AFRICAN DEVELOPMENT FUND

PROJECT COMPLETION REPORT

SECOND HEALTH SERVICES REHABILITATION PROJECT

REPUBLIC OF UGANDA

(LOAN No F/UGA/HEA/2/93/35)

COUNTRY DEPARTMENT EAST JUNE 2001

TABLE OF CONTENTS

Page

CURRENCY EQUIVALENTS, WEIGHTS AND MEASURESABBREVIATIONS, BASIC PROJECT DATA i - vi

MPDE MATRIX vii

EXECUTIVE SUMMARY viii

1. INTRODUCTION 1

2. PROJECT OBJECTIVES AND FORMULATION 1

2.1 Objectives 12.2 Project Description and Formulation 12.3 Origin 22.4 Preparation and Appraisal 22.5 Negotiations and Approval 2

3. PROJECT EXECUTION 3

3.1 Effectiveness and Start-up 33.2 Modifications 33.3 Implementation Schedule 43.4 Reporting 53.5 Procurement 53.6 Financial Sources and Disbursement 6

4. PROJECT PERFORMANCE 7

4.1 Overall Assessment 74.2 Operating Results 84.3 Institutional Performance 94.4 Management and Organisational Effectiveness 104.5 Staff Recruitment, Training and Development 104.6 Performance of Consultants, Contractors, Suppliers

and Borrower 114.7 Conditions and Covenants 12

5. SOCIAL AND ENVIRONMENTAL IMPACT OF THE PROJECT 13

5.1 Social Impact 135.2 Environmental Impact 13

6. PROJECT SUSTAINABILITY 14

7. PERFORMANCE OF THE BANK AND THE BORROWER 15

7.1 Project Objectives and Justification 157.2 Project Implementation and Operating Outcomes 15

8. OVERALL PERFORMANCE AND RATING 16

9. CONCLUSIONS, LESSONS LEARNED AND RECOMMENDATIONS 16

9.1 Conclusions 169.2 Lessons Learned 169.3 Recommendations 17

LIST OF ANNEXES

1. Map of Uganda and Location of Project Sites2. Planned and Actual Expenditures by Year, Source and Category of Expenditure3. Performance Evaluation and Rating4. Recommendations and Follow-up Actions5. Sources of Information

This report was prepared by a Consultant Architect and a Consultant Health Planner, OCDE.3following their mission to Uganda in June 2001. Enquiries should be addressed to Mr. T.Z.Sakala, Manager, OCDE.3 (EXT. 4151) or Mr. Muchenje Principal Health Analyst OCDE.3 (Ext.4551)

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CURRENCY EQUIVALENTSCurrency Unit : UGANDA SHILLING (UGX)1 UA : UGX 1,672.64 (2nd Quarter, 1993)1 USD : UGX 1,197 (2nd Quarter, 1993)1 UA : UGX 2,336.52 (March, 2001)1 USD : UGX 1,700 (March, 2001)*/*/ Commercial rate at PCR mission

WEIGHTS AND MEASURES1 metre = 3.28 feet (ft)1 square metre = 10.76 square feet1 km = 0.62 mile

ABBREVIATIONSADB : African Development BankADF : African Development FundADH : Adjumani District HospitalAIDS : Acquired Immuno-Deficiency SyndromeBDH : Bwera District HospitalBPCR : Borrower’s Project Completion ReportDDHS : District Director of Health ServicesDHMT : District health Management teamFE : Foreign ExchangeGOU : Government of UgandaGDP : Gross Domestic ProductGNP : Gross National ProductGOU : Government of UgandaHSRP : Health Services Rehabilitation ProjectHSSP : Health Sector Strategic PlanICB : International Competitive BiddingKDH : Kaabong District HospitalLC : Local Costs (Currency)LCB : Local Competitive BiddingMOH : Ministry of HealthMPDE : Methodology for Project Design and EvaluationOPD : Out-Patient DepartmentPCR : Project Completion ReportPHC : Primary Health CarePIU : Project Implementation UnitQPPR : Quarterly Project Progress ReportSWAps : Sector Wide ApproachesUA : Unit(s) of AccountUGX : Uganda ShillingUSD : United States DollarsWHO : World Health Organisation

GOU FISCAL YEAR1 July - 30 June

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REPUBLIC OF UGANDASECOND HEALTH SERVICES REHABILITATION PROJECT

PROJECT COMPLETION REPORT

BASIC PROJECT DATA

1. Loan Number : F/UGA/HEA/2/93/352. Borrower : The Government of the Republic of Uganda3. Beneficiary : Ministry of Health (MOH)4. Executing Agency : MOH/PIU

A. LOAN

1. Loan Amount : 22.566 UA Mill.2. Interest Rate : 0 (0.75 % service charge)3. Repayment Period : 50 Years (including grace period)4. Grace Period : 10 Years5. Loan Negotiation Date : 24 August, 19936. Loan Approval Date : 21 October, 19937. Loan Signature Date : 17 December, 19938. Date of Entry into Force : 13 June, 1994

B. PROJECT DATA

Appraisal Estimate Actual Cost at PCR

FE LC Total FE LC Total

1. Total Cost (UA mill.) 19.77 5.36 25.14 16.65 4.63 21.28

2. Financing Plan (UA mill.) Appraisal Estimate Actual Financing at PCR

FE LC Total FE LC Total

ADF 19.77 2.79 22.57 16.65 2.46 19.12Government 0.00 2.57 2.57 0.00 2.17 2.17

3. Effective Date of First Disbursement : 17 December, 19954. Actual Date of First Disbursement : 20 October, 19955. Effective Date of Last Disbursement : 31 December, 19986. Revised Date for Final Disbursement : 1) 30 September, 1999

2) 31 December, 20007. Commencement of Project Implementation Activities : 13 June, 19948. Date of Completion of Project Implementation Activities */ : April, 2000

*/ End of Defects Liability Period for additional works, and not including some minor administrative follow-up activities

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C. PERFORMANCE INDICATORS

1. Cost Under-run : UA 3.454 mill. (13.7 %)2. Time Over-run:

- Slippage of Effectiveness : 6 months (16.7 %)- Slippage of Completion Date : 2 years + 3 months (75 %)- Slippage of Last Disbursement : 2 years (40 %)- Number of Extensions to Last Disbursement : 2

3. Project Implementation Status : Completed4. Verifiable Indicators:

(A) Supervision : 100% complete(B) Construction : 100% complete(C) Furniture : 100% complete(D) Equipment : 100% complete(E) Training : 100% Complete(E) PIU : 100% complete

5. Institutional Performance (Unsatisfactory/Fair/Satisfactory):- The Bank Group: Satisfactory- The Government: Satisfactory- Contractors: Satisfactory- Suppliers: Fair- Consultants: Satisfactory

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D. MISSIONSNos ofPersons Composition Pers/Days Dates

Identification */ Consultant N/A 1993Preparation */ Consultant N/A 1993Appraisal 2 HA/AR **/ 44 09/04-02/05-93Techn. Superv. 3 HA(2)/AR 24 28/05-05/06-94Portfolio Review 10 CP/OP N/A 18/10-27/10-94Techn. Superv. 1 HA 12 29/09-10/10-95Techn. Superv. 2 HA/AR 28 28/09-12/10-96Techn. Superv. 2 HA/AR 30 21/11-06/12-97Portfolio Review 2 OCDE (Consult.) N/A 06/06-20/06-98Techn. Superv. 3 M/HA/AR 54 31/10-18/11-98Audit 1 IA 15 27/03-11/04-99Financial Superv. 1 DD 6 10/05-16/05-99Techn. Superv. 1 HA 11 31/05-11/06-99Techn. Superv. 3 M/HA/AR 48 15/10-31/10-99Techn. Superv. 4 HA/HE/AR/PE 68 03/03-21/03-00PCR 2 HE/AR 28 16/03-30/03-01*/ Identification and Preparation were carried out as a pre-investment study, completed in September, 1993.

**/ Health Analyst (HA); Health Economist (HE): Architect (AR); Population Expert (PE); Country Programmes Department (CP); Management

(M); Disbursement Department (DD); Operations Department (OP); Operations Country Department East (OCDE); Internal Auditors (IA)

E. DISBURSEMENT (UA Million)

ADF:Appraisal Percentage

Year Estimate Actual Disbursed

1994 4.201995 8.81 0.080 0.41996 8.02 2.649 12.11997 1.54 8.354 49.11998 4.705 70.01999 2.730 82.12000 0.594 84.72001 0.004 84.7- Total Disbursement 22.57 19.116 84.7- Undisbursed Balance 3.454 15.3- Amount Cancelled NIL

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F. CONTRACTORS

01 Company Name : Dragados Y Construcciones S.A.Responsibility : Civil Works for 3 District HospitalsCommencement date : 06 June, 1996Programmed Completion : 08 March, 1998 (30 August, 1999 for additional works)Actual Completion Date : 29 September, 1998 (24 September, 1999 addit.

work)Contract Amount : USD 26,406,776.98 (incl. additional works)Final Contract Cost : USD 25,336,908.63

G. SUPPLIERS

01 Company Name : Peja Africa B.V.Responsibility : Supply of Medical Equipment and

Hospital FurnitureDate of Contract : 20 November, 1997Completion Date : 28 February, 2000Contract Cost : USD 1,889,082.32

02 Company Name : Danspital Ltd.Responsibility : Supply of Communications Equipment and

AmbulancesDate of Contract : 03 February, 1997Completion Date : 04 September, 1999Contract Cost : DEM 244,401.77

03 Company Name : Kazinga Channel EnterprisesResponsibility : Supply of Computing Equipment for PIUDate of Contract : 24 November, 1999Contract Cost : USD 15,601.36

04 Company Name : Kjaer & Kjaer World WideResponsibility : Supply of Vehicles for PIUDate of Contract : 26 March, 1996Contract Cost : USD 76,800.00

H. CONSULTANTS

01 Company Name : PB Consultants LLC (formerly Peatfield &Bodgener Chartred Architects)

Responsibility : Supervision of Construction WorksDate of Contract : 15 May, 1996Contract Cost : USD 801,626.95

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PROJECT MATRIX (AS PER APPRAISAL)

NARRATIVE SUMMARY VERIFIABLE INDICATORS MEANS OFVERIFICATION

IMPORTANT ASSUMPTIONSAND RISKS

Sector Goal

Health care delivery system improved in ruralareas of Uganda

1. Infant mortality rate reduced to 80 per 1,000 live births.

2. Immunisation coverage raised to 60% of child population by year2000.

3. Maternal mortality rate reduced to 150 per 100,000 births byyear 2000.

1. GOU/MOH, ADB,World Bank, WHO,UNICEF, UNDPUSAID and otherdonor statistics.

(goal to supergoal)

1. Socio-economic stability maintained:improved health and increased life expectancylead to increased rural worker income andproductivity.

2. No major influx of refugees fromneighbouring countries.

Project Objectives

Referral system for secondary/primary healthcare strengthened in three remote ruraldistricts.

1. Reduction in patient/bed ratio to 80 ppb in the project areas byyear 2000.

2. Improved ratio for bed to population.

3. Increased supervision missions (MCH, EPI, etc.) from hospital toperipheral facilities.

4. Increased number of patients referred from peripheral facilities tohospital.

5. Quality health care accessible to 75% of population in projectdistricts.

1. GOU hospitalcensus statistics.

2. HospitalOPD/Ward/ MCHFamiliy PlanningClinic statistics andreports.

(purpose to goal)

1. On-going projects financed by ADB, WorldBank, ODA, USAID, France, Italy, DANIDA,OPEC Fund, Japan, WHO, UNICEF, etc. aremaintained and sustained: i.e. effectiveprimary and secondary health services upheldin other districts.

2. GOU rationalises its policy regarding costsharing.

3. No major outbreaks of epidemics.

4. Sustained community participation in healthcare development.

Outputs

1. Bwera District Hospital rehabilitated andreconstructed, fully operational andsupervising 31 outreach peripheral facilities(health centres, health posts anddispensaries).

2. Adjumani District Hospital rehabilitatedand reconstructed, fully operational andsupervising 53 peripheral facilities.

3. Kaabong District Hospital rehabilitatedand reconstructed, fully operational and

1. Fully functional clinical and nursing departments: OPD,Medicine, Surgery, Maternity and Paediatrics; with the relatedservice units (theatre, x-ray, pharmacy, laboratory, kitchen, laundry,workshop and mortuary); in addition to staff housing.

2. Maximum of 100 beds in the various departments.

3. Full set of standard district hospital furniture.

4. Full set of standard district hospital equipment and supplies(including reagents, consumables and essential drugs).

5. Full complement of qualified staff.

1. GOU QPPRs,

Project updatedocuments andBorrower’s ProjectCompletion Report(BPCR)

2. ADF supervisionreports, follow-upmission reports, andPCR

(output to purpose)

1. Population served pays minimal fees.

2. Hospitals and medical supplies adequatelymaintained.

3. Hospital management training conducted onschedule by ADF-HSRP.

4. Rural health teams from district hospitalseffectively serve outreach areas anddisseminate information on PHC, MCH, EPI,family planning, STD, AIDS, etc.

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supervising 22 peripheral facilities. 6. Retrained staff of peripheral facilities of district (health centres,dispensaries and health posts) in order to promote improved back-up and referral services.

Activities

1. Fulfilment of conditions precedent to firstdisbursement.

2. Negotiations, ADF approval for extensionof contract to cover supervision ofconstruction works.

3. Tendering and signature of contracts forconstruction, furniture, equipment andsupplies, with ADF approval.

4. Preparation and organisation of localseminars and workshops, with ADF approval.

5. GOU confirmation and ADF approval ofretention of existing HSRP-PIU to manageproject implementation.

Inputs/ResourcesExpenditure Schedule (UA million)

ADF 94 95 96 97 Tot

SUP 0.06 0.11 0.09 0.01 0.27

CON 3.93 7.86 6.87 0.99 19.65

FUR 0.00 0.10 0.13 0.06 0.29

EQI 0.00 0.49 0.63 0.28 1.39

TRG 0.00 0.08 0.13 0.07 0.29

PIU 0.21 0.17 0.17 0.14 0.70

TOT 4.20 8.81 8.02 1.54 22.57

GOU 94 95 96 97 Tot

CON 0.00 1.03 0.90 0.64 2.57

1. ADF approvedsigned contracts.

2. Disbursementrecords.

2. GOU QPPRs.

(activity to outputs)

1. GOU will include project in currentrevision of RDP in order to ensure counterpartfunds and recurrent expenditure.

2. There will be no major revision of tenderdocuments.

3. Acceptable tenders will be received.

4. No labour strike.

5. Furniture, equipment and supplies availableand within budget.

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EXECUTIVE SUMMARY

1. The Health Services Rehabilitation II Project, approved on 21 October 1993, was thefifth Bank Group financed involvement in the social sector in Uganda. The project waspreceded by an ADF/TAF financed study which was included as a component in a previousproject. This study provided the technical basis for the project.

2. At the time of identification and preparation, in 1992/93, Uganda was still sufferingfrom the after-effect of political turmoil and civil strife that had engulfed the country in the1970s until the mid-1980. During these years, the dramatic shift of resources away fromsocial services, particularly health and education, led to the dilapidation of basic socialinfrastructure and services. The situation has since been further aggravated by the AIDSpandemic as a new serious health and social threat.

3. The pre-investment study, involved rehabilitation of five district hospitals. Because ofbudgetary constraints, it was decided, at appraisal, to only include three of them in the project( Bwera, Adjumani and Kaabong).

4. Although somewhat delayed in the start-up phase, by more than two years, the projectis now fully complete. Overall, the project outcome is satisfactory. The project outputs, asdefined at appraisal, have been attained.

5. The project was implemented within its allocated budget. There remains some loansavings which will be cancelled.

6. With the development of Bwera, Adjumani and Kaabong health facilities to districtlevel referral points, the immediate objective to provide improved secondary health care inthese three remote rural districts has been achieved. These hospitals are now fully operationalin the delivery of primary health care services and performance of the referral, supervisory,outreach and training functions. They all provide outreach services in immunisation, motherand child health, nutritional monitoring, health education, sanitation, population and familyplanning, as well as the control of diarrhoea, vector-borne diseases, HIV/AIDS, and othersexually-transmitted diseases. Furthermore they serve as the storage centre and distribution ofessential drug kits to the peripheral level, apart from creating the essential linkage betweenthe peripheral facilities and the regional hospitals.

7 With the completion of the project, the provision of maternal health services throughadequate ante-natal and delivery care has considerably raised the welfare of women and theircontribution to social and economic development of the project districts. Within the hospitalenvironment, the project has offered improved and safe working conditions to all health carecadres thereby stimulating increased productivity.

8. Although the project sustainability is primarily dependent on budgetary provisionsmade by the government, local authorities are now responsible for planning, budgeting,resource mobilisation and allocation, and in passing by-laws related to health and therecruitment and management of health personnel for district health services. Presently, theimplementation of cost sharing has improved the finances of these hospitals by providingadditional funds for the maintenance of equipment and facilities.

1. INTRODUCTION

1.1 The Bank Group lending to Uganda started in 1968. By the time this project wasapproved in 1993, the portfolio had reached a total of UA 420.85 million, consisting of 42loans and 7 grants. Of this amount, the social sector accounted for 49.13 million (11.7 % ofthe total) spread over 5 operations, namely: i) Education Studies; ii) Mbale HospitalRehabilitation Project; iii) Mulago Hospital Study; iv) Science and Technical EducationProject; and, v) Health Services Rehabilitation Project. By March 2001, when the completionreport on the present project was under preparation, the Bank’s portfolio stood at UA648.05million. The social sector accounted for UA 161.58 million, or 24.9 % of the totalcountry portfolio.

1.2 At independence, and for about 10 years thereafter, Uganda’s social indicators wereamong the best in Africa. The country’s health service was well developed with a highlyorganised network of vaccination centres and many low-cost health and nutritionprogrammes. Immunisation programmes reached as much as 70 percent of the population.The political turmoil and civil strife that engulfed the country in the 1970s until the mid-1980s reversed the economic and social progress. During these years the dramatic shift ofresources away from social services, particularly health and education, led to the dilapidationof basic social infrastructure and services. The situation was further aggravated by the AIDSpandemic as a new serious health and social threat.

1.3 When the NRA assumed power in 1986, it inherited an economic and socialinfrastructure that had been destroyed by 15 years of political and civil strife, neglect andeconomic mismanagement. In an effort to put the economy on the path to recovery, the newgovernment immediately embarked on a broad and far-reaching three-year rolling EconomicRecovery Programme (ERP). The main objectives of the ERP were to promote economicrehabilitation and growth, restore internal financial stability and achieve lower inflation. Therecovery programme was supported with import support, financing and technical assistancefrom the international donor community, including the Bank Group. By the time the project,which is the basis for this report, was prepared and appraised, substantial progress had beenmade in reviving economic activity and creating a climate conducive to sustainabledevelopment.

2. PROJECT OBJECTIVES AND FORMULATION

2.1 Objectives

Within the overall framework of the health policy, the sector objective was to improvethe delivery of health care in Uganda, with specific emphasis on remote rural districts whichhad previously been under-served. The immediate project objective was to provide improvedsecondary health care in three remote rural districts of Uganda. The attainment of the projectobjective would enable those facilities to strengthen the referral system and the delivery ofprimary health care in the said districts.

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2.2 Project Description and Formulation

At appraisal the project contained four components:

1. Rehabilitation of Bwera District Hospital: Establishing the following clinicaland nursing departments: OPD, Medicine, Surgery, Maternity and Paediatrics,with the related service units (theatre, x-ray, pharmacy, laboratory, kitchen,laundry, maintenance workshop and mortuary). All units to be fully equippedand furnished according to MOH standards for district hospitals with a 100-bed capacity.

2. Rehabilitation of Adjumani District Hospital: As above.

3. Rehabilitation of Kaabong District Hospital: As above.

4. Project Management: Provision of equipment, vehicles and funds to coveroperating costs for a Project Implementation Unit.

2.3 Origin

In 1986 the Government of Uganda approached the Bank Group for support to thehealth sector to rehabilitate key hospitals which had deteriorated during the civil war. Thisresulted in three initiatives in the health sector of Uganda. The first of these was therehabilitation of selected units at Mbale Hospital. The second was a pre-investment study forthe rehabilitation of Mulago Hospital. The project resulting from this study was the HealthServices Rehabilitation Project (HSRP I), which was approved in 1990 and is now in its finalstage of implementation. This project also contained a study for the rehabilitation of fiveexisting district hospitals (Bwera, Adjumani, Kaabong, Kisoro and Kamuli), which formedthe basis for the Second Health Services Rehabilitation Project.

2.4 Preparation and Appraisal

The pre-investment study for the five district hospitals, which was included as acomponent of HSRP I, was carried out by a consultant, with the final phase completed in1993. This study formed the basis for the project, which is the subject for this report.However, mainly due to budgetary constraints, only three hospitals were included in theproject at appraisal. The other two were subsequently provided by other donors. The appraisaltook place in April/May, 1993

2.5 Negotiations and Approval

2.5.1 Loan negotiations were held in Abidjan on 24th August, 1993. In the context ofreviewing the Appraisal Report, the Government delegation invited the ADF negotiating teamto consider extending the project area to cover all the five district hospitals which wereincluded in the study. In reply, the ADF team pointed out that in view of budget constraintsunder ADF VI, the ADF could not, at that time, provide any resources over and above therecommended amount. However, the Government’s request for the construction of theadditional two hospitals was noted. Furthermore, the Appraisal Report was amendedconcerning the appointment of consultants for supervision of the construction works. The two

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negotiating teams concluded that the Auditor General would audit the project accounts, butthat in the event he was unable to do so, he could appoint an external auditor through ashortlist approved by the Fund.

2.5.2 Following loan negotiations, the project was presented to the Board in October, 1993and approved.

3. PROJECT EXECUTION

3.1 Effectiveness and Start-up

3.1.1 In addition to the general conditions, the granting of the loan was subject to thefollowing particular conditions:

A. Conditions Precedent to First Disbursement

Prior to first disbursement, the Government should have:

i) given an undertaking to ADF, that the existing HSRP-PIU will be maintainedfor the purpose of the implementation of this project; that, furthermore, ADF shall beinformed about any proposed replacements of key staff (the Coordinator, the Director,Architects and Engineers); that any appointed replacements shall receive prior approval fromthe Fund;

ii) given to ADF, an undertaking that the implementation of the MOH policy ofincreased decentralisation towards the district level, adequate numbers of medical doctors,nurses and other medical personnel will be assigned to the Bwera, Adjumani and Kaabongdistrict hospitals.

3.1.2 The two undertakings were made in a letter from GOU dated 13 December, 1993 andcleared by the Bank on 3 January, 1994. In retrospect, the conditions were both necessary andrelevant to the implementation of the project. The Legal Opinion on the Project Loan wasreceived on 12 May, 1994, and the loan was declared effective on 13 June, 1994.

3.2 Modifications

3.2.1 Generally, the project was implemented as described in the Appraisal Report. Allproject outputs were achieved with the exception of some drugs and supplies, which weresupposed to be procured through ICB, but could not be done due to unwillingness of potentialsuppliers to go through the necessary procedures when only small quantities were involved.However, the drugs are being procured through government procedures, outside the project. Afew modifications were made to the construction works to enhance the functionality of thehospitals. These were external works mainly, such as stone pitching of storm water drains tocontrol soil erosion, road works, extra boreholes, rainwater tanks, walkways and solarlighting.

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3.3 Implementation Schedule

3.3.1 The project was to be implemented over a period of 36 months, from January, 1994. Acomparison between the appraisal estimate and the actual implementation of key events isshown below.

Events Appraisal Actual

- Loan negotiations 08/93 08/93- Board presentation 09/93 10/93- Entry into Force 12/93 06/94- Negotiation/ADF approval superv. contr. 01/94 06/96- Tendering for construction 02-04/94 09-11/95- Analysis and ADF approval 05-06/94 05/96- Signature of construction contract 07/94 05/96- Mobilisation 08/94 05/96- Construction period 09/94-08/96 06/96-11/98- Tendering for equipment and furniture 07-09/95 10/95- Analysis and ADF approval 10-11/95 11/97- Signature of contract 12/95 11/97- Mobilisation 01/96 11/97- Delivery/commissioning 08/96-01/97 03/98-02/00- Prep. for training seminars/workshops 01-06/94 1998/99- Training sessions 07/94-12/96 1998/99

3.3.2 There was an initial slippage of six months before the loan entered into force.However, a major delay during the start-up phase, was caused by a prolonged processconcerning the employment of consultants to supervise the construction works. As agreedwith the Bank at appraisal and loan negotiations, the government was to negotiate thisassignment with the same consultants who had conducted the pre-investment study. Thenegotiations proved to be a lengthy activity since the budget set at appraisal was substantiallylower than what the consultants were willing to accept, considering the remoteness of thesites. Changes in the ownership of the consultancy firm also affected the situation adversely.The Bank’s insistence on trying to achieve a price within the budget may also have prolongedthe process. In the end, an agreement was reached for a considerably higher amount thanoriginally envisaged. The consultants were finally appointed in June 1996.

3.3.3 Concerning the decision to use the same consultants throughout, there are obviousadvantages in terms of continuity and responsibility. However, in retrospect it might havebeen advisable to pre-negotiate a budget figure for supervision when the study was beingconducted.

3.3.4 When construction started in June 1996, the progress was satisfactory. A further delaywas, however, caused by the necessity to carry out some extra works to enhance thefunctionality of the three hospitals. Overall, the project finished two years and three monthslater than planned at appraisal.

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3.4 Reporting

3.4.1 In all, 21 Quarterly Project Progress Reports were submitted to the Bank, on fairlyregular basis. The reports followed the Bank’s recommended format, but were centred mainlyon the physical aspects of the project such as construction and procurement of equipment. Adraft Borrower’s Completion Report, containing valuable information, was also submitted tothe Bank.

3.4.2 Three audit reports were received covering the periods 01 June 1995 – 30 June 1997,01 July 1997 – 30 June 1998 and 01 June 1998 – 30 June 1999. The Bank’s comments to thelast report concerned some technical matters relating to the balance sheet and schedule ofexpenditure as well as pointing out that the auditors should have provided a managementletter covering the auditors’ opinion in respect of compliance with the covenants of the loanagreement, adequacy of internal control policies and procurements implemented by theBorrower. The auditors reported a shortfall in government contribution to which the Bankresponded by requesting an undertaking from the government indicating that the Borrowerwould not cause the Bank to pay any penalties and similar charges relating from delayedpayments. Furthermore, the Bank stated that any further payment under the loan agreementand Health Services Rehabilitation Project would be contigent to evidence showing that thegovernment had paid in full its agreed contribution. The Auditor General has completed thefinal audit of the project, which was submitted to the Bank.

3.5 Procurement

3.5.1 As agreed at loan negotiations, the procurement of goods and services was to becarried out as specified in the appraisal report:

i) International Competitive Bidding for construction and hospital equipment andsupplies (including reagents, consumables and essential drugs;

ii) National Competitive Bidding for hospital furniture;iii) Local and International Shopping for PIU equipment and furniture;iv) Local Shopping for training seminars;v) Shortlist for project account auditing;vi) Negotiation with the pre-investment study consultants for supervision of

construction works

3.5.2 Generally, there were few problems with the application of the Bank’s procurementrules except that medical drugs could not be bought through ICB because the quantities wereso small that no firms were willing to register with the National Drug Authority and gothrough the required procedures. It was, therefore, decided that the drugs should be boughtfrom the districts yearly votes. It was further agreed with the Bank that the Auditor Generalshould audit the project rather than employing outside auditors.

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3.6 Financial Sources and Disbursement

3.6.1 The four tables below illustrate the differences between the planned financing of theproject and what actually took place up to the PCR stage.

Planned Financing by Source(UA millions)

FE %FE LC %LC TOTAL % of TOTAL

ADF 19.77 100.0 2.79 52.1 22.57 89.8

Government 0.00 0.0 2.57 47.9 2.57 10.2

Total 19.77 5.36 25.14

78.7% 21.3% 100.0%

Actual Financing by Source(UA millions)

FE %FE LC %LC TOTAL % of TOTAL

ADF 16.65 100.0 2.46 53.2 19.12 89.8

Government 0.00 0.0 2.17 46.8 2.17 10.2

Total 16.65 4.63 21.28

78.2% 21.8% 100.0%

Planned Financing by Category and Source(UA millions)

Categories ADF GOU TOTAL

A. Supervision 0.28 - 0.28

B. Construction 19.65 2.57 22.22

C. Furniture 0.28 - 0.28

D. Equipment/Supl. 1.39 - 1.39

E. Training 0.28 - 0.28

F. PIU (Op. costs) 0.70 - 0.70

Total 22.57 2.57 25.14

Actual Financing by Category and Source(UA millions)

Categories ADF GOU TOTAL

A. Supervision 0.58 - 0.58

B. Construction 16.19 2.17 18.36

C. Furniture 0.52 - 0.52

D. Equipment/Supl. 1.10 - 1.10

E. Training 0.22 - 0.22

F. PIU (Op. costs) 0.49 - 0.49

Total 19.12 2.17 21.28

Note: The government’s contribution in Uganda Shilling has been calculated in UA using

historical exchange rates

3.6.2 As can be seen from the above tables, there were savings in the categories ofconstruction, equipment/supplies, training and PIU (operating costs), while some cost over-runs were made in the categories of supervision and furniture. The overall saving is UA 3.86million, with a loan balance of UA 3.45 million. There are no outstanding commitments to bepaid. The analysis also shows that the government’s planned contribution of 10.2 % has been

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met. Basically, the relatively large saving is attributable to competitive tenders as a result ofimproved supply of building materials and better business climate than at the time ofappraisal, when the initial costing of the project was made.

3.6.3 Because of the delay in the implementation of the project, there are substantialdifferences between the planned disbursement schedules and what actually took place. Thecomparative tables are shown in Annex 2.

4. PROJECT PERFORMANCE

4.1 Overall Assessment

4.1.1 In accordance with the conditions stipulated at appraisal, there were no significantdeviations in the project implementation. The new National Health Policy and the HealthSector Strategic Plan provided for further decentralisation of health care management as wellas the training, recruitment, rational deployment, motivation and retention of qualified staffacross the country. While the assumption of socio-economic stability and others remainedapplicable through the project cycle, it was impossible to stem down the influx of refugeesfrom neighbouring countries. Nevertheless, these facilities were able to cope with the healthcare needs of the refugee population. As a result of the health sector reform process, thetargeted indicators at the sector goal was redefined during project implementation for the newplan period 2000/01-2004/05. The targets now stand at reducing Infant Mortality Rate from97 to 68 per 1000 live births, Under 5 Child Mortality from 147 to 103 per 1000 live births,Maternal Mortality Rate from 506 to 354 per 100,000 live births and HIV prevalence by atleast 25% from current levels.

4.1.2 With the development of Bwera, Adjumani and Kaabong health facilities to districtlevel referral points, the immediate objective to provide improved secondary health care inthese three remote rural districts has been achieved. The establishment of health sub-districtshas made it mandatory for these hospitals to deliver all facets of health services at sub-districtlevel, including referral from the lower level. In addition, the provision of stipulated numberof beds and standard furniture and equipment at these hospitals enhanced bed to populationratio and the quality of health care accessibility of the population in project districts. Howeverthere is scope for further improvement, if the current staff shortages, partly compounded bythe insurgency in these areas, can be resolved. Therefore, the government should guaranteeadequate security in these districts to ensure the safety and retention of hospital staff.

4.1.3 Although cost sharing as a policy instrument remain politically sensitive, theGovernment of Uganda (GOU) is still committed to develop and support alternative financingschemes such as user fees, health insurance and other community resource mobilisationefforts. During the HSPR II, cost sharing was used as an instrument of resource mobilisation.It was optional particularly for patients who would like to be accorded a special treatment attheir cost. In KDH and ADH, the PCR mission was informed that during the time of therecent presidential election, there was a suspension of user fees in all public health facilitiesbut this did not affect the use of the private wing of the hospitals. It was further informed inADH, that the hospital committee decided in a recent meeting to continue with the privatewing for those who would like to be given an alternative, at additional private cost. Sincepublic health service is free to the entire population, cost sharing in private wings has not

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discouraged access or reduced demand. More importantly, the amount realised from this costsharing has contributed to the financing of drugs, maintenance and repairs.

4.1.4 The Project Implementation Unit of HSRP (or HSRP-PIU) was responsible for theoverall management of the project. Despite some turnover of personnel, particularlyarchitects, the PIU has effectively discharged its overall functions of managing the technical,administrative and financial aspects of the project, including quarterly progress reporting toADF.

4.2 Operating Results

4.2.1 Bwera, Adjumani and Kaabong District Hospitals were designed at appraisal to offercomprehensive health care services to the population in the catchment areas. With therehabilitation of the physical facilities and adequate provision of equipment and furniture,these hospitals are now fully operational in the delivery of primary health care services andperformance of the referral, supervisory, outreach and training functions. They all provideoutreach services in immunisation, mother and child health, nutritional monitoring, healtheducation, sanitation, population and family planning, as well as the control of diarrhoea,vector-borne disease, HIV/AIDS, and other sexually-transmitted diseases. Furthermore theyserve as the storage centre and distribution of essential drug kits to the peripheral level, apartfrom creating the essential linkage between the peripheral facilities and the regional hospitals.

Bwera District Hospital

4.2.2 With respect to hospital performance, between 1998 and 2000 the Bwera DistrictHospital (BDH) deliveries increased from 836 to 1,402, Family Planning and Ante Natal Carefrom 6,707 to 9,878 and Operations from 324 to 1,155. Other currently providedcomplimentary facilities include Dental Services , Laboratory, X-ray, Ultra Sound Servicesand Ophthalmic Services. Apart from offering comprehensive health services to the five sub-counties (Bwera, Nyakiyumbu, Kitholhu, Karambi and Ihandiro), its operation has beenextended to cover a big part of North Kivu in the Democratic Republic of Congo (DRC)currently under political and civil turmoil. The cases from DRC constituted about 10% of thetotal patient population. This is a remarkable performance in the midst of constant outbreak ofinsecurity in the area and the creation of new phenomenon of internally displaced persons(IDPs), that are vulnerable and susceptible to disease. In terms of the staff situation, BDH hasimproved from a total of 28 in 1998 to 129 in 2000.

Adjumani District Hospital

4.2.3 In the case of Adjumani District Hospital (ADH), there has been marked increase inthe utilisation of the services and facilities. Since it became fully operational in August 1998,accessibility has improved with provision of health care services to a population of 176,000nationals and 76,000 refugees. With the opening of more health service outlets includingsurgical, medical and psychiatric clinics, the outpatient attendance increased from 14,504 in1998 to 26,323 in 2001. With the possible use of all the ancillary services, namely X-ray,Ultrasound, Laboratory, Dental, Eye, Physiotherapy, Orthopaedic Theatre and Dispensary, in-patient admissions increased from 3,378 to 5,189, referral from peripheral units from 187 to750 while Ante-natal coverage increased from 2,357 to 2,831 within the same period. Itsstructured network of functional health infrastructure provides effective referral services to 30

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peripheral health units compared with 53 stipulated at appraisal. Despite covering below thetarget, the hospital is able to reach these peripheral units in outreach and support supervision.It is expected that the coverage will increase with improved staff strength.

4.2.4 Presently, the ADH has 3 Medical Doctors, 1 Senior Nursing Officer, 2 RegisteredNurse/Midwives, 3 Registered Nurses, 4 Registered Midwives, 18 Enrolled Nurses and 5Midwives. The proportion of health workers possessing basic professional qualificationsincluding skills for specific primary health care services has also increased. This has enabledthe hospital to expand its service delivery in the Primary Health Care through the newlycreated Community Health Department. In addition, its capacity in management of emergencyinterventions, especially obstetrical emergencies, has been strengthened with improvement inthe quality of hospital staff, through continuous education in the proper utilisation of hospitalfacilities and equipment.

Kaabong District Hospital

4.2.5 The rehabilitated Kaabong District Hospital (KDH) now has a network of vaccinationcentres, with immunisation programmes reaching almost 100% of its catchment population.Restoring its functional capacity has enabled the hospital to operate at an acceptable level ofquality and provide back-up services to out-reach activities. Similar in performance to theother two hospitals, both outpatient attendance and in-patient admission have increasedsignificantly while 70% of these admissions are children. There are 2 Medical Officers (ofwhich one is on study leave), 5 Clinical Officers, 1 Senior Nursing Officer, 3 EnrolledNurses, 1 Enrolled Midwife, 1 Senior Dispenser, 4 administrative categories and 32 casualworkers currently employed by the hospital. With existing 44 vacant posts, the MOH isurgently identifying ways of improving the human resource situation of KDH. The conditionis expected to improve if the present policy to develop and promote incentive schemes forequitable deployment and retention of health workers, especially in the rural areas, isimplemented.

4.3 Institutional Performance

4.3.1 At the design of this project, institutional appraisal of the health sector revealed risingdemand for health services aggravated by insufficient access of the population to healthservices, inequitable distribution of health facilities and human resources and poor referralinfrastructure at the district level. Consequently, some policy measures proposed torestructure the institutional arrangement of health delivery service include increaseddecentralisation and resource allocation towards district level, and coordinated effort by thedonor community to establish solid foundation for poverty reduction.

4.3.2 Despite the appropriateness of the institutional diagnosis and the policy prescriptionsduring the project implementation, the present arrangement to plan and manage the healthsector through Sector Wide Approaches, is a continuous and more effective mechanism ofimproving institutional performance. It is also envisaged under this arrangement, that GOUwill seek support from development partners, to redirect spending through a flexiblebudgetary support procedure.

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4.4 Management and Organisational Effectiveness

4.4.1 The health sector has been reformed since the time of appraisal. The current Five YearHealth Sector Strategic Plan(2000/01-2004/05) has further strengthened the policy ofincreased decentralisation to the district level. The health sector reforms have led toadministrative and structural changes in the health care delivery system. The structure formanagement of health services in the district is now under the leadership of the DistrictCouncil through the District Health Committee (DHC). The District Health ManagementTeam (DHMT) is headed by the District Director of Health Services (DDHS) and composedof the heads of Health Sub-District (HSD) and section heads. In the plan period, the districthospitals will be under the responsibility of Medical Superintendent, who will report to theDDHS. The District Service commission are now responsible for appointment, discipline andsetting the conditions of service for district staff.

4.4.2 The Ministry of Health is now responsible for policy formulation, standards andguidelines, overall supervision and monitoring. It ensures that strategic guidance, technicalsupport and resources are made available to the districts. These reforms are consistent withfurther improvement in the planning and implementation of health projects and programmesin the district.

4.5 Staff Recruitment, Training and Development

4.5.1 At appraisal, it was stipulated that in order for the completed project facilities tobecome fully operational, the three hospitals would require 20 additional medical doctors(Bwera: 7; Adjumani: 7; Kaabong: 6); 94 additional nurses, midwives and paramedicals(Bwera: 35; Adjumani: 28; Kaabong: 31); and, 22 additional domestic staff (Bwera: 9;Adjumani: 6; and Kaabong: 7). These are far from realisation because of the human resourceproblems in the entire health sector. As already indicated in the previous sections, theperformance of the three district hospitals in staffing was significantly affected by theinsecurity in these areas apart from the country wide problems of inadequate number andinappropriate distribution of trained health personnel. However, the medium-term objective isto attain by the end of the HSSP period, at least 75% of the minimum staffing norms at eachlevel of the district health system. Among key strategies for achieving this objective are: (a)the progressive replacement of untrained staff by converting nursing aides to nursingassistants through an appropriate formal course; and (b) improving working conditions so asto minimise attrition rates. Other de-motivating factors that the HSSP will address specificallyin these districts are ineffective pay roll management, salary payment delays and arrears, lackof appreciation and establishment of performance based career progression schemes.

4.5.2 In area of training under the project, Adjumani and Kaabong benefited from localseminars and workshop through the improvement of the skills of their health services cadresincluding those at the peripheral level.. The training organised by MOH included Maternaland Child Health, EPI, AIDS/HIV, STD, Family Planning, essential drugs and building andequipment maintenance. On the contrary, BDH could not participate in some of the refreshercourses and workshops because of the delays and other bottlenecks in communicating thetraining schedules.

4.5.3 The PCR mission observed that the present shortage of staff accommodation in BDHand KDH may in the near future affect the staff morale and performance. Out of 129

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employees of the BDH, only 13 reside in single bedroom houses forcing others to sharerooms. Suitable accommodation for the hospital staff should have been incorporated in theproject at appraisal to ensure sustainable long-term social and economic impact.

4.5.4 The training received by PIU during the project implementation, though not fundedunder the HSRP II project, greatly enhanced its management and institutional capabilities.The areas included 5 PIU staff in Loan Administration, 2 in Project Planning andManagement and 5 in Computer courses. Transfer of this capacity was evidenced by AfricanDevelopment Fund’s recommendation that the Kenyan MOH/PIU spend one weekunderstudying HSRP-PIU of Uganda. In addition, an equipment specialist (Ugandan) was sentto MOH/Seychelles to assist with preparation of their equipment requirements on an ADBfunded project. The only major setback however, was that the first Project Director hadlimited experience in the management of large bureaucracy and never received training in anyaspect of loan administration. In general, the HSRP II has made significant impact on the PIUand the MOH institutional capacities to plan, organise and supervise fairly large and complexhealth infrastructure rehabilitation/reconstruction projects.

4.6 Performance of Consultants, Contractors, Suppliers and Borrower

Consultants

4.6.1 The three district hospitals were to be constructed on the basis of designs andspecifications provided by a consulting firm under a previous pre-investment study financedthrough and ADF/TAF grant. The same consultants were also employed to carry outsupervision of the construction works. The designs and tender documents were of adequatequality. However, during the course of construction, it was found necessary to carry outadditional works to enhance the quality of the facilities. The cost of this work was well withinthe overall budget in the appraisal report for the category of construction. The consultants’clear instructions and firmness while dealing with both the contractor and the client resultedin good quality works and cost control.

Contractor

4.6.2 The three hospitals were tendered as one contract through ICB. The contractor’sperformance was generally good considering the remoteness of the sites. The three sitesneeded good management and financial resources which were reflected in the completion ofmajor works within the contract period. The apparent time over-run of six months on theoriginal contract was mainly due to logistics in connection with carrying out additional works.Some defects on the buildings at Kaabong District Hospital were observed by the PCRmission. There are several cracks in the external and internal walls, probably caused bysettlements due to difficult soil conditions (black cotton soil). However, none of the cracksappear to be structurally hazardous. The outside plaster on the lower part of the external wallsare cracking and starting to flake off in several places. Since these defects have appeared afterthe expiry of the defects liability period, remedial work must be carried out by the MOH usingsupplementary funds or the annual maintenance budget.

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Suppliers

4.6.3 Some suppliers did not perform well. In most cases the issues related to their supplycontracts when they wanted to base their performance on mutual understandings concerningchange of payment mode, currency and delivery rather that adhering to the contracts. In somecases the equipment did not meet the specifications which resulted in outright rejection ormodifications.

The Borrower

4.6.4 The project was implemented by the Project Implementation Unit (PIU) established bythe MOH which was at the same time handling Health Services Rehabilitation I Project. Thesame unit had also handled the administration of the pre-investment study. Notwithstandingthe initial delays, the PIU’s performance was quite good ensuring successful implementationof the project and satisfactory operation of the three hospitals.

4.7 Conditions and Covenants

4.7.1 Three covenants, or “other conditions” were attached to the project,formulated as follows: The Borrower shall:

i) six (6) months prior to the organisation of local training workshops andseminars, submit for ADF approval, the programmes as well as the choice of the trainers;

ii) within 12 months of the signature of the loan, submit for ADF perusal, a clearstatement concerning the rationalisation between the cost-sharing scheme currently beingapplied in health facilities and the GOU official policy of free health services;

iii) not later than January 1995, provide evidence, satisfactory to the ADF, that thenecessary steps are being taken to assign adequate numbers of medical doctors, nurses andother medical staff to the Bwera, Adjumani and Kaabong district hospitals.

4.7.2 The covenants were quite appropriate in principle. However, concerning the firstcondition, the six-month period required by the Bank to approve the organisation of localtraining workshops, seminars and trainers seems unnecessarily long. A more appropriate timespan would have been three months because of the dynamics of training processes.Concerning the two other covenants, the MOH had already started the process of health sectorreform in 1994 in collaboration with development partners, among them ADB. The Bankwas, therefore fully informed about issues relating to the two covenants.

5. SOCIAL AND ENVIRONMENTAL IMPACT

5.1 Social Impact

5.1.1 The completion and full operational of the three district hospitals implies that, thepopulation in the catchment areas now has access to safer and more efficient service.Satisfactory rehabilitation of BDH, ADH and KDH has improved geographical accessibilityand reduction in cost of seeking medical services. Additionally, it has reduced significantlythe previous social neglect, poverty and past inequities in income distribution and resource

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allocation, because of employment-creating and income-generating outcomes of theseinfrastructures. BDH has provided employment opportunities to a team of about 120 people.The incomes generated have socio-economic implications on the welfare of the population.Opportunities for better health education have also empowered the local communities to takeresponsibility for their own health and well-being thereby reducing the incidence ofpreventable diseases like malaria, HIV/AIDS, diarrhoeas diseases etc. and increasedproductivity through reduced morbidity.

5.1.2 The provision of maternal health services through adequate ante-natal and deliverycare has considerably raised the welfare of women and their contribution to social andeconomic development of the project districts. Within the hospital environment, the projecthas offered improved and safe working conditions to all health care cadres therebystimulating increased productivity.

5.2 Environmental Impact

5.2.1 The project is classified as Category 2. With the appropriate measures included in theproject concerning hospital waste, sewage system, storm water drainage and landscaping, theproject will have limited adverse impact on the environment. However, the PCR missionobserved that there are some unresolved environmental problems at Kaabong DistrictHospital. The first one concerns storm water drainage. The surface water from the hospitalarea drains into a ditch constructed outside the perimeter fence. The ditch is lined with stonesand appears to be in good condition. However, where the ditch ends, outside the hospital area,the water has started to erode the soil forming a deep ravine in the direction of the nearestriver course. The situation is further aggravated by heavy run-off into the ditch from thesurrounding area outside the hospital compound. This is bound to get worse and worse withevery rainy season and should be looked into, for instance by involving other ministriesdealing with environmental matters. One solution may be to let the water flow into aconstructed dam which could be used to provide drinking water for cattle. The secondobservation is that mosquitoes seem to be breeding in the aqua privies. Regular spraying withan appropriate insecticide should, therefore, be introduced.

5.2.2 It was further observed that the hospitals are using firewood for cooking for in-patients. Although the amount of firewood may be small in relation to what is consumed bythe surrounding communities, it could be perceived as a potential factor in depleting naturalresources. As a mitigating measure, the hospital management should actively support effortsby the community to replace this energy source through regular tree-planting.

6. PROJECT SUSTAINABILITY

6.1 During the 2000/01-20004/05 plan period, the HSSP will continue to develop andsupport alternative financing schemes such as user fees, health insurance and other communityresource mobilisation efforts. It will further ensure that all financial transactions including theuse of Government funds, donor transfers to local authorities, and locally generated resources beadministered strictly within the financial regulation of Government. Apart from GOUcommitment to increase recurrent allocation to the health sector over the next five years, HSSPwill be implemented under the Sector Wide Approach (SWAps). This will facilitate supportfrom other donor agencies in financing some of the recurrent costs of BDH, ADH and KDH.

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6.2 At the district level, the DDHS under the overall direction of the District Council will beresponsible for the implementation of health financing initiatives, accountability and co-ordination of other sources of financing for health, and within the context of the integrateddistrict health plan. A comprehensive national health infrastructure development plan will bedeveloped while provision for preventive maintenance will be part of the Medium TermExpenditure framework.

6.3 Under the new decentralised health care system, the Local Authorities are nowresponsible for planning, budgeting, resource mobilisation and allocation, passing by-lawsrelated to health and the recruitment and management of health personnel for district healthservices. Specifically, the Health Service Commission is responsible for reviewing the termsand conditions of service of health workers. The implication is that the personnel cost for thethree rehabilitated hospitals will no longer be a burden on the recurrent expenditure of MOH.However, the GOU will continue to accommodate other recurrent costs of the project in theregular MOH budget.

6.4 Presently, the implementation of cost sharing in BDH, ADH and KDH has improved thefinances of these hospitals by providing additional funds for the maintenance of equipment andfacilities. The hospitals now have budget for equipment maintenance as well as some trainedartisans to support minor repairs. If continued, it will enable GOU to provide sustained andincreased financial resources for the delivery of efficient services to these remote rural districthospitals. Community based health initiatives as proposed by GOU, may further reinforce thequality and long-term sustainability of the project.

7. PERFORMANCE OF THE BANK AND THE BORROWER

7.1 Project Objectives and Justification

The Bank’s strategy in the health sector at appraisal was formulated within theframework of Poverty Eradication Action Plan of GOU. The Plan aimed at directing moreresources towards the rehabilitation and maintenance of the social infrastructure in remoterural districts which have previously been under-served. The delivery of primary health careand the strengthening of the referral system were expected to reduce morbidity and mortalitythereby enhancing the potential for productivity and poverty eradication. In retrospect, theBank’s analysis of the health sector and the district health sub-sector priorities and problemsconformed appropriately with the objectives upon which the project was designed for theGOU. Indeed, the subsequent health sector reform that culminated in the development ofHSSP and NHP reinforced the accuracy of the Bank’s original assessment.

7.2 Project Implementation and Operating Outcomes

7.2.1 The frequency of Bank’s supervision missions was adequate and particularly valuablein resolving issues and problems pertaining to the implementation of the project. The directinteraction between the PIU and the Bank’s missions enabled mutually agreed decisions to betaken on issues concerning the suppliers/contractors and consultants. More importantly, wasthe usefulness of the missions in educating the PIU on some operations of the Fund as itrelates to the project.

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7.2.2 However, the PCR mission observed gaps in the PIU Quaterly Project ProgressReports (QPPR) and the Bank’s follow-up reports of the missions as they contained nospecific information on output statistics of the hospitals, to enable better measurement ofhospital performance and broad assessment of project attainments. Most of the reportscontained details of problems on civil works and issues relating to financing, making itimpracticable to have an overview of how the project outputs relate to the target indicators atthe sector goal and project objectives. Hence the need for the Bank to review the format of theQPPR with PIU in order to facilitate the production of more comprehensive projectcompletion reports. Furthermore, the indicators identified at appraisal were too broad tofacilitate specific measurement of each hospital performance and its relationship to overallhealth status improvement of its catchment population.

7.2.3 In the area of financial management, it would be desirable if the Bank could provide aproject accounting package appropriate for multi currency transactions and suitable to theBank’s operation. The shortcoming of the present disbursement arrangement is the lack oftimely disbursement information to monitor the movement of all payments. In order tostreamline the flow of payment, it will be advisable for the Bank to always send an advancecopy of the Loan Disbursement Voucher (LDV) to PIU either by electronic mail or Fax.

7.2.4 Notwithstanding the initial delays, the PIU performance was quite remarkable inensuring successful implementation of the project and satisfactory operation of the threehospitals. The Bank should however, consider the possibility of reducing its bureaucraticprocess to facilitate communication and reactions on technical issues that require urgentintervention. In order to improve and sustain the current level of performance, complementaryinvestment in human resource development that guarantee continuous flow of professionallycompetent health and medical personnel to these hospitals would be desirable.

7.2.5 The observations made by the Bank on the audit reports, referred to in paragraph 3.4.2above, have been appropriately addressed by GOU and communicated to the Bank. Theseobservations could have been avoided if the Office of the Auditor General (OAG) in Ugandaare timely in auditing and reporting of project accounts. It is observed during the PCRmission that the current auditing of project account is far off the time schedule. Thisreinforces the need for the Bank to react promptly in ensuring that the borrower operateswithin the framework of financial accounting procedures and regulations expected atappraisal.

8. OVERALL PERFORMANCE AND RATING

The ratings in the areas of Implementation Performance, Bank Performance andProject Outcome have been calculated as 2.20, 2.75 and 2.89 respectively, which implies thatthe overall performance rating for the project is in the category of “Satisfactory”. For furtherdetails see Annex 3.

9. CONCLUSIONS, LESSONS LEARNED AND RECOMMENDATIONS

9.1 Conclusions

The HSPP II project was implemented satisfactorily as stated in the Appraisal Reportand confirmed at completion. Improved referral system, delivery of comprehensive health

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services to the catchment population, proper execution of the civil works and adequateinstitutional capacity of PIU to manage the project are clear evidence of accomplishments.Despite projections in the medium term expenditure framework for the health sector toincrease staff strength and financial allocation at the Health Sub-District and provide forpreventive maintenance, concerted effort among all the relevant development planners willstill be required, to ensure that human resource needed to sustain the operation of therehabilitated facilities are provided.

9.2 Lessons Learned

There are several lessons to be drawn from this project:

Implementation

(i) The experience from the management of this project has shown that successfulimplementation demands skilled personnel with institutional competence, dedication andfamiliarity with the Bank’s procedures for procurement, disbursement and reporting. It isindeed costly and time consuming to develop such capabilities. Because of the short-termnature of project assignment, adequate financial remuneration and/or incentives are alsoimportant to encourage motivation, dedication and retention.

(ii) There is a need for the Bank to strengthen its collaboration with other developmentpartners in the overall project implementation. It should engage relevant ones in criticaldiscussion during project identification and formulation. The current SWAps arrangementwould not only facilitate joint planning, monitoring and evaluation of the Bank’s project butalso complement the financing of some recurrent costs, that are considered crucial for longerterm sustainability. The financing of regular supplies of essential drugs, staff motivationthrough various incentives, provision for adequate routine maintenance and other logisticsupport are examples of the benefits of such collaboration.

(iii) In the case of the extension of health services to the refugees, it was envisaged duringthe appraisal that it might have adverse effect on the attainment of the sector targets.However, these hospitals were able to accommodate the needs of refugees. In this respect,the Bank should consider financing such project that extend health services to otherneighbouring countries, within the framework of its policy on regional integration,cooperation and assistance.

Performance Evaluation and Project Outcomes

(i) The financial reporting needs to be carefully reviewed by PIU to ensure appropriateaccounting classification of financial transactions. This is to preclude financial data errors inthe balance of payment. Proper accounting of project expenditure would facilitateidentification of such expenditure by component, category and timing.

(ii) The reports on the Bank follow-up supervision missions at the initial stage of projectimplementation should have contained remarks on the status of some conditions stipulated inthe loan agreement. The review of these reports by PCR revealed this deficiency, which oughtto be rectified, in other subsequent technical supervision missions of the Bank. A mid-termreview, which is now part of the Bank’s procedures, would have detected the potentially large

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saving on construction, which could have been used to strengthen the impact of the projectwhile still under implementation.

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9.3 Recommendations

For the Fund

(i) The format of the Bank’s follow-up mission report will require critical review in orderto generate relevant data required for general overview of the project performance. It isbecoming increasing apparent that collection and analysis of project data are essentialelements of an effective monitoring and evaluation process, and should therefore, be anintegral part of the project to be financed. It is therefore, unrealistic to rely exclusively on theMOH since the capacity to collect such vital statistics for the project is presently weak.

(ii) It will also be constructive if the Bank could regularly inform PIU on the status ofreporting guidelines including modifications and new developments. Upgrading the capacityof PIU in proper project management, data collection and analysis, reporting and loanadministration either through the Bank internal training or in collaboration with other localmanagement institutions in Uganda would be a valuable asset to project implementation.

For the Executing Agency

(i) The PIU Quarterly Project Progress Report should contain information on outputstatistics of the hospitals to facilitate better measurement of hospital performance andeffective reporting on the monitoring and evaluation of the project.

For the Borrower

(i) Prompt auditing and reporting of the project accounts by GOU Auditor General

(ii) Ensure active involvement of the catchment communities in the planning andmanagement of health services at the District and Sub-District levels through effective healthcommittees.

(iii) Continue to identify and implement the most appropriate cost sharing and costrecovery systems at the rehabilitated hospitals without unduly discriminating against the poorand the vulnerable groups, distorting the demand for care, or provision of district healthservices.

(iv) Allocate adequate amount in the budget to support the recurrent needs of the districthospitals.

(v) Ensure proper routine and preventive maintenance of the health infrastructures,medical and communication equipment at the district level.

(vi) Guarantee adequate security in the project districts affected by insurgency.

i

ANNEX 1REPUBLIC OF UGANDA

SECOND HEALTH SERVICES REHABILITATION PROJECT(HSRP II)

LOCATION OF PROJECT SITES

Adjumani

Kaabong

KASESE

Bwera

District Hospital

Site

ANNEX 2Page 1 of 2

PLANNED AND ACTUAL EXPENDITURES

PLANNED SCHEDULE OF EXPENDITURES BY SOURCE, YEAR AND CATEGORY OFEXPENDITURE (AS PER APPRAISAL – UA MILL.)ADF:Categories 1994 1995 1996 1997 Total

A. Supervision 0.06 0.11 0.09 0.01 0.27

B. Constr. 3.93 7.86 6.87 0.99 19.65

C. Furniture 0.00 0.10 0.13 0.06 0.29

D. Equip/Sup 0.00 0.49 0.63 0.28 1.39

E. Training 0.00 0.08 0.13 0.07 0.29

F. PIU 0.21 0.17 0.17 0.14 0.70

Total 4.20 8.81 8.02 1.54 22.57

GOU:Categories 1994 1995 1996 1997 Total

B. Constr. 0.00 1.03 0.91 0.63 2.57

Total 0.00 1.03 0.91 0.63 2.57

TOTAL:Categories 1994 1995 1996 1997 Total

A. Supervision 0.06 0.11 0.09 0.01 0.27

B. Constr. 3.93 8.89 7.77 1.62 22.22

C. Furniture 0.00 0.10 0.13 0.06 0.29

D. Equip/Sup 0.00 0.49 0.63 0.28 1.39

E. Training 0.00 0.08 0.13 0.07 0.29

F. PIU 0.21 0.17 0.17 0.14 0.70

Total 4.20 9.85 8.92 2.17 25.14

ANNEX 2Page 2 of 2

ACTUAL EXPENDITURES (DISBURSEMENTS) BY SOURCE, YEAR AND CATEGORY OF EXPENDITURE(AT PROJECT COMPLETION – UA )

ADF:

1995 1996 1997 1998 1999 2000 2001 TOTAL

A. Supervision - 159,175.22 260,583.92 61,807.96 82,221.63 14,777.10 3,505.43 582,071.26

B. Construction - 2,476,354.11 7,884,801.99 3,792,628.24 2,040,788.30 - - 16,194,572.64

C. Furniture - - - 131,441.34 175,198.62 217,377.16 - 524,017.12

D. Equip/Sup 48,511.05 - 68,488.37 280,380.20 341,437.22 362,295.27 - 1,101,112.11

E. Training - - - 215,503.77 7,954.16 - - 223,457.93

F. PIU 31,372.16 13,118.62 140,299.74 223,464.06 82,337.07 - - 490,591.65

TOTAL 79,883.21 2,648,647.95 8,354,174.02 4,705,225.57 2,729,937.00 594,449.53 3,505.43 19,115,822.71

GOU:

1995 1996 1997 1998 1999 2000 2001 TOTAL

B. Construction - 181,829.76 765,070.40 575,605.02 435,062.17 125,882.56 84,802.92 2,168,252.83

TOTAL:

1995 1996 1997 1998 1999 2000 2001 TOTAL

A. Supervision - 159,175.22 260,583.92 61,807.96 82,221.63 14,777.10 3,505.43 582,071.26

B. Construction - 2,658,183.87 8,649,872.39 4,368,233.26 2,475,850.47 125,882.56 84,802.92 18,362,825.47

C. Furniture - - - 131,441.34 175,198.62 217,377.16 - 524,017.12

D. Equip/Sup 48,511.05 - 68,488.37 280,380.20 341,437.22 362,295.27 - 1,101,112.11

E. Training - - - 215,503.77 7,954.16 - - 223,457.93

F. PIU 31,372.16 13,118.62 140,299.74 223,464.06 82,337.07 - - 490,591.65

TOTAL 79,883.21 2,830,477.71 9,119,244.42 5,280,830.59 3,164,999.17 720,332.09 88,308.35 21,284,075.54

ANNEX 3Page 1 of 2

UGANDA HEALTH SERVICES REHABILITATION II PROJECTPerformance Evaluation and Rating

IMPLEMENTATION PERFORMANCE

Component Indicators Score Remarks

1. Adherence to Time Schedule 1

2. Adherence to Cost Schedule 3

3. Compliance with Covenants 2

4. Adequacy of Monitoring & Evaluation and Reporting 2

5. Satisfactory Operations (if applicable) 3

TOTAL 11

Overall Assessment of Implementation Performance 2.20

BANK PERFORMANCE

Component Indicators Score Remarks

1. At Identification 3

2. At Preparation 3

3. At Appraisal 3

4. At Supervision 2

TOTAL 11

Overall Assessment of Bank Performance 2.75

PROJECT OUTCOME

Component Indicators Score Remarks

1. Relevance and Achievement of Objectives -

i) Macro-economic Policy 3

ii) Sector Policy 4

iii) Physical (incl. Production) 3

iv) Financial 3

v) Poverty Alleviation; Social; Gender 3

vi) Environment 3

vii) Private Sector Development N/A

viii) Other (gender) 3

2. Institutional Development -

i) Institutional Framework incl. Restructuring 3

ii) Financial and Management Information Systems including Audit Systems 3

iii) Transfer of Technology N/A

iv) Staffing by qualified persons; training and counter-part staff 3

3. Sustainability -

i) Continued Borrower Commitment 3

ii) Environmental Policy 3

iii) Institutional Framework 3

iv) Technical Viability and Staffing 3

v) Financial viability including cost recovery systems 2

vi) Economic Viability 2

vii) Environmental Viability 3

viii) O&M facilitation (availability of recurrent funding, foreign exchange,spare parts, workshop facilities etc.)

2

4. Economic Internal Rate of return N/A

TOTAL 52

Overall Assessment of Outcome 2.89

ANNEX 3Page 2 of 2

Explanatory Notes for Markings

Relevance and Achievement of Objectives:4 marks : if the relevance of objectives is fully confirmed, the project has achieved orexceeded all its major objectives, and the project has achieved, or is likely to achieve,substantial development results, without major shortcomings.3 marks : provided the relevance of objectives is generally confirmed, the project has achievedmost of its major relevant objectives, and has achieved, or is expected to achieve, satisfactorydevelopment results, with only a few shortcomings.2 marks : the project failed to achieve most of it major objectives, has not yielded, and is notexpected to yield, substantial development results, and has significant shortcomings.1 mark : the project failed to achieve any of its major objectives and has not yielded, and is notexpected to yield, worthwhile development results.

Achievement of Institutional Development (ID) Objectives4 marks : the achievement of ID objectives is in full accordance with the project objective orhas exceeded, or is likely to exceed it, without major shortcomings.3 marks : the achievement of ID objectives is likely to be substantial2 marks : the achievement of ID objectives is likely to be of only intermediate relevance andmodest efficacy or impact.1 mark : the achievement of ID objectives is of minimal and negligible efficacy or impact.

Sustainability4 marks : sustainability of most project achievements and benefits is highly likely to last.3 marks : sustainability of most project achievements and benefits is likely to last.2 marks : sustainability of most project achievements and benefits is uncertain.1 mark : sustainability of most project achievements and benefits is unlikely

ANNEX 4Page 1 of 2

UGANDA – HEALTH SERVICES REHABILITATION II PROJECTPROJECT COMPLETION REPORT

RECOMMENDATIONS AND FOLLOW-UP MATRIX

MAIN FINDINGS ANDCONCLUSIONS

LESSONS LEARNEDRECOMMENDATIONS

FOLLOW-UP ACTIONS RESPONSIBILITY

Formulation and Project Rationale - Include better measurable indicatorsof hospital performance.

- Ensure realistic assumptions in thedevelopment of the indicators toallow for uncontrollablecontingencies

- Ensure that output indicators for thehospitals are specified in the appraisalreport.- In preparing the appraisal the Bankshould critically examine allfactors(internal and external) indeveloping assumptions

- Bank(Task Manager)

- Bank(Task Manager)

Project Implementation - Ensure that PIU is managed byskilled personnel with institutionalcompetence and familiarity withBank’s procedure

- Strengthen collaboration with otherpartners in overall projectimplementation.

- Retain the present management teamin the implementation of futureprojects.

- Continuous training of PIU inProject management

- Engage relevant developmentpartners within SWAps arrangementin critical discussion during projectidentification and formulation.

- Borrower(MOH)- Bank(Task Manager)

- Bank (Task Manager)

- Bank (Task Manager)

Compliance with Loan Conditionsand Covenants

- The Bank’s follow up mission reportshould contain remarks on the statusof some conditions stipulated in theloan agreement.

- Allow flexibility at loan negotiation

- Comprehensive and timely reportingon the fulfilment

- Modify some conditions toaccommodate changes for example in theprocurement method whichcircumstances may dictate.

- Bank(Task manager)

- Bank(Task manager)

ANNEX 4Page 2 of 2

Performance Evaluation andProject Outcome

- Review financial reporting onproject expenditure

- Review the format of the Bank’sfollow up mission report toaccommodate collection of data forgeneral overview of the projectperformance

- Ensure proper accountingclassification of financialtransactions

- Regularly inform PIU on the statusof reporting guidelines includingmodifications and new developments

- Borrower(Project ImplementationUnit)

- Bank(Task Manager)

Sustainability - Ensure active involvement of thecommunities.

- Continue identification andimplementation of most appropriatecost sharing.

- Ensure budget support for recurrentcosts

- Establish effective and active healthcommittees at the District level

- Review and improve current systemof cost sharing

- Allocate adequate amount in thebudget to support the recurrent needsof the districts hospitals.

- Borrower(MOH)

- Borrower(MOH)

- Borrower(MOH)-

ANNEX 5

SOURCES OF INFORMATION

UGANDA HEALTH SERVICES REHABILITATION II PROJECTPROJECT COMPLETION REPORT

01 Appraisal Report, Second Health Services Project (HSRP II), July 1993

02 Loan Agreement

03 ADB/ADF Project Files: Inter-Office Memorandums, communications with Borrower,contracts, Back-to-Office Reports etc.

04 Country Strategy Paper – Republic of Uganda –

05 ADB Operations Manual (June 1999)

06 PIU Project Completion Report

07 PIU Quarterly Project Progress reports 1-21

08 GOU Audit Reports (3)

09 The Republic of Uganda – Ministry of HealthHealth Sector Strategic Plan 2000/01-2004/05