2 1989 LAO PEOPLE'S DEMOCRATIC REPUBLIC COUNTRY PORTFOLIO PERFORMANCE REVIEW March 26, 1998 PLAN OF ACTION South East Asia Country Unit East Asia and Pacific Region April 30, 1998 Document of the World Bank FILE COPY Table of Contents Page In tro d u c tio n ........................................................i I - Plan of Action, 1998-99 ........................................................ 1 A. Key Measures of the Plan of Action ......................... ........................... 1 B. Issues. Procedures.Timetables. and 1998-99 Plan of Action ........2........ ) II - Summary Report of the Proceedings ...................................................... .. 10 III - List of Annexes ........................................................ 13 Annex 1: - List of Participants ........................................................ 13 Annex 2: - Agenda ........................................................ 1 5 Annex 3: - Discussion Paper ........................................................ 1 6 IV - Attachments ......................................................... 8 1. Volume of Lending and Commitment ..................................................... 28 2. Implementation Status of Projects in the Portfolio ........................... 9....... 29 3. Highlights from Presentation on new Bank Lending Instruments ............ 39 4. Presentation on Procurement Procedures (Health Project) ....................... 41 5. Presentation on Contract Management Svstem (Education Project) ... ... 49 6. Highlights from Presentation on Bank's New Project Cycle .......... - ...... 72 PLAN OF ACTION COUNTRY PORTFOLIO PERFORMANCE REVIEW LAO PDR VIENTIANE, MARCH 26,1998 INTRODUCTION 1. This report describes the Plan of Action adopted during the CPPR Meeting held on March 26. 1998. with a view to resolvina the portfolio issues. 2. The Bank- (IDA) has lent a total of USS546 million to Lao PDR, for 25 operations. The current portfolio consists of 11 investment projects and one adjustment operation. There is substantial scope for improvement in portfolio performance, parti.cularly given the fact that several of the problems were raised at the first two portfolio reviews (June 1993 and June 1995). 3. It is within this context that the Governmrent and the Bank laid the groundwork during this CPPR Meeting for making real improvements in the portfolio's performance over the next 2 years. Following a consultative process involving a Work.ing Group of national project managers on the Lao PDR side and the Lao Country Team on the Bank side, the Government and the Bank decided to focus the discussion on: (i) the generic issues linked to financial management and their possible solutions; (ii) two projects in detail--Education and Health--from which to draw lessons for other projects; (iii) ways to design projects so as to make them less vulnerable in the future; and (iv) a plan of action and a timetable to help address portfolio performance issues over the next 2 years. Very little time was spent describing the issues as they were well kno-sT1 to all and had been fullv discussed during the first two Portfolio Reviews. LAO PDR COUNTRY PORTFOLIO PERFOR-MANCE REVIEW VIENTIANE, MARCH 26,1998 I - PLAN OF ACTION, 1998-99 During the Meeting, a series of recommendations and a timetable were adopted with a view to resolving the issues identified during the CPPR discussions. These recommendations and timetable were later confirmed by the Government and the Bank and gave birth to the 1998- 99 Plan of Action. The kev measures of the Plan are outlined in Section A below. Section B provides details on all the issues discussed during the Review, and the corrective measures and deadlines agreed to bv the two parties. A. Key Measures of the Plan of Action CPPR Follow-up • The Government will maintain the Lao Working Group of National Project D)irectors (WG of NPDs) established as counterpart to the World Bank's Countrv Team to conduct the Review. The WG will follow up on the recommendations of the CPPR and suggest further actions needed for implementation of those recommendations. It will meet quarterly, in synchronization with the Bank's own portfolio review cycle. * Starting end-April 1998, the Bank will strengthen its presence in Vientiane. This will help ensure satisfactory follow-up of the CPPR recommendations. Also, from Washington, the Bank's Lao Country- Team will maintain close contact with the WG. Procurement * By December 31, 1998: (i) the Government will standardize NCB docunents and seek donors' comments to facilitate donors compliance; and (ii) the Government will send draft of ,NCB documents to the Bank for comments. * By October 1. 1998: (i) the W G will make recommendations regarding amounts below which NPDs will be responsible for signing off: and (ii) the Government will start acting on the WG recommendations. * From May 1. 1998: (i) all IDA project procurement and disbursement docurnents will be sent to Washington through the Bank Office in Vientiane: (ii) pre-screening will be done; and (iii) - 2 - the Bank Office will start issuing no-objection letters (the Bank will have added a certified official to the Office by then). Disbursement * By October 31. 1998. the Government will start eliminating some of the prior authorizations for Withdrawal Applications and payments to contractors. This will be done as follows: (i) MoF will initiate the process by sending a letter to instruct NPDs to review the steps and suggest cuts (by May 1, I998); (ii) all NPDs will review their authorization requirements, and determine which of them are unnecessary (by July 31. 1998); (iii) MoF and the WG will act on the recommendations of NPDs (by October 31, 1998). With regard to Withdraw^al Applications. ministers will delegate signing off. Counterpart Funds * By July 1, 1998, the WG will seek a solution with the Budget Department. The National Budgyet will be amended at mid-year. Accounting, Auditing, and other Financial Management Issues * To improve project level accounting and financial management. the GoL and the Bank will not launch a new project if a core of essential staff--trained accountants--are not in place. * From now. new NPDs will ensure that books of accounts for their projects are properly kept and maintained in order that project activities are properly accounted for. * From now. NPDs and Bank Task- Managers will pay more attention to preparation of auditors' terms of reference. * Br December 31. 1998, the Government will license more private auditing firms in addition to the one firm previously licensed to operate in the country. Turnover of Bank Task Managers * The Bank will: (i) appoint a Task Manager by May 31, 1998 for the Health Project; and (ii) from now on, request proper hand-over notes from outgoing TM to incoming TM. To the extent feasible a final joint handover mission will be conducted bv the outgoing and incoming Task Managers of any project slated for change in task management. B. Issues, Measures, and Deadlines of the Plan of Action Procurement Issues Actions alreadv taken I1998-99 Plan of Action Measures Time table 0 shortcomings in * Decree No. 95/PM, December public 1995, to: create basis of a public * pursue legislative efforts to - ongoing procurement procurement sy stem, enhance la' out sound procurement policies and government capacity: provide a -uidelines contracting standard procurement code, and services modernize procurement process. . Procurement Decree to ensure * GoL will standardize NCB by Dec. 31, transparencv of public documents and seek donors' 1998 procurement and achieve comments to facilitate regularitv and unifonnitv of donors compliance. procurement procedures . Implementing rules and . GoL will send draft of by Dec. 31, regulations to clarify provisions NCB documents to the Bank 1998 of Procurement Decree. for comments * Procurement Monitoring Office within MoF established in March 1997. * Threshold for * GoL is seeking to delegate * WG will make by Oct. 1. prior review signing authority belowv the level recommendations regarding 1998 of minister. Threshold may varv amounts below which NPDs from project to project, will be responsible for signing off. GoL will act on WG recommendations. * Procurement * All documents will be sent from May 1, process is slow to Washington through the 1998 and difficult: too WB Office in Vientiane manv steps (same for disbursement invoived. between documents). Pre-screening the iine ministries. will be done. the Ministr' of . Bank Office will start from May 1, Finance (MOF). issuing no-objection letters 1998 and the Bank when certified official is in place. * Guidelines are * There must be better from now on unclear, procurement plans that t.ake unnecessariyI into account constraints such burdensome mul]tiple clearance and long - 4 - Issues Actions alreadv taken 1998-99 Plan of Action .Measures Time table processing time. Lack of staff with a There must be annual im- from now on sufficient plementation plans in place procurement so that project resources are training and well used. In particular, experience training programs must be planned adequately in order to be implemented in timely fashion. Disbursement Issues Actions already taken 1998-99 Plan of Action Mfeasures Timetable e Elapsed time on disbursement applications is getting longer. Main reasons are: - too manv steps - measures by MoF to reduce . eliminate some of the by Oct. 1. required before process time of disbursement authorizations (e.g.. EDP). 1998 sending Withdrawal applications from 2 weeks to 5 - All NPDs will review their Applications: days have been impeded by shifts authorization requirements, - most projects have in responsibilities, and shortage and determine which of long processes for of qualified staff to review them are unnecessarv. MoF approving payments to disbursement applications will initiate this process by contractors (5-7 sending letter to instruct signatures, sometimes - rules on -Foreign Loan and NPDs to review the steps even line minister Grant Management' issued by and suggrest cuts. must sign) MoF in I 995 will ensure more - then, MoF and WG will act - NPDs have difficultv accurate documentation and on the recommendations of reconciline Bank and timely processing NPDs Gov rules. Special Accounts * Most - Under SPRE, EDL will have * GoL will form 2 groups of \PDsl/projects do direct management of SA projects: not have direct access to SAs. - one group with direct Issues Actions alreadv taken 1998-99 Plan ofAction Measures Timetable Thev must submit management authority (MoF request for will only carr, out ex-ppost payment to MoF. reviews) MoF reviews before providing - other group will remain clearanice. under the current ex-ante control of MoF (MoF will allow payments below some pre-determined threshold without prior approval. MoF's post review authoritv will still be enforced by fact tthat all replenishment applications must be signed Iby MoF). * MoF is in favor of advancing * MoF will make cash immediately money to projects. This would advances to projects. allow the projects to function until satisfactory solutions are implemented. Withdrawal * To avoid delavs, ministers immediatelv Applications will delegate signing of Withdrawal Applications. Accounting and Auditing Issues Actions already taken 1998-99 Plan ofAction M.Heasures Timetable Generic Issues * number of projects - Enterprise accounting and . implement enterprise are audited by reporting system leayislation accountino and reporting personnel from the exists. If implemented. it will system MoF simplify review process and = conflict of interest facilitate delegation of approval . MoF will seek to establish = lack of authority to line ministries. standard book-keeping and independence accounting for all projects. World Bank will be asked to comment on proposed - 6 - Issues Actions already taken 1998-99 Plan of Action Measures Timetable systems and procedures and assist in implementation. appropriate * NPDs and Bank task immediately standards on managers will pay more accounting and attention to preparation of auditing are auditors terms of reference. Iackincg > project auditors are not complving with * Bank task managers will immediately accounting and pay more attention to auditing standards as interpretation and follow-up prescribed by World of audits. Bank * financial * receipts and expenditures statements to be wvill be properly summarized audited are not and presented prepared because accounts are not * audited reports will include, properly at a minimum. sources and summarized bv uses of funds for each project. project reconciliation of the special accountants accounts, a summary of the SOE - auditors do not * GoL and Bank will ensure rive clear advice that management letters that how financial highlight areas requiring management attention of project situation is to be management units accompany improved audit reports * important delays * reduce delays gradually to in submitting audit zero reports * GoL has allowed * GoL will license additional by Dec. 31, only one private auditing firms 1998 international besides the one now auditing firm to operating in Lao PDR. The operate in Lao World Bank will support PDR this action. - 7 - Issues Actions alreadv taken 1998-99 Plat of Action Measures Timetable Lack of qualified Measures in short run. accountants Carry out project-specific immediately training on procuremernt and other financial management subjects after orientation workshops. .ModifN DCA if necessarv. * Bank will provide support needed in the context of each from end- individual project April 1998 * Bank will strengthen its by May 1, presence in Vientiane to 1998 provide more field assistance. - Portfolio management immediately issues will feed into the design of new projects. This means that the GoL and the Bank will not launch a new project if the essential staff-- trained accountants-are not in place. Longer term Measures * organize massive retraining of existing accounting personnel * training will be done in country to extent possible. G* oL to take advantage of the opportunity offered by the Bank to develop accounting and financial management curriculum in the universities - 8 - Issues Actions already taken 1998-99 Plan ofAction Measures Timetable * GoL will implement the main recommendations of the IDF on Accounting Capacity Building Reconciliation and Book-keeping * On GoL's side, NPDs will: keep accurate records Bank records disagree (balances and payments) in with project records. the actual contract currencies, NPDs complain that it and provide the Bank with is difficult to reconcile adequate information when World Bank and they ask for payments to be project accounts made; and keep the Bank informed regarding amendments. * On Bank's side, maintain the MIS database of contracts up- to-date, and be sure of the correct currency when recording payments against the contracts. Provide increased assistance to individual projects and MoF. * Establish books of accounts for each project to ensure that the project activities are properly accounted for. * The Bank will establish a new monitoring system for projects to ensure timely periodic updates of project disbursement, procurement information and accounting data. -9 - Other Issues Issues Actions already taken 1998-99 Plan ofAction Measures Timetable Turnover of Bank Task Managers The Bank will: This is one of the * take steps to address this immediately reasons for the poor problem to GoL's portfolio performance: satisfaction. For example, it New TMs do not will request (i) proper hand- always follow up on over notes from outgoing agreements and TM to incoming TM, and reached with former (ii) joint mission by both TMs and on advice TMs. given by them. - appoint new TM for Realth immediately Project a strengthen its presence in the field by May 1, 1998 Counterpart Funds Depreciation of the kip * WG will seek a solution by July 1, has made the problem with the Budget Dept. The 1998 worse. National Budget will be amended at mid-year. * Credit Agreements will be amended when necessary. Project design Learning and Innovation Loans * more involvement and from now on (LIL) and Adaptable Program training of nationals in design Lending (APL) of projects Fight Against While the Government notes that * World Bank will share May 1998 Corruption this is not a major concern in Lao experience on how to address PDR, it would like the Bank to the issue. communicate to it the lessons from its experience in other countries, which may help Lao PDR to address the issue. Key measures are shown in bold characters. - 10 - II - SUMMARY REPORT OF THE PROCEEDINGS 1. The Third Country Portfolio Performance Review Meeting was held on March 26, 1998 in Vientiane under the chairmanship of Mr. Bounlith Kennavong, Vice-Minister of Finance. The technical sessions were chaired by Mr. Kheuankham Inthavong, Director FCAD, MoF. The meeting was attended by the Lao National Project Directors and by World Bank task managers and officials. The Bank delegation was led by Ms. Ngozi Okonjo-Iweala, Country Director for Cambodia. The list of participants is shown in Annex 1. 2. This report summarizes the proceedings of the meeting based on the Agenda that is shown in Annex 2. The Government and the Bank prepared a Discussion Paper for discussion at the meeting (see Annex 3). As a result of the discussions, the meeting agreed to a series of recommendations to be confirmed by the Government and the Bank. Opening Statements 3. In his opening statement, the Vice-Minister welcomed the representatives of the World Bank to Vientiane. He said that there has been progress in some areas as a result of the first two CPPRs, but there has also been disappointment in the search for solutions to portfolio issues. The main reason for concern, he added, is the slow pace of implementation of Bank-financed projects. He invited the participants to take a hard look at the reasons for slow progress and suggest specific, concrete solutions, with a timetable whenever possible. The Vice-Minister expressed the Government's strong commitment to doing its share to improve the portfolio performance and added that the meeting gives the Government the opportunity to reaffirm its commitment to development and strengthen its relations with the Bank. 4. In her opening remarks Ms. Okonjo-Iweala said that the central element that should guide the meeting is that of partnership between the Lao PDR and the Bank. She congratulated the Lao authorities for the excellent work done in preparation for the meeting, mentioning in particular the role of the Facilitator and the Lao Working Group for the focus they have brought to the examination of portfolio issues. She then expressed her wish that the meeting would focus on solutions to current portfolio issues, but added that some time will also be spent on the new lending instruments that the Bank has under consideration and that may in the future help address some of the difficulties that have been identified. Regarding portfolio issues, she agreed with the Vice-Minister that the meeting should spend time focusing on the search for solutions to financial management issues, as they seem to be at the heart of the problems encountered in the implementation of Bank projects in Lao PDR. The pervasive issue of lack of trained staff should also be examined closely, she added. She concluded by inviting the participants to make concrete recommendations, with a timetable, and avoid general statements. - 11 - 5. Followed a presentation on new Bank lending instruments (Learning and Innovations Loans, LILs, and Adaptable Program Lending, APL) by Ms. Carolyn Meyer Johnson, World Bank (see Attachment III). Portfolio Issues 6. Mr. Kheuankham for the Government and M. Darlan for the Bank then summarized the portfolio issues as they have been jointly identified in the Discussion Paper by the Government and the Bank. They focused on financial management issues, namely, procurement, disbursement, accounting and auditing, counterpart funding. They also iclentified the weak capacity to implement Bank-financed projects as one of the main reasons for concern. Their introduction was followed by a presentation by Dr. Bounsouane Phomsoupha, Director of the Health Project, who showed the complex and lengthy procurement procedures in Lao PDR, using the Health Project as an example (see Attachment IV). After a few specific comments by the first discussant, Mr. Finn Nielsen (World Bank), the floor was opened for discussion. All participants agreed on the diagnosis and many made specific recommendations. Search for Solutions 7. To kick off the discussion two presentations were made. In the .first presentation Mr. Bounthavy Issisienmay, Project Director, Ministry of Education, explained how the project team is implementing the Contract Management System as part of a plan of action to improve implementation of this project (see Attachment V). This system is showing promising results. Mr. Chinnakorn Chantra (World Bank) was the discussant on this presentation. In the second presentation, Ms. Carolyn Meyer Johnson described the Bank's new project cycle, stressing the attempt at simplification of Bank procedures. During this session Mr. Chris Redfem also commented on the presentation on LILs and APLs made in the morning. Frorn the point of view of a Task Manager he explained how these new instruments could help solve some of the problems discussed in the meeting and how, if these instruments had been available earlier they would have better addressed the issues faced in the ongoing projects. A lively discussion followed the two presentations and several concrete recommendations were made and seconded. The Lao representatives generally agreed that the LILs and APLs seem better suited to Lao PDR's condition that the traditional investment projects. Closing Session 8. Mr. Guy Darlan, Rapporteur for the Meeting, presented the recommendations adopted during the meeting. Ms. Okonjo-Iweala then took the floor to stress the importance of the key 6 - 12- to 10 concrete recommendations made during the meeting. Many of these recommendations, she said, carry a short time table, which will make monitoring easier. 9. In his closing remarks, the Vice-Minister congratulated the participants for the quality of the work done. He reiterated the Government's commitment to address the issues raised during the meeting and expressed his strong support for the recommendations adopted. He stressed the central role of his ow-n ministry, the Ministry of Finance, in spearheading simplification in government guidelines and procedures and in facilitating project implementation. He then vowed to continue working in close consultation with the Bank in addressing portfolio issues. Finally, he thanked once again the Bank staff who had come for the meeting and wished them a safe journey back to Washington. Annex 1 -13- Page 1 of 2 ANNEXES ANNEX I - LIST OF PARTICIPANTS NAME PROJECT MINISTRY POSITION ORGANIZATION 1. Bounlith Kennavong Ministry of Finance Vice-Minister (Deputy Governor to IMF) 2. heuangkham Third Structural Adjustment Cr. 28210-LA Foreign currency Affairs Project Director Inthavong & Strengthening Management and Dept, Monitoring Capacity TF28776-LA Ministry of Finance (Closed). 3. Nouloth Ladsaphone Upland Rural Road Component MCTPC Project Coordinator 4. Bountheuang Mounlasy Committe for International Deputy Director Cooperation! PMO 5. Bounthavy Insisienmay Education Dev. Proj. Cr. 24880-LA & Department of Planning & Project Director Norway Education Dev. Proj. Cr. 24365-LA. Cooperation 6. Lytou Bouapao Education Dev. Proj. Cr. No. 24880-LA & Department of Finance, Director Norway Education Dev. Proj. Cr. No. 24365- Ministry of Education LA 7. BouaHong Forest Management & Conservation Proj. Cr. Department of Forestry, Project Director Phanthanousy 25860-LA & GET-Wildlife & Protected Ministry of Agriculture and Areas Project WBTF. 28697-LA Forestry 8. Sommad Pholsena HIPI; HIP II, Upland, LNPDP Department of Director of Communication, MCTPC Communications 9. Sengdarith Highway Improvement Proj. Cr. 22180-LA. MCTPC/DOC Project Coordinator Kaittignasack Second Highway Improvement Proj. Cr. 26060-LA; Third Highway Improvement Proj. Cr. 29430-LA 10. Houmphanh Intharath Second Telecommunication Proj. IDA Cr. MCTPC/ETL Deputy Director 2102-LA General 11. Silavanh Sawathwong. Forestry Department - Deputy Director Ministry of Agriculture & General Forestry 12. Tenane Bouphasiri Land Titling Project Cr. 2832-LA Land and Housind Project Manager Department Ministry of Finance Annex I -14 - Page 2 of 2 NAME PROJECT MINISTRY POSITION ORGANIZATION 13. Somphone Provincial Grid Integration Proj. Cr. 24250- Electricite du Laos EDL Acting Manager, Simmalavong LA; PHRD Southern Provinces Rural Ministry of Industry and Project Officer Electrification Proj. Cr. 25522-LA; PHRD Handicraft Nam Ngum Extension & Transmission Cr. 29263-LA 14. Nalonglith Norasingh IDF 27538 Legal Framework Ministry of Justice Assistance to the Project. 15. Dangham Mahayo Health System Reform & Malaria Control Ministry of Health Deputy Director Project Cr. 2674-LA 16. Khampiou Syhakhang Planning & Cooperation, Director Planning & Division of Cabinet Cooperation, Division Ministry of Health 17. Ketkeo Rasphae IDF 28544 Accounting Capacity Building Accounting Department Accountant Ministry of Finance 18. Ngozi Okonjo-lweala World Bank Country Director, EACSM 19. Guy Darlan World Bank Country Program Officer, EACSM 20. Carolyn Meyer Johnson World Bank Operations Analyst, EACSM 2 1. Christopher Redfern World Bank Senior Economist, EASRD 22. Denis Robitaille World Bank Highway Engineer, EASTR 23. Linda Schneider World Bank Liaison Officer, EACLF 24. Finn Nielsen World Bank Senior Operations Offier, EACTF 25. Chinnakorn Chantra World Bank Operations Officer, EACTF 26. Frank Byamugisha World Bank Senior Economist, EASRD - 15 - ANNEX II - AGENDA 8:30 a.m. - 9:15 a.m. Opening Session * Welcoming Remarks by H.E. the Vice-Minister of Finance * Opening Statement by Ms. Ngozi Okonjo-Iweala, Country Director, World Bank * Presentation on new Bank Lending Instruments by Ms. Carolyn Johnson, World Bank 9:15 - 9. 30 Coffee break 9:30 a.m.- 12:00 Session I - Portfolio Issues * Presentation: Mr. Kheuankham Inthavong, Director FCAD, MoF * Discussant: Mr. Guy Darlan, Country Program Officer, World Bank * Presentation on Procurement Procedures, by Dr. Bounsouane Phomsoupha, Ministry of Health, Director of Health Project * Discussant: Mr. Finn Nielsen, World Bank * Discussion 12:00 - 1:15 Luncheon 1:30 p.m.- 4:00 p.m. Session II - Search for Solutions * Presentation on Education Project - Contract Management System, by Mr. Bounthavy Issisienmay, Project Director, Ministry of Education * Discussant: Mr. Chinnakom Chantra, World Bank * Discussion * Presentation on Bank Project Cycle, by Ms. Carolyn Johnson * Discussion * Discussion on new Bank Lending Instruments * Discussant: Mr. Christopher Redfem, World Bank 4:00 p.m. - 4:30p.m. Coffee Break 4:30 p.m.- 5:00 p.m. Closing Session * Main Recommendations, read by Mr. Guy Darlan * Summation by Ms. Ngozi Okonjo-Iweala, Country I)irector * Closing remarks by H.E. the Vice-Minister of Finance Annex 3 - 16 - Page 1 of 12 ANNEX III - DISCUSSION PAPER This Discussion Paper was prepared jointly by the Government and the Bank It served as the main background document for the CPPR discussions. 1. The Bank (IDA) has lent a total of US$546 million to Lao PDR so far, for 25 operations. The current portfolio consists of 11 investment projects (including the Southern Provinces Rural Electrification approved by the Board of Directors on March 17, 1998) and one adjustment operation. 2. The portfolio's performance has been evaluated from the perspectives of planning, effectiveness, and sustainability, using the Bank's standard indicators. Upon reviewing the portfolio, it appears that overall performance is low. While such performance needs to be judged in the context of the country's specific conditions, including the transition from central planning to a market economy, and the limited number of trained and experienced staff, there is substantial scope for improvement. 3. One reason for concern is the fact that the problems raised at the first two Portfolio Reviews (June 1993 and June 1995) have still not found adequate solutions. However, it was unrealistic to expect a quick solution to the financial management issues such as procurement, disbursement, and accounting given the shortage of qualified staff. These will need a longer period to be resolved and may explain why the portfolio's performance has not improved much overall since the June 1995 Review. It also appears that, in a few cases, the level of expectation in the original design with respect to the project objectives and the time frame in which to achieve them were unrealistic. OBJECTIVES OF THE CPPR MEETING 4. It is within this context that the Government and the Bank plan to lay the groundwork during this CPPR Meeting for making real improvements in the portfolio's performance over the next 2-3 years. Through a consultative process involving a Working Group of national project managers on the Lao PDR side and the Lao Country Team on the Bank side, the Government and the Bank have decided to narrow the scope of the Meeting. The Meeting will discuss: the generic issues linked to financial management and their possible solutions; only one project in detail--a problem project--seeking to draw lessons for other projects; and * ways to design projects so as to make them less vulnerable in the future. 5. Both sides have agreed that as little time as possible will be spent describing the issues as these are well known to all and have been fully discussed during the first two Portfolio Reviews. Annex 3 - 17 - Page 2 of 12 PORTFOLIO ANALYSIS 6. Volume of lending and commitment. IDA's lending to Lao PDR started in FY78. Since then the Bank has approved 25 credits for Lao PDR-- three structural adjustment operations and twenty-two investment credits (Annex I attached). Total cornmitment for these operations amounted to about US$546 million equivalent, including cancellations of about US$6 million, with undisbursed balance of about US$140 million. 7. Sectoral Distribution. Sectoral distribution of the 25 operations is as follows: * six for infrastructure/transportation and related activities, * five for agriculture, * four for electricity/power/energy, * three for structural adjustment credits, * two for rural development, * two for education, * one for health, * one for industry/finance/private sector development, and * one for environmental development/management. 8. Operations under preparation are for investments in: * rural development: Rural Infrastructure (FY99), * education: Education II (FY99); and * road infrastructure: Highway Improvement IV (FY2001). 9. AnnualLending. Average annual lending for FY94-FY97 was US$58.77 million, while the lending program for FY98-2001 is expected to average US$34.33 million. 10. Current Portfolio and its Composition. As of February 28, 1998, Lao PDR's current portfolio represents a total commitment value of about US$3 11 million of which 85.5 percent for investment operations and 14.5 percent for structural adjustment. Two projects closed during the last quarter of FY97, leaving the current portfolio with 12 operations as indicated in Table 1 below (the Rural Electrification Project is not counted here as it has not yet become effective). The implementation status of each of these projects is attached as Annex II. Annex 3 - 18 - Page 3 of 12 Table 1: Summary of IDA's Credits in the Current Portfolio Difference Between Last ARPP expected Supervi- Original Amount & actual sion Rating in US$ Millions disburs. a/ bl Credin Fiscal No. Year Borrower Purpose IBRD IDA Cancell Undis- Orig Frm Dov Imp ations bursed Rev'd Obj Prog Number of Closed credits: 13 Active Credits IDA 21010 1990 LAO PDR TELECOM II 3.0C 24.51 0.00 .20 -9.82 0.00 S S IDA 20790 1990 GOVT. OF LAOS UPLAND AGRIC. DEV. 0.00 20.20 3.55 5.19 7.22 -.88 5 S IDA 24880 1993 LAO POR EDUCATION DEVELOPMENT C.00 19.30 0.00 13.32 6.19 0.00 S U IDA 24250 1993 GOVT. OF LAO PCR PROV'' GRID INTEGRAT C.00 36.00 0.02 5.72 1.26 O.C0 S S IDA 26062 1994 GOVT OF LAOS H'WAY IM?ROVE II 0.00 30.20 0.00 7.00 -0.60 0.C0 S S IDA 25860 1994 GOVT OF LAOS FOREST MGT & CONSERV 0.01 8.70 0.00 6.52 5.38 0.00 S S IDA 25790 1994 GCVT OF LAO PDR LUANG NAFTHA PROV DEV 0.00 9.6? 0.00 571 1.11 0.00 S S IDA 26740 1995 LAO PDR HEALTH SYS. REF. & x 1.00 19.20 0.00 13.78 3.80 0.00 5 S IDA 28320 1996 GOVT. OF LAO PDR LAND TITLING 0.00 22.71 0.00 18.17 .86 0.00 S S IDA 28210 1996 GOVT. OF LAO PDR SAC :II 0.00 40.01 0.00 18.17 20.42 0.00 U S IDA 29430 1997 GOVT. OF LAO PDR HIGHWAY IMPROV. III 0.00 48.00 0.10 45.25 2.98 0.00 S S IDA 1998 GOVT. OF LAO PDR SP RURAL ELECTRIFIC. C.00 34.70 0.00 33.00 - - - - 0.00 310.67, 3.55 138 . 83 4 8 .62 -0.88 ............. .. . . . ........... *b... ;. .. ,....... ..... ............ . .................... . ....... - - ..._.. .............. f D .............. ......... ............... ...... .......... ...... ....... Active Loans Clcesed Loans Tote Total Disbursed )IBRO and IDA): _04.02 266.88 370.90 of which. has been repaid: 0.00 4.76 4.76 Total ncw held by _BRD and IDA: 247.92 252.77 500.69 Amount sold : 0.00 0.10 0.00 Of which repaid : 0.00 0.00 0.00 Total Undisbursed : 138.83 0.20 139.03 a. intended disbursements to date minus actual disbursements to date as prcjected at appraisal. b. Following the FY94 Annual Review of Portfclic performance (ARPP), a letter based system was introduced (HS =highly Satisfactory, S = satisfactory, U = unsatisfactory, HU = highly unsatisfactory) 11. Portfolio Performance and Management. Portfolio performance has been uneven over the years. Table 2 shows portfolio assessment and management for the past four years. FY95 ended with a poor performance rating--about 23 percent of projects in the portfolio was labeled 4" problem projects" and the disbursement ratio was only about 18 percent. In FY96, there was a marked progress and the portfolio was free of problems (no problem projects), but disbursement ratio in the same year (FY96) deteriorated to 16.6 percent. In FY97, the portfolio reported one "problem project" with a marked increase in disbursement ratio of 30.3 percent. So far in FY98, there are two problem projects--Education Development and SAC III. Although progress is being made to resolve project-specific problems, measures should be taken to address generic issues such as procurement, disbursement, accounting/auditing, counterpart funds issues and the problem of inexperienced project implementation staff. Annex 3 -19- Page4ofl2 Table 2: Selected Indicators of Portfolio Performance and Management Indicator 1995 1996 1997 1998 Portfolio Assessment Number of Projects under implementationa 13 12 13 11 Average implementation period (years)b 4.08 3.43 4.11 4.13 Percent of problem projectsa" by number 23.08 0.00 7.69 18.18 by amount 12.68 0.00 12.46 21.66 Percent of projects at riska d by number 30.00 8.33 9.09 18.18 by amount 27.67 3.15 14.68 21.66 Disbursement ratio (%)e 18.16 16.62 30.32 11.37 Portfolio Management CPPR during the year (yes/no) Supervision resources (total US$ 744.73 643.68 760.85 374.77 thousands) Average Supervision (US$/project) 57.29 53.64 58.53 34.07 Memorandum item Since FY80 Last five FYs Projects evaluated by OED by number 11 6 by amount (US$ millions)* 187 134 Percent rated U or HU by number 0 17% by amount 0 7% * The Commitments are nominal amounts. a. As shown in the Annual Report on Portfolio Performance (except for current FY). b. .Average age of projects in the Bank's country portfolio. c. Percent of projects rated U or HU on development objectives (DO) and/or implementation progress (IP). d. As defined under the Portfolio Improvement Program. e. Ratio of disbursements during the year to the undisbursed balance of the Bank's portfolio at the beginning of the year: investment projects only. Annex 3 -20- Page 5 of 12 ACCOUNTING AND FINANCIAL MANAGEMENT ISSUES A - Procurement 12. There are several reasons for the poor procurement performance: * shortcomings in public procurement policies and contracting services continue to hamper the effectiveness of public spending; * the procurement process is still slow and difficult. National project managers argue that there are too many steps involved, between the line ministries, the Ministry of Finance (MOF), and the Bank. The case of projects that require central as well as provincial clearance--Health System, for example--is particularly difficult. All of this leads to important delays in receiving clearance from the Bank. Delays can have a severe effect as late clearance can cause the project to miss the dry season when field and civil works can be undertaken (example, Forestry Project when the project started); * national projects managers also argue that the guidelines are not always clear or are unnecessarily burdensome. For example, for the Health Project the same exact bidding document is used for the construction of each hospital facility. Yet, the documents have to go through the whole no-objection process before the letters of invitation to bid are sent although the only thing that changes is the location; * there is a lack of staff with sufficient procurement training and experience. 13. Procurement Guidelines. As a condition for approval of SAC III, the government promulgated Decree No. 95/PM in December 1995 to create a basis of a public procurement system for acquiring goods, services and engaging consultants. A procurement decree has been enacted to ensure the transparency of public procurement; achieve regularity and uniformity of procurement procedures throughout the government and its agencies; achieve economy and efficiency in procurement and contract work; and guarantee suppliers and contractors fair and equal access to the award of contracts. The government has recently issued implementing rules and regulations to clarify the provisions of the Procurement Decree. In addition, a Procurement Monitoring Office within the Ministry of Finance was established in March 1997. All these actions should enhance government capacity in the area of procurement by establishing a procurement threshold; providing a standard procurement code which Lao PDR does not currently have; and modernizing the procurement process. Recommendation. The Government should pursue these efforts. 14. Procurement Threshold. National project managers suggest $50,000 as the threshold for prior review. Recommendation. This suggestion has merit but should be considered on a case by case basis, as opposed to agreeing on the same threshold for all projects. When construction is involved, for example, an even higher threshold could be considered. Annex 3 - 21- Page 6 of 12 B - Disbursement 15. Overall, the elapsed time on disbursement applications is getting longer, not shorter. Disbursement is slow mainly because of the following reasons: there are too many steps required before sending Withdrawal Applications; * most projects have long processes for approving payments to contractors. It often requires 5-7 signatures, sometimes even the line minister must sign; and some national project managers have difficulty reconciling the rules of the Bank and the rules issued by the Government. For example, previously, Letters of Credit were issued directly by BCEL. Now, clearance is needed from MOF before an LC can be issued. If the delays are too long, it entails procurement problems. 16. Corrective measures taken by the Ministry of Finance to reduce the process time of disbursement applications from an average of two weeks to within five days have been impeded by many factors including shifts in responsibilities, and shortage of qualified staff to review disbursement applications. The rules on "Foreign Loan and Grant Management" issued by the Lao Ministry of Finance will ensure a more accurate, complete and sufficient documentation and timely processing of disbursement applications. 17. Recommendation. In the meantime, practical steps could lead to immediate and significant improvements. Some of the authorizations should be eliminated. The managers of the Education Development project have indicated that the authorization of the Minister of Education has been eliminated, which is a good beginning. The CPPR Meeting should agree to have all project managers review their authorization requirements, and determine which of them is really necessary and appropriate to ensure a quality project, and which are uimecessary. The Ministry of Finance and the Working Group would then act on the recommendations of the project managers. 18. It should be noted that not all projects suffer from these constraints (for example, the Forest Conservation Project). It should therefore be relatively easy to find and implement solutions for all projects. 19. In addition to the points raised above, national project managers feel that their control over the Special Account (SA) is too limited, which in their view affects the rate of disbursement. 20. Most projects in Lao PDR do not have direct access to the SAs. They must submit a request for payment to MOF (after the long process mentioned above has been completed). MOF also reviews the request, and provides its approval, which can take a few more days. Only then can the project withdraw funds from the SA. Annex 3 - 22 - Page 7 of 12 21. A breakthrough has been achieved with the SP Rural Electrification Project. MOF will give EDL direct management of the SA. It is a first step. MOF intends to consider two groups of projects: one group that would have direct management authority. In this case MOF would carry out ex-post reviews. The other group, where the lack of experience is a problem, would remain under the current ex-ante control of MOF. 22. Recommendation. The Bank is in favor of allowing project units to make direct payments from the SA without having to get MOF approval in advance. Should the Government establish the two groups, for the second group MOF should still allow payments below some pre- determined threshold without its prior approval. MOF's post review authority is enforced by the fact that all replenishment applications must be signed by MOF. C - Accounting and Auditing 23. Generic Issue. Many accounting and auditing issues remain unresolved: * A significant number of projects are audited by personnel from the Ministry of Finance. The examination of government project accounts and financial management records by government auditors amounts to a conflict of interest and does by no means give the appearance of independence that must be maintained in an audit. • Appropriate standards on accounting and auditing are lacking. As a result, project auditors are not complying with accounting and auditing standards as prescribed by the Bank. * The necessarv financial statements required to be audited are not prepared because the accounts are not properly summarized by the accountants in the project implementation units. In particular, receipts and expenditures are not properly summarized and presented. The Bank requires the borrower's audited report to include, at a minimum, sources and uses of funds for each project, reconciliation of the special accounts, a summary of the statement of expenditure (SOE). * The auditors never really give clear advice as to how the financial management situation is to be improved. They do not accompany their reports with management letters that highlight areas requiring the attention of the project management units. * There are important delays in submitting audit reports. 24. Recommendations. The recent adoption of an enterprise accounting and reporting system is a step in the right direction. If implemented, it will simplify the review process and facilitate the delegation of approval authority to line ministries other than the Ministry of Annex 3 - 23 - Page 8 of 12 Finance. The country should open its doors to private auditing firms who would help improve the accounting and financial management situation. The country has allowed only one international auditing firm to operate. Terms of reference of auditors need to be carefully drafted with a view to help redress the situation of Lao projects. On the Bank's side, task managers should pay more attention to the preparation of auditors terms of reference, ancd the interpretation and follow-up of audits. D - Specific Accounting Problems * Lack of Qualified Personnel. One of the major problems that affect projects in the Lao PDR portfolio is the lack of qualified accountants. As a result, accounting tasks are left at the mercy of untrained personnel who may not be properly guided and supervised. Those left to carry out accounting tasks are not well equipped to cope with the requirements of the Development Credit Agreements (DCA). As a consequence, the accounting and audit reports submitted for Bank-financed projects do not always comply with the requirements of the DCA or with Bank-wide guidelines as contained in Financial Accounting, Reporting and Auditing Handbook (FARAH). The Bank requires borrowers and/or their project implementation units to establish a functional financial management system including relevant accounting and financial controls. In Lao PDR, such a system is either nonexistent or the necessary controls required to ensure the reliability of the accounting records and financial reporting are not well established. Under an IDF operation, an analysis of Lao PDR's "technical requirements and plan for subsequent design and implementation of governmental accounting systems" has been carried out. The operation has also been instrumental in training and in developing advanced accounting and financial management curriculum in institutions of higher learning in Lao. - Reconciliation. National project managers complain that it is difficult to reconcile World Bank and project accounts. The Banks has noted many problems with poor contract record keeping in most of the projects. Bank records disagree with project records on how much has been disbursed under a contract, and therefore what the remaining balance is. This is partially because of the use of multiple currencies in a contract, with poor recording of what payment is under what currency. Very few projects have a suitable systerrm of recording payments under their contracts, or even of keeping up with what contracts they have signed. Recent problems with the Provincial Grid Integration project come to mind. Recommendations. On the Government's side, the first remedy is better project financial management, which includes improved record keeping on contracts. In particular, national project managers need to keep accurate records (balances and payments) in the actual contract currencies, and provide the Bank with adequate information when they ask for payments to be made. When they pay from the Special Account (and convert the payment amount to US Dollars), they often provide inadequate information on replenishment applications for the Bank to determine the underlying currency to charge the payment to. Annex 3 -24- Page9of12 They also need to keep the Bank in the loop regarding amendments (get Bank clearance, provide copies of the amendment, etc.). On the Bank's side, there is a need to try harder to maintain the MIS database of contracts up-to-date, and be sure of the correct currency when recording payments against the contracts. The Bank should commit to provide project financial management assistance to the individual projects and MOF. * Lack of Complete Accounting Records. There are no complete accounting records established for projects. Subsidiary journals (books of original entries or source journals), general ledger subsidiary ledgers, and detailed records for each significant class of transactions were not established and maintained until the introduction of double entry accounting system in the public administration of Lao. Even now, some agencies are experiencing difficulties in keeping these books in balance. As is the experience in other developing countries there is, in Lao PDR, an inability or negligence in the maintenance of accounting records. As a result, the status of projects cannot be properly assessed; disbursement of cash is not properly controlled, authorized and documented; and use of project materials and property cannot be determined with any measure of certainty. Sometimes asset and/or material issues register may not be kept and maintained to track the location and use of project property and materials. * Segregation of Financial Management Functions. Internal accounting and financial controls require that accounting and financial functions be adequately segregated to prevent fraud and defalcation. In most cases, the receiving and issuing functions are concentrated in one department or entrusted to one staff. This must be corrected. C Compliance with Covenants. The compliance rate with the requirements of the DCA and other donor agencies is very low. Project implementation units do not comply with the requirements for recording and reporting of project activities. The result is that monitoring of project progress and timeliness of reporting of project activities becomes cumbersome. This is so because task managers on both sides generally do not take the accounting and financial management functions seriously and therefore do not utilize the results of accounting and audit reporting to their advantage. Probably they are unaware that these are useful planning, monitoring and implementing tools for successful project management. Non compliance with financial management requirements (procurement, disbursement, accounting and auditing) deters project implementation progress. Monitoring. Project sites and the location of the project management unit may be separated by long distances. Adequate communication facilities are not available to afford easy access to responsible officials who are needed to make decisions as they arise. For instance, a section of Road No. 13 between Namkading and Savannakhet fell apart after construction; this was not communicated to project implementing units until after construction was completed in April 1997. This would have been prevented had there been proper monitoring by field officers and timely communication between the project sites and the project Annex 3 - 25 - Page 10 of 12 implementing units. It would have been discovered that the embankment needed to be reinforced and protected to avoid the slip and thereby obviate the time and expense required to correct this problem. Financial and accounting data compiled at the project sites may not reach the project accounting unit timely to be useful for reporting purposes. This creates some monitoring problems which need to be addressed by the Bank. * Manual vs. Computerized MIS. The management information systems in Lao PDR is not well developed. Most of the financial management procedures are based oIn manual system. Therefore project accounting is, for the most part, still manually operated. This tends to be slow and susceptible to human error. Also, computerized systems, where in use, require key- punching and a mainframe computer. This is faster than manual operation but tends to waste time in generating the required output. * Weaknesses in Internal Accounting and Financial Management Controls. The system of internal accounting and financial management controls are either not functioning properly or they are weak. Until recently there were no chart of accounts; identification and description of accounting records was a problem; assignment of responsibilities and delegation of authority was lacking; the problem of determining cutoffs and account closing for each period persisted; and accounting and procedure manuals were outmoded. In short, the system of internal accounting controls is weak and needs to be strengthened. * Inadequate Budget Process. The Lao budgetary process is not well established. There has been a move to change the existing budget nomenclature (structure) to a new one. If carried out, this change should result in proper budget formulation and execution. Short-term Recommendations 25. Training. The experience of some projects shows that project-specific training on procurement and other financial management subjects following an orientation workshop is more useful than formal training. The Bank will need to provide the support that is needed in the context of each individual project. Under the Forestry Project, procurement is now going smoothly thanks to the backup provided by the Bank office in Thailand. The strengthening of the Bank's presence in Vientiane should yield even better results. 26. Book-keeping. Books of accounts should be established for each project to ensure that the project activities are properly accounted for. The number of accounts established for a project should be dictated by the type of project and the internal accounting control procedures established for that project. 27. Covenant Compliance. The Government should comply with accounting and auditing provisions of the DCA. Part of this process would be the establishment of a strong internal accounting control procedures. This will ensure that accounting and financial management Annex 3 -26 - Page II of 12 functions are properly segregated, personnel are adequately supervised, and sufficient training given to the accounting staff. The policies and procedures to ensure accuracy and reliability of financial records, controls over authorization for project activities as well as security of project property and materials should be instituted. 28. Monitoring by the Bank. The Bank should establish a new monitoring system for projects to ensure timely periodic updates of project disbursement, procurement information and accounting data. Successful project monitoring depends on the availability of reliable periodic financial reporting. Long-term Recommendations 29. Training. There should be massive retraining of existing accounting personnel in order for the government and its project management agencies to cope with the demand generated by the introduction of new accounting system. New internal accounting control procedures should be put in place to conform with the new accounting system. This will ensure accuracy, completeness and reliability of accounting records. It will also ensure that project accounts submitted for audit are reliable. As part of the training program, the government of Lao should be encouraged to take advantage of the opportunity offered by the Bank to develop accounting and financial management curriculum in the universities. Also, the government should open its doors to independent external accounting firms to help in the developing of the accounting and financial management profession in the country. The Government should implement the main recommendations of the IDF (Accounting Capacity Building). 30. Equipment. The information management system in Lao should be revamped by providing some desk-top computer hardware and a pre-packaged project accounting software developed by the Bank. Training on the use of the personal computers and software applications should be undertaken to ensure that the staff of the project implementation and project management agencies acquire some competency in operation of the new system. This will not only facilitate the recording and documentation of project activities but also ensure that reports generated are timely and conform to the accounting and financial management reporting requirements. 31. Regulatory Framework. There should be national accounting policies and procedures. These have the effect of strengthening the system of internal accounting and financial management controls. This will include the establishment of a chart of accounts, tailored to the needs of each project and accompanied by explanations of the items to be included in the various accounts. Such policies and procedures should simplify the identification and description of principal accounting records, recurring standard entries, and requirements for supporting documentation. Information on detailed records for each significant class of transaction should also be included. The system of internal controls should specify methods of assigning responsibilities, delegation of authority, identifying positions that have authority for approving transactions, and instructions for determining adequate cutoff and closing of accounts for each Annex 3 - 27 - Page 12 of 12 project reporting period. A strong and satisfactory system of accounting and financial management controls for a project should specify control procedures for authorization, verifications, reconciliation, recording procedures and project reporting adequate to provide reasonable control over project costs, security of project assets, schedules and technical performance. E - Other Issues 32. Turnover of Bank Task Managers. This is undoubtedly one of the reasons for the poor portfolio performance. The new task managers (TM) do not always follow up on agreements and reached with former TMs and on advice given by them. To alleviate the problem the Bank is taking steps to strengthen its presence in the field. 33. Counterpart Funds. Devaluation of the kip has made the problem worse. Most counterpart fund allocations were budgeted before the devaluation. The US$ has gone from 1,400 to 2,400. For example, the Land Titling Project are budgeted for kip 218 million (exchange rate used is 1,115) which was in line with the project needs. Till now, only 20 million has been disbursed to the project and there is concern that the balance may not be forthcoming. The Bank cannot allow 100 percent financing out of the SA when the Bank is financing a lesser percentage. It then takes years sometimes to get the Government to refund the difference. 34. Another example is the Forestry Project. The project has yet to obtain full counterpart fumds per project agreement. So far this has not been a problem because the other co-financier-- Finland--has covered some of the incidental expenses and because the IDA Credit is financing incremental operating expenses. However, IDA is financing incremental expenses on a declining basis, to reach 50% by September 1998. The project staff/MAF have already indicated that they will request a waiver in light of the fiscal crisis in Lao PDR. If incremental operating expenses are not fully covered, field activities, which have been going extremely well, will suffer. - 28 - Attachment 1 ATTACHMENT I LAO PDR - VOLUME OF LENDING AND COMMITMENT (As of February 28, 1998) Approval Credit Amount Undisbursed Credit/Project Date (US$ million) (US$ million) Agricultural Rehabilitation and Development 12/27/77 8.2 0 Agricultural Development II 06/05/79 10.4 0 Agricultural Development III 05/15/80 13.4 0 Narn Ngum III 12/22/81 15.0 0 Agricultural Production Support 06/28/83 6.2 0 Telecommunication Rehabilitation 04/22/86 3.9 O Electrification of Southern Province 06/23/87 25.8 Southern Transportation 10/06/87 14.1 0 Industrial Credit I 07/26/88 10.0 0 Polytechnic 04/11/89 3.5 0 Structural Adjustment Credit 06/06/89 40.0 0 Upland Agricultural Development 12/21/89 20.2 5.2 Telecommunication II 03/13/90 24.5 0.2 Highway Improvement 03/21/91 45.0 0 Structural Adjustment Credit II 10/01/91 40.0 O Provincial Grid Integration 10/06/92 36.0 5.7 Education Development 04/27/93 19.0 13.3 Luang Namtha Provincial Development 03/15/94 9.7 5.7 Forest Management and Development 03/25/94 8.7 6.5 Highway Improvement II 04/14/94 30.0 7.0 Health Systems Reform and Management 01/05/95 19.2 13.8 Structural Adjustment Credit III 02/22/96 40.0 18.2 Land Titling 03/21/96 20.7 18.2 Highway Improvement III 04/08/97 48.0 45.3 Southern Provinces Rural Electrification 0/3/17/98 34.7 34.7 TOTAL 546.20 173.8 less cancellations* 6.03 0 To40ta Ciiiiiiitnieni(excludig n ts a;_ _ x54; -0.2 0 9 1-73.8 * From the active projects US$3.55 million - a portion of Upland Agriculture Development Project was canceled. An additional US$2.41 million was canceled from fully disbursed credits. - 29 - Attachment 2 Page 1 of 10 ATTACHMENT II IMPLEMENTATION STATUS OF PROJECTS IN THE PORTFOLIO (As of January 31, 1998) STRUCTURAL ADJUSTMENT CREDIT HI APPROVED AMOUNT US$40.00 million DATE APPROVED . February 22, 1996 DATE OF SIGNATRE Api 9 ....................................................... ............................................................................................. ................................................................................... EFFE.CT1VENESS DATE July 11, 1996 CLO.SING DATE December 31, 1997 ... ... ... ... ............... ........ ...... ................. .... . ......................................... DISBURSEMENTS US19.'60 milo ....... -.... ............... ................................................................................ ............. ................................ .............................................................. .% disbursed over total approved credit 49.00% .............................. "U..... 'e.............................................................................................. ...m................ ...n......................................... undisbursed balance .US$18.20 million DEVELOPMENT OJ ECT ATING Unsatisfactory IMLEMENTTO RG SRTN Satisatr ..................................................................................................................................................... .................................................................................. DEVELOPMENT OBJECTIVES The project aims to (a) support improved management of State-owned Enterprises (SOEs) and privatization; (b) develop a legal framework that regulates commercial transactions; (c) create a state financial system; (d) improve planning and monitoring of public expenditures, civil service reform; (e) ensure the viability of the social security system. IMPLEMENTATION PROGRESS Overall implementation progress has been satisfactory. However, implementation progress in the area of regulatory framework and financial sector reform has been unsatisfactory. There are delays in enacting legislation required for progress to be made in these aspects of the project. In addition, there is also delay in hiring independent external auditors for state-owned commercial banks as well as hiring staff for the implementing agency. Progress in implementing policy reforms has not been satisfactory. This is due to delay in implementing structural measures in financial sector reform (state-owned commercial banks are not audited by independent external auditors); and regulatory framework (there are no drafted plans for legal reform). Increased efforts in other areas including SOE reform, public expenditure management has yielded limited results. There are major foreseen problems which may further delay or hamper the completion of project activities. These include the following problems (i) audit of commercial banks required, but still not being enforced, by the Bank of Lao PDR; (ii) issuance of the long-awaited decree on the accounting profession has not materialized; (iii) commercialization of state- owned enterprises has not been implemented due to lack of the legal framework required to convert these enterprises to Joint-stock companies; and (iv) the new budget nomenclature has not been fully implemented. NOTE: disbursed amount plus undisbursed balance will not equate the approved amount due to exchange rate vis-a-vis SDR. - 30 - Attachment 2 Page 2 of 10 LAND TITLING APPROVED AMOUNT US$20.72 million D A TE.... A PP...O...D.................................................................................................................................................................................................... March 21, 1996 ~~~~~~~~~~~~~~~~......................................................................................................................................................... ............ DA.TE OF SIGNATURE June 7, 1996 EFFECTIVE.NESSDATEs February 27, 1996 ~~~~~~~~~.... ................................................................................................................................ CLOSING DATE September 30, 2003 ..................................................................................................................................... ............................................................................................... ISBURSEMETS ;US$0.60 million % disbursed over total approved credit 2.90% ................ ............................................................................................................ ............................................................................................... undisbursed balance US$18.30 million ~~~~~~~~~~~~~~~~~~~~~~~~~~........................................... ..................................................................................................... DEVELOPMENT OBJECTIVE RATING Satisfactory PlVfl~.LEMENTATION PROGRESS RATING.. Satisfactory ............................................................................................................................................. ....... .................................................................................... DEVELOPMENT OBJECTIVES The project aims at (i) fostering the development of efficient land markets; (ii) facilitating domestic resource mobilization through a clear and enforceable system of land ownership rights; and (iii) developing a land valuation capacity. IMPLEMENTATION PROGRESS Overall, the implementation progress for this project has been satisfactory. Significant progress has been made by instituting new methods of land registration and valuation, and revising the enabling regulation to facilitate project implementation. The bidding process for some contracts has been completed. In addition, an administrator to support project management in procurement, financial management and control, planning, monitoring and evaluation has been hired; and training of personnel in systematic adjudication has been successfully accomplished. It is too early to access the implementation progress of the Land Administration and Facilities component of this project. Despite the progress made there are problems that are likely to delay or hinder the implementation of this project during the next few months. There is a delay in hiring the technical assistant funded by AusAID. Delay being experienced in contract negotiations and hiring the technical assistant could impede some project activities. NOTE: disbursed amount plus undisbursed balance will not equate the approved amount due to exchange rate vis-a-vis SDR. - 31 - Attachment 2 Page 3 of 10 HIGHWAY EMPROVEMENT H APPROVED AMOUNT US$30 million DATE APPROVED.April i4,1994 ................................................ ........................................... .............. ............................... ............................................................................... DATE OF SIGNATURE July 20,1994 EFFECTIVENESS DATE February 28,1995 CLOSING... D --- --------------June 30,2001 .................................................................................................................................................... ......... ........................................... ....... DISBURSEMENTS US$23.30 million .. ........ ............... ............................................................................................... ........................I........................................................................ % disbursed over total approved credit 77.67% undisburse bal e US$7.00 million D......................................................... ......................................... ....... ....S.... atisfac..to..y................................................................. ~~~~~~~~~~~~~~~~~~~~~~~~~~~. ............................................................ ................................................................................ DEVELOPMENT OBJECTIVE RATING ~Satisfactory IMPLEEN:TATION.PROGRE.SS RATING Satisfactory DEVELOPMENT OBJECTIVES The project aims to: (a) increase the efficiency of the country's road network through specific road improvements; (b) strengthen institutional capabilities to plan, manage and maintain the national highway network; and (c) support the development of local contracting capacity through the commercialization of selected state enterprises. The highway project will have an impact in (i) supporting economic growth; (ii) facilitating accessibility to social services; (iii) institutional development and sustainability; and (iv) creating and supporting the private sector contracting industry. IMLEMENTATION PROGRESS Overall implementation progress has been satisfactory. The project has progressed somewhat slowly but surely. All the specific aspects of the project have progressed well. The upgrading of roads will reduce transport costs and improve accessibility to social services. However, the development of the local contracting industry through technical assistance to the State-owned Enterprises (SOEs) has not been fully implemented. Despite the progress noted, certain components of the project require some attention. A portion of the road which fell apart after construction was completed needs to be monitored to identify the cause of the problem and responsibility of each involved party determined and corrections made in the construction. The training program which was planned is not being implemented at reasonable pace required to train the engineers needed to monitor and maintain the civil works. ..................................... ................................................................................................................................................................................. .. NOQTE: disbursed amount plus undisbursed balance wvill not equate the approved arnount due to exchange rate vis-a-vis SR - 32 - Attachment 2 Page 4 of 10 HIGHWAY IMPROVEMENT III APPROVED AMOUNT US$48.00 million ........ I....... ...................... ............................. ............................................................I................................................................... .......................... DATE APPROVED April 8,1997 DATE OF SIGNATURE .June 20, 1997 ~~~~~~~~~~~~~~~~~~~................. ................................................................................... ........................................................................................ ..................................................... EFFECTI VENESS DATE September 30, 1997 ~~~~~~~~... .. . ... .. . ...... ......................... . ... .. . . .. . . .. . . . . . .. . .. .. . . .. . . CLOSING DATE June 30,2003 DISBUSEMENT US$1.50 million ~~~~~~~~~......... ..................................................................................................... . .......- -, ,' - - - --- .1- 1 1 1 1 I l ,............................................................ ............... %disbursed over total approved credit 3.13% .............................. ................................... ..... .... ......................... ........................ . . undisbursed balance US$45.30 million DEVELOPMENTiOB ECTIE ERAT NG Satisfactory IMP.LEMENTATION PROGRESS RATING sfactory ........................................ ........................................ ................................................. ................... .............................. ................................................................................... DEVELOPMENT OBJECTIVES The project aims to: (a) support the country's economic growth and transition to a market economy; (b) reduce transportation costs through the upgrading of a southern leg of Road #13 and construction of Road #A- 1; (c) improve institutional capacity and effectiveness in managing construction and maintenance activities at the central and provincial levels; and (d) introduce routine and periodic maintenance of roads by contract using competitive bidding procedures. IMPLEMENTATION PROGRESS The implementation progress is rated satisfactory which is recommended for all new projects. Implementation of project activities was supposed to have commenced in October-November 1997. There is no information available to determine whether or not work has started or when it will start. However, procurement activities for works and consultants are ongoing; detailed design are substantially completed; and routine and maintenance programs were under preparation and were expected to be submitted by June 1, 1997. There is still no effectiveness date and this could further delay this project. ........................................................................................................................................................................ ................................................... ......... ........ NOTE: disbursed amount plus undisbursed balance will not equate the approved arnount due to exchange rate vis-a-vis SDR. - 33 - Attachment 2 Page 5 of 10 HEALTH SYSTEM REFORM & MANAGEMENT APPROVED AMOUNT US$19.20 million ........................................................I................................................................................................ .................................................................. *D.ATEAPPROVED ;January 5,1995 DATE OF SIGNATURE February 4,1995 ................................................. ....................................................................................................................................................................... EFFECTIVENESS DATE . June 30, 1995 ....................................................... ...................................... .................................................. & .......... ....... .... 6 f...................................... CLOSI........G. DATE.. .... . December 31, 2001 DISBURSEMENTS US$3.40 million . i ....... .................................................................................. ................................................................................................ % disbursed over total approved credit 17.71% .................................................................................................................................................. ............................................... undisbursed balance US$14.20 million ....................... .............. ................ ....................................................................... ........................i DEVELOPM NT OB.ECTIVE RAT NG Satisfactory IMPLEMENTATION PROGRESS RATING . Satisfactory .................................................................................. .................................................... ........................................................ ............... ...................... DEVELOPMENT OBJECTIVES The project aims to: (a) improve the health of the Lao people in selected parts of the country focusing on women and children who are the most vulnerable members of the population; (b) reduce mobility and mortality by increasing accessibility to basic health care services in two provinces and by strengthening the national malaria control program in eight provinces; and (c) enhance the country's ability to conduct effective health education programs to improve health awareness in the population. IMPLEMENTATION PROGRESS Overall, the implementation progress for this project has been satisfactory. Although the project is still in the early stage of project implementation, the Ministry of Health's experience with Bank's procurement procedures continues to increase because of the technical assistance provided by the Government of Belgium. It is still early to determine whether this experience has transformed into a transfer of skill. Progress has also been made in the completion of the major civil works. There are problems with the completion of civil works for the regional hospital in Savannakhet. Attention should be given to planning and development as decentralization of health services planning and implementation is quite new to Lao PDR. The challenge posed by the process of integrating national policies into provincial service development could cause implementation delay; training of personnel and health education in malaria control, and the persistent confusion regarding malaria control practices arising from differences in standards for inputs by different donors may delay implementation. The standards for inputs are in conflict with those adopted by the Ministry of Health which has the benefit of the technical advice and support of WHO. .................d....................................................................................................................................................................................................... . NOQTE: disbursed amount plus undisbursed balance will not equate the approved amount due to exchange rate vis-a,-vis SR - 34 - Attachment 2 Page 6 of 10 FORESTRY MANAGEMENT & CONSERVATION APPROVED AMOUNT US$8.70 million .............................. ............................... ......................................................... ............................................................................................. DATE APPROVED . March 25,1994 DA.TE O SIGNATURE.June 29, 1994 . ..................................................................................................................................................... ............................... ............................ ............ EFFECTIVENESS DATE January 10, 1995 _. U 6 b ........................................................................................................... ............................................. ......................... CLOSING DATE .. September 30, 2000 .b § i T ..................................................................... ..................................................................................................................I................. ........................................ ..... DISBURSEME.NTS US$2.10 million .. i 6.......... .... ................ ............................... ..... ....... ......................................... .................................................... ... i... .. .......... .......... ...................... .......... .... % disbursed over total approved credit . 24.14% ....... ...... ... .... ..................................... ............... ....... ................................ .... ..... ............ ..................... ..................... ......... undisbursed balance US$6.50 million DEVELOPMENT OBJECTIVE RATING Satisfactory IM.LEMENTATION PROGRESS RAT NG Satisfactory DEVELOPMENT OBJECTIVES The project aims to: (a) assist the government to implement new forest resource management systems; (b) develop a legal, policy, and organizational framework for sustainable forest management and conservation; (c) institute sustainable village-based forest management system for production forests; (d) support the establishment of an integrated conservation and development management system; and (e) build local capacity to implement these new management systems. IMPLEMENTATION PROGRESS Overall, the implementation progress for this project has been satisfactory. The recommendations of the June 1997 supervision mission have been implemented to the satisfaction of IDA. However, a follow-up action is required on the drafting and issuing of implementing regulations to the Forestry Law enacted in November 1996. Progress has been made in implementing village forestry activities. Training of the implementing agencies' staff has strengthened human resource capacity and increased the sustainability of project activities. Although there are no notable problems with other aspects of financial management, disbursement has been slow because of the need to first develop the forest management systems before full-scale implementation. The main constraint which may impede progress of project implementation is the untimely development and issuance of supporting regulations to enable the participating villages to implement forest management plans before the specified date (June 1998) of signing of the 7 village forest management contracts and the commencement of forest management. ........................................................................................................................................................................................................................... NOQTE: disbursed arnount plus undisbursed balance will not equate the approved amount due to exchange rate vis-a-vis SDR. - 35 - Attachment 2 Page 7 of 10 TELECOMMUNICATIONS TT APPROVED AMOUNT US$24.50 million ....... ...................... ........... ......................................................................................................................... DA.TE APPROVED .March 13,1990 b ............................................................................................................ ............................... . -------------- ............................................................... DATE OF SIGNATURE May 18,1990 EFFECTiVENESS DAT.October 23,1990 CLOSING DATE . February 28, 1998 .~ ~ ~ ~~~f f ;§.................... ................... ........................... .............................................................................................................................. DISBURSEMENTS.US$26.90 million --disbur over total approved credit 109 80% undisbursed balance US$0.20 million ....................... ....................... ................................... ................................................ ............ DEVELOPMENT OBJECTIVE RATING ..Satisfactory ~~~~~~~~~~~~~~~~~~~~~.......................................... - ----------I......... ..... ...... ......................................... IMP.LEMENTATION PROGRESS RATING Satisfactory ..................................................................................................................................................... .................................................................................. DEVELOPMENT OBJECTIVES The project aims to: (a) improve the quality of, and access to, telecommunications services; (b) carry out priority investments in the sector, particularly the first phase of a nationwide digital telephone network; (c) improve international telecommunications services; (d) strengthen EPTL's capabilities in the areas of planning, project implementation, operations, maintenance and financial management; and (e) develop EPTL's human resources. IMPLEMENTATION PROGRESS The implementation progress for this project is satisfactory. Installation of the main project components has been completed and since then there has been a remarkable improvement in telecommunications services. Contributions from donors added impetus to expand the investment program to include the microwave routes, the rural network and the international services. At this point, there are no known or foreseen problems which will impede the successful implementation and realization of the development objectives of this project. Attention should be drawn to the amount of disbursements which, for this project, is in excess of the amount approved. This is due to the differences in exchange rate used in converting SDR into the US dollar equivalent at both the approval date and disbursement date. N OTE: disbursed amount plus undisbursed balance will not equate the approved amount due to exchange rate vis-a-vis SDR. - 36 - Attachment 2 Page 8 of 10 UPLAND AGRICULTURAL DEVELOPMENT APPROVED AMOUNT US$20.20 million .. ......................... .... ........................................................................................................................... .............................................. DATE APPROVED December 21, 1989 .............................. .............................. ......................................................................... ...............I................................................................................ DATE OF SIGNATURE February 23, 1990 EFFECTIVENESS DATE.. May 2,1990 ................... ..................... ..................................................................................... ............................... ......... ................................................. CLOSING DATE.. June 30,1998 .......................................................................................................................I................................................................................................... DISBURSEMENTS US$12.80 million ..d i ..................................................... ..........................!............... ......... ...................I.................................................. ./ disbursed over total approved credit 63.37% undisbursed balance US$5.40 million ~~~~~~~~~~~~~~~~~.. ........ .............................................................................................I.........I..................................................i DEVELOPMENT OB*JECTIVE RATING Satisfactory .............. ~ ~~.... ................................................................................. ........................ ......................... ...................................................................... IMP.LEMENTATION PROGRESS RATING Satisfactory DEVELOPMENT OBJECTIVES The project aims to: (a) develop a market-oriented agricultural sector, expand export earnings, improve rural incomes, increase food security, and reduce environmental degradation; (b) encourage the establishment of water user groups which will takeover the operation and maintenance of irrigation facilities. IMPLEMENTATION PROGRESS Overall, the implementation progress for this project is rated as satisfactory. The road component of this project (includes the upgrading and construction of more than 200 kilometers of rural roads; and strengthening the Road Administration Divisions of the implementing agencies in the area of contract supervision) has progressed remarkably well. Appropriate training is being provided to local supervisory engineers and contractors. The three completed irrigation schemes has been handed over to water user groups trained under the project for routine maintenance of the facilities. The benefits of the irrigation schemes have been reported. However, there are problems which may impede the successful implementation of the project: the non completion of the remaining 72.6 kilometers of rural road construction may delay implementation progress.; the installation of electricity at the Hin Heup Research Station may cause a delay if not completed in January 1998 as scheduled; the requested extension (to June 30, 1998) by the Ministry of Finance may hamper full implementation of project if not granted; and the devaluation of the Lao currency (Kip) may result in requests for adjustments of payments by contractors and the Special Account recovery may cause cash flow problems to the Ministry of Finance. .............................................................................................. ......................................................................................................................... . NjOTE: disbursed amount plus undisbursed balance wvill not equate the approved amount due to exchange rate vis-a-vis SR - 37 - Attachment 2 Page 9 of 10 PROVINCIAL GRID INTEGRATION APPROVED AMOUNT US$36.00 million .............................. ................................................................................................................................................................................. ...... DATE APPROVED.. October 6, 1992 DATE OF SIGNATURE .December 23, 1992 . .................................................................................................................................................................................................................................... EFFECTIVENESS DATE July 6, 1993 ............ ~ ~~.... .................................................... ......................................................... .......................... .................................................................... CLOSING DATE June 30, 1998 DISBURSEMENTS US$300 million ........ 1 i~... ~ W............................................................................................................... ............................................................................................... % disbursed over total approved credit 83.33% undisbursed balance US$6.10 million DEVELOP ENT OB ECTIE RATING Satisfactory .MPLEMENTATION PROGRESS RATING sfactory ........................................................................................................ ............................................ ................................................................................... DEVELOPMENT OBJECTIVES The project aims to: (a) extend and enhance the quality of electricity supply to existing and prospective consumers in the Southern and Central regions; (b) improve electricity system efficiency; (c) continue institutional development through strengthening electric company's autonomy and finances, training of staff, and planning new investments; and (d) develop projects to export additional power and/or energy. IMPLEMENTATION PROGRESS Overall, the implementation progress for this project is satisfactory. Meters have been made available to the EDL (electrical company) stores for the implementation of the Loss Reduction Program (LRP). The EDL systems efficiency is weak therefore unsatisfactory. This is due to the inability of EDL to generate, from internal sources, funds of not less than 20% of its average annual capital expenditures and to cover estimated debt service requirements. Problems which may hamper implementation progress include the delay in procuring materials, engaging contractors to implement the LRP and appointing a financial consultants to set up profit centers. NOTE: disbursed amount plus undisbursed balance will not equate the approved amount due to exchange rate vis-A-vis SDR. - 38 - Attachment 2 Page 10 of 10 LUANG NAMTHA PROVINCIAL DEVELOPMENT APPROVED AMOUNT j US$9.70 million DATE APPRO March 15, 1994 .. ~ b § ~ ....... .............................................. .......................................... ,,,,,,,,,,..... . .,....,,..,........ DATE OF SIGNATURE.iMy1819 May 18,1994 EFFECTIVENESS DATE November 1,1994 CS DA...-- -- - ---------December 31,2001 ........................................................... .......... ...................... ........................................... .....................I.................................. ...................................... DISBURSEMENTS US$4.10 million % disbursed over total approved credit i42.27% undisbursed balance US$5.70 million DEVE OPMENT OCTiE.RATIG Satisfactory ........................................... ........................ ................................................................................ ........................................................I.............. ..... ....... IMPLEMENTATION PROGRESS RATING .Satisfactory. DEVELOPMENT OBJECTIVES The project aims to: (a) improve the standard of living and raise the income potential of the rural poor; (b) enhance local income generating activities; (c) integrate the local population into the market economy and provide access to social services; (d) provide adequate supply of quality water to meet the hygiene and health needs; and (e) strengthen human resource capacity of implementing agencies in the areas of planning and management. IMPLEMENTATION PROGRESS Overall, the implementation progress for this project is good. The road component of this project which was slow has picked up. However, the road component will have cost overrun because of the addition of 22 kilometers of road to Xiengkok and also the decision on the selection of roads for construction may delay start-up. The lack of qualified and experienced staff to manage the rural water program may cause a serious implementation delay. N_TE: disbursed amount plus undisbursed balance will not equate the approved amount due to exchange rate vis-A-vis SDR. Attachment 3 - 39~ -Page lof2 ATTACHMENT 3: HIGHLIGHT FROM PRESENTATION ON NEW BANK LENDING INSTRUMENTS TWO LENDING INSTRUMENTS LEARNING AND INNOVATION LOAN IMPLEMENTING THE STRATEGIC COMPACT (LIL) ADAPTABLE LENDING ADAPTABLE PROGRAM LENDING (APL) Learning and Innovation Loan Learning and Innovation Loan Objective To provide structured support for small, SMALL SIZE (leon up to smilfion) time-sensitive programs to... IMPLEMENTATION PERIOD OF 2-4 YEARS * Build capacity to prepare for a large-scale MODULAR APPROACH - Learn what you need to know program T Test promising development initiatives - Experiment and develop "locally-based" Laotian(?) models prior to scaling up * Some combination of the above. Monitoring and Evaluation... What about Quality Standards? VITAL . We will maintain quality standards * Place the emphasis on different During Project. .. things... * Need to collect evidence about what is - learning as we go.. working or not working ~~~~~~~not up-front economic analysis working or not working -mauea eg. - measure as we go... * Frequent reviews don't wait until end of project * Frequent changes - measure trajectory at every stagee... * Don't wait until end of project don't wait until we reach the "moon"! Attachment 3 -40- Page 2 of 2 ADAPTABLE PROGRAM LENDING Adaptable Program Loan Objective: * Provides for funding of a long-term development To provide sustained support for the strategy, starting with a first sequence of activities, implementation of a long term according to agreed milestones & objectives development program that reflects * Divisible, phased & discrete investments economic pruiorities and contributes to econo mt preduction through a series of m A logical sequence of events & staging of activities poverty reduction through a series of with defined milestones and policy requirements loans, phased to reflect intermediate results. MODALITIES Milestones = Triggers for Next Phase APL * Long term program set out in a Letter of Development Program would be evaluated in the context of appraisal of the * Readiness for successive APLs would be triggered by first APL meeting milestones v First APL would establish upper limit for Bank financing *Mlestones are not "conditionality" for next phase * Board would approve program & first APL Milestones are a leading indicators that the next phase will succeed. * Successive APLs would be appraised, negotiatied. and then approved by the Regional Vice President. Letter of Development Program Long-term goal(s) of the program Sequencing or phasing of the program, and the specific objectives of each phase General descripton of the key activities (policy and institubonal retorms and investment) to be pursued in each phase Program performance indicators and milestones to be used in monitoring and assessing progress. and as triggers for moving from phase to phase Program cost esumates and financing plan, by phase and categorized into investment and recurrent expenditures * Monitoring and evaluabon plan for tracking progress and developing lessons to be used in prepanring subsequent phase Instttubonal and implementabon arrangements. kttachment 4 - 41 - Page I of 8 ATTACHMENT 4: PRESENTATION ON PROCUREMENT PROCEDURES BY MR. DANGLAM MAHAYO, DEPUTY DIRECTOR HEALTH P'ROJECT -~~~~~~~~~~~~~~~~~~~~~~~7 -7 'i~: _ F j X X = M gi , r~~C, 3 LY,ci r- tr e - - 4/ - S t r. \ * h 50% 72 Duration of main stages in ICB procurements, expressed in weeks and as a percentage of the total usual time Eamin mustial En2 O;~~~uRa A 11)1XX SSrH Emax d - d) 5 Ot 24 Data Approval ' Bidding Contract MOH TOTALS compiling stage stage stage logistics A.Van Don Brande 10 11/6/97 - 43 - Attachment 4 Page3 of 8 IV~~~ QF~~~~~~~~~~~~~~~~~O de *P o o o o o.A o c Data cmilig|W Wfntg of bid dotm 7) Apprcrd ot tec r s, 7pc Approvais sage _ bid dosPU I speeaUOH deparze(s) CD1 PrOcuremwntftr~ proc==r, ~~Chief of cab.J (D bid 4wcsRhe Wortd Bankg Frls*on atbid dumert I <-- MOH aaproval Bidding "ae7 Bids sUtn!ss rCt MOH appr> Of e.uaion report -; W S__ appro-I of B replt ds p r e p ar a t ion .' WiS approval of esstiD rep,t 4: Cort-&c- stqg MO:H appr oval of evalua tion (D Co-aa w-brig CD Ceontractsisned byTe Suppli e COrtl Signewd br 1-- Contract finalisation UQ Con sired byMOH L rr`por,tatorn alcw (MOC & Customs) 7 7rCD 0 O.Per*ytofUC by MOF a .C.F-L t-11 D e 7 y t i e- - I|p o r t a t i o n l l ww aec er CD MOH)ogistr C3 =_=>g: - MOHoms /earance dgx-sX <-- Lat e d elive ry . CU.Stoms dearance ofga1 0 GCoods routed to the cOrruponet. _x t CD 4- - -~~ 44 . Attachmnent 4 *-- - .Example of Procurement document requiring an excessive numberPae4f8 r , , ~~~~~~~~~~~~~~~of clcarance stepsPae4o8 Eil-* SqlJ:n D 1 {J - t)UZfl~ -a- e a38~: ni dl l -.szunm =cm .-. - .- , . . -. .I * - 43aI-~ iY67-,vAs w~#.JJJzJ 2. - : .~~ 'CW''WB' :C S - - ~~~~-31i 08/091997 4 - . , , - - - . ................ - - -.3mJ8 4-lbB ;=r3- : gI2ei.~1.7,4 5 5~67 7 10950 S12,32 7iO9 5 If9l,=7 , ut l;c '-Z-' '=' - - eb.v'di-- - ~~'.77 saoexdnLa I-=-='--.;-,:'-- - - -,8 j ^ u3=23 Dr.i W3077c1nmnsuaze ?OMSOPIE ER,lSSSTwOHd =enbsurta .l .V~j~flS~kOd rOdtra' 4 .. ..... w A* ;sx - ->- ~~~~~- - ~ MNi lE~~~~~~~~~~~~~ 1~~~~~r oukhn XAO YPoiin )252 f~~ ~~~~~ ietin prvneLa .. N~~~~~~~~~~~~ Contract #: | CB204C/96 Date Contractors Prc-qaulified: - i Date Bid Doc Completed: | 10-Nov-961 Date Bidding Advertised: | 18-NOV-96! Date Bid Opened: | 18-Dec-9qJ Date Bid Evaluated: - 20-Dec-96| Date Evaluation Cleared: | 15-Jan97j Date Contract Signied: 07May-971 Date Contract Commenced: | 06-Apr-971 Contract Awarcded to: CT027 Value of Coritract: |_8,572.00 Construction Period Start: [=2-vav 9, Constructlon Period End: Fr 7 ct-97I ° O aD 6.~ ~ ~ ~ ~ ~ ~ ~ ~ PROJECT PROGRESS TASK ID: |B168 CONTRACT#: |C_WB.04C/96 | School Name: Bane Laodonedengj REPORT DATE [20-Nov-97 | % COMPLETED: | 0 1!00% |- Planned Start Date: 15| May-:97 Planned Duration: | 165lDays Plantned Finisil Date: [ _ 31-Oct-97 __ Budget: | $49,50000 j Work Type: [NebJinq Scale: Major_ Thursday, March 26, 1998 11:45:00 - - -llll| lll F 8 §§l 810CB.666 Ma mimmilwan,m, lrin Llonstruction Co. Ltd $48,572.~~~~~~~~~~~~~~~~~~~~~~~~~~~~ef l~~~~~~~~~~~~~~~~~~~~~~~q hursday, March 26,1998 IIA&M,~~ch CpD 0 n Province: Ltiang Nanitli 'PCode SCode SCHOOL NAME LIuang Namtla 1303-29 Mlilaiig School Type LOCATION COST ESTIMATE I'S ( Sxzl0) llock shape) 75 Km fi oiii I,NT A . PLANNED START DATE PLANNED FINISH DATE APPROVAL DATE PLANNED DURATION STATUS Okey PCode SCode |SCHOOL NAME ItuaIIg NaimtIia 301-20 INaI1oImi V School Type LOCATION COST ESTIMATE 'S ( 5x40 ) 131ock siape) mmi municipal area PLANNED START DATE PLANNED FINISH DATE APPROVAL DATE |PLANNED DURATION 'STATUS Okey oeS fe, 19 W b ^f g- PCode Contract # SCODE SCHOOL NAME Contract awardec Value of Contract Date Contract Si n Period Start:n Period End: Iuwang Naintha CWB.03-01 I S/9 301-1 . 'llonig Dee 1Phanthauitl Conistitiction Co. Lt $28,287.36 01-Mar-98 18-Mar-98 | 15-Aug-98 301-2 Khorni Ph1,antthamith C'onistiticlioii Co. I | $28,287.36 01 -Mar-98 18-Mar-98 15-Aug-98 Summary for 'Contract #' = CWB.03-OIPS/98 (2 detail records) Sumn $56,574.72 twang Naitiha CWI.03-031PS/9 303-5 ChoIm clealig 1'liatltamitlt Construction Co. It $3.1,3415.23 0 1 -Mat-98i 18-Mar-98 I 5-Aug-98 303-7 Nami lak Iait1thamnililth Constructioni Co. Ll $2 1,508.98 01 -Mar--98 18-Mar-98 I5-Auig-98 302-6 Nakltam inI'llithamithi Constirictioni Co. IA $32,707.80 01-Mar-98 18-Mar-98 15-Atig-98 Summary for 'Contract #' = CWB.03-03PS/98 (3 detail records) Sumli $8s8,562.01 luIang Nain tha CWI3.03 -04l'S/9 30)1-8 I)orI kitotni Insitliong Construction Co. Ild $29, 1 l)4 16 01 -Mar-98 I 8-Mar-98 I 5-Atg-98 c 30! -1( Pholl xa i Ilsitholg Constructioln Co. Ltld $2 1,0649,94 0! -Mar-98 1 8-Mar-98 I 5-Aig-98 301-9 Viciug Ngeuti lIlsitliolg Construiclioni Co. L(d $21,369.31 01 -Mar-98 18-Mar-98 15-Atig-98 Summary for 'Contract #' - CWB.03-04PS/98 (3 detail records) Surm $71,538.41 (mang Namitha CWlt.03-05 PS/9 304-1 1 '1ltieo C(a leuinl C'olnstiruiction Co. tI dI $39,131.29 1 -Ma r-98 18-Mar-98 15-Alug-98 304-12 Nam Ac'g Clialcui( Construction Co. 1 (I $28,321.86 01 -Mar-98 I8-Mar-98 5-Aug-98 304-13 Naiii Chili Chaleiun Construiction C'o. Lt $28,303.4t3 0 1-Mar-98 18-Mar-98 15-Atig-98 Summary for 'Contract #' CWB.03-05PS/98 (3 detail records) Sum $95,756.58 ILuangrNamthia CWB.14.021)S/9 303-29 Mulanig S.O.I (onstri.ction Co. ltd $26,43i.29 | | 01-Mar-98| 18-Mar-98 | 15-Atug-98 j > Summary for 'Contract #'= CWB.14.02PS/98 (1 detail record) Sutnm $26,434.29 Summary for 'PCode' = Luang Namtha (12 detail records) °° Sum1 $3383,866.01 ° t' j yi~~~~~~~~~ arc, j~~~~~~~~~~~~~~~~~~~~~~' 4.~~~~~~~~~~t)I PCode Contract # SCODE SCHOOL NAME Contract awardee Value of Contract Date Contract Si -n Period Start:,n Period End: jI.tiauigphllr(lilahag CW13.06-)1 PS/9 605-33 PI'lonsa-At Seugigllhet Consitictioll Co. Ltd $33,952.87 01-Mar-98 18-Mar-98 15-A g-98 601-34 hI'Iat Ko SculgPlhet Colnstiuction Co. Ltd $32,084.07 01-Mar-98 18-Mar-98 1 5-Aug-98 Summary for 'Contract #' = CWB.06-O1PS/98 (2 detail records) StiuTm $66,036.94 Summary for 'PCode' = Luangphrabang (2 detail records) SurnI $66,036.94 Luangplrabang |CWBI06-011'S/91604-35 I'llaa lee SeligPlet Constirictioll Co. Itd $25,051.70 01 -Mar-98 1 8-Malr-98 1 5-Atug-98 605-36 Don Ngeuiin SenigPliet Conisiltiction Co. Ltld $24,293.36 01-Mar-98 18-Mar-98 15-Atug-98 Summary for 'Contract #' = CWB.06-O1PS/98 (2 detail records) Sumil) $49,345.06 Liangpr labang CWB.06-021)S/91606-37 -iaKhalKioni hI.uangIrabangConistitictioi Co. $31,055.98 18-Mar-98 15-Atug-(8 Surnmary for 'Contract # CWB,06-02PS/98 (1 detail record) S urn $31,055.98 LIangpr-abang ICWB(.06-031S/9 603-42 |I'1hon I fillI oItOIg(IalI Conlstruictioti Co. itd $24,798.00 01 -Mar-98 18-Mar-98 I 5-Aug-98 o' 602-4() Kiew Ka Chain Ihong(dala Constrilctiol Co. I.ld $39 ,14 1.19 01 -Mar-98 18-Mar-98 15-Aug-98 603-41 I'aa Phai 1101onLIdala ConstrIction Co. Ltd $39,441.19 01 -Mar-98 18-Mar-9X 15-Aug-98 Summary for 'Contract #' = CWB.06-03PSI98 (3 detail records) Sum $103,680.38 |Luangprabanig |CWB.24C/96 1601-48 _-Sangkalok tangluang 13usiuiess Cousti-icti $42,922.i5 09-Jull-97 24-Jt11-97 17-Nov-97 Summary for'Conra#' = CWB.24C/96 (1 detail record) Sum $42,922.15 |Luangpjabang |CWB.25C/96 1604-49 JSomsaiotiuk |Muaitgiaiig Businiess Coitsti ticti I $44,049.32 | 09-JuI-97- 24-Jtn-97 17-Nov-97 J Summary for'Contract ' = CWB.25C/96 (1 detail record) Suin $44,049.32 Summary for 'PCode' =Iuangprahang (8 detail records) S lun $271,062.S9 Salavalill CW13. 1 4.021S/9 1405-71 Saphat S.(.'I' ConIstr uctioll Co. I .tld $34,896.76 01-Mar--981 1 8-Mar-98 1 5-Au:g-98 | 1405-70 Vapi S ° I Construiction CO. L.td $34,896.76 01-Mar-981 18-MaL-9X 15-Aug-98 9. ...... ;-.22:!tEr7: '1 fTi,4 ) PCode Contract # SCODE SCHOOL NAME Contract awardee Value of Contract Date Contract Si n Period Start:-in Period End: SalavaI;IV;I] |CWIF. 14.021.S/9 ( 1105-72 MWang ISOTA. Colns tiuctioll Co. Lid $26,434.29 O| | m a( I I8-Mar-98 | 5-Aug-98 Surmmary for 'Contract # =CW.14.02PS/98 (3 detail records) Slainz t$96,227.81 |SalaVauI |CWIi 4.04 01H)S/I9 1407-78 IM. loV Ngaanm Souligna CoInstIrIctionl CO. Ltd $32,583.70 1i -Mar-98 1 8-Mar-( I 15-Atig-98 1407-77 OI)axia Sotiligia Coistrtictioii Co. tAd $25,24,11.50 01-Mar-98 I8-Mar-98 15-Aug-98 1400 1-76 Sapolul Souligua C(onstrucion Co. I $ .d;25,24 1.50 1-Mar-98 18-Mar-98 I 5-Atig-98 Summary for 'Contract # = CWB.14.04PS/98 (3 detail records) Stuivm $83,066.70 Summnary for 'PCode' = Salavanih (6 detail records) Stim $ 5179,294.51 |Savannaklhet CWB.04C/96 11309-123 I.aodonedeng INixaisinih Consti-tiction Co. ILtd $48,572.00 | 07-May-97| 22-May-97 I 17-Oct-97 I Summary for 'Contracl #' = CWf.04C/96 (1 detail record) Sillai $48,572.00 ISavannakl .et ICWR.O5C/96 11303-121 lChalaInong Nixaisiuh Construiction Co. td | $48,572.(00 | | 07-May-971 22-May-97 I Summary for 'Contract i' CWB.05CI96 (1 detail record) Suilmi $40,572.00 |Savalnnakhet |CW13.06C/96 11302-124 Manivongxai INixaisiili Construction co. ILd | $48,572.00 0 | 07-May-97| 22-May-97 I Summary for 'Contract #' = CWf.06C/96 (1 detail record) Stillu $48,572.00 Savalinahet CWB.07C/96 1311-122 Veuna Nixaisinlih Coistruictioi co. L $48,572.00 | 07-May-97 22-May-97 Summary for 'Contract #' = CWB.07C/96 (1 detail record) Sum $48,572.00 ISavannakhet 1CWr3 13.02PS/9 1301-109 13ooeig va Nixaisinh CoInsirriction Co. LI d $28,4 1 5.01 01 -Mar -98 18 -Mar-98 I 5-Aig-98 13(09-1(07 Noung Lan (Chan Nixaisitr Constlucticion C(. tAl $40,03 5.'16 01 -Mar-98 18-Mar-98 I,5-Aug-98 1309-106 I'lloll Mulanl g Nixaisinili Coiistirictioni Co. I .t(l $'10,03 5.46 0 1 -Mar-98 18-Mar--98 15-Atig-98 Summary for 'Conlract #' = CWI3.13.02PS/98 (3 detail records) > Stinm $108,485.93 |SavannIIakllet |CW. I3 1303liS/9 1304-Ill |XCthainuak IDM ConsIIStrIcioIn Co. lAd $39,331.60 | 0 1-Mar-981 18-Mar'9 8 I 5-Aug-98 | Thu sd,, , Ic r! 199 . PAYMENT REPORT Contract # KWB.o4C/__ - = 1 School Name Contract Awardee Value of Contract PAYMENT AMOUNT VOUCHER ID Payment Round PAYMENT DATE Laodolnedeng Nixaisinh Construction Co. Id.td $48,572.00 $6,747.03 1 Advance 30-May-97 Laodonedeng Nixaisinh Conisi-tictioni Co. ltd $48,572.00 $18,187.53 2 1 ist Initerii 26-Auig-97 I.aodoldeICcng Nixaisiihli Conisiniction (o. ILOd $48,572.0() $ 13,333.99 [I 2n1 hiit nerii 20-Scp-97 Laodonicleieg Nixaisinih Conistirictioni Co. Ltd' $48,572.00 $10,303.45 4 3rdl Interimil 25-Oct-97 Summary for 'Contract # = CWB.04C/96 (4 detail records) Sum $48,572 00 Grand Total $48,572.00 ThUrs d,ac , 1998 ., Page 1 of I Conltract # I' SCtlOOL NAME PCode Conitract Awardee Value of Contract ) SIART DAIE) FINISN DATE DIuration Pctg ComipletedRpt Date (O)trIdomsill I miag MNil i, Sumninary for 'Contract f1'= (I detail iecord) Cotitract r- CWI 04- __ ___ ___ SCIIOOL NAME PCode Conitract Awardee Value of Contract ) SIART DA-1 El FINISII DATE Duration Pctrj Coinpleted Rpt Date I ao(lod1e(de'tg Savannrrak he Nixa isi ilt ('oust rmcion Co. 1. $48,572.)) 1.5-May-97 3 1-(00-97 169 1 (00%1 02-Nov-97 Sumnmnrary for 'Contract 1t' = CWB.04C/96 (I (letlil record) St,,, $'8,572.0u0 1(1 Contract # (CWIL- -C/9__ ___ SCHOOL NAME PCode Contract Awarlee Value of Contract ) START DATE) FINISI DATE Duration Pctg Complete(d Rpt Date Sanigkalok IAmringplraba rvluarigluramig BusiueCss ('onst $4.2,92215 1()I1)°0 07-Nov-97 Suinmary for 'Contract f' = CWB.24C/96 (I detail record) Sumili $42,922.15 10(0((0% Contract # iOWW25C/_ _ SCtlOOL NAME PCode Contract Awardee Value of Contract ) START DATE) FINISH-l DATE Duration Pctq Completetl Rpt Date CD M a n rDrj CONTRACT DETAILS SCODE |1309-123 | Contractor Contract# CWB.0qC/96 . CONTRACTOR CONTRACTOR ID |CT027 j CONTRACTOR ID CT027 Registration No Contract awardee fNixasintr Construction Co. Ltd COMPANY NAME |Nixaisinh Construction Co. ILtd Expire Date MANAGER Mrs.Nipha Ki-IAMPHE Remarks ...... . . .... . ADDRESS . ]Kovorlavoitn street, B. Sanhtiisotui . Value of Contract |$48,572.00 j I TELEFONE N (051 ) 2123-3-5 - Date Contract Signed 07-May-97 Constroction Period Start: | -9 CODNTRY L I h Constrtctiorn Perio(d End: | 17-Oct-97 D SRICT lhakherk PROVINCE KGZotfanle . Contract Details: {CONTRACT#:, TASK ID Scode: ISCHOOLN ...N PCode:i,i^, -ORK,TY TASK,NAMEi2 BUDGET: PLANNEDSTA PLANNED Ifl1iiratIBti4 6'11-2..... | CWB.03-01PS/98 B001 301-1 Thong Luang MaJor NeW $37,000.00 18-Mar-98 15-Aug-98 150 Dee Namttia building CWB.03-01 PS/98 8002 301-2 Klioril luang MaJor New $37,000.00 18-Mar-98 15-Aug-98 150 Namthia building CWB.03-02PS/98 B003 305-3 Vang MiXal Luanig Major New $39,000.00 18-Mar-98 . 15-Aug-98 150 Namtlha buliding CWB.03-02PS/98 8004 305-4 Oem Luang Major New $39,000.00 18-Mar-98 15-Augs-98 150 Narntha buildinig CWB.03-03PS/98 B005 303-5 Cliom Luang MaJor New S4i0,000.00 18-Mar-98 15-ALug-98 150 cheang NamtLla buildirlg CWB.03-03PS/98 B006 302-6 Naklanm Luang Major New 538,000.00 18-Mar-98 15-Aug-98 150 Namtha buIlding CWB.03-03PS/98 B007 303-7 Narn Bak Lualng Major New 530,000.00 18-Mar-98 15-Aug-98 150 Nanitha building D CWB.03-04PS/98 B008 301-8 Dorn Luang Major New $37,000.00 18-Mar-98 15-Aug-98 150IO khoun Namtha bullding . CWB.03-04PS/98 B009 301-9 Vleng Luang MaJor New $26,000.00 18-Mar-98 15-Aug-98 150 W e NgeuLl Namtlia building Attachment 6 - 72 - Page I of 3 ATTACHMENT 6: HIGHLIGHTS FOR PRESENTATION ON BANK'S NEW PROYECT CYCLE The World Bank/IDA New Procedures Project belongs to the clients not to the Bank. Who is the Client? Results on the Ground * Government - Better projects * Ministry of Finance - Well-designed * Government linc agencics - Well-prepared * Provincial -overnments - Well-implemented * Target group -- the Poor - Development impact - measured and felt by •Target roup the Poor ~~~~~~~client 4 6 CAS DRIVES ALL BANK OPERATIONS *h dr,is the CAndr pro 2ra tC_ Won hindtah(econorac rLd c-.Or work) and rachnical assktanca * Bank,cJerr. sva=ng Ccur,r D,rcno rasponsibce * ConsrItiox-s w,h !akohoWders an.d orhe Bank nurts cnt ca 1 2 Affachment 6 - 73 - Page 2 of 3 Key Steps of CAS Cycle Featuring: Joint IDA/clicnt srategy Lending Procedures Consultation at 2 stag,es Initiation mern and Team io-mulation * Can eoniultation Prepawtior- * Country Programn matrix and CAS report are drafted *gegonal review in Bank * Client onsnltation Operations Commnree Recnce (top Bank management) * CAS repor. revised : * Board prescmnation *33 14 * ~~~~~~~~Lending-- Key Staaes Lending -- Key Stages bL * ! * * Appraisal to Board Identification and Preparation lboi et SoarU pracntaO n *" r4 A, 15D'Ia 1 _ 16 Portfolio Project Impiementation - Key Stages iManagFement _ otroarc,> D PS ¢:: CE:XPI 44C Z>::>t.X>rr , .arB ________ PRPl4 ZNd S l I)C!4D>:N b :1 Attachment 6 -74- Page 3 of 3 PROJECT LAUNCH Monitoring and Evaluation Good reporting system is p ittrwCit 2erminimde important READINESS of rt ph,a first year impow,uinetpog pro,tn i, Cieti11 Eonotil ~~~~~~~~STEPS < ~~~~Si2nQrj £ffeeti.eaco E Pro2rss rporIiri Pro,jet aunct. .oorkhop 19 20 Portfolio Monitoring and Roles of Client and IDA Reporting - A Joint Effort in Project Implementation Quarterlv Rcports fromn The Client's Role: IDA's Role: Facilitiate clients to Bank Manage the Project and 'Trouble Shoot" Ban:k staff reports quarterly to imnagement Bank and Government (CPPR) 2 1 22