The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) REPORT NO.: RES33497 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF CHINA: GUANGDONG SOCIAL SECURITY INTEGRATION AND RURAL WORKER TRAINING APPROVED ON JUNE 20, 2013 TO PEOPLE'S REPUBLIC OF CHINA SOCIAL PROTECTION & JOBS EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Bert Hofman Senior Global Practice Director: Michal J. Rutkowski Practice Manager/Manager: Philip O'Keefe Task Team Leader: Dewen Wang, Lansong Zhang The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) ABBREVIATIONS AND ACRONYMS DGI Digital Government Initiative DOF Department of Finance DOHRSS Department of Human Resources and Social Security GATSLI Guangdong Advanced Technical School of Light Industry GITC Guangzhou Industry and Trade College MOF Ministry of Finance MIS Management Information System RF Results Framework SSI Social Security Integration TVET Technical and Vocational Education and Training URWT Urban and Rural Workers Training YATS Yunfu Advanced Technical School The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) BASIC DATA Product Information Project ID Financing Instrument P117596 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 20-Jun-2013 31-Dec-2018 Organizations Borrower Responsible Agency People's Republic of China Dept. of Human Resources and Social Security Project Development Objective (PDO) Original PDO The Project Development Objectives are to enhance portability of social security data and beneficiary entitlements, and tostrengthen the skills base and employment prospects of rural hukou workers in Guangdong. Current PDO The objective of the Project is to enhance portability of social security data and beneficiary entitlements, and to strengthen the skills base and employment prospects of urban and rural workers in Guangdong. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-82680 20-Jun-2013 22-Jul-2013 12-Sep-2013 31-Dec-2018 80.00 53.91 26.09 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING Project Status 1. The project has continued moving steadily toward its development objective. The Social Security Integration (SSI) component has completed the design, testing and synthesis of an integrated provincial management information system (MIS) and started rolling out to the prefectures across the province, which has enhanced the administration of social insurances and supported the pension fund pooling at the provincial level. This made Guangdong a pioneering province of pooling the social security funds in China. The Urban and Rural Worker Training (URWT) Component has strengthened the partnership between the project schools and enterprises and the teaching capacity of project schools, and greatly improved the access of both urban and rural workers to Technical and Vocational Education and Training (TVET). 2. The overall project implementation has made solid progress since the Mid-Term Review (MTR) in April 2016. The project has disbursed US$54 million, accounting for 67% of the loan proceeds. Of the total, US$21 million was disbursed in FY2018. However, the overall project implementation is downgraded to Moderate Satisfactory mainly because of slower than expected progress under the SSI component. The progress and current status of the two components are the following: 3. Under SSI Component, the integrated provincial MIS had been successfully piloted in two municipalities— Qingyuan (August 2017) and Zhuhai (October 2018). In parallel, cleaning of the historical data in all the prefectures has been carried out for many rounds so as to meet the requirements of uploading them into the provincial All-in-One. The first pilot in Qingyuan took longer than originally anticipated for preparation and informed the second pilot in Zhuhai. The second pilot in Zhuhai has helped finalize a “basic version” of the integrated provincial MIS for rolling out. With the “basic version”, the new MIS can be scaled up in batch compared with the one-by-one approach adopted for the two pilots. To do so, the quality of historical data will be crucial. Therefore, the PMO and the information center has started the procurement of the phase II hardware and equipment to provide computing support for the data cleaning work at the prefectural level. In addition, DOHRSS has deployed an integrated financial management system for the social security fund management such as unified records, accounting and reporting. With those efforts, another 3 prefectures will be considered for roll-out by the end of 2018, and 10 new prefectures will be included in 2019. 4. Under the URWT component, the three Project Schools have carried out the activities as planned and accelerated the pace of projection implementation. The delivery of outputs from completed and ongoing activities has enabled the Project Schools to promote school reforms and innovations and enhance their overall capacities in training provision, curriculum development, and school-industry partnership. As a result, Yunfu Advanced Technical School (YATS) was upgraded as a TVET college after the assessment and approval by the provincial Department of Human Resources and Social Security (DOHRSS). Guangdong Advanced Technical School of Light Industry (GATSLI) has strengthened its overall capacity in teaching and training, which has become a provincial TVET demonstration base. Guangzhou Industry and Trade College (GITC) has become a “star” of TVET schools representing a model of Guangzhou in this sector and broadened international collaboration. All these outputs and results are contributing to better labor market outcomes of graduates and trainees, and thus to the achievement of the project objectives. The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) Rationale for Restructuring 5. Despite of the progress made since MTR, the project will require additional time beyond the current closing date to complete all the activities. DOHRSS requested an extension of the loan closing date for 22 months. 6. SSI component. There are two major reasons for the extension. One is from a new policy initiative that has caused a halt on the agreed implementation plan for the SSI component. In August 2017, the Guangdong provincial government introduced a Digital Government Initiative (DGI), aiming to centralize all government information systems, consolidate the IT staffing of various agencies, and outsource the maintenance to third parties. The DGI called for stopping new sectoral MIS projects and suspending the ongoing sectoral MIS projects. Considering the integrated provincial MIS of DOHRSS aligns with the DGI by design, the provincial stakeholders finally reached a consensus in May 2018 that the social security MIS would be handed over to the provincial e-government office after its completion. The other reason for the requested extension is that the technical complexity of rolling out the new MIS is greater than expected. This requires more time to well prepare for the system cutover and ensure no interruption of the social security administration. The data cleaning work is substantial for each prefecture, which has taken significantly longer due to the huge volume of local databases and limited local computing resources. Migrating to the new MIS also requires close coordination among between the province and prefectures. Based on the progress and the new approach of rolling out the new MIS, the Information Center of DOHRSS has prepared a realistic implementation plan that will be able to complete all the project activities by October 31, 2020. Allowing for completion of the full system will have important demonstration effects for other provinces of China in integration of SI systems, and also provide an important example for other countries in EAP region such as Vietnam, Indonesia and Philippines who can learn from the experience of integration of a previously fragmented and complex information system for social insurance. 7. URWT component. the overall implementation is progressing well, but the performance among the project schools varies. Most training equipment financed by the project in GATSLI and GITC has been fully utilized, and the first batch of training equipment recently installed in YATS has already been put in use. Some activities, however, require longer for completion, particularly for the consulting services in process and the school buildings in YATS under construction. With more attention paid to the quality and impacts of outputs, the PMO has proposed 12 months extension for this component to ensure the greater effects of the “soft activities” and to make full use of physical outputs such as school buildings and procured equipment. II. DESCRIPTION OF PROPOSED CHANGES 8. The Ministry of Finance (MOF) of China, in a letter dated October 16, 2018, requested the World Bank to extend the loan closing date and to modify the results indicators in the Results Framework. This is the second project restructuring but the first request for project extension. 9. The first project restructuring was approved by the Board on July 6, 2017, which involved a modification of the Project Development Objective to expand the beneficiaries from ‘rural worker’ to both ‘urban and rural workers’. Others entailed a change in the name of Component 2 and its implementation arrangements, the modifications of indicators in the Results Framework, and other certain amendments in the legal agreements. The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) 10. Guangdong DOHRSS, the project implementation agency, has prepared the detailed proposal for restructuring including an implementation plan for the extended period, in consultation with the World Bank task team. The provincial Department of Finance (DOF) has endorsed the proposal and submitted a request for restructuring to MOF. The proposed changes are detailed as following: (a) Extension of the loan closing date. The closing date for the Loan (Ln. 8268-CN) is proposed to be extended from December 31, 2018 to October 31, 2020. In view of the distinct nature and the progress of the two components, the SSI Component will need the full 22 months to complete all activities while the URWT component will need around 12 months. As there is only one closing date for a single project/loan, therefore, upon the approval of this restructuring, a new closing date of October 31, 2020 will be established. (b) Modification of Results Framework (RF). The dates of end targets for indicators mapped to the SSI Component and the URWT Component will be set as October 31, 2020 and December 31, 2019, respectively. With the project extension, the end target values for some indicators are adjusted based on the actual achievement and future trends, which are recorded in the Result Framework of this Restructuring Paper (RP). Following the approval of the restructuring, the World Bank team will inform Guangdong counterparts of the updated RF and follow up with DOHRSS to update the project Operational Manual. (i) For the SSI component, the end target values for one PDO level indicator (health insurance transactions serviced across the prefectures through the provincial platform), and two intermediate indicators (percentage of provincial standards which have been adopted by prefectures, and percentage of prefectures using the new provincial system) will be increased to reflect greater impacts if granted the extended period for implementation. (ii) For the URWT Component, the end target values for three PDO level indicators and 5 intermediate indicators in YATS will be adjusted to reflect policy changes and school development at the final stage of implementation. (c) Disbursement Estimates. The disbursements are estimated to reflect the pace of the project implementation and the extended period. The remaining funds in URWT component will be fully disbursed in 2019. (d) Implementation schedule. The implementation agency has developed a work plan for each component. (i) The 22-month implementation plan for the SSI component. By the end of 2018, the integrated provincial MIS will be rolled out to cover 5 prefectures (in total). In 2019, the target will be 15 prefectures (in total). By the end of October 2020, the integrated provincial MIS will cover 80 percent of the 21 prefectures in Guangdong. In parallel, the PMO and the information center will complete the procurement of phase II hardware and equipment in the early 2019, and organize technical training for staff at the prefectural level to support the roll-out. The project will conduct the end line survey and data collection for preparing the implementation completion report. (ii) The 12-month implementation plan for the URWT component. In 2019, YATS will complete the construction of the school buildings, install the training equipment and put them in use. GATSLI will put the new buildings and the procured equipment in operations. The three Project Schools will further strengthen the quality of “soft activities”, complete all the activities in August 2019, and disburse the loan proceeds allocated to this component by the end of 2019. The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) 11. The fiduciary risk rating is moderate. The procurement has been accelerated and no substantial contract management issues. The project financial management system has been functioning well. There is no overdue audit report. The auditor’s opinion for 2017 on this project was unqualified (clean). 12. The proposed restructuring will not trigger any new safeguard policy nor a change of EA category. No new/additional/supplemental safeguard instruments are needed to be prepared since no safeguard related issues or changes are involved. In the ISR archived in September 2018, the environmental and social safeguards risks rating is low. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Loan Closing Date(s) ✔ Disbursement Estimates ✔ Implementation Schedule ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IBRD-82680 Effective 31-Dec-2018 31-Oct-2020 28-Feb-2021 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2013 0.00 0.00 2014 2,000,000.00 2,000,000.00 2015 6,000,000.00 6,000,000.00 2016 2,296,116.67 2,296,116.67 2017 21,000,000.00 22,249,688.30 2018 34,000,000.00 21,165,075.91 2019 14,703,883.33 10,534,240.00 2020 0.00 10,151,920.00 2021 0.00 5,602,959.12 . The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) . Results framework COUNTRY: China China: Guangdong Social Security Integration and Rural Worker Training Project Development Objectives(s) The objective of the Project is to enhance portability of social security data and beneficiary entitlements, and to strengthen the skills base and employment prospects of urban and rural workers in Guangdong. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 to enhance portability of social security data and beneficiary entitlements Percentage of social insurance beneficiaries whose records are uploaded 0.00 50.00 70.00 90.00 into the centralized provincial All-in-One database (Percentage) Rationale: The end target date is changed to October 31, 2020. No change in the end target value. The intermediate targets are the projection for 2018 and Action: This indicator has been Revised 2019. Volume of health insurance transactions serviced across prefectures through the 0.00 63.00 65.00 65.00 provincial clearinghouse platform (10 thousand) (Number) Rationale: The new health insurance system has significantly increased the transactions across the prefectures in Guangdong. The actual transaction is over Action: This indicator has been Revised 620,000, well exceeding the current end target of 38,000. Based on the current project, the end target is proposed to be increased to 650,000. The intermediate targets are projections for 2018 and 2019. The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Total business processing volume through the provincial integrated MIS per 0.00 4,000.00 5,000.00 6,000.00 operator (number of individual cases processed per operator) (Number) Rationale: The end target date is changed to October 31, 2020, but no change in the end target value. The intermediate targets are projections for 2018 and Action: This indicator has been Revised 2019. to strengthen the skills base and employment prospects of urban and rural workers Percentage of trainees who pass skill assessment tests (Degree Course) 60.00 76.00 80.00 (Percentage) Rationale: Yunfu school has made steady progress in the passing rate for the degree course. In view of the fact that the majority of the students are middle school graduates from the rural areas, it takes time for them to adapt to the computerized examination. Based on the data in recent years, the end Action: This indicator has been Revised target is expected to reach 80%, a decrease from 85%. The end target date is change to December 31, 2019. The intermediate target is the projection for 2018. Light Industry: 75% Light Industry: 80%; Percentage of trainees who pass skill Light Industry: 78%; Industry and Trade: 81% Industry and Trade: 91%; assessment tests (short-term training) Industry and Trade: 90%; Yunfu: 30% Yunfu: N/A (Text) Yunfu: N/A Rationale: Yunfu school has mainly provided on-the-job training as requested by the local firms and public institutions on specific knowledge and skills. It is Action: This indicator has been Revised not necessary for the trainees to take the skill assessment tested by the occupational guidance center affiliated to the human resources and social security authority. As the denominator is a very small number, this indicator is not applicable to Yunfu school. The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 The end target for Light Industry School will be changed to 80%, a 2% decrease from 82%. The decrease in the number of occupations at the national level has caused the reduction of the number of occupational skill tests at school level. The end target date is changed to December 31, 2019. The intermediate targets are projections for 2018. Light Industry: 92%; Industry and Light Industry:95%; Industry and Percentage of graduates finding initial Light Industry:95%; Industry and Trade:98.4%; Yunfu:75% Trade: 98.5%; Yunfu: 92% employment (degree course) (Text) Trade: 98.5%; Yunfu: 91% Rationale: Yunfu school has been upgraded to a technical college. More graduates from the school will choose to take advanced study or pursue college Action: This indicator has been Revised degree. Therefore Yunfu school has proposed to be lower the end target from 97.5% to 92%. The end target date is changed to December 31, 2019 and the intermediate target is the projection for 2018. Light Industry: 18% Light Industry: 30% Light Industry: 25% Percentage of graduates finding initial Industry and Trade: 26% Industry and Trade: 53.5% Industry and Trade: 45% employment (short-term training) (Text) Yunfu: 0% Yunfu: N/A Yunfu: N/A Rationale: Similar to the indicator of percentage of trainees who pass skill assessment tests (short-term), Yunfu school has mainly provided and will continue Action: This indicator has been Revised providing short-term training to those on-the-job. This indicator is not applicable to Yunfu school. The end target date is changed to December 31, 2019 and the intermediate target is the projection for 2018. No change in the end targets for the other two schools. PDO Table SPACE The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Social Security MIS Percentage of provincial standards which have been adopted by prefectures 0.00 60.00 80.00 90.00 (Percentage) Rationale: The project is expected to achieve better results in the proposed extended period. The end target of this indicator will increase from 80% to 90%. Action: This indicator has been Revised The end target date is changed to October 31, 2020. The intermediate targets are the projections for 2018 and 2019. Some technical specifications of this indicators have been modified in the M&E manual. Percentage of prefectures using the new provincial system (of 21 prefectures) 0.00 40.00 70.00 80.00 (Percentage) Rationale: The project is expected to achieve better results if grants the extension. The end target value will increase from 70% to 80%. Some technical Action: This indicator has been Revised specifications on the new system will be modified in the M&E manual. The intermediate targets are the projection for 2018 and 2019. Percentage of SI system development (of 0.00 100.00 five SI business lines) (Percentage) Number of provincial and prefectural staff involved in development and 0.00 2,000.00 5,000.00 8,000.00 operation of MIS who are trained relevant to this project (Number) Rationale: The end target date is changed to October 31, 2020, but no change in the end target value. The intermediate targets are the projection for 2018 Action: This indicator has been Revised and 2019. The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Satisfaction of staff and beneficiaries using the new provincial system 0.00 50.00 70.00 80.00 (Percentage) Rationale: The end target date is changed to October 31, 2018, but no change in the end target value. The intermediate targets are the projections for 2018 Action: This indicator has been Revised and 2019. Urban and Rural Worker Training Light Industry: 3,000 Light Industry: 3,600; Industry and Industry and Trade: 2,000 Light Industry: 3,500; Industry and Number of short term trainees (Text) Trade: 3,700; Yunfu: 1300 Yunfu: 21 Trade: 3,600; Yunfu: 1200 Rationale: The light industry school is expecting to provide less short-term training in 2018 and 2019 because of the adjustment in the occupation categories at the national level and the suspension of continued education and training program for technicians in Guangdong. Yunfu school is expecting to Action: This indicator has been Revised provide more short-term trainees (mainly for on-the-job) for the local enterprises. The end target date is changed to December 31, 2019 and the intermediate target is the projection for 2018. Light Industry: 800; Industry and Light Industry: 1,400; Industry and Number of trainees for on-the-job Light Industry: 1,200; Industry and Trade: 1,000; Yunfu: 21 Trade: 3,200; Yunfu: 1600 training (Text) Trade: 3,000; Yunfu: 1500 The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Rationale: Action: This indicator has been The end target value for Yunfu is proposed to be increased from 300 to 1600. Yunfu school is expecting to provide more on-the-job training. The Revised end target date is changed to December 31, 2019 and the intermediate target is the projection for 2018. Light Industry: 15% Light Industry: 25%; Industry and Percentages of instructors trained in Industry and Trade: 30% Light Industry: 25%; Industry and Trade: 50%; Yunfu: 20% industry attachments (Text) Yunfu: 0% Trade: 48%; Yunfu: 15% Rationale: Yunfu school has been upgraded from a technical school to college. In addition to the regular lecturing, the teachers will take the training programs supported by the project and accordingly the time for the training in the industry will be reduced. Therefore Yunfu school has proposed Action: This indicator has been Revised to lower the end value of this indicator. The end target date is changed to December 31, 2019 and the intermediate target is the projection for 2018. Light Industry: 8% Percentages of industrial experts from Light Industry: 16%; Industry and Industry and Trade: 8% Light Industry: 16%; Industry and enterprises participated in teaching in Trade: 36%; Yunfu: 18% Yunfu: 0% Trade: 35.5%; Yunfu: 15% schools (Text) Rationale: Action: This indicator has been Revised The end target date is changed to December 31, 2019, but no change in the end target value. The intermediate target is the projection for 2018. Light Industry: 70% Light Industry: 85%; Industry and Students satisfaction to school's teaching Industry and Trade: 85% Light Industry: 85%; Industry and Trade: 93%; Yunfu: 92% and management (Degree Course) (Text) Yunfu: 0% Trade: 91%; Yunfu: 88% The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Rationale: Action: This indicator has been Revised The end target date is changed to December 31, 2019. No change in the end target value. The intermediate target is the projection for 2018. Light Industry: 85%; Industry and Students satisfaction to school's teaching Light Industry: 75%; Industry and Light Industry: 85%; Industry and Trade: 93%; Yunfu: 91% and management (short-term training) Trade: 86%; Yunfu: 0% Trade: 91%; Yunfu: 90% (Text) Rationale: Based on the feedback from the enterprises whose employees received training from Yunfu school on how to improve the curriculum and delivery, Action: This indicator has been Revised Yunfu School has proposed to slightly decrease the end target value from 95% to 91%. The end target date is changed to December 31, 2019, but no change in the end target value for Light Industry School and Industry and Trade School. The intermediate target is the projection for 2018. Light Industry: 35% Percentage of students enrolled in Light Industry: 60%; Industry and Industry and Trade: 30% Light Industry: 60%; Industry and modular, CBT curricula (Degree Course) Trade: 100%; Yunfu: 40% Yunfu: 0% Trade: 100%; Yunfu: 38% (Text) Rationale: Action: This indicator has been Revised The end target date is changed to December 31, 2019, but no change in the end target value. The intermediate target is the projection for 2018. Percentage of students enrolled in Light Industry: 40%; Industry and Light Industry: 60%; Industry and Light Industry: 60%; Industry and modular, CBT curricula (short-term Trade: 40%; Yunfu: 28% Trade: 65%; Yunfu: 40% Trade: 58%; Yunfu: 38% training) (Text) Rationale: Action: This indicator has been Revised The end target date is changed to December 31, 2019, but no change in the end target value. The intermediate target is the projection for 2018. The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Light Industry: 0% Light Industry: 80%; Industry and Percentage of equipment utilization Industry and Trade: 0% Light Industry: 80%; Industry and Trade: 85%; Yunfu: 65% (Text) Yunfu: 0% Trade: 80%; Yunfu: 60% Average: 0% Rationale: Yunfu school has started using the practice training equipment financed by the World Bank loan. Since Yunfu school schedule the class and practice in different weeks, the utilization rate is affected by using the current formula. Yunfu school has proposed to reduce the utilization rate Action: This indicator has been Revised from 75% to 65%. The end target date is change to December 31, 2019. No change in the end target value for the other two project schools. The intermediate target is the projection for 2018. IO Table SPACE The World Bank China: Guangdong Social Security Integration and Rural Worker Training (P117596)