely by major, formal examinations and the length o f time spent in classrooms), for a good mix o f theory and practical training, and for the need for a coherent system for a l l education and training, but particularly underpinning the TVET sub-sector. The Bank's project design will ensure that all these suggestions are taken into account. 4. In terms o f the target beneficiaries o f this project there are two main groups: (i) young men and women who have completed Grade 12 and are seeking to improve their s k i l l s through post-secondary training programs diploma and certificate programs that will allow them t o enter the labor market directly or continue their studies by enrolment in regular degree programs; and (ii) second chance training opportunities for those who have not had, or have had limited, formal schooling to enhance their s k i l l s to increase their employability or make them more adapted for self-employment in the informal sector. T w o special target sub-populations will include girls and women, and persons with disabilities. 5. Since 2002, the number o f girls accessing general schooling has increased f r o m nearly 0% to 35% in 2006/07. However, they are s t i l l significantly under-represented in higher level education and specifically in vocational and technical education. The recent census o f institutions under DTVETMOE shows that only 8% o f the students in Grades 13/14 in these training institutions are women. Part o f the reason for this l o w number i s due to the nature o f the courses being taught largely oriented towards engine, mechanic repairs, construction, etc., all o f which do not employ women in the labor market. A number o f teachershainers in these sectors are however women. Training under the N S D P mandates that implementing partners must ensure a minimum threshold for women and persons with disabilities o f 35% and 10% respectively. This project will continue this emphasis on increasing access t o these special sub- groups in the Afghan context. A detailed gender assessment i s included in Annex 11 o f this Technical Annex and a Disability Assessment would be prepared within six months o f project effectiveness. 28 The Project by Components 6. The project development objective (PDO) i s to increase the number o f immediately-employable graduates by building, in stages, a high quality TVET system that i s equitable, market responsive, and cost-effective. 7. This will be operationalized through the specific components described below. Component 1: Develop Regulatory and Quality Assurance Framework for TVET (Total $1.5 million, IDA $1.5 million) 8. The GOA, recognizing the need for coherence across various levels o f learning in the country, has committed itself to undertaking difficult reforms and in developing a new institutional framework for education and training, and in particular for TVET. This component will create the necessary institutional conditions for a TVET system in an effort to satisfy the requirements o f the above stated PDO. The two main elements o f this component include the establishment o f an appropriate regulatory structure and quality assurance system; and a Qualifications Framework. This component will be developed in parallel with the implementation o f Components 2 and 3. This i s a difficult component, requiring the establishment o f new institutional and regulatory structures to replace the existing structures that are fragmented across three or more ministries. The focus on the priority sectors (Administration and Management, Accounting, ICT, Basic Engineering Trades, and Agriculture) allows for the implementation o f Components 2 and 3, even though Component 1 i s not fully developed. 9. This component builds o n existing designs and plans for independent institutions to help regulate and ensure quality provision across the education and training sectors, though it i s unlikely that without the added impetus provided by the proposed project, it i s unlikely that these institutions will get established. For example, the original strategy documents o f the NSDP calls for the establishment o f an independent authority for TVET. However, n o legislation has been drafted or moved in the past three years. Similarly, the MOE has plans for the establishment o f an independent board for secondary education, and the proposed project could assist the MOE put such an institution in place. However, as stated earlier, the roles and responsibilities o f such institutions are not clear; their modes o f operation are well established, and sometimes not even relevant to a dynamic and vibrant education and training system. The key contribution o f the proposed project i s to bring together a disparate set o f actors, with a similar set o f goals, to help develop an education and training framework that provides coherence across various levels and i s comprehensive in i t s coverage. It i s necessary to strengthen these institutions, bring them under a properly defined legislative umbrella, make explicit their functions, roles and responsibilities, and to professionalize them so that they can become pro-active agents in the institutionalization and sustenance o f the TVET system as envisaged in this document. 10. It i s clearly recognized and understood that the institutional system must be designed, and must operate in such a manner that capacity i s built throughout the range o f trades and skills, but must do so in a way that will ensure standardization, and therefore competitiveness o f Afghan labor vis-&vis labor from foreign countries. 11. The specific activities to be accomplished through these components are described in the three sub-components highlighted below. 29 Sub-component 1.1: Establish o f the Afghan National QualificationAuthority (Total $0.3 million, IDA $0.3 million) 12. This sub-component will establish the ANQA through an act o f parliament. This will be the highest regulatory and standards setting body in the country for education and training and would help bring about coherence (when the QF i s developed) to the education and training sectors. 13. A Committee o n Education and Skills Policy (CESP) will be established under the Chairmanship o f the Vice President. I t has been agreed between MOE, MOHE and M O L S A M D , that the NSDP o f the M O L S A M D will take o n the responsibilities o f initially establishing a Secretariat for the CESP. The CESP will comprise o f the Vice President, representatives o f MOE, MOHE and M O L S A M D , a representative o f MOF, two members representing the private sector, and two members representing the donor community (on a revolving basis). A Designated Officer o f the NSDP will be the Secretary to the CESP, but without the rights o f a full Member. All ministerial representation will be at the level o f the Minister, with their deputies being identified as the alternates o n the committee. The Secretariat o f the CESP will be responsible for all administrative and management functions o f the CESP - including the hiring o f technical experts needed to draft legal documents for the establishment o f new, statutory, regulatory structures, and for the development o f the NQF). The CESP shall initiate the establishment o f the Afghan National Qualifications Authority. U p o n the establishment o f ANQA, all policy and other functions performed by CESP under Component 1 o f the Project, including the development and institutionalization o f the National Qualifications Framework, will be transferred t o the ANQA. 14. The agreement to avail o f the facilities and personnel o f the NSDP PIU as a Secretariat for the CESP initially i s reflected in a Memorandum o f Understanding (MOU) between the three concerned ministries and the NSDP". The Secretariat o f the CESP will be responsible for overall coordination o f Component 1. The Secretariat o f the CESP will ensure coordination across government, donors, and user-agencies for a sustainable and smooth multi-year programmatic approach t o building the TVET capacity in the country. The Director o f the NSDP will oversee the program, with the assistance o f consultants and longer-term national staff all chosen competitively. The TORSfor all persons to be hired and brought o n board will be shared with the CESP for comments and the selection will be done by a duly appointed sub-committee o f the CESP 15. The CESP-Secretariat will work in close coordination with the concerned departments (such as DTVET) and other relevant ministries and agencies involved in TVET. The main function o f the Secretariat i s to facilitate the implementation o f Component 1. I t i s also responsible for (a) assuring steady progress o f execution in accordance to an implementation schedule reviewed and approved by the W o r l d Bank, (b) regular reporting to the CESP, and (c) ensuring that a high ethical standard and transparency i s maintained throughout the process. 16. All new regulatory bodies established under Component 1, would be statutory bodies having been approved by an A c t o f Parliament, and shall be independent o f all ministerial linkages. This includes the Afghan National Qualifications Authority and the awarding boards, such as, the Board for Secondary Education, the National Vocational Education and Training Board, the Islamic Education Board, and the Higher Education Board. The statutory nature o f these decisions will ensure the corresponding developments needed t o finance such an entity in the initial years, with the expectation that over time (approximately ten years) these bodies will become self-sustaining 17. All new regulatory bodies will be headed by professionals who will have the title o f CEO. For the interim period, they will receive some support from the project but in the long run these new bodies l1Ths MOU has been signed by a l l the concerned Ministries and the MOF o n December 14,2007 30 will receive financing from the Government, but through a direct budget line that does not pass through the provider ministries, such as, MOE, M O L S A M D , and MOHE. Such an arrangement will ensure that the quality control and quality assurance functions o f these institutions, i s not compromised by a financial dependence on provider ministries. Such a separation between a regulatory authority and providers i s needed to ensure checks and balances in the system to improving the quality, relevance, equity and access to education and training programs. 18. The CESP may evolve into an oversight committee to oversee the functioning o f the ANQA and related bodies depending upon the view that the Government takes after the establishment o f the ANQA. At this point in time however, it i s anticipated that the CESP will cease to exist once the ANQA has been established. 19. The CESP will put in place the necessary administrative, legal and regulatory foundations needed to establish the ANQA in a time-bound manner. Outputs, approvals and concurrences o f the CESP will therefore include: (a) the presentation and ratification o f an A c t in Parliament for the establishment o f the ANQA, and to define i t s Charter, role and mandate under the Act, and (b) all other interventions required to effectively implement the Act. 20. The specific functions o f the ANQA will be to: (i) establish and maintain a National Qualifications Framework (NQF) for the recognition, development and award o f qualifications based on standards, skills, and competencies to be achieved by student and trainees; (ii) establish and promote the maintenance o f awards standards at least in the area o f W E T and perhaps in other areas as w e l l i ipromote and facilitate access, progression and depending o n which other bodies are established; and ( i ) movement through the Framework. 2 1. The A c t will also establish or modify other institutions which together will constitute the sub- ordinate qualifications, standards, quality assurance and awarding authorities for the education and training sectors. In particular, the Act will simultaneously establish the National Vocational Education and Training Board (NVETB)", which will be a major element in terms o f TVET reforms. Sub-Component 1.2: Establish the Afghan National Qualifications Framework (Total $0.8 million, IDA $0.8 million) 22. This sub-component will be implemented by the ANQA which will oversee the design, development, and institutionalization o f the NQF. The NQFwill provide a levels-based structure needed to map all education and training competencies into specific award-types and helps to create a learner centered environment. 23. This i s particularly important in the Afghan context given the disruption in education and training due t o conflict years, The NQFwill help to: recognize prior learning (for example, o f the large number o f IDPs and returnees), 0 bring about much needed standardization through the adoption o f levels based curricula and awards, 0 provide a clear signal to employers o n the abilities and s k i l l s available, 12 T h e Act w i l l also provide space for the establishment o f the following: Secondary Education Board, Higher Education Board, the Islamic Education Board. For general education, i t i s proposed that a Board o f Secondary and Higher Secondary education be established independento f the Ministry o f Education to set standards and accredit secondary and senior secondary programs offered through government schools, within the prescriptions o f the ANQA. The Board could also conduct the School Leaving Certificate Examination. 31 0 allow trainees to concretize their learning needs and develop a commitment to l i f e long learning lay the groundwork for reciprocity and mutual recognition arrangements with other countries. 24. Establishing and maintaining an NQFwill require a number o f steps: 0 engage in extensive consultations in the process o f developing the guidelines for establishing the NQF, decide on policies and criteria o n which the NQFi s t o be established prepare an outline o f the proposed framework. 0 define the relevant levels in the framework and the generic learning outcomes (knowledge, skills and competences) associated with each level. prepare a backgroundconsultative paper on the proposed NQF development for the next series o f consultations t o obtain a consensus on this with other stakeholders 25. At each step o f the way it i s important to review the purpose o f the NQFin light o f the need to move towards a more learner centered approach to education and training, instead o f the current system where the learner i s merely a participant. 26. Once a framework has been mapped out and legally approved, the Authority would have t o work with awarding bodies, such as, NVETB, to apply this new framework, develop standards for new qualifications, and `map' existing qualifications o n t o the framework. Sub-component 1.3: Establish Awarding Board (Total $0.4 million, I D A $0.4 million) 27. As stated earlier, the A c t will also provide the necessary legal and regulatory underpinning needed to establish several awarding bodies or councils. For TVET, the A c t will provide legislative cover for the establishment o f a National Vocational Education and Training Board (NVETB) with a formal charter. The Act will also provide space for the establishment o f a Board for Secondary Education, an Islamic Education Board, and a Higher Education Board as stated earlier. 28. The establishment o f the NVETB has already been envisaged in earlier government documents (please refer to Education Sector Strategy prepared by the ANDs and to the strategy document o f the NSDP). I t i s anticipated that the policy functions currently being undertaken by the various departments within the MOE, MOHE, M O L S A M D , and the NSDP PIU will be transferred to the NVETB once it has been established. These Boards will be independent entities with their own staffing, budget and functions, but will act under the direction o f the ANQA to realize their aims and objectives, as set out in the Act. The NVETB will be a joint decision making body and will include in i t s membership all the key national stakeholders involved in the TVET system in the country. 29. The Boards will be primarily responsible for facilitating and applying the policies o f the ANQA and in ensuring that the procedures set by it are implemented by providers. The Boards will maintain the quality and standards demanded by the ANQA. They will also have the right to determine credit for prior learning and the awards to individuals who have not gone through any specific provider or without participation in specific programs, in terms o f the NQF. 30. The proposed Secondary Education Board will help ensure that the `school leaving' standards set by the ANQA are being complied with through the conduct o f a common school leaving certification examination, and through other quality control and assurance mechanisms. The MOE has expressed a desire to establish an Islamic Education and Training Board to provide a systematic relationship between students in Islamic education programs and those in general or vocational schooling. This will allow for 32 developing coherence across similar levels o f competencies in both general and Islamic education, and permit the movement o f students from one to the other. The adoption o f such a model would make it a first o f i t s kind in the world. Component 2: Improve Relevance, Quality and Efficiency of TVET (Total $18.5 million, IDA $12.5 million and Norway $6.0 million") 3 1. The objective o f this component i s to improve the relevance, quality and efficiency of TVET programs, and to increase the number o f graduates from these programs, through the establishment o f a new institute, and by undertaking reforms in a select number o f other institutions. Training programs will be contracted to experienced, national and international training institutions through partnership arrangements. The partners will develop and implement comprehensive training packages, using competency-based approaches in selected sectors. Given that these training packages will be designed with modem and up to date standards and curriculum, this will allow for them to be mapped into the N Q F once this has been established at a later stage. It should be noted that Component 2 will not be held in abeyance till Component 1 has been fully implemented, both will be implemented simultaneously. Courses developed for Component 2 and 3 will be placed on the Framework (at the appropriate level) once the N Q F has been developed. Programmed activities will focus o n both direct teaching o f students and on the training o f TVET teachers. Sub-component 2.1: Establish the National Institute o f Managementand Administration (NIMA) (Total $11.0 million, IDA $5.0 million and Government of Norway $6.0 rni~ion'~) 32. This sub-component i s aimed at establishing a new National Institute o f Management and Administration, under a cabinet decision involving the Ministries o f Education, Higher Education, and Economy. The Institute will provide training in the areas o f (i) Management and Administration, (ii) Accounting, and (iii) Information and Communications Technology (ICT). The Institute will cater to students at Grades 13 and 14. Thus, minimum requirements for entry to this Institute would be a pass in Grade 12 from either the general or vocational education streams. A new, fully equipped, campus will be developed and i s likely to cater to about 2000 per year in all three fields. 33. Donor Sumort and Coordination: This sub-component will be executed in a partnership with USAID (parallel financing) and the Government o f Norway (co-financed with IDA through the ARTF). The Government o f Norway and USAID will provide U S $ 6 million each over a three year period. IDA will provide an additional U S $ 5 million over a 5 year period. While USAID, through it principal contracting partner, Bearing Point, will support the project through the development and implementation o f all necessary software components including, provision o f international experts and trainers, text books, computer software, etc., the Government o f Norway and IDA will finance hardware costs associated with the establishment o f this institute. This will primarily focus on c i v i l works, goods and equipment. Donor coordination has been enshrined in an MOU between USAID, the Government o f Norway and the GOA, signed on October 10,2007, and to which IDA was a witness. 34. I t i s anticipated that the contribution from USAID, particularly in terms o f direct technical assistance will decrease over time and the Institute will be increasingly run by Afghans. The MOE/GOA has also committed to take on an increasing share o f the operating budget and cover all local costs. T o this effect, GOA has committed to financing all local costs o f the Institute &om the very start o f the l3Expected contributions from Borrower (US $ 3 million) and U S A I D (US $ 6 million) not reflected here as these are financed directly. Only co-financing from Government o f Norway i s administered through the ARTF. l4All o f USAID's expected contribution o f U S $ 6 million will be focused o n Sub-component 2.1. 33 project at Year 1. This will help ensure the sustainability o f the investment both by reducing the operating costs o f the institute to a more meaningful amount, and by providing an environment where well qualified, professional Afghans run the Institute and eventually take o n training roles. 35. Oversight Provision: A Steering Committee (SC) will be established to provide oversight to the functioning o f the Institute. The SC i s expected to have participation from the three concerned ministries, members o f the private sector and academia, and with a revolving membership from the three principal donor organizations. The SC will be Chaired by the Minister for Education, as the other ministries party to the Cabinet decision have given the MOE the leadership role o n this Institute. 36. Institutional Autonomy: The SC and DTVET will have distinct supervision and oversight roles over NIMA. While SC will be concerned with strategic direction and internal and external policy, DTVET will primarily be concerned with ensuring that overall policies o f the national government are being adhered to. The Institute will be established as an autonomous one with n o role o f the two oversight bodies o n i t s day to day functioning. The autonomous nature o f the Institute will ensure the management's complete and sole responsibility and accountability for i t s functioning, performance and the outcomes achieved. All Institute level decisions including issues such as faculty hiring and replacement, student selection procedures and systems, assessments, course content, identification and procurement o f teaching learning materials, and numerous other decisions to be taken in the running o f an institution o f this kind will be at the sole discretion o f the Institute's management. The SC and the MOE together will approve the annual or multi-year work plans o f the Institute and monitor progress carefully to ensure that the planned targets are being met. 37. n Contract-Out Management and ODeration: I the initial years o f the Institute's operation, the program will be managed by contracting out to experienced, reputed, international training providers. 38. Training o f Trainers: An important part o f this program will be the training o f trainers (TOT). Students in the program will be trained by Afghan trainers who have undergone intensive TOT programs with the partner agency selected to manage this Institute. T w o forms o f TOT programs will be provided - an Accelerated Training Program for Year 1, and a Basic Training Program thereafter. The TOT program will also be open to participants o f other institutions in Afghanistan who desire to upgrade their faculty capacities in the three fields specified under this program. The international faculty will provide all the necessary supervision t o Afghan faculty and thus, help in the capacity building objectives. 39. Equity Issues: The GOA desires that students at the Institute shall be drawn from all parts o f the country. The Institute will ensure equitable access through the provision o f on-site residential facilities. I t has been decided that students from outside o f Kabul (likely to be about 70% o f the total) will be lodged in dormitories constructed o n the Institute's premises. I t i s expected this approach would also help in addressing concerns o f gender equity. Since parity may be difficult to achieve in a country like Afghanistan, widespread dissemination campaigns will be needed to ensure regular and continued participation o f female students. Alternatives to being housed at the Institute could be to provide an equivalent stipend and allows such students to live with relatives in Kabul. Additionally, given the post- conflict status o f the country and the large number o f persons with disabilities, due t o injuries and otherwise, the program will focus o n making these available to a broader set o f individuals. 40. Course Structure: The agency contracted t o run this institute will be given the freedom t o devise the details o f the curriculum. However, the structure o f courses will follow a modular, competency based model. All programs offered by the Institute will conform to the developments in the overall structure being institutionalized through Component 1. All the coursed programs offered by the Institute will have to be mapped on to the NQFafter i t s establishment in Year 2. I t i s expected that the Institute will primarily provide three types o f training programs - (i) 1 year Certificate Program, (ii)2 year Diploma a a 34 Program and (iii) host o f short-courses aimed at individuals who are unable to participate in longer term a programs due to work commitments. The proportion o f these courses will be determined by the Institute's management as a response to the perceived demand for various program lengths. 41. Accreditation and Professional Certification: I t i s expected that any provider selected to manage and run the Institute will itself be accredited and recognized by various international institutes. The awarding o f certificates/diplomas will be done by the Awarding Bodies once established. While this will greatly increase the mobility o f the Institute's graduates, students will also be encouraged to obtain professional certification through industry or professional bodies, such as, various regional and international chartered accounting institutes and other professional bodies (e.g., I C A S L or ACCA, etc.), and in the area o f ICT through Microsoft or Cisco Certification programs or any other equivalent programs. The Institute's management will be responsible for developing the necessary linkages needed for professional certification with the help o f the donor partners. The percentage o f graduates o f these programs who obtain professional certification will be one o f the key indicators o f the success o f this Institute. 42. Imprest Account and Cost Recoveq: Along with the need for operational autonomy, it i s expected that an Imprest Bank account will be opened to permit flexibility in the day t o day functioning o f the Institute. All the courses offered at the Institute will be costed-out and a fee plan prepared and students interested in attending the Institute without financial support from the MOE or Institute, will become eligible for participation o n a fee paying basis. Financing from such sources or from the sale o f shorter term programs will be retained within the Institute for future investments. 43. M e d i u m o f Instruction: The medium o f instruction will be English. However, care shall be taken to see that this does not have a significant impact o n equity. T h i s will require the implementation o f affirmative action programs and the introduction o f bridging courses in English and Computer Literacy, as well as refresher programs in basic mathematics and other relevant subjects. Sub-Component 2.2: Institution-Based Reform Package (Total $7.0 million I D A $7.0 milli~n'~) 44. This sub-component aims to support reforms and rehabilitation in a self-selected subset o f the DTVET's remaining 42 institutions which have not received support from other donors16. These institutions are plagued by the same issues discussed earlier in the document, including problems in institutional and regulatory structures (fragmented decision making), governance, management and administration at the Institute and DTVET level (for example, n o stakeholder involvement and centralized decision making with little r o o m for decisions to be taken at the Institute level,), programs with very l i t t l e relevance (supply driven programs with little links to the needs o f the labor market), poor quality o f inputs and outcomes (resource constraints, poorly trained teachers and trainers, and very little equipment and materials), and finally poor planning for changing these attributes o f the system. 45. This sub-component will re-orient a select number o f institutions to be more responsive to the needs o f the labor market, improve the quality o f the training provided, establish programs to help link trainees to market opportunities, and rationalize programs and activities that are not in tune with the above mentioned characteristics o f a w e l l developed TVET system. This re-orientation would be undertaken through a sequence o f reform measures, each o f which will trigger a tranche-release t o undertake the next set o f reform and rehabilitation activities. l5Borrower's expected contribution o f U S $ 3 million i s likely to be spent o n Sub-Component 2.2. l6The Technical School in Kabul i s being rehabilitated under support from KfW. 35 46. This sub-component i s deliberately kept flexible in an effort to ensure that new ideas and developments can be incorporated with relative ease as it i s difficult to fully define the steps to be undertaken in the reform process and predict the nature o f the partnerships that may emerge. For example, discussions are already underway for the establishment o f a Construction Trade Training Center in Mazar e Sharif to be jointly managed by the Afghan Chamber o f Commerce (Mazar branch) and MOE, and similar discussions are underway for the involvement o f the Ministry o f Agriculture and support from the Government o f the Netherlands for development o f programs in agriculture. 47. Mechanism for Self-selection: Three broad measures will have t o be agreed t o by each institute to become eligible for program participation - (1) limiting training to focus sectors, (2) agreeing to re- orient the institutes by expanding stakeholder involvement and serving community and industry at large i igradually declining government contribution to the overall operating budget o f the institute and ( i ) beginning in Year 3. Focus Sectors: The first set o f reforms will involve (a) the narrowing down the sectors or occupational areas in which training will be provided and (b) converting mono-trade schools to multi-trade schools. The focus sectors have been identified based on perceived needs o f the market and includes at present: (i) management and administration, (ii) accounting, (iii) ICT, (iv) basic engineering s k i l l s (such construction related trades, metal work, and mechanical repairs), and (v) agriculture and related sub-sectors. Training outside o f these areas should be phased out. 0 Stakeholder Involvement: This reform measure needs t o be adopted before program participation i s triggered. The purpose o f this reform i s to encourage the active participation o f industry, private sector enterprises, and other key stakeholders in the management and guiding o f the institute's activities. 0 Gradually Declining Government S u p ~ o r t :Institute directors, faculty, staff and students agree t o declining support from Government beginning in Year 3. This will ensure that under a decentralized management framework, Institute management will liaise closely with the needs o f the private sector and begin t o develop channels o f alternative financing". 48. All institutions that subscribe to and implement these reform measures will be eligible to participate in the next stage o f the reform program in terms of: (i) physical and equipment rehabilitation and upgradation, (ii) i ideveloping, training o f administrative, management and faculty personnel, ( i ) adapting, and adopting course content, curriculum, standards, and teaching-learning materials, (iv) establish internship and placement programs for trainees, (v) the development o f tools to monitor the process o f transformation, and (vi) adoption o f a continuing program o f quality management an assurance in line with the prescriptions o f the NVETB in these regards. 49. Physical and Eauipment Rehabilitation and Upmadation: M o s t buildings and campuses are in need o f renovation and physical rehabilitation due to conflict related damage, lack o f maintenance, and poor quality construction. The project will finance the upgradation o f existing buildings and the construction o f new learning spaces and workshopsAaboratories as needed to carry-out training functions. The program will also finance stop-gap measures needed to accommodate students in other facilities while their institutes are being rehabilitated. Preliminary estimates for the rehabilitation o f a `generic' 17 W h i l e the current Constitution o f the country ensures free education and training, this w i l l either require an amendment or the MOE would have to contract in a private partner who w i l l have the authority to charge fees for training programs. An initial amount o f merit scholarships w i l l be agreed with the Government for a three year period and beyond this negotiated every year during supervision missions. 36 institution has been made and it i s believed that depending upon the specific conditions o f each institute, a maximum o f ten institutes may be accommodated under this first batch. This i s also a good opportunity t o develop flexible learning spaces and engage in partnership arrangements with industry to allow for cost- effective programs. 50. The project will also finance the purchase o f equipment, tools, and other consumables needed to provide training. Specifically, the will include such things as furniture, tools and equipment, computers and related peripherals, and other fixtures and equipment as may be needed (such as, access to V S A T facilities, etc.). 5 1. Training o f Administrative, Management and Faculty Personnel: Administrative and management capacity within the institutions i s very weak and will be strengthened in t w o ways -by expanding the management team to include participation o f external partners from private and NGOs sector, and through direct recruitment o f new personnel with the necessary capacities and training o f existing personnel. Specifically, administrative and management capacity building will include training in areas such as strategic planning, annual planning, budgeting, procurement and finance, labor market assessment and o n h o w to promote the institute to stakeholders. 52. Faculty and trainers will be specifically trained to deliver courses which incorporate revised curriculum, standards, and newly developed instructional materials. Furthermore, pedagogical training will be an important part in the faculty and training o f trainers program. The emphasis o n TOT in the Sub- component 2.1, will also help ensure a steady f l o w o f teachers and trainers for the institutions being rehabilitated through this sub-component. 53. Course Content: The project will finance the development o f course materials, teaching learning materials, training manuals, teaching guides, and other consumables needed for training, and will ensure that all o f the above dovetail into Component 1 that will help develop clear guidelines o n standard setting and levels/volume o n the NQF. Specifically, with regards t o the teaching learning material such as books and manuals, efforts will be made to minimize duplication o f efforts through the adoption o f what already exists in the public domain either in the country or in neighboring countries". 54. Student Internships and Placement: Each institute being financed through this project will establish a placement cell in order to build close linkages with the market and industry. Internship assignments or apprenticeship programs must be a defined and compulsory part o f every student's work programlg. The responsibility o f these cells would be t o prepare the trainee adequately for school-to-work transition, inform her o f the opportunities that exist in the labor market, identification and purchase o f appropriate tool k i t s for trainees completing their program o f learning, and develop and maintain close links between the institute and employers in the schools vicinity and elsewhere. 55. Promam Monitoring: Once the institutes to receive financing through this project have been short-listed, an elaborate project monitoring system would have to be developed to ensure that the transformation from a supply driven program to an institute that i s responsive to the needs o f i t s surroundings, i s invested in the trainees future, and measures success only through the performance o f i t s " Text books available in Iran lend themselves (with minimal alterations) for easy use in Afghanistan given the proximity between Farsi and D a r i languages. Many o f these books have recently begun to come into the bazaars in Kabul and are readily available for student use. 19 Whether the internship comes at the end o f an extended period o f study, for example for students in accounting programs, or whether the student's course o f study consists o f a couple o f months in class, followed by a 3 months on-the-job training, followed by another few months in class, etc. (as might be the case in classes o n masonry, construction, brick laying, etc.) would be for the institute's reformed management to decide. This would also apply to Sub-Component 2.1, 37 students in the labor market can be carefully tracked. This will allow for rapid scaling up o f the program, and for simultaneously ensuring that all bottlenecks that may arise can be quickly and effectively mitigated. 56. The MOE will develop a detailed guidance document on what the reforms and rehabilitation package will include and state the initial conditions and undertakings that have to be met by institutions intending to participate in the program. The MOE will then review the responses o f the individual institutions and decide upon institution specific strategies and action programs with the institute. Sub-component 2.3: Management Reforms in DTVET (Total $0.5 million, IDA $0.5 million) 57. This sub-component aims to support reforms within the DTVET t o ensure that: (i) various the departments and personnel within DTVET develop a better understanding o f the structure and functioning o f modem TVET systems; (ii) become more responsive t o market needs and accountable for effective vocational training delivery through institutions under their control, and ( i ) administrative i ithe procedures within DTVET are re-oriented in terms o f the wider responsibilities that the implementation o f the project will entail. 58. Specifically, the reform measure t o be implemented through this sub-component focuses o n achieving a TVET management system that i s decentralized. As has been mentioned earlier, the TVET system in Afghanistan as it exists n o w i s a very centralized structure, with little t o n o r o o m at the institution level both administratively and financially to be able to take decisions critical t o the survival and functioning o f such institutions in a reformed TVET environment. By further delegating roles and responsibilities in management and administration to the institution- level. It i s expected that the institutes will become more responsive to the specific needs o f i t s clients in the community and private sector. 59. These reforms will entail a review o f all staffing, responsibilities and occupational standards, and other procedures to streamline the delivery o f services from the DTVET. The Government has expressed an interest in having a decentralized framework for TVET, and has explicitly stated that it wishes that by the end o f Year 5, that there would only be a loose relationship between the Ministry and the institutions under i t s purview. The specific focus o f this sub-component would be to help and trace out the changes needed at the Department over time to achieve such a loose relationship between the DTVET and the institutions. In as much as the DTVET i s an important institutional set-up in the TVET sector, it i s the responsibility o f this Directorate to ensure a seamless integration between internal DTVET reforms and external structural changes brought about through the creation o f the ANQA, the NVETB, and the development o f the NQF. Therefore, internal reforms shall be designed and implemented t o support overall project objectives. Such reforms will include building capacity within the DTVET for framing administrative policy o n the basis o f Monitoring and Evaluation studies carried out by various agencies and units o n the effectiveness and progress o f the TVET system. Lastly, this sub-component will focus o n the M I S needs o f the DTVET and the I T infrastructure needed to support it. Component 3: Skills Development Program and Market Linkages with a Rural Focus (Total $5.0 million, IDA $5.0 million) 60. This component aims to support a slice o f the on-going activities by the National Skills Development Program, and simultaneously build the capacity within NSDP and M O L S A M D to undertake reforms in technical and vocational training, labor market assessments, and t o strengthen industrial and market linkages. The three program subcomponents follow. 38 Sub-Component 3.1: Contracted Vocational Training Packages (Total $3.0 million, I D A $3.0 million) 61. This component will contract out to training providers market driven training for wage- and self- employment. Training providers will be chosen competitively and their performance formatively monitored. Training will be based on localized labor market studies and will typically cover trades in the agriculture (including horticulture, animal husbandry, apiculture and market gardens), construction sector and fabrication, etc. Where training relates to self-employment, BDS training and facilitative links to micro-finance will be provided. This sub-component builds on existing training programs facilitated by the NSDP. In the current Afghan government's FY, the NSDP i s facilitating more than U S $ 10 million dollars worth o f training programs in about 24 provinces across the country. This i s done through contracts primarily with 6-7 main training providers, most o f whom are established as NGOs. By building on an existing model o f training, the project will ensure speedy implementation. However, by focusing on training needs in rural areas and by rigorously evaluating the program, the project will help to develop much needed information on training needs and impacts in rural areas and on specific target populations. 62. The specific focus within this sub-component would be on: (i) Youth development, (ii) `Chronically Poor Women'*', and (iii) Marginal farmers and landless farm laborers. Youth DeveloDment: This activity will be targeted at youth, particularly those who have missed out on educational and training opportunities, with the aim to provide them with market driven vocational and business development training. Such training will not only provide them with a toe-hold on the ladder o f life-long learning but could contribute to their own, and families' livelihood. This i s particularly true in a post-conflict setting, where the concern lies in the fact that male youth, unable to find employment, will become disenchanted and demoralized and become a security risk. Chronically Poor Women: Given nearly three decades o f conflict and social and cultural mores, the plight o f women in Afghanistan i s more difficult to address than in some o f the neighboring countries. L o w labor force participation rates o f women, suggest that any educational and training interventions aimed at improving income earning opportunities, and to eke out a livelihood, would have to focus on activities that can be done within the personal confines o f one's home. Recent research studies, commissioned by JICA and GTZ, provide some focus on how to identify and work more effectively with extremely poor women. Marginal Farmers: Key areas o f interventions have been defined and will support the introduction o f improved farming methodologies, increased yields and better marketing o f farm produce. Technical assistance to support the development o f a comprehensive set of curriculum and facilitation-of-training materials at an entry level (into the NQF), covering key agriculture-sector topics such as: Horticulture, Food processing, Cash Crop Farming, Ecosystem protection, Livestock Restocking, Aquatic Farming, Plant Protection. These materials will be designed to be accessible by marginal farmers. Trainer farmers, drawn from the same f a m i n g communities, will be trained in the use o f these highly accessible learning materials and will work with groups o f marginal farmers on their own land, to introduce the new farming methodologies. ''Terminology used by the ANDS. 39 63. Training will be contracted out to reputable agencies with expertise in the area o f WET, and who are capable o f delivering well-focused, market driven vocational and business development training interventions, sensitive to the needs o f the youth, and which will lead to wage- and self-employment. The NSDP mandates in the contracts with training providers the percentage o f trainees to be in self- or waged- employment within a certain number o f months after the completion o f the program, and tracks this through systematic tracer studies. 64. T o make the program impacts more explicit, the NSDP has agreed t o stipulate in their contracting procedures with training agencies the need for a randomized allocation o f potential trainees into treatment and control groups and to periodically track the two groups over time to determine the impact o f training on labor market outcomes for people receiving training and a comparable control group. This more rigorous evaluation method will be applied beginning next month in the next round o f NSDP training facilitation, even though we will not be financing this activity. 65. Training will be conducted through a combination o f workplace or centre-based training, or mixtures o f both (on-the-job/off-the-job `dual'-system training). All training will be underpinned and supported through a focus on essential competencies, specifically, literacy and numeracy. 66. Trainees in the area o f business development services (BDS), could be further provided with follow-up business incubation support training and intervention. In these cases the NSDP supports the procurement o f independent and registered Business Development Service (BDS) providers to provide B D S training and facilitate the essential linkage to sources o f finance - such as savings, revolving funds and microfinance. Sub-Component 3.2: Training of Trainers Program (Total $1.5 million, IDA $1.5 million) 67. Contracted training for Productive Skills Officers (PSOs), Business Development Service (BDS) trainers, and selected trade trainers; and the development o f a menu o f 15-20 contextualized productive s k i l l s curriculum materials, through competitively selected public and private/NGO training providers, or consortia o f providers, to support the USAID-funded Learning and Community Empowerment Project 2 (LCEP2). 68. The PSOs will do the following: (i) Assessing the employment market and marketing i) opportunities in the community districts, ( iLocating training venues and trainers for the delivery o f the productive slulls elements, ( i ) i iAssisting the literacy teachers and members o f the Community Development Councils in ensuring that the productive skills training i s seamlessly linked to literacy learning, and to viable livelihood improvement opportunities and (iv) providing guidance to selected s l u l l s trainers in h o w to deliver first level skills development modules linked to literacy development. 69. LCEP 2 i s a USAID-funded project which will support the development o f communities through a combination o f literacy and productive skills development. UN Habitat has identified the lead agency to implement the LCEP2, which will be delivered through the Ministry o f Education's (MoE's) Literacy Department. The key aim here i s t o adopt key lessons learned form global research on acquisition o f functional literacy, and deliver much more effective literacy development courses by linking them to productive slulls training. 70. The project will finance capacity building for LCEP2 through hnding the following productive skills development project components by developing a range o f introductory Skills Development curriculum modules suitable for: (i) Trainees having very basic levels o f prior learning; (ii) focus on a wide range o f agricultural, horticultural, animal husbandry and food processing, and off-farm slulls, and (iii)incorporating literacy-development guide notes for the trainer. 40 Sub-component 3.3: Capacity Building for NSDPMOLSAMD (Total $0.5 million, IDA $0.5 million) 7 1. ' This sub-component will build the capacity within N S D P M O L S A M D in the following areas: (1) curriculum and materials development, (ii) strengthen the capacity within these organizations to collect, collate, analyze and interpret labor market information and to support capacity building to carry out a labor force survey jointly with the CSO; and (iii) train up to 10 key personnel from among the actors will involved in TVET planning, management and outreach from the NSDP, MOLSAMD, and MOE. I n addition, the sub-component will finance capacity development through study tours to countries in the region and beyond to obtain a better understanding o f how modem TVET systems exist and operate. Three comparative study visits (Malaysia, Bangladesh, and Iran), consisting o f four NSDP/(VET sector) members o f staff for each visit. (Three separate groups o f four staff completing one study visit per group.) Each group will follow the same pre-prepared study guidelines and then work together after the visits to present a comparative overview o f TVET management systems for each country visited. (Allocation will cover visits, associated planning and post-visit workshop activity.) 72. Curriculum and Materials Development Specialist: The project will finance high quality, international, Technical Assistance in the area o f Curriculum and Materials Development. Expert will develop the curriculum and standards in grassroots agricultural training, and training facilitation materials, suitable for very poor farmers having l o w levels o f basic education, and work closely with all other organizations that undertake similar work, such as, MAIL, MRRD, FAO, and other organizations and offices. Widespread consultation and dissemination will have to be undertaken with practitioners, government, private sector and other entities to ensure an adoption o f standards and levels described. Level descriptors from the N Q F can be used to develop the volume and duration o f such training programs so that a coherent set o f training standards can be developed. 73. Labor Market Information Specialist: The project will finance an international consultant, for a six-month period to provide technical assistance to support the professional competence and development o f a team o f data collection and processing managers and analysts attached to the newly established Labor Market Information and Analysis Unit (LMIAU) under the MOLSAMD. 74. Training in TVET ManaPement and Administration: The project will finance accredited Distance Learning programs o f study in the area o f TVET management and administration for individuals involved in the management o f the existing W E T system in the country. This will include individuals from the NSDP, MOLSAMD, MOE and other ministries and organizations as appropriate. The training will be through an informal distance learning program and can be designed to suit the needs o f each individual. Component 4: Research, Monitoring& Evaluation (Total $1.0 million, IDA $1.0 million) 75. The objective o f this component i s to develop a program monitoring and information system that will provide routine, timely, and accurate information on program implementation and allow for the measurement o f longer term impacts and independent research. Sub-component 4.1: Monitoring and Decision Support (Total $0.4 million, IDA $0.4 million) 76. This sub-component will put in place monitoring and information systems to measure program progress. Information generated by the monitoring system (and other relevant data) will be used as input for a decision support mechanism which will identify alternatives and recommend course-corrections in program implementation. 41 77. The monitoring o f program implementation, outputs and outcomes will be done by the DTVET and NSDP for Component 2 and 3 respectively. Specifically, in the case MOE, while the DTVET will be primarily responsible, it will work in close cooperation with the DOP o f MOE and develop key monitoring instruments within the EMIS fkamework. Development o f data collection tools will be designed, piloted and implemented and within 6 months o f project effectiveness a thorough baseline will be developed for all 42 institutions under DTVET's jurisdiction. T h i s information will be updated every year, and the project will finance the necessary investments needed to provide this, including computers, experts to further develop and implement the E M I S system, and establish clear and concise reporting mechanisms. 78. With respect t o NSDP, instruments will be developed to monitor and evaluate the program through the course o f the project. This will include developing a good understanding o f participants before, during training and after training participation in the labor market. The project will also finance the further strengthening o f the M&E team under the NSDP both through technical assistance and through the provision o f key goods and equipment. Sub-Component 4.2: Impact Evaluation (Total $0.6 million, IDA $0.6 million) 79. This sub-component will conduct impact evaluations o n specific sub-components in relationship to stated program objectives and identified key performance indicators. 80. The E M I S team will also be trained by experts to help develop the necessary procedures for sampling, randomization in initial admissions processes, and methods and procedures t o carry out tracer studies o f both those in the eligible and randomly selected and trained cell, and others in the eligible, randomly chosen not to be selected for training, and not trained at the specific institute. 8 1. Though the target populations for the training under the DTVET and the N S D P might be very different the method to be applied for the evaluation o f program impacts are very similar and for this purpose please refer to Annex 5 o n project supervision for a detailed lay-out o f h o w program impacts will be evaluated. 42 Annex 4: ESTIMATED PROJECT COSTS Table 4.1 : Estimated Financing Requirements Comnonent DescriDtion I IDA I Norwav I TOTALz1 Skills Development Program and Market Linkages with 3 RuralFocus 5.0 5.0 3.1 Contracted Vocational Training Projects 3.0 3.0 3.2 Training o f Trainers 1.5 1.5 3.3 Capacity Building for NSDP and M O L S A M D 0.5 0.5 4 Improve Relevance, Quality and Efficiency o f TVET 1.o 1.o 4.1 Monitoring and Decision Support 0.4 0.4 4.2 Impact Evaluation 0.6 0.6 Total Estimated Financing. 20.0 6.0 26.0 21 Expected contributions from Borrower and USAID in the amounts o f U S $ 4 million and U S $ 6 million respectively not shown in the table as i t i s financed directly and on items not covered under project financing. 43 Annex 5: IMPLEMENTATION ARRANGEMENTS 1. Institutional Set-Up: The education and training sector cuts across ministerial boundaries and involves MOE, N S D P h I O L S A M D , and MOHE. The Bank team intends to work with all three ministries mentioned above, though principally with the DTVET (MOE) and the NSDP (MOLSAMD). Given the different objectives o f each component and specific roles o f a l l key stakeholders in i t s development and implementation, it i s proposed that the implementation arrangements be designed in such a way as to limit the need for coordination between these two principal ministries and in effect, ring-fence each component from the other. As such, Component 2 will be implemented by the DTVET and Component 3 by NSDP. 2. Implementation Period: The project will be implemented over a period o f five year and six fiscal years (World Bank) from March 1,2008 to February 28,2013. 3. Government's Capacity for Proiect Execution: The DTVET and NSDP PIU both have the capacity t o take o n the responsibility o f the implementation and delivery o f this project. The Bank team did consider other alternatives, such as, employing a Facilitating or Implementation Partner to manage and help implement the entire project. This idea was discarded in favor o f using Government systems to implement, which will simultaneously help further build capacity within the Government to undertake such tasks in the future. Furthermore, in a post-conflict setting, there i s a critical need t o explicitly demonstrate that the Government i s both in control and capable o f taking key decisions aimed at improving the lives and welfare o f the population and as such, an interest in visibly establishing Government presence across the country. 4. Implementation Arrangements: N o new Program Implementation Unit (PIU) will be established for the execution o f this project. Given the emergency nature o f the project, i t s strategic importance, the large number o f activities to be completed within the time frame o f the project, and the s t i l l limited capacity o f the government to be able to coordinate and monitor program implementation, the following institutional arrangements have been agreed t o ensure that funds disburse quickly, multisectoral objectives are reached, and transparency o f a l l transactions i s maintained. 5. Component 1 i s an institutional reform component and requires the participation of all the three providing ministries - MOE, MOHE, and M O L S A M D . As stated earlier, The DTVET (MOE) will be responsible for the implementation o f Component 2 and the NSDP's PIU will be responsible for Component 3. These are the two principal service provision components. The DTVET and NSDP will be responsible for Component 4, Research, Monitoring and Evaluation. These are described in greater detail below. a. Execution o f Component 1: A Committee o n Education and Skills Policy will be established under the chairmanship o f the Vice President. It has been agreed between MOE, MOHE and M O L S A M D , that the NSDP PIU will take o n the responsibilities o f a Secretariat for the CESP. The CESP will comprise o f the Vice President, representatives o f MOE, MOHE and M O L S A M D , a representative o f MOF, two members representing the private sector, and t w o members representing the donor community (on a revolving basis). A Designated Officer o f the N S D P will be the Secretary to the CESP, but without the rights o f a full member. All ministerial representation will be at the level o f the Minister, with their deputies being identified as the alternates on the committee. The Secretariat so established will be responsible for all administrative and management functions o f the CESP - including the hiring o f technical experts needed to draft legal documents needed for the establishment o f new, statutory, regulatory structures, and for the development o f the NQF. 44 b. The agreement to use the NSDP as the Secretariat initially for the CESP i s reflected in a Memorandum o f Understanding (MOU) between the three concerned ministries and the MOF. This Secretariat will be responsible for overall coordination o f Component 1. The Secretariat will particularly ensure coordination across government, donors, and user-agencies which will be a key requirement for a sustainable and smooth multi-year programmatic approach to building the TVET capacity in the country. A designated officer o f the NSDP will oversee the program, with the assistance o f several short-term, international consultants and longer-term national consultants all chosen competitively. C. The CESP-Secretariat will work in close coordination with the concerned departments (such as DTVET) and other relevant ministries and agencies involved in TVET. T h e main function o f the Secretariat i s to facilitate the implementation o f Component 1. I t i s also responsible for: (a) assuring steady progress o f execution in accordance to an implementation schedule reviewed and approved by the World Bank; (b) regular reporting to the CESP; and (c) ensuring that a high ethical standard and transparency i s maintained throughout the process. d. Execution o f Component 2: The DTVET i s a fully established department within the M O E with a total staff o f about 2460 across the country with about 140 staff members managing the Department headquarters in Kabul. A Grants Management Unit within the MOE, which i s responsible for all donor-funded projects in MOE, will play the main fiduciary roles related program activities, such as, all procurement, financial management and reporting as well as all project related coordination with other line departments, such as, planning and M&E. All construction and works related aspects o f this component would be handled by the Department o f Construction (DOC) o f the MOE. This would include overall technical guidance on institute rehabilitation and construction. While the DTVET has i t s own Department o f Planning, the project proposes that the overall responsibility for monitoring will lie with the MOE's Department o f Planning (DOP). All DTVET schools will be included in the E M I S data collection program so that an annual update on all the students through these programs can be maintained. e. Provincial Institutes: Institutes in the provinces will continue to be supported directly by the DTVET as i s done now. However, in terms o f fund flows and personnel decisions, the roles o f the provincial education departments (PEDS)and other officers o f the MOE (such as the engineering staff in the DOC, etc.,) will come into play. While it i s anticipated that under the reform package stated in Component 2.2, schools will gain increasing autonomy as the DTVET moves to a more decentralized management style, the impacts o f such developments on implementation arrangements i s necessarily vague. The MOF has agreed to allow the institutions selected from the 42 institutions under the DTVET to have and access imprest bank accounts to help ensure operation autonomy and flexibility in the implementation o f programs. However, this more laissez-faire management style will have to be supported with intensive monitoring o f project implementation and outcomes, and evaluation o f program success. f. Execution o f Component 3: Implementation o f Component 3 would be the sole responsibility o f the NSDP PIU. As this component i s only a slice o f the activities o f the NSDP, the same procedures will be followed for program implementation as are being done today. The NSDP already employs procurement and financial management processes that conform to Bank guidelines. g. The NSDP, while linked to M O L S A M D has been given relative freedom and independence by the Ministry to chart their own course. Nevertheless, MOLSAMD plays a critical role in the fbnctioning o f the NSDP, as the Chairperson o f the NSDP Steering Committee (NSDPSC) i s also the Minister o f MOLSAMD. The NSDP, as an NPP, has a direct budget line 45 from the MOF. The authority to clear all o f NSDP activities rests with the Chairperson o f the NSDPSC. All training contracts are approved by the Chairperson o f the NSDP, but are monitored by the NSDP PIU. h. Execution o f Component 4: T h i s component will be implemented by DTVET and NSDP respectively for all monitoring o f project activities, while the ministries will outsource evaluation work to third parties. i. The oversight function for all projects implemented by M O E i s performed by a senior management group, which consist o f the Minister, the Deputy Ministers, the head o f GMU, and other advisers as deemed necessary. T h i s oversight body meets regularly (at least twice monthly) to review overall project implementation progress, and are also responsible for review and approval o f annual work plans and budgets. j. The oversight function for the NSDP will be performed by the a steering committee, which i s made up o f representatives from 11 line ministries and chaired by the Minister o f Labor, Social Affairs and Martyred and Disabled. The steering committee will meet at least every quarter to review overall project implementation progress, and are also responsible for review and approval o f annual work plans and budgets. k. The Grant Management Unit o f the Ministry o f Education and the Finance Department o f NSDP will be responsible for the financial management o f their respective project components. They will carry out day-to-day financial management operations o f the project, preparation o f M- 16 forms (payment orders), project coding sheet, B27 allotment form and overall contract and project management. 6. The project preparation team considered the establishment o f a joint program coordination unit that would span both MOE and NSDPMOLSAMD, but then decided against this idea with the realization that it may be better for implementation purposes to limit the need for coordination across the various entities. Donor Support and Coordination 7. Component 2 o f the project i s also supported by USAID (parallel financing) and the Government o f Norway (co-financing). In a recent M O U signing, between USAID, the Governments o f Norway and Afghanistan. Monitoring and Evaluation 8. The monitoring systems for the Components 2 and 3 exist, to varying degrees, in their respective organizations. The monitoring o f programs in the M O E has been considerably strengthened in the past 10 months and the NSDP's monitoring efforts have been commendable with the conduct o f periodic tracer studies to determine the usefulness and impacts o f these training programs. These are described in some detail below. 9. Monitoring o f M O E TVET Promams: A recent census by the MOE has begun to provide information on the number o f students in DTVETs programs around the country. However, there are no clear policies on monitoring and evaluation in the DTVET and the department has not maintained any centralized, computerized, information on the nearly 11,000 student in their programs. As part o f this project, the DTVETMOE have committed to strengthening the M&E o f TVET programs through a 46 centralized M&E department for the whole ministry, rather than a stand-alone M&E unit for the DTVET department. The DTVET will become the repository o f this information, but the collection, processing, analysis, and interpretation o f this data will be done by the more centralized M&E unit within the MOE. 10. This will enable a regular updating o f records o f all students in the programs and proper accounting o f their performance during the program and a follow-up o f graduates with respect to their labor market outcomes through tracer studies 6-9 months after program completion. Furthermore, the DTVET should also seek to benefit from the MOE's decision to develop a HR data base. T h i s will provide information on availability o f trainers, their qualifications, the training they have received in recent years, and the gaps in their skills sets that need to be filled. 11. Tracer Studies: Given the poor quality o f monitoring, it i s not surprising that the DTVET does not conduct systematic tracer studies on students and their performance in the labor force, once they leave the program. This leaves the DTVET very little means o f verifjmg the effectiveness o f training programs offered through the institutions under the DTVET. The DTVET has agreed to conduct, by contracting out to a qualified third-party, systematic tracer studies within a period o f 6-9 months after the completion o f the trainees period o f study. The main aim o f this effort would be to determine the labor market outcomes o f these individuals, and hence the success or failure o f the programs. In addition to this, the Bank team has proposed to work closely with the DTVET to attempt to randomize students in to treatment and control groups during their process o f application. This will be achieved from a l i s t o f all students eligible for admission (assuming that there are more eligible candidates than those that can be admitted or that the program has been over-subscribed) students will be randomly assigned to control and treatment groups. Tracer studies will cover both sets o f students to try and determine the effectiveness o f the training program on labor market outcomes. 12. Monitoring o f NSDP Facilitated Training A very tight and organized system o f monitoring exists within the NSDP. The program has a fully staffed M&E department and the training being carried out (by contracted agencies that may be either government, nongovernment, or private institutions) i s closely scrutinized. The monitoring officers visit and inspect contracted out training programs closely. This scrutiny provides a reason for good performance, and lays the foundation stone for a good demand- driven, labor market oriented program. The benchmark o f program success used by the NSDP till this year has been to determine the proportion o f the graduates out o f their contracted research programs who are employed within six months o f completing their training or have a job through self-employment within the same period o f their completing the training. 13. This i s typically achieved through tracer studies carried out by the NSDP team in an effort to determine the labor market outcomes o f its trainees. Two rounds o f such tracer studies have been carried out, typically within a period o f 6-9 months after the completion o f their studies. These studies provide the basis for determining the success or failure o f the training programs since the NSDP's primary goal i s to ensure that all trainees become more employable after the program, and hence improving their chances for obtaining work andor being self-employed. As stated above, till date the measure o f program success was defined by the percentage o f program participants who were gainfully employed or engaged in self- employment opportunities. Through discussions with the Bank team it has been agreed that the NSDP will now seek to obtain a more rigorous measure o f program impact. The NSDP, eager to demonstrate the success o f their model o f training facilitation, have agreed to adopt a rigorous evaluation design beginning this FY, though Bank financing will not be available by then. The section below outlines the approach to be followed and i s applicable to training by the NSDP, and MOE, though the text below refers to NSDP. 47 Design for Evaluating Impacts of NSDP Facilitated Training Program 14. Sub-Components 3.1 and 3.2 o f the project a i m to contribute to the socio-economic recovery o f Afghanistan through the provision o f a skills development and vocational education and training, facilitated by the NSDP. It i s expected that these training programs offered will be responsive to labor market needs and which will provide Afghan women and men with the knowledge and skills for decent work through increased wage and self-employment opportunities. 15. In order to achieve this target, the N S D P relies strongly o n Implementing Partners (IP) f r o m among NGOs and the private sector. These are selected based o n their quality and offered price for a given project. In each round o f the program the N S D P announces, publicly, i t s intention to train a given number o f trainees in a specific region and asks IPS o submit their technical and financial proposals22. t The technical proposals o f the IPS must contain a labor market assessment, for the areas where they intend to train23,as a justification for the type o f s k i l l s that they are willing to provide. Moreover, recruitment and screening for the program all are conducted by the selected IPS. These IPS provide information to the public through outreach activities, screen applicants to ensure that they meet the eligibility criteria and assign eligible candidates to classes. 16. Although this procedure i s not without i t s limitations, it is, probably, the fastest way to reach the NSDP objectives in Afghanistan where the lack o f useful and timely information to all actors in the vocational education and training system i s evident. However, there i s not any effort to study the effectiveness o f the trainings o n employment and welfare status o f the participants to help making informed decision about program expansion or even i t s termination. 17. This research i s intended t o devise a method for estimating the causal impact o f the N S D P training programs on participants' earnings and work opportunities. A social experiment where the eligible participants are randomly assigned t o treatment and control groups will be carried out. Econometrics methods will be used t o estimate the difference between the responses o f those in the treatment group and those in the control group and this i s the estimated effect o f the training. Main Assumptions 18, The a priori belief i s that: 0 The earning o f the treatment group i s significantly greater than the earning o f the control group 0 Participation in the training program improves the chance and the quality o f employment. Methodology and Data Sources 19. The overall impact analysis i s designed t o examine two major types o f outcome measures: 0 Employment and earnings 0 Dependence o n family, welfare and or public transfers 22 In the recent call for proposals (2007), for example, the NSDP has divided the country into seven regions and asked the interested IPSt o submit proposals for training o f 1400 individuals, on average, for each region. 23 Even, if the training is designed for remote rural areas, the labor market assessment can be part o f the contracted activity. 48 20. Employment and earnings outcomes indicators provide a key summary o f the quality o f an applicant's post-program employment experiences, and allows for inference on the effectiveness of the training program. Other indicators collected will provide information o n trainees and control group individuals personal, household and other characteristics, thereby providing means to understand the manner in which the benefits o f training accrue to various participants. 21. Since the interest i s to correctly estimate the effect o f the program on the beneficiaries, the counterfactual o f interest i s the outcome that would have been observed for the beneficiaries, after the program took place, had they not participated in the program. The evaluation problem exists because we only observe persons either in the state o f the world where they participate in a program or in the state o f the world where they do not, but never both. 22. Various methods o f dealing with this problem can be found in the literature. One possibility i s to assess the counterfactual using a control group o f non-participants matched on observable characteristics or some scalar aggregate o f those characteristics, such as the propensity score matching (following Rosenbaum and Rubin, 1983). An alternative approach i s to use an instrumental-variables estimator, in which the instrumental variable (IV) identifies the exogenous variation in participation. Naturally these non-experimental methods require assumptions to make up for the missing data on outcomes in the absence o f the intervention. Matching on the basis o f propensity scores requires the conditional independence (sometimes called "strong ignorability") assumption, namely that outcomes are independent o f participation given the observable covariates. Instrumental- variables methods require an alternative conditional independence assumption, namely the exclusion restriction that the IV i s uncorrelated with outcomes given participation and the control variables. 23. Randomization i s often considered to be the gold-standard for evaluation designs in that it balances the distributions o f all (observed or unobserved) covariates between the treatment and control groups. If everyone who was given access to the training automatically took it up and access was assigned randomly then we would have n o difficulty estimating the impact on those treated by comparing measured outcomes with those observed for the randomized-out control group. Under weak conditions, an unbiased estimate o f mean impact for those treated can then be obtained by taking the mean difference in the outcome measure (employment say) between the treatment and control groups. This i s equivalent to the regression coefficient o f the outcome measure on a dummy variable for which group one belongs to (treatmentlcontrol). This provides an unbiased estimate o f impact because this dummy variable i s exogenous given randomization and full compliance. 24. Thus, the data will come from a controlled, randomized experiment. Most participant data will be descriptive in nature, such as age, gender, education, prior occupational training, work history, wages, determination toward work, assets and herhim household socio-economic characteristics. Some data, however, will be measures o f variables related to program objectives. These data will be compared to data collected at completion o f the program to determine effects. We will use the following steps for collecting the data: . To make sure all eligible candidates are aware o f the program, NSDP training contractors use all national and local media to inform people o f their intent to provide training facilitated by the NSDP. The eligibility conditions are set according to the NSDP goals and are precise enough to be understood by everyone and minimize ambiguities in the selection process. Moreover, at the day o f registration, all applicants will be briefed about the programs and courses offered, possible number o f applicants, and the finite capacity for each course, and the criteria on which the final set o f trainees will be selected 49 . The registration i s local and will be conducted by the evaluation team. A questionnaire will be given to each applicant, containing questions o n the following: (i) personal information and their interests; (ii)employment and employment histories; ( i )i ihousehold characteristics; and (iv) community variables. Staff will be trained to help fill in the forms for those who are illiterate. 25. Random Allocation to Training: These data in these questionnaires will then be entered into a computer data base, a l l eligible applicants will be assigned an x digit random number, and they will be then sorted out according to a combination o f their region, gender and lottery number. The assignment o f training will start with the applicant with the lowest lottery number for a given region and gender category. The holder o f the lowest lottery number has this opportunity to register in hisher most favourite course. The same procedure applies to the next lottery numbers. 26. As the process continues, the courses will fill up and candidates have to register in their second and third choices if they have not already filled up. The assignment continues until all classes have been filled. The l i s t o f admitted applicants will be announced to the IPS enrolment and starting the classes. for Those with "too high" lottery number and those who couldn't enrol in their most interested subject constitute the first control group. The second control group will be matched by NRVA survey (or a separate survey as may become available). This group must contain the eligible people who do not participate. 27. Since the past experience shows that almost 70% o f not-selected applicants will return for the next rounds o f training and probably part o f them will be selected in the future, it i s possible, as training cycle goes on, to have another control group to investigate the dynamic effects o f training o n target variables. The timetable o n the following page i s for the current set o f training contracts being issued by NSDP. This round o f training i s being financed through the GOA'SOrdinary Budget, and not through Bank financing. However, the NSDP has adopted the evaluation approach based o n an understanding that the method i s superior. The timetable pertains t o the current training contracts and activities. Figure 5.1 : Social Experiment With Random Assignment . Randomized Control group Eligible? - yes 50 Table 5.1 I Timetable o f Evaluation Activities under Current NSDP C c tracts Proposed Dates Activity By O 0910 1107-11I 1/07 The NSDP requests for proposals, Evaluate them and awards NSDP contracts to the IPS 09101107-11101107 1. The evaluation team develops participant's data gathering Evaluation instruments: questionnaire, questioner guide, computer Team program for data entry, etc 2. Training interviewer and make them ready for registration day 02105108-02115108 Registration and enrollment o f applicants, Collection o f NSDP baseline data 02116108-02130108 Start o f the class I.1 (6 month duration classes) IPS Start o f the class 11.1 (9 month duration classes) 0310 1I08 -0313 0108 Analyzing data and providing a preliminary report on socio- Evaluation economic characteristics o f applicants, Developing the plans Team and instruments for collecting necessary data regarding the program implementation 05121108 -05101108 Review projects records and interview the project director, Evaluation staff and participants o f class I.1 Team I 0811010 8-0812 1O8 End o f class I.1 08125108-0813 010 8 Certification o f trainees NSDP & I P 11101108-11/06/08 Review projects records and interview the project director, Evaluation staff and participants o f class 11.1 Team 11/10/08-11/21/08 End o f class 11.1 11125108-11130108 Certification o f trainees NSDP & I P 12101108-12130108 Developing follow-up data collection methods and Evaluation instruments Team 02110109-0212 1109 1St Follow up survey for class I.1 NSDP 1'' Follow up survey for class 11.1 02125109- 04l10109 Data entry Evaluation Team 0411 1109-04130109 Analyzing data, first report on impact analysis Evaluation Team 05110109-05l2 1109 . 2ndFollow up survey for class I1 NSDP I1 2ndFollow up survey for class I . 05 I24109-0 611010 9 Data entry Evaluation Team 0611 1109- 06130109 Analyzing data, second report on impact analysis Evaluation Team 51 Annex 6: FINANCIAL MANAGEMENT AND DISBURSEMENT ARRANGEMENTS Country Issues 1. The Bank has gained substantial experience and understanding o f the financial management environment in Afghanistan through the large number o f projects under implementation over the past four years. The Public Administration Capacity Building Project (PACBP) i s the primary instrument to continue and enhance the fiduciary measures put in place during the past years to help ensure transparency and accountability for the funding provided by the Bank and other donors. 2. A PFM performance rating system using 28 high-level indicators that was developed by the Public Expenditure and Financial Accountability (PEFA) multi-agency partnership program was applied in Afghanistan in June 2005. PEFA i s comprised o f the World Bank, IMF, EC, and several other agencies. The system i s structured around six core dimensions o f PFM performance: i) budget credibility, ii) i) comprehensiveness and transparency, i i policy-based budgeting, iv) predictability and control in budget execution, v) accounting, recording, and reporting, and vi) external scrutiny and audit. Afghanistan's ratings against the PFM performance indicators generally portray a public sector where financial resources are, by and large, being used for their intended purposes. This has been accomplished with very high levels o f support from international firms; this assistance will continue to be needed over the medium term if these ratings are t o be maintained. There i s also much room for improvement. 3. I spite o f undeniable gains made in reconstruction since the end o f 200 1, the challenges facing n Afghanistan remain immense; not least because o f the tenuous security situation in the region and continued prevalence o f a large illegal and illicit economy. The policy framework benchmarks have not yet been fully costed so various priorities are funded through the annual budgeting process. The rising costs o f the security sector constitute the major constraint on attainment o f fiscal sustainability. With regard to executive oversight, the national assembly will play an increasingly active role. All in all, the new national strategy has created high expectations o f the executive which could prove to be quite difficult to meet. 4. The public sector, in spite o f considerable efforts to reform i t s core functions, remains extremely weak outside o f Kabul. The lack o f qualified staff in the civil service and the absence o f qualified counterparts in the government after 30 years o f war and conflicts i s a binding constraint. Delays in reforming the pay structure and grading o f civil servants have severely crippled the public administration o f the country. Domestic revenues lag behind expenditures by a factor o f ten t o one. Large-scale corruption could emerge to undermine the government's efforts to enhance aid flows through national accounts. Capacities to track expenditures and monitor expenditure outcomes have improved, but they need rapid and substantial strengthening if progress toward the attainment o f national development targets i s to be monitored. Currently, 75% o f external revenues bypass government appropriation systems. 5. The W o r l d Bank i s financing a Financial Management Advisor to assist the Ministry o f Finance, an Audit Advisor to assist the Control and Audt Office, and a Procurement Advisor to assist in Procurement-related activities. Also an Internal Audit function i s being developed within the Ministry o f Finance with World Bank financing. USAID, and earlier the Indian Aid Assistance Program, i s financing a team o f consultants and advisors t o assist the D a Afghanistan Bank in local as w e l l as foreign currency operations. The activities carried out under the existing Public Administration projects have helped the Government to ensure that appropriate fiduciary standards are maintained for public expenditures, including those supported by the Bank and the donor community. 6. Progress has been slower than expected in shifting from operations support provided by the three Advisors to capacity development and knowledge transfer to the c i v i l servants. Given that, i s expected 52 that the Advisors will continue to be required for the medium term. Challenges s t i l l remain in attaining the agreed upon fiduciary standards and also to further enhance them. And t o make matters more complex, the regulatory environment in Afghanistan has advanced significantly in the past three years. Unfortunately, even mastery o f basic skills in the early environment does not fully qualify the civil servants to work effectively in the new emerging environment. Risk Assessment and Mitigation 7. The table below identifies the key risks that the project may face and indicates h o w these risks are to be addressed. The overall FM risk rating i s high but the residual risk rating after application o f the mitigating measures i s substantial. Table 6.1: Financial Management Risks I I Risk Risk Rating Risk Mitigation Measures I Residual Risk 1 Condition o f negotiations, Boardor Effectiveness Country Inherent Risk M Source - P F M study M N Project Financial H Minimize use o f Designated Account, S N Management Risk maximize direct payments to consultants; all procurement through Procurement Advisor Perceived Corruption H Government commitment, internal S N controls and new internal audit will help to reduce the high level o f perceived OVERALL INHERENT I H S RISK I I ~~~ ~ I I 2. Control Risk Weak implementing S Utilization o f the services o f the Grant I M N Entity Management U n i t (GMU) o f the Ministry o f Education (MOE), which has gained enormous experience from previous and currently implemented Bank and other donor funded projects. Presence o f qualified and experienced n internationallnational staff i GMU o f n M O E and i NSDP. n Engagement o f additional staff i GMU o f MOE and NSDP to strengthen the capacity. Funds Flow S Payments will be made to contractors, M N consultants, Suppliers, etc. from the Designated Account (DA) by SDU-MoF. In addition to payments out o f DA funds, the implementing entities can also request the SDU to make i) direct payments from the Credit Account to contractors, consultants or consulting i special commitments for firms, and i ) 53 Condition of Risk negotiations, Risk Residual Rating Risk Mitigation Measures Board or Risk Effectiveness (YW contracts covered by letters o f credit. These payments would only be made by SDU after due processes and proper authorization from the implementing entities. Funds meant to be utilized for activities at the provinces, will be transferred to the D a Afghanistan Bank provincial branch, after due processes at the Mustofiat, funds are received by the imtllementing unit. Budgeting S Respective component's implementing M N entity budget committee will coordinate the preparation o f the project's annual work plan and the derivation o f annual budget there from. The budget committee will include representatives from relevant departments o f the implementing entity, and shall report to the top management. Accounting Policies and S W i l l follow international standards. M N Procedures Project accounting procedures and details o f the FM arrangements w i l l be documented in an FM Manual already being prepared by the key implementing entities - M O E and NSDP, and which will be approved by the Bank Internal Audit MOE's & NSDP's newly-created S N internal audit department w i l l review project internal Control systems External Audit W i l l be audited by C A O with support __ S N from Audit Advisor Reporting and Monitoring Strengthening the S D U i s a priority S N under the FM Advisor contract, to provide information that w i l l comply with agreed format o f financial reports. This will be facilitated by the computerized accounting system being utilized by NSDP and the database that MOE plans to acquire for budget preparation, record keeping, expenditure tracking and generation o f required reaorts. Overall Control Risk S Detection Risk Adequate accounting, recording, and M N oversight w i l l be provided inproject procedures. 54 I I I I I I 1 Risk Risk MitigationMeasures 1 Residual Risk 1 Condition of negotiations, Boardor Effectiveness (YW Accounting/Recording/oversight by SDU - M O F o f all advances/M-16 supported by Financial Management Advisor. Risk rating: H=high risk; S=substantial risk; M=modest risk; L-low risk Strengths and Weaknesses Strengths 8. The Government provides assurance to the Bank and other donors that the measures in place t o ensure appropriate utilization o f funds w i l l not be circumvented. The Government support for PACBP i s strength in itself to enhance financial management in Treasury operations, public procurement, internal audit in the public sector, and external audit by the Auditor General. 9. The key implementing line ministries, Ministry o f Education and Ministry o f Labor, Social Affairs and Martyred and Disabled have implemented some IDA-funded grants previously, so it has experience in implementing Bank projects and following Bank procedures. Weaknesses and Action Plan 10. The main weakness in this project, as in many others in Afghanistan, i s the ability to attract suitably qualified and experienced counterpart staff especially for Financial Management. The utilization o f the services o f the Grant Management Unit (GMU) o f the Ministry o f Education (MOE), which has gained enormous experience f i o m previous and currently implemented Bank and other donor funded projects, presence o f qualified and experienced internationahational staff in GMU o f MOE and in NSDP, engagement o f additional staff in GMU o f MOE and in NSDP, together with intensive training programs included in this project, i s expected to strengthen the fiduciary arrangements. Weaknesses Action Responsable I Completion Agent Appointment o f a Finance MOE/NSDP/CESP Shortage o f qualified and Officer in GMU o f MOE. Supervision experienced FM staff Appointment o f a National FM Consultant and an Internal Auditor in NSDP. Project internal controls and Financial Management Manual MOE/NSDP BY 30th procedures need to be defined updated October 2007 Interim reports need to include Un-audited interim financial IDA/MOF/KM Before required information report formats confirmed negotiations 55 ImplementingEntity 11. Comuonent 1: A Committee o n Education and Skills Policy will be established under the Chairmanship o f the Vice President. I t has been agreed between MOE, MOHE and M O L S A M D , that the NSDP P I U will take o n the responsibilities o f a Secretariat for the CESP. The CESP will comprise o f the Vice President, representatives o f MOE, MOHE and M O L S A M D , a representative o f MOF, two members representing the private sector, and two members representing the donor community (on a revolving basis). A Designated Officer o f the NSDP will be the Secretary t o the CESP, but without the rights o f a full member. All ministerial representation will be at the level o f the Minister, with their deputies being identified as the alternates on the committee. The Secretariat so established will be responsible for all administrative and management functions of the CESP - including the hiring o f technical experts needed t o draft legal documents needed for the establishment o f new, statutory, regulatory structures, and for the development o f the NQF. 12. The agreement to use the NSDP as the Secretariat initially for the CESP i s reflected in a Memorandum o f Understanding (MOU) between the three concerned ministries and the MOF. This Secretariat will be responsible for overall coordination o f Component 1, The Secretariat will particularly ensure coordination across government, donors, and user-agencies which will be a key requirement for a sustainable and smooth multi-year programmatic approach t o buildingthe W E T capacity in the country. 13. Component 2: The DTVET o f MOE will be responsible for the implementation o f this component. The DTVET i s a fully established department within the MOE with a total staff o f about 2460 across the country with about 140 staff members managing the Department headquarters in Kabul. A Grants Management Unit within the MOE, which i s responsible for all donor-funded projects in MOE, will play the main fiduciary roles related program activities, such as, a l l procurement, financial management and reporting as w e l l as all project related coordination with other line departments, such as, planning and M&E. All construction and works related aspects o f this component would be handled by the Department o f Construction (DOC) o f the MOE. T h i s would include overall technical guidance o n institute rehabilitation and construction. While the DTVET has i t s own Department o f Planning, the project proposes that the overall responsibility for monitoring will l i e with the MOE's Department o f Planning (DOP). All DTVET schools will be included in the E M I S data collection program so that an annual update o n all the students through these programs can be maintained. 14. Component 3: Implementation o f Component 3 would be the sole responsibility o f the NSDP PIU. As this component i s only a slice o f the activities o f the NSDP, the same procedures will be followed for program implementation as are being done today as the NSDP already employs procurement and financial management processes that conform to Bank guidelines. The NSDP, while linked to M O L S A M D , i s independent o f the Ministry and has the relative freedom t o chart their course. M O L S A M D plays a critical role in the functioning o f the NSDP, as the Chairperson o f the NSDP Steering Committee (NSDPSC) i s the defacto Minister o f M O L S A M D . The NSDP, as an NPP, has a direct budget line from the MOF. The authority to clear all o f NSDP activities rests with the Chairperson of the NSDPSC. All training contracts are approved by the Chairperson o f the NSDP, but are monitored by the NSDP PIU. 15. Component 4: This component will be implemented by DTVET and NSDP respectively for all monitoring o f project activities, while the ministries will outsource evaluation work to third parties. 16. The oversight function for all projects implemented by MOE i s performed by a senior management group, which consist o f the Minister, the Deputy Ministers, the head o f GMU, and other advisers as deemed necessary. This oversight body meets regularly (at least twice monthly) to review 56 overall project implementation progress, and are also responsible for review and approval o f annual work plans and budgets. 17. The oversight function for the NSDP will be performed by the a steering committee, which i s made up o f representatives from 11 line ministries and chaired by the Minister o f Labor, Social Affairs and Martyred and Disabled. The steering committee will meet at least every quarter to review overall project implementation progress, and are also responsible for review and approval o f annual work plans and budgets. 18. The Grant Management Unit o f the Ministry o f Education and the Finance Department o f NSDP will be responsible for the financial management o f their respective project components. They will carry out day-to-day financial management operations o f the project, preparation o f M-16 forms (payment orders), project coding sheet, B27 allotment form and overall contract and project management. Budgeting 19. The respective component implementingentity's budget committee will coordinate the preparation o f annual work plan and the derivation o f annual budget. This committee will be made up o f representatives from relevant departments o f the implementing entity, and shall report to the respective implementingentity's oversight body. The Budget Committee shall also coordinate quarterly budget reviews to ensure adequate budget discipline and control. The committee will be responsible for ensuring that project expenditures for each fiscal year are captured in the Governmental Development budget o f that fiscal year. The M O E & NSDP must get approvals from the presidential office and the parliament and attach them to B27 and PCS forms at the time o f requesting yearly allotments for contracts under the project to avoid delays in payment processing. Funds Flow 20. The standard funds flow mechanism in Afghanistan will be followed in this project. Project funds will be deposited in the Designated Account (DA) to be opened and maintained at the D a Afghanistan Bank (DAB). The DA, in keeping with Afghan law and current practice for other projects in Afghanistan, will be operated by the Special Disbursement Unit (SDU) in the Treasury Department o f MoF. Requests for payments from the DA will be made to the SDU by the implementing entities when needed. 21. In addition to payments out o f DA funds, the implementingentities can also request the SDU to make i) direct payments from the Grant Account to contractors, consultants or consulting firms, facilitating partners, NGOs, i ) i) i advances to other accounts, and i i special commitments for contracts covered by letters o f credit. These payments will follow World Bank procedures. All payments will be made either through bank transfers into the account o f such firms or by check. 22. Expenditures payable from the provinces as support to provincial institutes will be made in two ways: (a) Cash transfers to provinces as an advance - after due processes and approval by the Deputy Minister (or Minister) o f payment request initiated by the DTVET Coordinator, M o F processes the authorized form M16 prepared and submitted by the GMU and transfers the amount to the designated province Mustofiat, from where the designated MOE official i s paid. On completion o f the activities, the SOE and supporting documents are provided by the provincial Finance Officer to the Mustofiat, after relevant checks, the Mustofiat prepares a form (M27) and forward this form together with the relevant supporting documents to M o F for liquidation o f the cash advance. MOE finance department also gets a copy o f this form and supporting documents. 57 (b) Contracts payments in the provinces - after receiving MOE's or NGO's engineering staff certification o f work accomplished (25%, 50%, 75% & 100%) for specific contracts already approved by designated Government official (Provincial Education Director, Governor and Minister, depending on the threshold), the provincial Finance Officer will prepare the form M 1 6 together with the relevant supporting documents, gets this approved by the Provincial Education Director and submits to the Mustofiat for processing and payments. The Mustofiat, thereafter sends copies o f the form M 1 6 and supporting documents to MoF. Also the provincial Finance Officer, sends copies o f the form M 1 6 and supporting documents to MOE finance department. Figure 6.1: Funds Flow Chart \ Direct Payments to Consultants, Contractors, NGOs, etc. after approval o f W.A initiated by the project and submitted through SDU DAB denominated in U S Project transactions processed through SDU and paid in U S $ or Afghanis; Advances to other accounts \ Payment Requests T Payment Requests 58 Figure 6.2: Funds Flow Chart (Provinces) Stea Activities Time Required Preparation of D1, PCS 1 for each Contract at Submitting signed D1 By MOE Finance and PCS to Archive of 5 contract , D1, PCS and approval from the head of Budget departme By MoF Budget Dept. & After review and Approval 6 MOE Finance D1 and PCS is delivered back to MOE relevant on the approved D1 Get approval from submitting M16 to 9 10 Submitting Cheque to Da Afghanistan Bank 11 12 Mastuffee Control the 13 PED or other responsible person assigned by the MOE to delivers money to DTVET - 59 Legal Requirements for Authorized Signature 23. Ministry o f Finance has authorization to disburse funds from the Grant. Specimen signatures o f authorized signatories in M o F are on file. Accounting 24. The SDU will maintain a proper accounting system o f all expenditures incurred along with supporting documents to enable IDA to verify these expenditures. The MOE Grant Management Unit, the N S D P N O L S A M D for their respective components, will: i) supervise preparation o f supporting documents for expenditures, ii) i) prepare payment orders (Form M16), i i obtain approval for M-16s by the Minister or Deputy Minister depending on the payment amount, and iv) submit them to the Treasury Department in M o F for verification and payment. W h i l s t original copies o f required supporting documents are attached to the Form M16, the project i s requiredto make and keep photocopies o f these documents for records retention purposes. The FM Advisor in the MoF/SDU will use the government's computerized accounting system, AFMIS, for reporting, generating relevant financial statements, and exercising controls. 25. The M O E Grant Management Unit and NSDP will maintain essential project transaction records using computerized accounting system/Excel spreadsheets and generate required monthly, quarterly, and annual reports. 26. The M O E & NSDP respective FM Manuals, already being prepared and to be approved by the Bank, will include: i)roles and responsibilities for all FM staff, ii)documentation and approval i) procedures for payments, i i project reporting requirements, and iv) quality assurance measures to help ensure that adequate internal controls and procedures are in place and are being followed. 27. The FM Manuals will also establish project financial management in accordance with standard Afghan government policies and procedures including use o f the government Chart o f Accounts to record project expenditures. The use o f these procedures will enable adequate recording and reporting o f project expenditures. Overall project accounts will be maintained centrally in SDU, which will be ultimately responsible for recording o f all project expenditures and receipts in the Government's accounting system. Reconciliation o f project expenditure records with M o F records will be carried out monthly by the MOE GMU & NSDP. Internal Control & Internal Auditing 28. Project-specific internal control procedures for requests and approval o f funds will be described in the FM Manuals including segregation o f duties, documentation reviews, physical asset control, and cash handling and management. 29. The Head o f the MOE GMU and the NSDP FM unit will be responsible for coordinating FM activities o f the project with the SDU. 30. Annual project financial statements will be prepared by S D U N o F detailing activities pertaining to the project as separate line items with adequate details to reflect the details o f expenditures within each component. 3 1. The project financial management systems will be subject to review by the newly-established internal audit department o f the M O E & NSDP, according to programs t o be determined by the heads o f the department using a risk-based approach. 60 External Audit 32. The project accounts will be audited by the Auditor General, with the support o f the Audit Advisor, with terms o f reference satisfactory to the Association. The audit o f the project accounts will include an assessment o f the: (a) adequacy o f the accounting and internal control systems; (b) ability to maintain adequate documentation for transactions; and (c) eligibility o f incurred expenditures for Association financing. The audited annual project financial statements will be submitted within six months o f the close o f fiscal year. All agencies involved in implementation and maintaining records o f expenditures would need to retain these as per the IDA records retention policy. 33. The following audit reports will be monitored each year in the Audit Reports Compliance System (ARCS): Responsible Agency Audit Auditors Date MoF, supported by Special SOE, Project Accounts and Auditor General Sep 22 Disbursement Unit Desirmated Account 34. The Bank-funded projects already or currently being implemented by the Ministry o f Education and Ministry o f Labor, Social Affairs and Martyred and Disabled, have n o over due audit reports; key issues raised in these projects previous audit reports are being resolved. Financial Reporting 35. Financial Statements and Project Reports will be used for project monitoring and supervision. Based upon the FM arrangements o f this project Financial Statements and Project Reports will be prepared monthly, quarterly, and annually by the M O E GMU & NSDP. These reports will be produced based on records kept on the project's computerized accounting system or Excel spreadsheets after due reconciliation to expenditure statements from SDU (as recorded in AFMIS) and bank statements from DAB. 36. The quarterly Project Reports will show: (i)sources and uses o f funds by project component, and i) ( iexpenditures consolidated and compared to governmental budget heads o f accounts, the project will forward the relevant details to SDUDBER with a copy to IDA within 45 days o f the end o f each quarter. The government and IDA have agreed on a pro forma report format for all Bank projects; a final customized format for ASDP will be agreed prior to project negotiations. 37. The annual project accounts to be prepared by SDU from AFMIS after due reconciliation to records maintained at the project, will form part o f the consolidated Afghanistan Government Accounts for all development projects. T h i s i s done centrally in the Ministry o f Finance Treasury Department, supported by the Financial Management Advisor. 61 Disbursement Arrangements 38. Disbursements procedures will follow the W o r l d Bank procedures described in the World Bank Disbursement Guidelines and the Disbursement Handbookfor World Bank Clients (May 2006).Table 1 shows the allocation o f IDA proceeds in a single expenditure category and Table 2 presents the expected co-financing. The single category for "goods, works, consultancy services, training and operating costs" will facilitate preparation o f withdrawal applications and record-keeping. The final disbursement date will be four months after the closing date. Duringthis additional 4-month grace period, project-related expenditures incurred prior to the closing date are eligible for disbursement. 39. Retroactive Financing. Retroactive financing not exceeding U S $ 2 m i l l i o n for project-related expenditures incurred and paid by Government after November 15,2007 and prior t o signing o f the financing agreement i s authorized. Amount of the Financing ExDenditure Cateporv Grant Allocations Percentage [SDRI (inclusive of taxes) (1) Goods, works, consultants' services, training, and 12,600,000 100 % Incremental Operating I I Total I 12,600,000 I 100% IDA USAID Norway I Beneficiaries I Total 20 6 26 40. Summary Reports. Summary reports in the form o f Statements o f Expenditure will be used for expenditures o n contracts above U S $20,000; all training programs and operating costs regardless o f whether Bank procurement prior review i s required or not. 41. Designated Account. A single designated account will be opened at DAB in U S dollars for a maximum amount o f U S $1.5 million. The S D U in MOF will manage payments from and n e w advances/replenishments to this account. Cash advances and transfers to other accounts may be taken from the Designated Account, and held and managed by the MOE & NSDP or other agencies or contractors approved by Government. MOE's and NSDP's controls for holding and accounting for cash advances, and preparation o f Summary Reports (SOEs) have been satisfactorily assessed. N e w cash advances will only be made when all other prior cash advances have been justified through submission o f SOEs to the SDU. The designated account will be replenished o n a monthly basis. 42. Direct Payments. Third-party payments (direct) and Special Commitments will be permitted for amounts exceeding 20 percent o f the advance in the Designated Account ( S $300,000). All such U 24Incremental Operating Costs refers to project-related incremental expenses incurred on account o f project implementation support and management including the rental o f office space; the operation, maintenance, rental and insurance o f vehicles; fuel; communications supplies and charges; advertisements; books and periodicals; office administration and maintenance costs; bank transaction charges; utility charges; domestic travel and per diem but excluding salaries o f officials and staff o f the Recipient's civil service. 62 payments require supporting documentation in the form o f records (copies o f invoices, bills, purchase orders, etc.). 43. Preparation of Withdrawal Applications. MOE & NSDP will prepare Summary Reports and forward those reports to the S D U for further processing as a reimbursement application. The S D U will review withdrawal applications for quality and conformity to Treasury procedures, and then obtain signature. Selected M O E N S D P and S D U finance staff will be registered as users o f the W o r l d Bank Web-based Client Connection system, and take an active hand in managing the flow o f disbursements. Financial Management Covenants M o F shall submit audited financial statements for the project within six months o f the end o f each fiscal year. The Project's audit report will cover the financial statements, the Designated Account, and SOEs, in accordance with terms o f reference agreed with the Association. Un-audited project interim financial reports will be submitted by MOE & NSDP respectively o n a quarterly basis to the W o r l d Bank and a copy to SDU-MoF within 45 days after the end o f each quarter. The Ministry o f Education and the National Skill Development Program will ensure that key FM staff engaged for this project are retained throughout the duration o f the project in order to ensure smooth project implementation. Regular Supervision Plan 44. During project implementation, the Bank will supervise the project's financial management arrangements. The team will: Review the project's quarterly un-audited interim financial reports as well as the project's annual audited financial statements and auditor's management letter. Review the project's financial management and disbursement arrangements (including a review o f a sample o f SOEs and movements o n the Designated Account and bank reconciliations) to ensure compliance with the Bank's minimumrequirements. Review agency performance in managing project funds to ensure that it i s timely, accurate, and accountable. Particular supervision emphasis will be placed o n asset management and supplies. Review o f financial management risk rating and compliance with all covenants. Conclusion 45. The FM arrangements, including the systems, processes, procedures, and staffing are adequate to support this project - subject t o implementation o f the items listed in the action plan. 63 Annex 7: PROCUREMENT ARRANGEMENTS Country Context 1. The Bank has gained substantial experience and understanding o f the procurement environment in Afghanistan through i t s involvement in the interim procurement arrangements put in place through Emergency Public Administration Project (EPAP) as w e l l as with the institutions such as Afghanistan Reconstruction and Development Services ( A R D S ) that i s holding the current responsibility for government's procurement administration. As part o f the broader review o f Afghanistan's Public Finance Management (PFM) system, the Bank recently carried out an assessment o f the procurement environment in the country based on the baseline and performance indicators developed by a group o f institutions l e d by the W o r l d Bank and Organization for Economic Co-operation and Development (0ECD)Development Assistance Committee (DAC). 2. The f i r s t key issue identified through the procurement assessment was the need for ownership and a champion in the Government for reform, deepening o f capacity, ensuring integrity in the operation o f procurement systems, and promoting sound procurement among ministries. 3. A new Procurement L a w has been adopted in November 2005 which radically transforms the legal and regulatory framework for the procurement administration o f Afghanistan. While it provides a very modem legal system for procurement, effective implementation o f the l a w may encounter difficulties in the current weak institutional structure and capacity o f the Government. A Procurement Policy Unit (PPU) has n o w been established under MOF t o ensure the implementation through the creation o f secondary legislation, standard bidding documents, provision o f advice and creation o f the necessary information systems for advertising and data collection. "Rules o f Procedure for Public Procurement" which details the better implementation o f the Procurement L a w has been issued by MOF as circular number PPU/COO5/1386 dated April, 12 2007. The Procurement Appeal and Review mechanism i s in place and the Manual o f Procedures for "Procurement Appeal and Review" has been issued by MOF as circular number PPU/NOO1/1385 o n March 18, 2007. 4. In the absence o f adequate capacity to manage procurement activities effectively, some interim arrangements have been put in place to improve the procurement management o f the country. A central procurement facilitation service, A R D S -PU has been established under the supervision o f Ministry o f Economy. The Bank and the Government has agreed on a program for country wide procurement reform and capacity building, leading t o the transition f i o m centralized to decentralized procurement services. The Bank funded Public Administration Capacity Building project (PACBP) and Public Financial Management Reform Project (PFMRP) are the primary instruments for implementing the program to strengthen capacity o f the line ministries to manage public procurement in an effective, transparent and accountable manner. However, the implementation o f the procurement capacity building strategy has not made any significant progress yet due to lack o f coordination and delays in decision making within the Government. The envisaged radical changes t o the procurement management environment expected from the new L a w also require the urgent implementation o f a comprehensive human resources and capacity development program. The implementation o f the procurement reform component o f the PACBP and PFMRP should be considered with due priority to ensure that fiduciary standards are further enhanced and that capacity i s developed in the Government to maintain these standards. 5. A Consultant has n o w been mobilized under the PPU/MOF to carry out the capacity Building which focuses o n systematic training o f staff o f ministries in public procurement. The assignment includes conduct o f training programs to private sector. The consultant has completed the training needs assessment and the program for training o f trainers has begun. The first training program i s planed t o commence o n December 1,2007. 64 Procurement Overview General 6. The Ministry o f Education (MOE) and the National S k i l l Development Program (NSDP) under the Ministry o f Labor, Social Affairs, Martyrs and Disabled (MOLSAMD) will have overall responsibility for all procurement under the project. Both the implementing agencies will implement procurement actions under the Afghanistan S k i l l Development Project. 7. The Procurement administration o f the project would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated M a y 2004, Revised October, 2006 "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers" dated M a y 2004 and Revised October 2006, and the provisions stipulated in the Financing Agreement. The general description o f various procurements under different expenditure categories are described below. For each contract to be financed by the Grant the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are agreed between the Grant Recipient and the Bank project team are described in the Procurement Plan agreed with the Government at appraisal and finalized during negotiations. This Procurement Plan will be updated at least annually or at lesser time intervals as required to reflect the actual project implementation needs and improvements in the institutional capacity. 8. Procurement o f Works: Works procured under this project, would include:(i) * ReconstructiodRehabilitation o f existing Dar-ul-Aman campus (ii) construction o f new Administrative i iSix and Academic buildings ( i ) Dormitories, kitcheddining facilities, and heating (iv) Landscaping, Power and Water Supply Systems for the various buildings (iv) Auditorium, Library and Gym (v) miscellaneous other buildings necessary for the campus) All the civil works component will be handled by the Ministry o f Education (MOE). The procurement will be done using the Bank's Standard Bidding B Documents (SBD) for all I C B and National S D agreed with (or satisfactory to) the Bank. Threshold for I C B civil works will be equivalent or more than U S $5,000,000; threshold for N C B works will be less that U S $5,000,000. All civil works contract estimated to cost U S $ 100,000 or less per contract can be procured through shopping procedure o f paragraph 3.5 o f the procurement guidelines. 9. Procurement o f Goods: Goods procured under this project would include: (i) Office Equipment, ( i i) i iIT Furniture ( i ) Equipments, (iv) two mini buses and two other vehicles, (v) students' recreational equipment (vi) Audio-visual equipment for teaching and for the Auditorium, (vii) installation o f a V-sat dish and related equipment, and (viii) miscellaneous other equipment including tools.. The procurement will be done using Bank's SBD for all I C B and National SBD agreed with (or satisfactory to) the Bank. Threshold for I C B will be equivalent or more than U S $200,000 and threshold for N C B goods will be equivalent or less than U S $200,000 per contract and shopping threshold per contract will be U S $ 100,000 per contract. 10. Staff Development: The grant will finance several study tours and in-country workshops. 65 11. Selection o f Consultants: Major contracts to be financed under this grant include: (A) for f i r m s under NSDP (i) Training for youth development, (ii) i iTraining for Training for vulnerable women, ( i ) marginalized farmers, (iv) Training for Productive Skills and Business Development Services, (v) Management Consultant for providing Technical Support for setting up o f Qualification Boards; (B) for individual consultants under N S D P h l O L S A M D (vi) Technical Consultant for designing the National Qualifications Framework, (vii) Procurement and Contract Officer, (viii) Curriculum and Materials Development Specialist; (ix) Technical Support for Labor Market Unit (LMIAU); (C) for f i r m s under MOE: (x) Management Consultants for the rehabilitation o f the Vocational Education and Training Schools, (D) for Individual consultants under MOE: (xi) Design Engineer, (xii) Assistant Design Engineer, (xiii) Three Engineering and Works Supervisors, (xiv) T w o Electrical & Water Supply Engineer [for six months], (xv) Management Consultant for the Department o f Technical and Vocational Education and Training. 12. The selection method for hiring consultants shall be QCBS, QBS, FBS, LCS, CQS, SSS, and Individual Consultant. Single Source Selection may be used when appropriate and prior IDA agreement shall be obtained. Short lists o f consultants for services estimated to cost less than $100,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. 13. Threshold for CQS will be U S $200,000 or less per contract. Operational Costs 14. Would be financed by the project and be procured using the implementing agency's administrative procedures which were reviewed and found acceptable to the Bank. Assessment o f the Agency's Capacity to Implement Procurement 15. The Ministry o f Education (MOE) and National S k i l l Development Program (NSDP) will have overall responsibility for all procurement under the project. Both the implementing agencies will implement procurement action under the Project. Ministry o f Education 16. Procurement activities under the M O E components will be carried out through Grant Management Unit, GMU. 17. An assessment o f the capacity o f GMU, the ImplementingAgency to implement procurement actions for the project, has been carried out by Rahimullah Wardak procurement Analyst in September 2007. 66 18. The GMU i s a group o f individuals established in 2005 to carry out procurement activities for Education Quality Improvement Project (EQUJP-I), and other donors funded projects. The agency i s staffed with 17 procurement staff. The procurement staff has limited experience in procurement under the World Bank financed projects. The contracts for 17 procurement consultants are funded by the World Bank and other donors. The procurement staff i s responsible for procurement o f works, goods, and consultancy services. As the agency does not have competent procurement staff to cover the procurement actions under Afghanistan National S k i l l Development Project as well. Therefore, it i s agreed that the two International Procurement Specialists to be hired under EQUIP-I1 will provide cross support to both the projects [ASDP and EQUIP-IT]. 19. The International Procurement Specialists along with other procurement officers under the GMU will be responsible for managing procurement based on technical specifications/TOR provided by the technical team o f the Ministry o f Education. National S k i l l Development Program 20. Procurement activities under the NSDP components will be carried out by the NSDP PIU. An assessment o f the capacity o f the procurement staff o f the implementing agency to implement part o f the procurement actions for the project has been carried out by Rahimullah Wardak, Procurement Analyst in September 2007. During the assessment it was revealed that the NSDP procurement staff did not have experience in procurement under Bank financed projects. 21. To mitigate the risk, the following actions are needed: The NSDP will be strengthened by a competent procurement specialist to carry out procurement action under the project and train the NSDP procurement staff. T o ensure compliance with the World Bank policy and procedure, procurement documentation for complex and large value o f goods, works and consultancy contracts shall be carried out with consultation o f the ARDS. 22. The overall project risk for procurement with above arrangement i s medium with the recruitment o f a competent procurement specialist and large value procurement being handled by ARDS-PU. Procurement Plan 23. The Borrower, at appraisal, developed a Procurement Plan for project implementation which provides the basis for the procurement methods. This plan has been agreed between the Borrower and the Project Team on December 12,2007 and i s available at Ministry o f Education and the NSDP offices. I t will also be available in the Project's database and in the Bank's external website. The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 67 Frequency of Procurement Supervision 24. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment o f the implementing agencies have recommended one supervision mission to visit the field to carry out post-review o f procurement actions. As the overall project risk for procurement i s high, therefore, the percentage o f contracts to be post reviewed will be 10%. Procurement Audit 25. In addition to the prior review and post review supervisions to be carried out from Bank offices, an independent procurement audit will also take place during the project life. 68 Attachment 1 DETAILS OF THE PROCUREMENT ARRANGEMENTS INVOLVING INTERNATIONAL COMPETITION (a) Goods and Works and Non-Consulting Services. i) o f contract Packages which will be procured following ICB and Direct contracting: List Reference Contract Estimated Total Procurement Review by Expected Comments No. Description cost Price Method Bank Bid YeslNo (PriorPost) 0peni g n Date MOE/G-4 I T Equipment 515,000 515,000 ICB Prior January (computers, 15,2008 printers and accessories) Package- 1 3,250,000 6,5 15,000 ICB Prior February Six 1,2008 Dormitories, kitcheddining facilities, and heating Package 2 450,000 ICB Prior February Utility 1,2008 Systems, H eati g, n power and MOEIW-2 Water Package-3 530,000 ICB Prior February Landscaping, 1,2008 play-ground Gym, and Streetlights Package-4 1,600,000 ICB Prior February Administration 1,2008 and Academic buildings Package 5 625,000 ICB Prior February Auditorium 1,2008 and Library Packaged 60,000 ICB Prior February Miscellaneous 1,2008 Buildings including student shops, security barracks, etc i Works contracts estimated to cost equivalent U $500,000 or more per contract, Goods contracts i) S estimated to cost equivalent U S $200,000 or more per contract and all Direct contracting will be subject to prior review by the Bank. 69 @) Consulting Services. i) o f Consulting Assignments with short-list o f international firms. List Expected Proposal- Total Procurement Review opening Ref No Contract (Description) Price Method by Bank Date Remarks NSDP/C- Support for the Labour Market Unit 72,000 IC Prior Feb 15- 6 (LMIAU) under MOLSAMD 08 [Individual Consultant] NSDP/C- Technical Consultant for designing 500,000 QBS Prior Feb 15- 8 the National Qualification 07 Framework[Firm] NSDP/C- Management and Administrative 150,000 IC Prior Dec 30- 9 Consultant for Afghan National 07 Qualification Authority [Individual Consultant] MOE Consultancy Services MOE/C- Design Engineer [Individual 120,000 IC Prior Nov30- 1 Consultant] 07 MOE/C- Assistant Design Engineer 120,000 IC Prior Nov30- 2 [Individual Consultant] 07 MOEIC- Management and Technical 300,000 QCBS Prior Mar 20- 8 Consultant setting up o f 08 Qualification Boards[fm] MOE/C- Management and Technical 600,000 QCBS Prior Jan 20- 9 Consultant Rehabilitation and 08 Reform o f VETS [Firm] MOEIC- Management consultant to the 200,000 IC Prior Dec 31- 10 Directorate o f Vocational Education 07 and Training [Individual Consultant] MOE/C- Chief Project Adviser (inclusive o f 720,000 IC Prior Jan 31- 11 all costs, for three years) 08 MOE/C- Implementation Adviser (inclusive o f 570,000 IC Prior Dec 31- 12 all costs, for three years) 07 MOE/C- Design Consultancy for NIMA [Firm] 220,000 QCBS Prior Feb-15- 70 i Consultancy services provided by firm estimated to cost above $ 100,000 per contract and consultancy i) services provided by individual estimated to cost above $50,000 per contract and all Single Source selection o f consultants f i r m s and individual regardless o f value will be subject to prior review by the Bank. i) i i Short l i s t s composed entirely o f national consultants: Short lists o f consultants for services estimated to cost less than $100,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. 71 PROCUREMENTPLAN Project Information Countw: Afghanistan Borrower: Islamic Republic o f Afghanistan Project Name: Afghanistan Skills Development Project Grant No.: XXXXXX Project Implementing Agency: Ministry o f Education and National Skills Development P r o g r a d M O L S A M D , and the Ministry o f Higher Education Bank's A m r o v a l Date o f the Procurement Plan [Original December 12,20071 Date o f General Procurement Notice: Issue 16 December 2007 Period covered by this Procurement Plan: 18 Months I.Goods and Works and Non-Consulting Services (i)Prior Review Threshold: Procurement Decisions subject to Prior Review by the Bank as stated in Appendix 1 to the Guidelines for Procurement: [Thresholds for applicable procurement methods (not limited to the l i s t below) will be determined by the Procurement Specialist Procurement Accredited Staff based o n the assessment o f the implementing agency's capacity.] Procurement Method Prior Review Threshold Comment 1. Civil Works S U $500,000 2. Goods s u $200,000 3. Direct Contracting All Regardless o f value Procurement Method Threshold for Methods Comment 1. ICB Civil Works U S $ 5,000,000 Equivalent or more 2. NCB Civil Works U S $5,000,000 Equivalent or less 3. ICB Goods s u $200,000 Equivalent or more 4. NCBGoods s u $200,000 Equivalent or less 5. Shopping Goods s u $100,000 Equivalent or less (ii)Reference to (if any) Project OperationaVProcurementManual: A Project Operational Manual shall be prepared and agreed with IDA. 72 T U T 8 .- k ! -L 3 0 =* 2 a 2 m b 3 '- - a- 3 '')I 8 c e c i i a a l- I /t SELECTION OF CONSULTANTS Prior Review Threshold; Selection decisions subject to Prior Review by Bank as stated in Appendix 1 to the Guidelines Selection and Employment o f Consultants: Selection Method Prior Review Threshold $ Comment 1. Competitive Methods (Finns) 100,000 2. Competitive Individual Consultant 50,000 3. Single Source (Finns & Individual) All Regardless o f value Selection Method Threshold for Methods Comment 1. QCBS/QBS/FBS/LCS 200,000 equivalent or above 2. QCBS/QBS/FBS/LCS 200,000 equivalent or less 3. CQS 200,000 equivalent or less Short list comprising entirely o f nationalconsultants: Short l i s t o f consultants for services, estimated to cost less than $ 100,000 equivalent per contract, may comprise entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. Any Other Special Selection Arrangements: Procurement and Contract Officer will be hired under retroactive financing. Consultancy Assignments with Selection Methods and Time Schedule Ref. No. NSDP Consultancy Services NSDP/C- 1 I Training for youth Total Price I 1,000,000 I Procurement Method QBSILCS Review byBank Prior 1 Expected Proposal- opening Date Mar 15 - ~ Remarks I development [fm] 08 NSDP/C-2 I Training for vulnerable 1 1,000,000 I QBS/LCS Prior M a r 15- women-[fm] 08 NSDP/C-3 Training for marginalized 1,000,000 QBS/LCS Prior Marl5- farmers [firm] 08 NSDP/C-4 Training for Productive 1,500,000 QBS/LCS Prior M a r 15- Skills and Business 08 Development Services [fml NSDP/C-5 Curriculum and Materials 144,000 IC Prior Feb 15- Development Specialist 08 [Individual Consultant] NSDP/C-6 Support for the Labor 72,000 IC Prior Feb 15- Market Unit (LMIAU) 08 under MOLSAMD I [Individual Consultant] NSDP/C-7 I Procurement and Contract I 60.000 I IC Prior Jan25- 08 Prior Feb 15- designing the National 07 Qualification 76 Expected Proposal- Total Procurement Review opening Ref. No. Contract (Description) Price Method by Bank Date Remarks NSDP/C-9 Management and 150,000 IC Prior Dec30- Administrative Consultant 07 for Afghan National Qualification Authority [Individual Consultant] MOE Consultancy Services MOE/C-1 I Design Engineer [Individual I 120,000 I IC I Prior I Nov30- I Consultant] 07 MOE/C-2 Assistant Design Engineer 120,000 IC Prior Nov30- [Individual Consultant] 07 MOE/C-3 Implementation & 24,000 IC Post Apr 15- Supervision Engineer 08 [Individual Consultant] MOE/C-4 Implementation & 24,000 IC Post Apr 15- Supervision Engineer 08 [Individual Consultant] MOE/C-5 Implementation & 24,000 IC Post Apr 15- Supervision Engineer [for 08 six months, Individual Consultant] MOE/C-6 Electrical & Water Supply 12,000 IC Post NOV30- Engineer [for six months, 07 Individual Consultant] MOE/C-7 Electrical & Water Supply 12,000 IC Post NOV30- Engineer [for six months, 07 I Individual Consultant] MOE/C-8 I Management and Technical I 300,000 1 QCBS I Prior I Mar 20- I Consultant setting up o f 08 Qualification Boards[fm] MOE/C-9 Management and Technical 600,000 QCBS Prior Jan20- Consultant Rehabilitation 08 and Reform o f VETS [Firm] MOE/C- 10 Management consultant to 200,000 IC Prior Dec 31- the Directorate o f 07 Vocational Education and Training [Individual Consultant] MOE/C-11 Chief Project Adviser 720,000 IC Prior Jan 31- (inclusive o f all costs, for 08 three years) [Individual Consultant] MOE/C-12 ImplementationAdviser 570,000 IC Prior Dec 31- (inclusive o f all costs, for 07 three years) [Individual Consultant] MOE/C-13 Design Consultancy for NIMA 220,000 QCBS Prior Feb-15- Campus [Firm] 08 MOE/C-14 ImplementationOfficer 57,000 sss Prior Dec 31- I [Individual Consultant] I 07 MOE/C- 15 I Translator 54,000 I IC I Prior I Dec 31- I I 07 I 8,483,000 I 77 ImplementingAgency Capacity Building Activities with Time Schedule n I this section the agreed Capacity Building Activities (some items could be from CPAR recommendation) are listed with time schedule. No. Expected outcome / Estimated Estimated Start Date Comments Activity Description Cost U S $ Duration TRN- 1 Training o f two 15,000 Two weeks NSDPDTVET The training sessions procurement staff in N I F M to provide should be completed in or ASCI in India the f i r s t FY o f the I project. National Competitive Bidding procedures shall be subject to the following additional procedures: (i) Standard bidding documents approved by the Association shall be used. (ii) Invitations to bid shall be advertised in at least one (1) widely circulated national daily newspaper and bidding documents shall be made available to prospective bidders, at least twenty eight (28) days prior to the deadline for the submission o f bids. (iii)Bids shall not be invited o n the basis o f percentage premium or discount over the estimated cost. (iv) Bidding documents shall be made available, by m a i l or in person, to all who are willing t o pay the required fee. (v) Foreign bidders shall not be precluded from bidding. (vi) Qualification criteria (in case pre-qualifications were not carried out) shall be stated o n the bidding documents, and if a registration process i s required, a foreign firm determined to be the lowest evaluated bidder shall be given reasonable opportunity o f registering, without any hindrance. (vii) Bidders may deliver bids, at their option, either in person or by courier service or by mail. (viii) All bidders shall provide bid security or a bid security declaration form as indicated in the bidding documents. A bidder's bid security or the declaration form shall apply only to a specific bid. (ix) Bids shall be opened in public in one place preferably immediately, but n o later than one hour, after the deadline for submission o f bids. (x) Evaluation o f bids shall be made in strict adherence to the criteria disclosed in the bidding documents, in a format, and within the specified period, agreed with the Association. (xi) Bids shall not be rejected merely o n the basis o f a comparison with an official estimate without the prior concurrence o f the Association. (xii) Split award or lottery in award o f contracts shall not be carried out. When two (2) or more bidders quote the same price, an investigation shall be made t o determine any evidence o f collusion, following which: (A) if collusion i s determined, the parties involved shall be disqualified and the award shall then be made to the next lowest evaluated and qualified bidder; and (B) i f n o evidence o f collusion can be confirmed, then fresh bids shall be invited after receiving the concurrence o f the Association; (xiii) Contracts shall be awarded to the lowest evaluated bidders within the initial period o f bid validity so that extensions are not necessary. Extension o f bid validity may be sought only under exceptional circumstances. (xiv) Extension o f bid validity shall not be allowed without the prior concurrence o f the Association: (A) for the first request for extension if it i s longer than eight (8) weeks; and (B) for a l l subsequent requests for extensions irrespective o f the period. (xv) Negotiations shall not be allowed with the lowest evaluated or any other bidders. (xvi) Re-bidding shall not be carried out without the Association's prior concurrence; and 78 (xvii) All contractors or suppliers shall provide performance security as indicated in the contract documents. A contractor's or a supplier's performance security shall apply to a specific contract under which it was furnished. 79 Annex 8: ECONOMIC ANALYSIS 1. As the project i s being processed under OP/BP 8.50 a f i l l economic analysis i s not required. Secondly, Afghanistan i s yet to develop the kind o f statistical infrastructure and resources needed for such an analysis. However, a brief analysis has been undertaken and i s included below. 2. The objectives o f the G O A under the Afghan Compact are to produce 150,000 skilled personnel in the country by the Year 2010. This initial step i s aimed at providing the country with a corps o f trained individuals who can better help implement projects and programs in the process o f rehabilitation and development. This includes providing school leavers the opportunity to acquire market relevant s h l l s and become more employable, while simultaneously providing focused employment oriented training for those who have not had the benefit o f formal schooling and are seeking second chance opportunities. This project aims to address critical skills issues in both the public and private sector, and cater to both formal and informal sector employment. The government's aim i s to enhance the productivity o f its labor force through such training and ensure that large numbers o f young Afghans are trained to be able to find opportunities in the country and beyond. 3. Investment in human capital, especially o f the kind that i s currently taking place in Afghanistan, will have an impact on a wide-variety o f social and economic outcomes. This will be a key measure in helping individuals and families come out o f poverty and for laying the foundations for an inclusive growth trend. I t i s widely recognized that a trained and educated workforce i s a necessary component o f the process o f economic growth, though not necessarily a sufficient one. 4. Though not specifically related to training per se, there i s sufficient evidence from around the world to suggest that in developing countries, those completing a higher level o f education are more likely to find employment and have higher life-time incomes compared to individuals who do not. Furthermore, in a country like Afghanistan, the direct and indirect spill-over effects o f education and training for girls in terms o f delayed age o f first marriage, lower levels o f fertility and better child health, are likely to be critical. 5. S h l l s development and improvement can also be a key strategy in Afghanistan to deal with the problems o f high unemployment and poverty. Demand-driven and market relevant VET can enhance an individual's likelihood o f being employed. Better job and higher income opportunities encouraged by training, could improve the quality o f life o f the population. It i s expected better trained persons will be more able to make use o f economic and social opportunities available to them, better adapt to newer technologies, and modem processes. As has been stated above, a formal analysis o f the returns to training (and education) would be difficult given the paucity o f relevant data in the country (for example, little information on population estimates and trajectories, on schooling attainment, prior training, and wages o f trained graduates). Afghanistan's Labor Market 6. The only previous population census in Afghanistan was a partial, incomplete one population census conducted in 1979. Consequently, there currently exists a very limited and inadequate population database on which to formulate development policies and programs. The size and distribution o f the population i s not known and this shortage o f information hampers national planning and policy n formulation. I 2003, the I R C carried out a market survey25between March and April. The survey demonstrates a high degree o f correlation between education levels, sector o f employment, and incomes 25 These numbers are based o n an IRC survey f r o m 2003 and i t s methodology has come under question recently. Furthermore, the 40% o f businesses needing skilled personnel i s in sharp contrast t o the Bank's ICA that places the lack o f skilled personnel very low o n the priority list o f employers and business owners. 80 in localized markets. However, the survey design i s methodologically weak and some survey estimates have come under considerable scrutiny. However, these estimated have almost become home-truths in Afghanistan (even among development partners), who frequently cite large levels o f unemployment in the country. There i s also a belief that about 40% o f businesses suggest that there i s a critical need for skilled personnel, in sharp contrast to the Bank's ICA that places the lack o f skilled personnel as being very l o w o n the priority list o f employers and business owners (World Bank 2007). 7. There i s considerable empirical evidence from around the world that completing basic and post- basic education provides for higher returns in developing countries than in developed countries. Such rate o f return calculations form the basis for decision making o n whether to invest in education. One of the weaknesses with the typical ROR type calculations i s that they are typically applied to those in the waged or salaried economy. In most developing countries, and particularly in a country like Afghanistan, where over 90 % o f activity i s in the informal sector, there does seem to be a limited value for such elaborate economic analysis. As stated earlier, in the Afghanistan context, this i s further compounded by the lack o f reliable data o n indicators, such as, salariedwages by levels o f education and training, unit investment and recurrent costs in education, and the probability o f being gainfully employed in the stream o n which in which training was obtained. 8. The benefits o f the projects are assumed to accrue in three ways: (a) increased number of graduates being put through the system, (b) children access training programs that are o f a higher quality, and (c) improved internal efficiencies with lower dropout rates, absence rates, etc. Even the direct calculation o f costs and benefits i s most likely to be a lower bound, since the indirect or spillover benefits through better health, adaptability to changing environment, trainability are all concepts that are difficult to measure but demonstrates these qualities. 9. However, given the post-conflict nature o f the country, it i s n o surprise that the rate o f return t o education and training in Afghanistan i s very high. The NRVA 2005 indicates that there exists a positive relation between education level and annual income. I t also shows that the wage and salary workers earn between 24% and 174% times at each level o f school as much as those in self-employment (Table 1 and Figure 1). Table 8.1: Average annual income of Afghans wage and salary workers (Afghani) .. - Salaried/Wage Labor Self-Employed Ratio o f Wage/Self- Employed Illiterate 73,073 49,495 i.47 Read & write 80,722 56,268 1.43 Primary 103,096 49,092 2.10 Secondary 86,923 69,767 1.24 H i g h School 82,246 64,873 1.26 College 174.135 63.515 2.74 10. Figure 8.1 shows the distribution o f annual income o f wage and salary workers, and non-wage labor by years o f educational attainment. T o draw this graph we have estimated a wage equation26where education, age and sector o f employment were explanatory variables. 26 : ln(wage)= 10.36 + 0.004 age +0.49 skilled -0.09 agriculture + 0.04 read & write +0.03 primary + 0.18 middle +0.22 h g h + 0.28 college 81 Figure 8.1: Wage distribution for skilled and unskilled wage and salary workers Wage distribution '1 nP 4 6 8 1.0 12 14 Yearly wage(Afghan1s) Skilled 11. Figure 8.2 is, indeed, the predication o f wages for different educational levels and skills, by type o f employment. It i s clear that given education, experience and sector o f employment the income level o f a salaried worker i s greater than the income level o f a non-salariedwage one. I t i s anticipated that with the specific focus sectors o f training identified under this project, viz., management and administration, accounting and financial management, ICT, basic engineering, and agriculture, and the level at which the training i s being conceived (post-grade 12), there will be a shift towards wage employment for most trainees emerging from two-year, post-grade 12 institutions under the MOE's DTVET. This would considerably improve their chances for salary/wage employment and hence lead t o predicted higher income levels. For people seeking second chance opportunities, and who are trained through the NSDP facilitated training programs, it i s anticipated that the training would increase their opportunities for wage employment or bring them to a higher income bracket within the self-employed categories. Figure 8.2: Wage Distribution after Controlling for Age and Sector of Employment Y r I I I I I No read and vmte Pnmmy High School Read and r m t S Ssccndary College education 82 Annex 9: S A F E G U A R D POLICY I S S U E S Safety o f Dams (OP/BP 4.37) [I [XI Projects in Disputed Areas (OP/BP 7.60) [I [XI Projects o n International Waterways (OPBP 7.50) [I [XI Environmental And Social Safeguards Framework Background 1. W i t h an estimated population o f around 25 million, Afghanistan i s among the poorest countries in the world. Afghanistan needs a well-trained and flexible workforce to help rebuild the country after three decades o f conflict. The conflict has decimated Afghanistan's training infrastructure, t o m the fabric o f human society, and has relegated the country to the status o f one o f the least developed in the world. The country's efforts to emerge from this predicament i s hampered by numerous factors, one o f which i s the availability o f a well-educated and trained labor force, that i s competent and flexible, thereby allowing the acquisition o f new skills and trades needed by the country as i t grows and develops. A well-trained labor force will yield higher productivity and be able to accommodate the changing needs o f a changing economy, while simultaneously ensuring higher earnings and greater mobility for participants in the labor force. Though a majority o f the Afghan labor-force i s in the informal sector, skills acquisition and judiciously combined with literacy and numeracy programs, will result in a productive work force, adaptation o f modern production technologies and enhance opportunities through self-employment and small enterprise development. 2. The Afghanistan S k i l l Development Program in response to the above needs has different components including the renovation and building the infrastructures for the s k i l l development program. Objectives 3. The proposed project development objective is: Increased number o f immediately-employable graduates i s produced by building, in stages, a high quality TVET system that i s equitable, market responsive, and cost-effective. Potential Impacts o f Various Components 4. Activities under the project should not entail significant and negative environmental and social impacts, provided they are designed and implemented with due consideration o f environmental and social issues. Construction activities may cause limited, temporary, and localized negative impacts due to 83 depletion or degradation o f natural resources such as stone, earth, water etc. used for school construction if proper environmental management i s not carried out at design, construction and operation stages. This can be mitigated through the implementation o f an appropriate social and environmental management plan. Capacity building o f PEDS and DEDs including physical and institutional management, are likely to have a positive impact on social and physical environment. 5. In case, the project i s considering rehabilitation/ or construction o f new buildings o f vocational institutions having components and installations o f old or new plants involved with, chemicals, chemical fertilizer, and other similar polluting industries would need a special and full EIA by a competent relevant specialist or a team as the case may be. 6. O P B P 4.0 1 i s triggered because o f vocational institutions building or rehabilitation activities. The project will apply the principal Environmental and Social Safeguards Framework (ESSF) for emergency projects in Afghanistan. T o limit the extent o f these risks, the Framework provides guidelines and codes o f practice for an environmental mitigation measures to be incorporated in the design, contracting and monitoring o f sub-projects, along with an implementation structure assigning responsibilities to implementing agencies and their consultants, and a capacity building program for social and environmental management. 7. There will be n o land acquisition under the project as all the physical works relate to renovatiodrehabilitation o f buildings belonging to existing training institutions or few new constructions within these institutions, which are all located on Ministry o f Education land. All the training institutions are currently functioning, and there are thus no questions o f squatters or informal settlers on these lands. 8. Chance finds o f cultural property (archaeological artifacts) during implementation o f sub-projects involving c i v i l works will be handled according to provisions in the "Law on Preservation o f Afghanistan's Historical and Cultural Heritage (2004)" and be reported to the provincial or district governors, who then will inform the Archaeological Committee. 9. Compliance with the safeguard provisions and the negative l i s t will be ensured through an environmental, social and risk screening procedure (check lists) required for sub-project proposals, and by internal input, process, and output monitoring, and by Bank supervision missions. Purpose o f the Environmental and Social Management Framework 10. Currently, social and environmental management in Afghanistan i s suffering from critical capacity constraints. Since there i s potential for adverse environmental impacts, albeit limited, from the proposed activities under the ASDP, their mitigation and management i s key to the wholesome rehabilitation and development within the vocational educational sector. Hence, keeping in view the existing management capacity, as well as the flexibility requiredwith investments s t i l l to be finalized, a framework approach i s adopted for ASDP. I t allows for early identification o f potential adverse impacts, without the requirement o f rigorous analysis through quantification, and also provides general policies and broad guidance for their effective mitigation, along with codes o f practice and procedures to be integrated into project implementation. Consistent with existing national legislation, the objective o f the Framework i s to help ensure that activities under the proposed reconstruction operations will: 0 Protect human health; 0 Prevent or compensate any loss o f livelihood; 0 Prevent environmental degradation as a result o f either individual subprojects or their cumulative effects; 0 Enhance positive environmental and social outcomes; and 0 Ensure compliance with World Bank safeguard policies. 84 General Principles 11. Recognizing the emergency nature o f the proposed relief and reconstruction operations, and the related need for providing immediate assistance, while at the same time ensuring due diligence in managing potential environmental and social risks, this Framework i s based on the following principles: a. The project will support multiple subprojects, the detailed designs o f which may not be known at appraisal. To ensure the effective application o f the World Bank's safeguard policies, the Framework provides guidance on the approach to be taken during implementation for the selection and design o f subprojects, and the planning o f mitigation measures; b. All proposed subprojects will be screened to ensure that the environmental and social risks can be adequately addressed through the application o f standardized guidelines; c. Project design and subproject selection will aim to maintain regional balance, and equity between ethnic and religious groups, considering variations in population density. Employment opportunities within the projects will be available on an equal basis to all, on the basis o f professional competence, irrespective o f gender, or ethnic or religious group. A separate gender assessment has been conducted to help accomplish the project's development objective" to expand access to jobs and skills training, as well as meet i t s commitment to gender mainstreaming through a gender-focused assessment. d. Consultation and disclosure requirements will be simplified to meet the special needs o f these operations. Prior to approval by the World Bank Board, this Environmental and Social Safeguards Framework will be disclosed in Afghanistan in Dari and Pashto, and in the World Bank Infoshop. Safeguard Screening and Mitigation 12. The selection, design, contracting, monitoring and evaluation o f subprojects will be consistent with the following guidelines, codes o f practice and requirements: a. A negative l i s t o f characteristics that would make a proposed subproject ineligible for support, as indicated in Attachment 1; b. Procedures for the chance discovery o f archaeological artifacts, and unrecorded graveyards and burial sites, provided in Attachment 2; c. Relevant elements o f the codes o f practice for the mitigation o f potential environmental impacts, presented in Attachment 3; d. Relevant Environmental Guidelines for Contractors to be used during the construction o f the facilities (see Guidelines in Attachment 4) Responsibilities for Safeguard Screening and Mitigation 13. The overall responsibility o f project implementation rests with the Ministry o f Education (MOE) and the Ministry o f Labor, Social Affairs, Martyrs and Disabled (MOLSAMD). A designated Safeguards Nodal Officer will be identified with responsibility for overseeing the implementation o f the Environment and Social Safeguards Framework and Management Plan within the Project Management Team at the 2'Increased number o f immediately-employable graduates is produced by building, in stages, a high quality TVET system that i s equitable, market responsive, and cost-effective. 85 relevant ministries. T h i s could be a sanitation engineer currently having responsibility in the ministries and n o need to hire a specific person for this. Capacity Building and Monitoring of Safeguard FrameworkImplementation 14. The capacity building activity will be implemented under a separate Technical Assistance program for Social and Environmental management. As part o f the social and environmental capacity building that will be provided for implementation o f IDA-financed operations in Afghanistan, the Safeguards Focal Officer and relevant staff o f MOE and implementing agencies/Consultants will receive training in the application o f the Safeguard Framework. Specialist training modules may be considered after an acceptable level o f base knowledge has been established. During supervision o f the project, the World Bank will assess the implementation o f the Framework, and if required, will recommend additional strengthening. Consultation and Disclosure 15. This Environmental and Social Safeguards Framework was developed on the basis o f an overall Framework for World Bank-funded reconstruction operations which was prepared in consultation with the principal NGOs, and development partners participating in reconstruction activities in Afghanistan. Prior to approval o f the project by the World Bank, it will be disclosed by the Government in Dari and Pashto, as well as English, and it will also be made available at the World Bank's Infoshop. Since no other separate environmental or social assessments will be prepared for activities under the proposed reconstruction operations, no additional disclosure requirements will apply. 86 Attachment 1 Negative List of Subproject Attributes 1. Subprojects with any o f the attributes listed below will be ineligible for support under the proposed emergency reconstruction operations. Table 9.2: Attributes o f Ineligible Subprojects GENERAL CHARACTERISTICS Involves the significant conversion or degradation o f critical natural habitats. Including, but not limited to, any activity within: 0 Ab-i-Estada Waterfowl Sanctuary; 0 Ajar Valley (Proposed) Wildlife Reserve; 0 Dashte-Nawar Waterfowl Sanctuary; 0 Pamir-Buzurg (Proposed) Wildlife Sanctuary; 0 Bande Amir National Park; 0 Kole Hashmat Khan (Proposed) Waterfowl Sanctuary. W i l l significantly damage non-replicable cultural property, including but not limited to any activities that affect the following sites: monuments o f Herat (including the Friday Mosque, ceramic tile workshop, Musallah complex, Fifth Minaret, Gawhar Shah mausoleum, mausoleum o f Ali Sher Navaii, and the Shah Zadehah mausoleum complex); monuments o f Bamiyan Valley (including Fuladi, Kakrak, Shar-i Ghulghular and Shahr-i Zuhak); archaeological site o f A i Khanum; site and monuments o f Ghazni; minaret o f Jam; mosque o f H a j i P i y a d a u Gunbad, Balkh province; stupa and monastry o f Guldarra; site and monuments o f Lashkar-i Bazar, Bost; archaeological site o f Surkh Kotal. Requires involuntary acquisition o f land, or any resettlement o f people. Involves the use o f unsustainably harvested timber or fuelwood. Involves the use o f hazardous substances. 87 Attachment 2 Protection of Cultural Property 1. Physical culture includes monuments, structures, works o f art, or sites o f "outstanding universal value" from the historical, aesthetic, scientific, ethnological, or anthropologxal point o f view, including unrecorded graveyards and burial sites. Within this broader definition, cultural property i s defined as sites and structures having archaeological, paleontological, historical, architectural, or religious significance, and natural sites with cultural values. 2. The proposed emergency project i s unlikely t o pose a risk o f damaging cultural property, as the sub-projects will largely consist o f small investments in community infrastructure and income generating activities, reconstruction o f existing structures, and minor urban public works. Further, the negative l i s t o f attributes, which would make a subproject ineligible for support (Attachment l), includes any activity that would significantly damage non-replicable cultural property. Nevertheless, the following procedures for identification, protection from theft, and treatment o f chance finds should be followed and included in standard bid documents. Chance Find Procedures 3. Chance find procedures are defined in the l a w o n the Preservation o f Afghanistan's Historical and Cultural Heritages (decree no. 19, Official Gazette, no. 828, 1383/02/31 - 2004/05/20)), specifying the authorities and responsibilities o f cultural heritage agencies if sites or materials are discovered in the course o f project implementation. T h i s l a w establishes that all moveable and immovable historical and cultural artifacts are state property, and further: i. All humanitarian artifacts (Moveable and Immoveable) which have historical, scientific, artistic or cultural value and are at least one hundred (100) years old.(art. 3, 1) ii. All artifacts which are less than 100 years old but have cultural, scientific and artistic value and are determined to be preserve able and valuable artifacts (art. 3,2). i. i i The Archaeology Institute and the Historical Artifacts Preservation and Repair Department are both responsible to survey, evaluate, determine and record all cultural and historical sites and collect and organize all historical documents related t o each specific site. N o one can build or perform construction on the recorded historical and cultural site unless approved or granted permission or agreement i s issued from the Archaeology Institute (art. 7) iv. Whenever municipalities, construction, irrigation or other companies (whether they are governmental or private) find or discover valuable historical and cultural artifacts during the conduct o f their projects, they are responsible to stop their project and report any findings t o the Archaeology Institute about the discovery. (art. 10). If a construction project harms a historical or cultural artifact, the project will be stopped until proper measures are taken t o preclude such harm. (art. 11) v. Any finder or discoverer o f historical and cultural sites i s obligated to report a find or discovery to the Archeology Institute immediately but not later than one week if it i s in the city and not later than 2 weeks if it i s in a province. All discovered artifacts are considered public properties and the Government o f Afghanistan will pay for all lands and sites which are considered to be o f historical or cultural value.(&. 19, 1) 88 v1. Whenever there i s an immovable historical and cultural site discovered which includes some movable historical and cultural artifacts, all such movable artifacts are considered public property and the owner o f that property will be rewarded according to Article 13 o f this Decree (art. 19,2). vii. A person who finds or discovers a movable historical and cultural artifact i s obligated to report the discovery to the Archaeology Department no later than seven (7) days i f he/she lives in the capital city o f Kabul, and in the provinces they should report the discovery to the Historical and Cultural Artifacts Preservation Department or Information and Culture Department or to the nearest governmental Department n o later than fourteen (14) days. Mentioned Departments in this article are responsible to report the issue to the Archaeology Department as soon as possible and the discoverer o f the artifact will be rewarded according to Article 13 o f this Decree.(art. 26) ... v1. 11 Whenever individuals who discover historical and cultural artifacts do not report such discoveries to the related Departments within the specified period according to Articles 19 and 26 o f this Decree, they will be incarcerated for a minimum o f one (1) month but not more than a maximum o f three (3) months.(art. 75) ix. Individuals who deliberately destroy historical and cultural artifacts will be fined and according to the level and kind o f destruction, they shall be incarcerated from one (1) month minimum to a maximum o f ten (10) years. (art. 74) 4. In case o f a chance find o f moveable or immovable historical or cultural artifact, the implementing agency i s responsible for securing the artifact from theft, pilferage and damage until the responsibility has been taken over by the relevant authorities as specified above. 5. These procedures must be referred to as standard provisions in construction contracts, when applicable. During project supervision, the Site Engineer shall monitor that the above regulations relating to the treatment o f any chance find encountered are observed. 6. Relevant findings will be recorded in World Bank Implementation Status and Results Report (ISR), and Implementation Completion Reports (ICRs) will assess the overall effectiveness o f the project's cultural resources mitigation, management, and capacity building activities, as appropriate. 89 Attachment 3 Deforestation caused by: Replace timber beams with concrete where structurally possible. unsustainable use o f timber. Ensure fired bricks are not wood-fired. wood-firing o f bricks. Where technically and economically feasible, substitute fired bricks with alternatives, such as sun-dried mud bricks, compressed earth bricks, or rammed earth construction. Injury and death from earthquake: Apply low-cost aseismic structural designs. Disease caused by inadequate provision Ensure designs include adequate sanitary latrines and access to safe o f water and sanitation: water. contamination by seepage from Chemical and bacteriological testing o f water quality from adjacent latrines, municipal waste or comparable sources prior to installation o f new sources. agricultural areas. Redesign to prevent contamination if adjacent comparable sources high mineral concentrations. are found to be contaminated. creation o f stagnant pools o f water. Subsequent monitoring o f installed or rehabilitated sources. Appropriate location, apron and drainage around tube wells and dug wells to prevent formation o f stagnant pools. Provision o f cover and hand-pump to prevent contamination o f dug wells. Where pit latrines are used they should be located more than 10m from any water source. The base should be sealed and separated by at least 2 m o f sand or loamy soil from the groundwater table. Where nightsoil latrines or septic tanks are built they should be sealed. Outflows should drain either to a soakaway located at least 10m from any water source or be connected to a working drain. Depletion o f water source: Urban interventions and abstraction l i m i t s to be planned in the over-exploitation o f aquifers. context o f groundwater investigations. Contamination o f water supplies: I Where pit latrines are used they should be located more than 10m contamination o f groundwater from any water source. The base should be sealed and separated because o f seepage. vertically by not less than 2 m o f sand or loamy soil from the ground contamination o f surface waters due water table. to flooding or over-flowing. 0 Where nightsoil latrines or septic tanks are built they should be sealed. Outflows should drain either to a soakaway located at least 10m from any water source or be connected to a working drain. 0 Maintenance training to be delivered along with new latrines. Disease caused by poor handling 0 Training and health education to be provided to nightsoil handlers practices o f nightsoil. where affected by interventions. Protective clothing and appropriate containers for nightsoil transportation to be provided. 90 Disease caused by inadequate excreta 0 Nightsoil should be handled using protective clothing to prevent disposal or inappropriate use o f any contamination o f workers skin or clothes. latrines. 0 Where night-soil i s collected for agricultural use it should be stored for a sufficient period to destroy pathogens through composting. At the minimum it should be stored in direct sunlight and turned regularly for a period o f at least 6 weeks. Septic tanks should not be constructed nor septic waste collected unless primary and secondary treatment and safe disposal i s available. 0 Health and hygiene education to be provided for all users o f latrines. 0 Awareness campaign to maintain sanitary conditions. 91 Attachment 4 Environmental Guidelines for Contractors The following guidelines should be added to the ESMF and included in the contractual agreements: 0 Installation o f the work site on areas far enough from water points, houses and sensitive areas; 0 Sanitary equipments and installations; 0 Site regulation (what i s allowed and not allowed o n work sites); 0 Compliance with laws, rules and other permits in vigor; 0 Hygiene and security on work sites; 0 Protect neighboring properties; 0 Ensure the permanence o f the traffic and access o f neighboring populations during the works to avoid hindrance to traffic; 0 Protect staff working on work sites; 0 Soil, surface and groundwater protection: avoid any wastewater discharge, o i l spill and discharge o f any type o f pollutants on soils, in surface or ground waters, in sewers and drainage ditches; 0 Protect the environment against exhaust fuels and oils; 0 Protect the environment against dust and other solid residues; a Waste management: install containers to collect the wastes generated next to the areas o f activity; a Degradatioddemolition o f private properties: inform and raise the awareness o f the populations before any activity causing degradation o f natural vegetation and resources. Compensate beneficiaries before any work; 0 Use a quarry o f materials according to the mining code requirements; 0 Compensation planting in case o f deforestation or tree felling; 0 N o waste slash and bum on site; 0 Speed limitation o f work site vehicles and cars; 0 A l l o w the access o f Public and emergency services; 0 Organize the storage o f materials; 0 Organize parking and displacements o f machines; 0 Footbridges and access o f neighbors; 0 Signaling o f works; 0 Respect o f cultural sites; 0 Safe Disposal o f asbestos; 0 Consider impacts such as noise, dust, and safety concerns on the surrounding population and schedule construction activities accordingly; 0 Protect soil surfaces during construction and revegetate or physically stabilize eligible surfaces; 0 Ensure proper drainage; 0 Prevent standing water in open construction pits, quarries or fill areas to avoid potential contamination o f the water table and the development o f a habitat for disease-carrying vectors and insects; 0 Select sustainable construction materials; 0 Control and clean the construction site daily; 0 During construction, control dust by using water or through other means; 0 Provide adequate waste disposal and sanitation services at the construction site; 0 Dispose o f o i l and solid waste materials appropriately; 0 Preserve natural habitats along streams, steep slopes, and ecologically sensitive areas; 0 Develop maintenance and reclamation plans and restore vegetation. 92 Gender Assessment 1. Over the past three decades o f conflict, Afghan men and women have encountered pronounced obstacles in their access to education and development o f s k i l l s for employment. Minimal involvement in public l i f e has left a generation o f women with l o w literacy rates (estimated recently at 18 percent for women over age 18 and, in rural areas, as l o w as 10 percent2*) and limited skills for paid employment. Women's participation in economic activities remains largely agricultural, family-based, and not monetarily compensated. I certain areas, cultural traditions restrict women's work to that which i s n performed in the household. Afghan males face their own set o f barriers in the current armed conflict situation, which promotes a violent atmosphere and i s not conducive to raising awareness about vocational s k i l l s training opportunities. Training programs must compete with higher-paying activities, including the illegal opium industry, that have a greater short-term appeal to males than the longer-term payoff o f investment in s k i l l s and educational attainment. Barriers for both males and females deprive Afghanistan o f a substantial contribution to i t s stock o f human capital, a critical factor in i t s rapid reconstruction. Review o f Gender Focus in the Four Components o f Project Design 2. The project has committed to gender mainstreaming through a gender-focused assessment prior to By Project Appraisal that will inform further planning and implementati~n.'~ targeting females as well as males in i t s objectives, ASDP reflects the gender sensitive approaches (reviewed below) o f related programming in M o E and the NSDP in MOLSAMD, under whose aegis the project will operate.30 Components 2 and 3 support NSDP and M o E programs for TVET and literacy training. B o t h program strategies give attention to gender mainstreaming in several project and sub-project activities and have identified gender-related targets among priority results. Components 1 and 4 address gender to a lesser degree and draw from NSDP's Strategy, as discussed below. 3. n Component 1: Develop Rermlatorv and Oualitv Assurance Framework for TVET. I developing an appropriate regulatory, legislative and institutional framework and strengthening capacity to plan, monitor and coordinate the framework, NSDP aims to develop a national VET delivery policy with gender-sensitive attention to skills shortages in all sectors. 4. Component 2: Improve Relevance, Oualitv and Efficiency o f TVET aims to increase the access to post-basic education and training programs that are relevant to the needs o f the market, o f high quality, and improve employment opportunities for both women and men.31T h i s component addresses improvements among select trades and VE institutions under MOE, which has made TVET a major part o f i t s National Strategic Plan. I t s TVET program i s fundamentally gender sensitive in i t s approaches and objectives, with an overall goal to "provide relevant and quality technical and vocational opportunities for all male and female Afghans in order to equip them with marketable s k i l l s that meet the needs o f the ~~ labour market in Afghanistan and other c o u n t r i e ~ . "Like NSDP, MoE's programming emphasizes a shift from supply-driven technical and trades training to labor market demand-driven TVET opportunities Afghanistan `s Millennium Development Goals Report, 2005: Vision 2020; (Islamic Republic o f Afghanistan Ministry o f Education (MoE). 2006. "The National Strategic Plan for Education in Afghanistan" [December 2006 Draft], p. 49. 29 This commitment i s expressed in the ASDP, Project Information Document, p. 3. 30 ASDP has adopted MoE's vision to provide ". . .equal access to a better quality education for all, regardless o f gender, ethnicity, language, religion or geographical location, and build the country's human resources to meet the challenges of national reconstruction and launch the country on a path of rapid growth and development (MoE 2006: p. 4). I t also reflects NSDP's "strong commitment to addressing women's access to vocational education and training and gender issues will be addressed in all aspects o f the program" (NSDP, Strategy Master Document [May 31,2007 draft], p. 13. 3' These opportunities are gained "through the provision of market-driven skills training, business training and linkages to business development support services" (NSDP 2007, p. 4). 32 MoE. 2006, p. 13. 93 (plus management skills training) for both men and women. For the target period (2006-2010), this will be accomplished through expanding existing TVET apparatus, closer partnership with the private sector, and short-term training courses in select TV fields that target both male and female unemployed youth. The Literacy and Non-formal Education program o f M o E builds upon N S D P and M O L S M D ' s planned Vocational Training Centres. This program i s especially attentive to females, as MOE cites poor female attendance in an already l o w overall participation rate (10 percent among only 15,000 students in 2006). One goal i s that by end 2007, females comprise at least 60 percent o f the target 100,000 learners from a l l provinces. Principal planning objectives for 2010 include a minimum 50 percent improvement in literacy rates and a minimum 60 percent o f learners are female. Another objective i s that at least 30-35 percent o f the 12,000 youth and civil servants trained in finance and public administration s k i l l s are female (2008- 2010). T w o o f five priority program components also address gender issues: curriculum development will adhere to the principle o f easy access to education for females and males; and short-term (6-12 months) vocational courses for up to 4,000 youths and existing civil servants require a minimum 40 percent female participation. The cascade approach to training, where literacy facilitators mentor facilitator assistants who then launch classes in their communities aims to "enable communities with few literate people, females in particular, to develop their own team o f literacy facilitators after the first classes have been conducted.. .."33 5. Component 3: Skills Development Program and Market Linkages with a Rural Focus This component will provide rural-markets oriented training for youth, destitute women, and marginal farmers aimed at diversifying their income sources, improving productivity, and developing marker linkages in rural areas without any pre-condition o f prescribed schooling levels. The component will be implemented by the NSDP o f M O L S A M D with the following priority results expected by 2010: at least 35 percent o f the 150,000 unemployed or underemployed Afghans who gain opportunities are women; and improved capacity o f GOA and VET providers to promote gender equality in relevant, high-quality, labor market- driven training. 6. NSDP plans to gender sensitize VET practitioners and c i v i l servants: a l l staff and managers in relevant PIUs and other training institutions will receive gender awareness training, and at least 30 percent o f stafvmanagers in the NSDP PIU are to be women. NSDP ensures gender sensitivity in training, framework development, and labor market analysis; and attention to the security situation so related constraints do not impede female participation. NSDP's two-pronged strategy o f gender mainstreaming and gender-specific action (carried out in partnership with the Ministry o f Women's Affairs) emphasizes gender equality in teaching methodology and training/skills development curricula; encourages female participation in non-traditional occupations; and commits t o set up facilitiedmechanisms for female trainee management o f childcare, provide school-level career guidancehounseling; build training provider capacity to address gender issues, carry out targeted campaigns for training/promotion o f female employment, and provide second-chance educatiodliteracy training to both men and women. 7. Component 4: Research, Monitoring and Evaluation. NSDP, MoE will develop info/M&E systems to provide routine, timely information on implementation and more accurate, up-to-date gender- disaggregated labor market data that translates into policies for men's and women's s h l l s development. MoE's TVET, Literacy/Non-formal Ed programs already collect gender-disaggregated data on literacy, training rates and student, teacher participation in TV Schools. 33 Ibid., p. 112. 94 Recommendations for Enhancing Gender Focus, Male and Female Participation 8. The measures that NSDPMOLSAMD and MoE already have incorporated to improve gender equality and sensitivity in their TVET and literacy trainingleducation programs would be enhanced by considering the recommendations displayed in Table 9.4 below. These recommendations are based on international best practices and observations from visits to program sites, Sept-Oct 2007.34 34 Field research was conducted by Nasrin Rafiq, local consultant to the World Bank Kabul office. 95 Annex 10: PROJECT PREPARATION AND SUPERVISION Table 10.1: Project PreDaration Schedule Planned Actual P C N review 05/08/2007 05/08/2007 Appraisal 11/15/2007 1111712007 Negotiations 1211212007 12/5/2007 Board Approval 0113 112008 Planned date o f effectiveness 03/31/2008 Planned date o f mid-term review 04/01/2010 Planned closing date 02/28/2013 Key institutions responsible for preparation o f the project: 0 Ministry o f Education 0 Ministry o f Labor, Social Affairs and Martyred and Disabled 0 Ministry o f Higher Education 0 Department o f Technical and Vocational Education Training 0 National Skills Development Program Table 10.2: Bank staff and consultants who worked on the project included: Name Title Unit Venkatesh Sundararaman EconomistfTask Team Leader SASHD Alexandria Valerio Senior Education Specialist LCSHE Amit Dar Lead Education Economist SASHD Cynthia Deane Consultant SASHD Deepal Fernando Senior Procurement Specialist SARPS Hasib Karimzada Team Assistant SASHD Hiroshi Saeki Operations Analyst SASHD Julie-Anne Graitge Program Assistant SASHD Kenneth Olcpara Senior Financial Management Specialist SARFM Miche1 Welmond Lead Education Specialist AFTH3 Mohammad Arif Rasuli Environment Specialist SASDN Nazir Ahmad Extended-Term Consultant SASFP Pema Lhazom Operations Officer SASHD Rahimullah Wardak Procurement Analyst SARPS Scherezad Joya Monami L a t i f Senior Education Specialist SASHD Sheila Braka Musiime Counsel LEGMS Bank funds expended to date on project preparation: 1. Bank resources: U S $254,169.54 2. Trust funds: U S $55,744.74 S 3. Total: U $309,914.30 Estimated Approval and Supervision costs: 1. Remaining costs to approval: U S $25,000.00 2. Estimated annual supervision cost: U S $ 150,000.00 98 SUPERVISION 1. The Bank will devote an average o f 25 staff weeks per year to supervise the project as TTL, and a total o f 60-80 staff weeks per year for other staff. T h i s i s keeping in line with emergency operations where the money i s made available relatively quickly, but with an increased emphasis o n supervision, monitoring and evaluation. This amounts to approximately 300-400 staff weeks (on an annually declining basis) over the l i f e o f the project through FY 2013. During the first year, supervision will focus o n performance o f the DTVET and the NSDP PIUs ability in managing contracts, procurement, and financial matters, as w e l l as in completing the agreed implementation plans. The focus will also be o n the training o f trainers program, the works components needed to rehabilitate temporary infrastructure to accommodate the students while the NIMA i s under construction. 2. During the following years, supervision will focus o n progress in executing works, developing the plans for the rehabilitation o f institutions that have self-selected for reforms, strengthening the capacity o f government entities t o implement future TVET projects with the a i m o f developing a vibrant private sector for training. 99 Annex 11: DOCUMENTS I N THE PROJECT FILE Project'sBackground Documents 1. Policy Note on Slulls Training in Afghanistan, World Bank (November 2006). Bank Staff Documents 1. Project Information Document (PID), Appraisal Stage, October 3 1,2007. 2. Integrated Safeguards Data Sheet (ISDS), Appraisal Stage, October 31,2007. 3. Aide Memoire, Pre-appraisal Mission, October 9-21,2007. 4. Preparation Mission, Management Letter August 7,2007. 5. Minutes o f the Project Concept Note (PCN) Review Meeting, M a y 8,2007. 6. Project Concept Note, March 2007. 7. Project Information Document (PID), Concept Stage, M a y 22,2007 8. Aide Memoire, Identification Mission, February 1 - February 13,2007 100 Annex 12: STATEMENT OF LOANS AND CREDITS Table 12.1: Active IDA Projea in Afgh nistan Difference Between Expected Active Proiects IDA Undisb. 1 and Actual , Disbursementsa/ 1 ProjectID PO88719 FY 2005 Project Name AF Investment Guarantee Facility 5.00 I Orig. I Rev'd Frm I PO90928 2007 AF PSD Support Project 25.00 25.54 PO78936 2004 AF: Emergency Irrigation 65.00 39.99 12.62 Rehabilitation PO83720 2004 AF: Emergency Communications 22.00 3.85 2.87 DeveloDment 20.00 33.40 10.00 89.60 I Reha P103343 I 2008 I Afghanistan Emergency Rural Access 112.00 30.00 27.87 1.57 8.00 8.23 0.33 20.40 20.66 i4 2005 Education Quality Improvement 35.00 18.96 (1.72) Program PO83906 2004 Emergency Customs and Trade 3 1.OO 3.49 1.89 I Facilitation PO83908 I 2004 I Emergency Power Rehabilitation 105.00 80.29 50.64 (3.63) Project PO78284 2003 Emergency Transport Rehabilitation 153.00 14.94 PO839 19 2005 Kabul Urban Reconstruction Project 25.00 24.29 13.81 P102288 2007 NSPII 120.00 24.00 48.13 PO82472 2003 Natn'l Emergency Emp. Prog for Rural 39.20 0.1 1 PO84736 2005 Public Admin Capacity Building 27.00 11.13 ,.,, 7 79 I Project PO89040 I 2005 I Strengthening Higher Education 40.00 36.19 0.64 1 Program PO87860 I 2006 I UrbanWaterSector 42.28 Overall Result 14.84 101 Annex 13: COUNTRY AT A GLANCE Afghanistan at a glance 1I5107 POVERTY and SOCIAL South Low- Dsvelopment diamond' Afghanistan Asia income 2005 Population, mid-year (millions) 1,470 2,353 GNI per capita (Atlas method, US%) 684 580 Life expectancy GNi (Atlas method, US%billions) 7.0 1,005 1,364 Average annual growth, 1SSS-05 1 Population (%) 1.7 1.9 Labor force (%) 2.3 2.1 2.3 Gross per primary Most recent estimate (latest year available, 1 SS9-05) capita Poverty (% of population below nationalpoverty line) Urban population (% offotal population) 24 29 31 Life expectancy at birth (years) 45 63 59 I infant mortality (per 1,000 live births) 165 66 60 Child malnutrition (% of children under 5) 45 39 Access to improved water source Access to an improved water source (% ofpopulation) 40 84 75 Literacy (% ofpopulation age 15+) Gross primary enrollment (% of school-age populaflon) Male 29 54 60 110 116 62 104 110 - Awhanistan -Low-Income group Female 105 9s KEY ECONOMIC RATiOS and LONG-TERM TRENDS 1985 IS65 2004 2005 Economlc ratios. GDP (US%billions) 6.0 7.3 Gross capital formation1GDP 31.1 25.0 Exports of goods and ServiceslGDP 11.5 12.4 Trade Gross domestic savingslGDP -13.1 -18.2 Gross national savings1GDP -13.1 -18.2 CUNent account balance1GDP 1.4 -1.0 Domestic Capital Interest payments1GDP savings formation Total debtlGDP Total debt servicelexports 6.7 Present value of debtlGDP Present value of debtlexports Indebtedness 1985-95 1995-05 2004 2005 2005-09 (average annualgrowth) GDP 8.0 14.0 -AfBhanlsfan GDP per capita ~ Low-Income group Exports of goods and services -2.8 31.4 STRUCTURE of the ECONOMY I 1985 1695 2004 2005 Growth of capltal and GDP (X) (% of GDP) T Agriculture 37.2 36.1 lndusby 24.4 24.5 Manufacturing 15.8 14.9 Services 38.3 39.4 Household final consumption expenditure .. 104.0 109.6 General gov't final consumption expenditure 9.1 8.6 I -GCF *GDP I Imports of goods and services 55.7 55.7 1985.g5 19s5-05 2005 IGrowth of exports and Imports (x) (average annual growth) Agriculture -17.1 lndusby 32.4 Manufacturing Services Household final consumption expenditure General gov't final consumption expenditure Gross capital formation 21.9 34.6 -5.0 -7.7 -1 1.9 14.3 20.3 14.0 -2.7 1 -Expo* / -O-lmports I Imports of goods and SeNiCeS -25.7 20.9 Note: 2005 data are preliminary estimates. The diamonds show four key indicators in the counby (in bold) compared with its lncome-group average. If data are missing, the diamond will be incomplete. 103 Afghanistan PRICES and GOVERNMENT FINANCE 1985 1995 2004 2005 Domestlc prlces Y ( Y change) Consumer prices 26.7 12.7 Inflation (%) I Implicit GDP deflator 17.0 11.9 Government finance (% of GDP, includes current grants) Current revenue 9.5 9.8 Current budget balance 0.1 1.1 1 -GDPdeflator *CPI I Overall surplusldeficit -0.7 0.1 TRADE 1985 1995 2004 2005 I Export and Import levels (US$ mill.) (US$ millions) Total exports (fob) 592 755 Fresh fruits T Dried fruits 3.000 Manufactures 2,000 Total imports (cif) 2,713 3,280 Food 1,000 Fuel and energy Capital goods 0 Export price index (2000=100) Import price index (2000=100) Terms of trade (2000=100) 99 00 01 rn Exporls 02 03 rn Imports 04 "'I BALANCE of PAYMENTS 1985 1995 2004 2005 Current account balance to GDP (Ye) (US$ millions) Exports of goods and services 668 1,720 1,705 4T Imports of goods and services 1,076 4,432 4.849 Resource balance -408 -2,712 .3,144 Net income 21 8 27 Net current transfers 2,787 3,048 Current account balance 83 -70 Financing items (net) 38 1 448 Changes in net reserves -26 -464 -378 Memo: Reserves including goid (US$ millions) 61 1 1.283 1,662 Conversion rate (DEC, local/US$) 50.6 47.8 49.7 EXTERNAL DEBT and RESOURCE FLOWS 1985 IS95 2004 2005 (US$ millions) Total debt outstanding and disbursed 2.274 5,619 IBRD 0 0 IDA 0 0 Total debt service 47 89 iBRD 0 0 IDA 0 0 Composition of net resource flows Official grants Official creditors 210 0 Private creditors 0 0 Foreign direct investment (net inflows) Portfolio equity (net inflows) World Bank program Commitments 0 0 Disbursements 0 0 Principal repayments 0 0 Net flows 0 0 Interest payments 0 0 Net transfers 0 0 Development Economics 1/5/07 104 60°E 65°E 70°E 75°E To U Z B E K I STA N Dushanbe hob Am u Da Murg r ya TA J I K I S TAN To Chardzhev To TA JI K IS TA N To Kulob To Shazud Dushanbe To Qurghonteppa AFGHANISTAN TU RK M EN ISTA N Faisabad h ¯ ¯ JAWZJAN JOWZJAN ndz Pya BALKH ¯ KUNDUZ KONDOZ mi r Taloqan Taloqan ¯ ¯ Pa h Kunduz Kondoz ¯ Sheberghan ¯ Mazar-e ¯ Sharif i Shar¯f Shari TAKHAR TAKHAR s ¯ BADAKHSHAN Saripul Tirich u Tirich Mir Samangan ¯ Baghlan ¯ K (7690 m) To Meymaneh Mary ¯ SAMANGAN ¯ BAGHLAN ¯ YA ¯ F A R YA B u ¯ nd o uz d To eQ Chitral To SARIPUL SAR-E POL ya -y n 35°N Mashad Mor gh¯ ¯r Da H i ¯ NUREST¯¯ NURESTAN AN NURISTAN a ¯ B A D G H ¯S b 35°N P I ¸ ¯ Mahmud-e Raqi ¯ i Raq¯ ¯ ¯ ¯ Nurestan KAPISA Nuristan ¯ ¯ ¯ a Qal`eh-ye Qal`eh-ye Now Qal` Bamyan ¯ i¯ Bami ¯ Bam¯an PARWAN ARWAN PARWAN ¯ Asadabad ¯ ¯ r o Charikar Chari ¯ ¯i Char¯kar LAGHMAN To p a e ¯ KUNAR R a n g ¯ ¯ Mardan m i s u s Chaghcharan ¯ BAMYAN BAMYAN KABUL KABUL ¯ Mehtarlam ¯ Herat ¯ ir¯d Har¯ u Jalalabad ¯¯ ¯ PAK I S TAN WA R D A K WA Meydan Shahr ¯ INDIA ¯ Khyber Pass ¯ LOGAR NANGARHAR H E R AT GHOR To Peshawar Pol-e `Alam `Alam nd PAKTIKA PAKTIKA lma Ghazn¯ Ghazni i Gardiz i Gard¯z Gardi us He G H A Z N¯ Ind ISLAMIC I KOWST To U ¯ OR U Z G A N Kowst Kohat 0 50 100 150 Kilometers REPUBLIC h Sharan ra ¯ Fa OF IRAN ¯ FA R A H Tarin Kowt Tar¯n i ari 0 50 100 Miles ut ¯r Ha ¯ Farah ¯ I ¯ P A K T¯K A ¯ U Z A B OL Qalat ¯ h Kh¯ s a ak rn¯ Ta Hamun-e ¯ ¯ Saberi ¯ ¯ Lashkar Gah ¯ Kandahar A rgh a n d a b ¯ To AFG HA NI STAN Zhob Dasht-I Margo PROVINCE CAPITALS Zaranj NATIONAL CAPITAL N ¯M R O Z I ¯ U HI LMAND H EL M A N D ¯ KANDAHAR RIVERS Helm To and Quetta MAIN ROADS 30°N Gowd-e RAILROADS Zereh 30°N NOVEMBER 2004 IBRD 33358 This map was produced by the Map Design Unit of The World Bank. PROVINCE BOUNDARIES The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any INTERNATIONAL BOUNDARIES 60°E PAK ISTAN 65°E endorsement or acceptance of such boundaries. 70°E