Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 20240-PG

IMPLEMENTATION COMPLETION REPORT(LOAN 32900)

ON A

LOAN

IN THE AMOUNT OF US$20.8 MILLION

TO THE

INDEPENDENT STATE OF PAPUA NEW GUINEA

FOR THE PUBLIC SECTOR TRAINING rPROJECT

March 31, 2000

Human Development Sector UnitEast Asia and Pacific Region

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS

(Exchange Rate Effective January 2000 K3.1746 = US$ 1)

Currency Unit = Papua New Guinea Kina (K)November 1990 KO.967 = US$ IMarch 1995 KI .17 = US$1

December 1998 K2.15 = US$1September 1999 K2.963 = US$1

US$ I = K3.1746

FISCAL YEARJanuary I - December 31

ABBREVIATIONS AND ACRONYMS

ADB Asian Development BankAdCol Administrative College (later PNGIPA)AIDAB Australian International Development Assistance (later AusAID)AusAID Australian Agency for International DevelopmentCAS Country Assistance StrategyCIDA Canadian International Development AgencyDEY Department of Employment and YouthDFP Department of Finance and (Economic) PlanningDLE Department of Labor, Employment, Culture and Tourism (formerly DEY)DoTP Department of Treasury and Planning (formerly DFP)DPM Department of Personnel ManagementFWPA Foreign Work Permit ApplicationFWPAS Foreign Work Permits Applications SystemGRA Gazelle Restoration Authority (for Rabaul/Gazelle Peninsula Reconstruction Loan)HRD Human Resource DevelopmentICB International Competitive BiddingICR Implementation Completion ReportIT Information TechnologyLCB Local (later National) Competitive BiddingNTB or NTC National Training Board or National Training CouncilNTCS National Training Council SecretariatNTP National Training PolicyPCC Project Coordinating Committee (later PMC)PMC Project Management CommitteePMU Project Management Unit (later PSU)PNG Independent State of Papua New GuineaPNGIPA Papua New Guinea Institute of Public AdministrationPPAR Project Performance Audit ReportPSU Project Support UnitRTC Regional Training CenterSAR Staff Appraisal ReportSDU Staff Development UnitSOE Statement of ExpenditureUPNG University of Papua New GuineaWPS Work Permit Scheme

Vice President: Jemal-ud-din KassumCountry Manager/Director: Klaus Rohland

Sector Manager/Director: Alan RubyTask Team Leader/Task Manager: David Klaus

FOR OFFICIAL USE ONLY

CONTENTS

Page No1. Project Data 12. Principal Performance Ratings 13. Assessment of Development Objective and Design, and of Quality at Entry 14. Achievement of Objective and Outputs 55. Major Factors Affecting Implementation and Outcome 96. Sustainability 127. Bank and Borrower Performance 138. Lessons Learned 159. Partner Comments 1610. Additional Information 19Annex 1. Key Performance Indicators/Log Frame Matrix 20Annex 2. Project Costs and Financing 24Annex 3. Economic Costs and Benefits 27Annex 4. Bank Inputs 28Annex 5. Ratings for Achievement of Objectives/Outputs of Components 30Annex 6. Ratings of Bank and Borrower Performance 31Annex 7. List of Supporting Documents 32Annex 8 Status of Legal Covenants 33Annex 9 Loan Disbursement: Cumulative Estimate and Actual 37Annex 10 Consultants: Proposed and Actual 38Annex 11 Overseas Fellowships: Proposed and Actual 39Annex 12 Local Fellowship Training 1997-1998 42

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization.

Project ID: P004387 Project Name: PG-PUBLIC SECTOR TRAININGTeam Leader: David A. Klaus TL Unit: EASHDICR Type: Core ICR Report Date: March 29, 2000

1. Project Data

Name: PG-PUBLIC SECTOR TRAINING L/C Number: 32900Country/Department: PAPUA NEW GUTNEA Region: East Asia and Pacific

RegionSector/subsector: BI - Institutional Development

KEY DATESOriginal Revised/Actual

PCD: 02/13/89 Effective: 06/03/91 07/03/91Appraisal: 01/16/90 MTR:Approval: 01/29/91 Closing: 03/31/98 09/30/99

Borrower/lmplementing Agency: THE INDEPENDENT STATE OF PAPUA NEW GUINEA/DEPARTMENT OFPERSONNEL MANAGEMENT

Other Partners:

STAFF Current At AppraisalVice President: Jemal-ud-din Kassum A. KaraosmanogluCountry Manager: Klaus Rohland R. CheethamSector Manager: Alan Ruby C. GilpinTeam Leader at ICR: David Klaus W. ReesICR Primary Author: Bernard Masters (Consultant)

2. Principal Performance Ratings

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=HighlyUnlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible)

Outcome: S

Sustainability: L

Institutional Development SUImpact:

Bank Performance: S

Borrower Performance. S

QAG (if available) ICRQuality at Entry: S

Project at Risk at Any Time: Yes

3. Assessment of Development Objective and Design, and of Quality at Entry

3. 1 Original Objective:

The basic objectives of the Project were to: (i) strengthen in-service training in the publicand private sectors; and (ii) increase the supply of specialized high-level personnel to staff the

Government's policy and planning agencies and to help meet shortages of technical skills. Theoverall impact of the Project was intended to assist in strengthening the management, planningand technical capabilities of the public sector, and to improve and monitor the effectiveness oftraining in the private sector.

Above all, the Project was meant to be a strategic planning intervention. It was widelyrecognized that training was critical for achieving several basic government objectives, including(a) economic and social development (training nationals in skills needed for the developingeconomy and society), (b) localization (training nationals to replace skilled expatriates), (c)devolution (training civil servants at the provincial and district levels in order to transferresponsibilities for providing basic government services from the national level to the provincialand district levels), (d) enhancement of gender equity (increasing training opportunities forwomen), and (e) civil service reform (training civil servants in order to increase the productivityof the civil service). It was also recognized that strategic planning was required to ensure thatthe scarce resources available for training (both national and donor-funded) be used as efficientlyand effectively as possible. To achieve this end, the National Training Act was passed in 1989,and the Project was designed to support the National Training Act as follows:

* Assist all government Departments (national and provincial) to prepare training plans for theirstaff (i.e., civil servants).

e Require private firms to prepare training plans for their employees.

* Assist the Department of Personnel Management (DPM) to amalgamate and computerize thetraining plans of Government Departments and analyze the results so as to identify thehighest-priority training needs in the public sector.

3 Assist the Department of Labor and Employment (DLE) to amalgamate and computerize thetraining plans of private firms and analyze the results, together with newly generatedinformation on employment and the labor force, so as to identify the highest-priority trainingneeds in the private sector.

* Assist the National Training Council Secretariat (NTCS) to use DPM's and DLE's results toprepare an annual National Training Plan (NTP) setting forth the highest-priority trainingneeds, both qualitative and quantitative, for the country as a whole.

* Assist government planners to determine how to make best use of national resources availablefor training, including training both locally and overseas, to meet the highest-priority needs.

* Assist government planners to determine how to make best use of donor resources availablefor training, particularly technical assistance and overseas fellowships.

* Assist the National Training Council Secretariat to evaluate and accredit the country'straining institutions, both public and private.

- 2 -

* Assist the Administrative College (AdCol) (later the Papua New Guinea Institute of PublicAdministration-PNGIPA) to provide the training courses required to meet some of thehighest-priority needs.

* Provide overseas fellowships, particularly at the mid-career level, in areas (policy andplanning; higher-level technical skills) unlikely to be offered by the traditional fellowshipdonors:

Project indicators were not identified until 1996 but focused on: (a) the existence ofreliable databases on the civil service, and on the labor force and employment; (b) increasedpercentages of civil servants and private-sector employees receiving in-service training; (c)increased percentage of national staff in policy and planning positions having graduate degrees;and (d) decreased percentage of expatriates in (i) high-level positions in Government policy andplanning agencies, (ii) technical positions in key Government line agencies, and (iii) technicalpositions in private sector firms (Annex 1).

These objectives more clearly focused earlier Bank support in institutional improvementand personnel training. They are in line with the Bank's Country Assistance Strategy (CAS) ofimproving governance for sustainable development. Although the qualitative objectives were notmodified, Bank funding for the Public Sector Training Project (PSTP) was drastically reduced inMarch 1995 with the transfer of US$12.5 million into the Gazelle Restoration Authority (GRA)project which resulted in only US$8.3 million remaining for the PSTP (Annex 2), and physicaltargets (civil works, technical assistance and number of overseas fellowships) were reducedaccordingly.

3.2 Revised Objective:

The basic objectives of the Project were not changed despite a major reduction in funds(with $12.5 million going to GRA) and in physical scope (civil works, TA and fellowships) toallow for this transfer of funds.

3.3 Original Components:

The Project included the following components in support of the National Training Policy:

(a) Strengthening DPM's capacity to promote, coordinate, monitor and evaluate public sectortraining. DPM was charged with: (i) designing and delivering management trainingworkshops; (ii) developing a computerized database of the training plans of allgovernment Departments; and, later, (iii) computerizing a Human Resource System (HRS)database, and combining this with the Payroll System in order to increase thecost-efficiency of Public Service postings. The first of these has been successfullyimplemented, with positive feedback from provincial participants, while greatly assisting inrestructuring the public service. The foundations for computerizing the training plans ofall government Departments and the HRS/Payroll system are in place, but data remain tobe entered into a modernized system.

- 3 -

(b) Strengthening DLE's capacity to identify, record, monitor and evaluate the training plansof private employers. This required (i) the development of a computerized database of allForeign Work Permit Applications (FWPA), to track the extent to which localization ofpositions was occurring, (i.e., the extent to which training was being provided to allownationals to replace non-nationals); (ii) the development of a computerized database ofthree-year training plans of all private enterprises grossing more than Kina 100,000annually or hiring at least one expatriate, and subject to a 2% training levy; and (iii) thedevelopment of capacity within DLE to gather, produce, and disseminate labor statistics(see 4.2 below). These first two items have only been partially successful, with workremaining to be done to operationalise the databases. The development of the LaborStatistics Unit was more successful.

(c) Assisting NTCS to implement the National Training Act and Policy. NTCS was intendedto direct planning, policy, monitoring and evaluation of training in both the public andprivate sectors. To achieve this: (i) an annual National Training Plan was to be preparedcombining information from DPM and DLE; and (ii) a register of all training providerswas to be computerized as each provider applied for recognition. These elements havebeen put in place, but much data collection is still required, and maintaining theireffectiveness is a continuing activity.

(d) Revitalizing PNGIPA through (i) revising and upgrading syllabi at PNGIPA so that shortcourses of greater relevance to both the public and private sectors could be offeredthrough intensive skill development and executive management development programs;(ii) funding civil works, furniture and equipment in the main campus and four RegionalTraining Centers (RTCs); and (iii) emphasizing research, curriculum development and thetraining of trainers. All of these elements have been substantially achieved. In 1999, budget stringency caused the Department of Finance and Planning to eliminate theoperating budget of PNGIPA, which was therefore forced to begin generating its ownrevenues immediately by charging for the delivery of courses to public servants.

(e) Providing about one hundred overseas fellowships in management, planning and technicalskills for which training was not available in PNG. This component was reduced in 1995from an allocation of $9.1 million to only $1.5 million. This contradicted one of theoriginal project's key objectives of providing many overseas fellowships. The Government(Department of Planning) decided to stop the overseas fellowships of the PSTP in 1995,since Australia and New Zealand offered about 450 grant fellowships annually for whichonly about 200 qualified candidates could be found. As a result, only 51 fellows wentabroad under the PSTP, achieving moderate success, with many now occupying seniorgovernment positions (Annex 11). In 1997, remaining funds from the PSTP were used tostart a local fellowship program at PNGIPA. This two-year initiative (Annex 12)responded directly to the enormous demand at the provincial and district levels generatedby the devolution of responsibilities from the central government.

-4-

3.4 Revised Components:

The following costs include Government contributions:

Rating Component Sector CostS DEPT. OF PERSONNEL Public 1,900,000

MANAGEMENTU DEPT. OF EMPLOYMENT & Private 900,000

YOUTHS INSTITUTE OF PUBLIC Training 4,600,000

ADMINISTRATIONS FELLOWSHIPS PROGRAM Training 1,500,000

HS VOLCANO/RURAL RDS. Reconstruction 13,400,000RECONSTRUCTION

S NAT. TRAINING COUNCIL Training 800,000SECRETARIAT

Total 23,100,000

3.5 Quality at Entry:

While the objectives were clear and consistent with CAS general objectives, and theproject design was relatively straightforward, insufficient attention was given by the Bank toassessing the capacity of the culture and society to adopt a strenuous work ethic. TheGovernment was over-ambitious in seeking fellowships without adequately gauging the pool ofpotential candidates, especially the availability of qualified women to go overseas (Annex 1). Theinstitutions involved in the project, and particularly the Project Support Unit (PSU) established tomanage it, did not have the qualified or experienced manpower or the authority to be assigned tosuch an undertaking. In retrospect, therefore, the Project's quality at entry can be judged to havebeen only barely satisfactory.

4. Achievement of Objective and Outputs

4.1 Outcome/achievement of objective:

The overall assessment is that the objectives were achieved satisfactorily. However,during the first two years, little was accomplished due to innumerable changes in government andsenior personnel adversely effecting decision-making for initial implementation, lack ofunderstanding of Bank procedures, use of a centrally controlled disbursement process, failure toappoint international consultants, insufficiently qualified key national personnel appointed fromthe outset, and in the fourth year, a natural disaster forcing re-allocation of 60% of the Loan intoreconstruction relief. Only in 1995 was project implementation significantly turned around by anew Bank Task Manager instituting stricter supervision, disbursement through the Project itself,appointment of international consultants, establishing an implementation plan and projectindicators, and almost daily interaction with the Project Director.

Qualitatively, the objectives have largely been satisfactorily achieved. The four major

-5-

institutions (DPM, DLE, NTCS, and PNGIPA) have been revitalized, and the managers and staffinvolved in the Project in each agency have become multi-skilled. However, it must berecognized that specialized skills in such areas as accounting, procurement, and computerprogramming were not readily available within these institutions and appropriate staff were notemployed. This has adversely affected project management. Training received greater public andpolitical recognition as the PSTP was implemented. Private sector training providers arebeginning to be registered (about 75 by August 1999), and enterprises submit training plans toprepare nationals to replace foreigners. There is some evidence that public and private trainingare better coordinated. On the negative side, DPM, DLE, and NTCS still have only limitedtrained manpower to analyze or monitor training plans. NTCS can not do any more than cursorilyregister private training providers, and it registers all public providers automatically, irrespectiveof quality. NTCS staff have neither the time nor the competence to evaluate actual training or itsrelevance to the workplace. Each of these qualitative activities needs further attention.

Quantitatively, the Project was borderline unsatisfactory. Project financing wasdrastically reduced in March 1995, following the volcanic eruptions in September 1994. Despitethis reduced funding, the PSTP failed to disburse eleven percent of its reduced Loan amount ($8.3million, as compared to the appraisal figure of $20.8 million) (Annex 2), only half of the overseasfellowships were awarded (but were adequately replaced by in-country training) (Annexes 11 and12), and in comparison to appraisal estimates, only limited technical assistance, civil works andgoods were provided. The four databases (the URS/Payroll system and the Civil Service TrainingPlans database in DPM and the FWPA system and the Company Three-Year Training Plansdatabase in DLE), intended to be major outputs from the Project, are not yet fully operational. AHousehold Labor Force Survey was designed, but lack of funding forced it to be postponed pastthe PSTP's Closing Date.

A major omission from project design was the lack of any criteria or performanceindicators by which to judge the progress or achievements of the project. Only through theefforts of the latest World Bank Task Manager were general performance indicators discussedwith PSU in 1996. These indicators were labeled as Input, Output and Management indicatorsand each component agency was asked to evaluate its performance so that the PSU could makean annual assessment of progress toward the targets (Annex 1). Insufficient understanding of themanner in which such indicators could be assessed, as well as their value in guiding future plansand actions, has diluted their impact. More importantly, insufficient emphasis and effort havebeen placed on completing the databases which in turn has restricted the analysis and use of theindicators.

4.2 Outputs by components:

In concept, the Project design was appropriate for assisting the Government to implementits new National Training Policy, but it did not prescribe adequate daily management, personnel orfinancial procedures. The Project's macroeconomic policies have been in line with broadGovernment priorities and with the sector policies of upgrading training and improving the skillsand understanding of senior officials. The institutional strengthening of key Departments has beenachieved. Indeed, the revitalization of these Departments and the improved understanding ofpersonnel management in the Provinces is evidence that the Project has contributed significantly

-6 -

to the longer-term ability of the Government to train and effectively deploy its human resources.At the same time, the minimum physical inputs of the Project were disappointing both to thecomponent agencies and to the Bank. This, and the poor financial management of the Project,can be attributed to insufficient and constant non-availability of Government counterpart funding,to political interference in the administration of the Project, and to project management which wasnot sufficiently proactive and forceful.

The Department of Personnel Management (DPM) was responsible under the Project fordeveloping four major actions: (i) A framework, strategy and guidelines for human resourcedevelopment within the public service. Public Sector Training Manuals have been produced toexplain these initiatives, but only one of three volumes has been distributed and training on itscontent conducted. A core group of trainers has been trained who will continue to trainpersonnel, provided local budget provision is made. DPM needs to give priority to thedistribution of, and training on, the remaining two volumes. Training was given to over 100departmental, provincial and local officers, especially in how to identify the skills mix appropriatefor each entity, which greatly assisted in the rationalization exercise in late 1998 in which everyDepartment of government was reduced, amalgamated or abolished. The output from the PSTPcan be seen as the successful application of effective training which resulted in a morecost-effective and downsized civil service. These actions were stimulated through the work of aneffective and greatly appreciated consultant assigned to DPM as part of the Project technicalassistance. (ii) The coordination and management of overseas and local fellowship training.A high success rate was achieved in overseas fellowships, and most fellows were assigned toposts of significance (Annex 11). It is unfortunate that at the time when the number of fellowshipapplications was increasing sharply, due to greater awareness and acceptance of the program,funding was curtailed and overseas fellowships stopped. (iii) The Civil Service Training Plansdatabase. This database, intended to identify types of training most needed, still is notoperational. All national departments and the provinces prepared annual training plans for 1999,and some of the data were entered into the database, but then the plans could not be implemented,once rationalization (the reduction in the civil service) began to take effect. (iv) The combinedHRS/Payroll database. This database is intended as a monitoring and decision-making tool forthe whole civil service. The groundwork has been done, but the system cannot be madeoperational without new hardware and software. These outputs from the PSTP have thereforebeen only partially realized.

The Department of Labor and Employment (DLE) was intended to provide at least threeoutputs under the Project. The outputs were designed to enable DLE to fulfill its role of definingwhere skills are needed in the private sector which, in turn, will contribute to a more effective rolefor NTCS in planning, registering and monitoring training directed at such skill gaps. (i) Acomputerized Labor Statistics Unit. The Unit has been established and, through the work of thePSTP-funded Labor Economist consultant, a comprehensive basis now exists for collecting andupdating labor statistics. Annual reports are produced by a widely representative Labor StatisticsAdvisory Group which also intends to obtain annual employment returns. Such data would alsohave been enhanced from the carrying out of a Household Labor Force Survey, which theconsultant had prepared but whose implementation was delayed through lack of funding. (ii)Computerization of a Foreign Work Permits Application System (FWPAS). While basic

-7 -

technical work and a manual were prepared by the international consultant, DLE management hasbeen unwilling to operationalize it because some national systems analysts oppose its introduction.Hence, the system is not operational despite efforts to hire a local computer firm to ensure that itcan, over the next three years, take over the existing manually operated system as current workpermits expire. (iii) A Company Three-Year Training Plans database, which is not fullyoperational since less than 20 percent of the data received from the training plans submitted by the3,200 private-sector firms in the country have been inputted. Once again, local technical expertiseis needed to integrate this system with other systems. The work could have been completedbefore the Closing Date, but was not. DLE must now find funds to complete both databasesystems or much of the work of the PSTP in DLE will be lost, and DLE's plans to developftirther databases will be jeopardized.

The National Training Council Secretariat (NTCS) was established in 1994 to implementthe NTP, and, under the PSTP, to lay the foundation for four major outputs: (i) AnnualTraining Plans. Such plans were prepared for 1998 and 1999, as required under the NationalTraining Act, but have not been approved yet by the National Executive Council (NEC). Suchplans reflect the data collected from both DLE and DPM but at this stage do not sufficientlyquantify key skills in each occupational group, the skills gaps in the current workforce, and hencethe priorities or direction for training in both the private and public domains. (ii) A Register ofTraining Providers. This Register has been established and requires an assessment of bothpublic and private training institutions--syllabi, physical conditions, and staffing. To date, about73 private institutions (of the 107 which applied for accreditation) have been visited by officersfrom NTCS. Of these, 5 are being recommended for de-registration. The assessment needs to bemore comprehensive, but NTCS staff also should be more appropriately trained in accreditationmeasures. Public institutions are automatically registered as training institutions, but this practiceneeds to be brought into line with the standards required for private accreditation. (iii)Dissemination of information about training. This activity has been limited by lack of funds.The NTCS produced a brochure but has been unable to reprint or update it. A Newsletter iscirculated to all Departments and Provinces, to registered private training institutions, Chambersof Commerce, and other parties, but does not seem to be known among employers and thegeneral public. Hence the impact of NTCS is restricted, although its potential for guiding,regulating, monitoring and accrediting training is great. (iv) An assessment of InstitutionsQualifying for the Tax Levy Exemption. This activity has been only partially implemented.NTC has approved some 46 tertiary training institutions, but only four non-tertiary-levelcommercial programs have been submitted by the Internal Revenue Commission for assessmentby NTCS. A major review of NTC was completed in 1997, but since the review has not beensubmitted to NEC, no action has been taken on its findings. Although monitoring of the NationalTraining Policy was a major function intended for NTCS, this has not been possible because (a) itis understaffed and under-skilled; and (b) the quantitative databases do not yet exist. Presentthinking within key core government agencies is that the National Training Policy is outdated andneeds to be replaced by a broader, yet stronger, policy on human resource development.

The PNG Institute of Public Administration (PNGIPA) was funded under the Project toprovide three key outputs: (i) A revitalization of PNGIPA. Under the PSTP, and withPSTP-provided technical assistance, PNGIPA underwent a major reorganization and

-8 -

revitalization, with a new mission statement, a new structure, and new procedures. The agency isfar more efficient and effective than it was at project inception. (ii) Increased physical capacityto receive students. With capacity for about 300 students on the main campus and an annualturnover of about 1,500 students through the short courses, student demand is increasing,especially in the RTCs, whose current capacity and limited staffing preclude private students eventhough the demand from the private sector is large. Staffing at the main campus, on the otherhand, is generous, increasing from 33 in 1990 to 98 in 1999, and could benefit from a proposedretrenchment which may force PNGIPA to contract for services and become moreincome-generating and cost-effective. PNGIPA was the only PSTP-assisted agency to receivefunding for civil works and furniture, and the new buildings provide a positive contrast withearlier buildings. Yet more works and goods could have improved further the quality andeffectiveness of the institution, but these could not be procured because of limited cash flow andthe reticence of the Project Director to commit additional funds. (iii) An increase in thenumber, range and quality of short courses. PNGIPA publishes an annual Course Directorywhich demonstrates the accomplishment of this objective. In 1999, only 14 long-term courseswere offered in comparison to 30 short-term core courses and 18 short courses in specializedcompetencies for management and administration. Manuals for all courses have been compiled,with assistance from the PSTP-provided international consultant.

4.3 Net Present Value/Economic rate of return:

Not applicable.

4.4 Financial rate of return:

Not applicable.

4.5 Institutional development impact:

Four major institutional developments have resulted from the Project: (i) The provincialadministrations, through the training provided by DPM, have become much more responsive totraining for their officers. This is having a positive effect on the way in which governmentbusiness is being conducted at the local level. (ii) The establishment of the new entity, theNational Training Council Secretariat (NTCS), is having a marked effect on the manner inwhich training policy is being implemented. (iii) The PNGIPA has become revitalized both in itscourse offerings and in its movement toward being more income-generating and cost-effective.(iv) Overall, the impact of the overseas and local fellows and their high retention rate ingovernment posts have improved the functioning of both managerial and technical officers. Inretrospect, many more officers in each of the components of the Project could have benefitedfrom such training.

5. Major Factors Affecting Implementation and Outcome

5.1 Factors outside the control of government or implementing agency:

Although the objectives of the Project were not changed by the following external factors,the achievements were. The most significant was the volcanic eruption at Rabaul in late 1994,

-9-

with the subsequent re-allocation from the PSTP of 60% of the Loan to the GRA in March 1995.Given the dismal record of the PSTP project to that point, such a reduction was both opportuneand understandable. Secondly, the decline in the price of copper and other minerals in theearly years adversely affected the Project because the Government had continuing difficultyfinding counterpart funds to cover Project expenses.

5.2 Factors generally subject to government control:

The Project strongly supported Government and sector policies for improving humanresource capacity. But the protracted Government procedures for selection and contracting ofinternational consultants, identification of suitable fellowship candidates, for approvingprocurement actions, and for appointing qualified staff or consultants adversely affected the speedwith which the Project could be implemented. There was a serious delay (of over three years) inappointing international consultants under the Project. Despite the initial estimate of 16international consultants needed to assist the Project, by the end of protracted negotiations and inview of the reduction in Loan amount, only 6 consultants were ultimately appointed in 1995.Initially, too, the Government had suggested that most of these posts could be filled by nationalconsultants, indicating a strong opposition in certain Departments to the use of foreign expertise.But the impact of such a long delay was irreparable. Not only had computer hardware beenprocured prior to the arrival of the consultants to which some objections were then made, but thesequencing of fellowships and use of counterparts was adversely affected. Furthermore, inPNGIPA and DPM, in particular, where course revisions and management training were timedearlier to assist in the general overhaul of human resources and to increase at an earlier stage anexpanded pool of skilled personnel, the development of new courses and the provision of manualsand training to the Departments and Provinces did not take place until 1997.

It proved equally difficult to identify persons sufficiently qualified to meet the criteria bothfor fellowships and for appointment to administer aspects of the Project. No qualifiedprocurement officer was ever appointed. Despite the covenant that a qualified accountant wasrequired in the PSU, one was not appointed during the first two years of the Project whenessential accounting procedures and formats had to be established. The accountant remained withthe Project for less than half its life, so that during the crucial last 18 months, the Project waswithout an accountant. This hiatus at both the end and the beginning of the Project not onlyplaced the Project in legal default, but meant that daily financial records were not maintained andessential payments and transfers of funds were not carried out in a timely manner.

The third major restriction on Project implementation subject to government control wasthe manner in which the Government handled project financing. This was evident on two levels.The first was that the Government had established only one Special Account for all projectsfinanced with funds from the World Bank. This was controlled centrally by the Treasury. Onlyafter concerted donor pressure in 1996 were individual Special Accounts established for eachproject. Until that time, the PSTP had disbursed less than $1.5 million out of the Loan of $20.8million. Once direct authority was vested in the PSU, funds flowed more consistently (Annex 9).However, the second handicap to effective disbursement was the Government policy of requiringall payment on a "reimbursement" basis. This meant that the Government paid the bills in localcurrency out of its own account before drawing funds from the Loan Account. In practice this

- 1 0 -

required the Treasury to allocate funds and issue warrants for all expenditures in times when cashflow was difficult to maintain. This practice applied to all procurement (except direct payment tothe international consulting firm), even that which was financed at 100% out of the Loan.

5.3 Factors generally subject to implementing agency control:

The Loan Agreement (Section 3.01(a)) required the Borrower to carry out the Projectthrough its "Department of Personnel Management, Department of Labor and Employment, andAdministrative College" and by maintaining a "Project Coordinating Committee" (PCC). DPMestablished, as proposed in the Staff Appraisal Report, a management unit (later the PSU) andeach of the components in the Project designated a component coordinator responsible for liaisingwith the PSU and for implementing the Project within its component. It took time for the variousroles and responsibilities to be recognized, but most procedures worked satisfactorily. It wasfortunate that one of the key persons involved in project preparation was appointed as ProjectDirector (PSIJ) as a national consultant. This not only assured continuity of action, but gave herthe authority and standing to work with the component coordinators. Some uncertainties aroseduring implementation regarding specific powers in procurement and in dealing with theinternational consultants who were each assigned to different components, but in general, theadministration of the Project proceeded smoothly, if slowly. Unfortunately, little attention hadbeen given during preparation to the monitoring and evaluation aspects of the Project, and thiswas not attended to during implementation, even after a range of project indicators was agreed in1996. The PCC performed the essential function of guiding project implementation policy, butunfortunately, it met too seldom to identify weaknesses early enough, authorize the ProjectDirector to take independent actions within specified frameworks, or establish a firm image of theProject within Government. In part the weakness of the PCC (later the Project ManagementCommittee--PMC) can be blamed on frequent changes among senior personnel, but as a policyand public relations body it did not appreciate the Project's potential impact and hence did notexercise its authority in a sufficiently timely and comprehensive manner.

5.4 Costs andfinancing:

In addition to the points made above regarding financing, it should be noted that the costsfor international consultants estimated at appraisal (of $12,500 per person month in 1990) wereso far below the actual bid submitted by the lowest evaluated bidder in 1994 that the Bankrejected the bid. Eventually, following protracted re-submission of bids, and drastic alteration tothe composition of the consulting team, a negotiated contract was agreed, but the average costper consultant was over $15,000 per person per month.

A final point to be made about costs and financing is that despite continual reminders fromthe Bank, the Government's delays in approving contracts and preparing and submittingwithdrawal applications resulted in the cancellation of nearly US$930,000 of undisbursed Loanfunds.

- 11 -

6. Sustainability

6.1 Rationale for sustainability rating:

The Project's impact is likely to be sustainable. The purposes of the Project were: (a) tostrengthen the institutional capacity of key Departments responsible for planning and monitoringboth public and private sector training; (b) to raise the awareness of the importance of training inboth sectors; (c) to increase opportunities for training; and (d) to improve the higher-level skills ofmanagement and the workforce. This strategic emphasis on training has become accepted by bothGovernment and industry. Training plans are submitted, regular surveys are conducted to matchkey job tasks against the skills needed by the workforce, the training levy is paid, fees are beingcharged for courses in some public training institutions, localization of positions is proceeding,and local and provincial officers continue to receive training from the cadre of trained trainers.

6.2 Transition arrangement to regular operations:

For the impact and benefits of the Project to be sustained, the Government should commititself to:

(a) maintaining a National Training Budget, supplemented from the training levy, tofuirther improve syllabi and trainers and to increase the number and range of coursesoffered by both public and private providers;

(b) revising the National Training Act of 1989 through the creation of a National Planningand Training Authority with broader responsibilities, greater accountability and strongerpowers of monitoring, evaluation and accreditation;

(c) coordinating public and private sector training through completing entries in currentdatabases and regularly updating them, eliminating duplications in training, and reportingresults and setting priorities through annual National Training Plans;

(d) providing incentives to private training providers and employers both to improve thestandard of training and to increase its relevance while encouraging a wider acceptance offees for service; and

(e) improving the mechanisms for monitoring and evaluation, for accreditation andregistration, and for broad-based and more widely applicable training suitable forpersonnel at local, provincial and national levels working in both public and privateenterprises.

A Japanese Grant was approved to assist with the preparation of a possible future PublicSector Reform Project which would expand and reinforce many initiatives begun under the PSTP,as well as going well beyond training to many other aspects of an improved civil service.Technical assistance will be provided and the Government should instigate specific measures sothat meaningful reforms within the public service can take effect. In order not to loose the

- 12 -

momentum of the PSTP, it would be desirable if the Grant could be instituted immediately and thenext project commence late in 2000, ahead of the CAS timetable.

7. Bank and Borrower Performance

Bank7.1 Lending:

Overall, Bank performance was satisfactory. Various alternatives and Governmentproposals to support the Government's new National Training Policy were considered duringpreparation and appraisal. However, insufficient attention was given to detail, especially in theidentification of key project personnel, financing procedures, initial training of nationalimplementation staff, and the profiles of staff needed to supervise the project throughout its life.The Bank's preparation and appraisal teams were well balanced and experienced in management,institution building and training. Both the Bank and the Government had unrealistic expectationsfor other donor-assisted financing of fellowships for mid-career people, and hence the initial scopeof fellowships was curtailed at negotiation. The Bank pursued its own timetable for processingthe Project without sufficient regard for cumbersome Government approval procedures or thecapacity of the key personnel to begin implementation. These contributed to the slowness withwhich the Project was implemented during the first four years. Only the Project Director wasconsidered for appointment as a consultant and no other incentives were available toimplementation staff. The Bank faced up to the major quantifiable risks for the project, but failedto appreciate sufficiently the tremendous importance of cultural and social influences on the paceat which work proceeds in PNG due to family, village and tribal commitmnents, which takeprecedence. In retrospect, this may mean that more and better trained staff were needed to handlethe volume of work, that more persistent and forceful management could have maintained stricteradherence to a project timetable (which was quickly outflanked), and that more preciseprocedures (especially in accounting and procurement) and project indicators could have beendeveloped earlier by more alert Bank and project personnel.

7.2 Supervision:

Before 1995, supervision was maintained on an irregular basis, with many gaps of seven toten months, which adversely effected smooth relationships (Annex 4). Supervision of the PSTPwas nearly always carried out in conjunction with supervision of other Bank-assisted projects,especially in the education sector. Partly because of this duality, the composition of thesupervision teams remained relatively constant, thus providing continuity, which the Borrowerappreciated. Bank guidance and supervision during the early years of the Project was notsufficiently strong, experienced or authoritative to give firm direction to project management,which was largely unaware of Bank policies and procedures. Although continuity was maintainedin Bank Task Managers, with only three persons having that responsibility over the eight years ofthe Project, improved project performance was not evident until 1995. Bank managementseverely limited the number of persons (and therefore the skills) sent on supervision, claimingbudgetary constraints. Despite requests from Bank task managers, no specialists in informationtechnology or in training ever supervised the Project. Hence, database methodology and trainingpolicies, perspectives and priorities were not examined sufficiently. Implementation problemswere identified, but little persistent follow-up action was taken until 1995. Until 1995, the ratings

- 13 -

in supervision reports tended to gloss over the potential problems, and failure to conform withcovenants was insufficiently addressed. On the other hand, the Bank did impose restrictionsduring 1993 and 1994 on the availability and use of funds for all of its projects in PNG, but theGovernment was unable to rectify conditions until early 1996.

7.3 Overall Bank performance.

While the overall performance by the Bank was satisfactory, in a training project it issurprising that the Bank did not provide training to the nationals who were implementing theProject. Although Bank Task Managers provided considerable assistance to the PSU andComponent Managers, this was not seen by the recipients as a substitute for formal training.Project technical assistance was not intended to advise on how to manage or implement theProject, but on how to develop specific manuals, training syllabi and computerized operations foreach component. Bank procurement and disbursement staff visited the country and gave one- ortwo-day workshops only twice toward the end of the Project.

Borrower7.4 Preparation:

The Borrower's preparation can be considered as only barely satisfactory. Duringpreparation, only a few people in DPM foresaw the potential for the project in trying to develop amore strategic plan rather than limited provision of individual fellowships. In view of theconsiderable bilateral technical assistance already present in the country, it is not surprising thatthe Government resisted further international expertise.

7.5 Government implementation performance:

In light of the considerable difficulties deriving from central control over disbursements,general lack of interest in the PSTP among senior government officials (who seldom remainedlong in any post) and complicated procedures for approving contracts, the efforts of PSU andcomponent managers have to be considered commendable. This emphasizes the importance ofestablishing a more appropriate level at which implementation decisions should be made, and ofrecognizing the importance of the PMC in both policy and public relations.

The Borrower experienced generic problems associated with financing. The Project wasconceived during boom periods for the mining industry and hence for the country. Even so, thecentral control of financing, the system of issuing monthly warrants (many of which wereimmediately rescinded through lack of cash in the Treasury) for Project expenditures, and thereimbursement policy of the Government in paying bills all adversely affected the Borrower'sability to use Loan funds directly for their intended purposes. Even when the Trust Funds foreach project were established in 1996, the predominant method of payment was throughreimbursement of Kina paid out of the Government Trust Fund rather than either from the SpecialAccount or directly (using Procedure 3) from the Loan Account. This illustrates confusion overwho had the fundamental control and responsibility for project implementation. The fact that theTreasury received all communications from the Bank on financial matters but that the PSUcorresponded directly with the Task Manager on all other aspects of the Project allowed

- 14 -

irritations to develop between Treasury and implementation staff.

7.6 Implementing Agency:

The dynamism and persistence of the Project Director saved the Project. Administrativerecords were maintained adequately, communications were frequent among the componentmanagers and PSU, and efforts were made by all managers to promote the image of the Project.The biggest fault was in tardy recruitment of a trained accountant until two years after the Projectbecame effective, and then subsequently in not replacing the accountant, even by part-timeconsultant expertise, after she resigned 15 months prior to the Closing Date. Similarly, no trainedprocurement officer w.as ever available to the Project Support Unit, and counterpart staff withappropriate technical skills were not assigned to the international experts. The financial recordswere inadequately and inaccurately maintained. Every audit report was late in being submitted tothe Bank. Procurement was not pursued by the component coordinators with sufficient vigor,and hence the potential for purchasing more equipment for each component was not fullyexploited.

7.7 Overall Borrower performance:

A rating of barely satisfactory for overall Borrower performance masks the efforts of theDirector and staff in the implementation agencies to manage the Project as smoothly as possible.It also minimizes the considerable achievements. But it reflects the reality of social and familypressures on the work ethic, the need for financial and human resources planning and efficientmechanisms for their implementation, and the significance of accountability and monitoring topromote the effectiveness of Project goals and outcomes.

8. Lessons Learned

The major problems encountered by the Project and the detailed lessons drawn from themare listed in the Aide Memoire of the Completion Mission of August 1999. In summary, thelessons from the Project include:

* Responsible and accountable Project management could be delegated to a lower operationallevel, provided: (a) sufficiently trained personnel are available and committed to the Project,without relying on politically appointed decision-makers; (b) a strong PMC directs policy andpromotes the image of the Project to Government and the, general public; and (c) appropriatefinancial management is available and practiced;

* Much greater attention to cultural and social factors could assist management to plan andimplement in a more timely manner, provided adequate provision is made for appropriatestaffing and counterpart funding from the outset;

* Project performance indicators, a mid-term review, stricter adherence to more detailedscheduling of events, and greater attention to monitoring and evaluation throughout the life ofthe Project could reduce the delays during implementation;

* Clearer definition and understanding of Borrower and Bank procedures for financial

- 15 -

management, together with trained personnel to implement them from the outset of theProject, could allow more effective disbursement, more appropriate use of the SpecialAccount for quicker payments, easier and more comprehensive procurement, and more timelyadherence to scheduled actions;

* More detailed planning of Bank supervision needs, including specialist personnel and therelated budget, could have been incorporated into Project design, and amended from time totime, as needs changed;

* Cumbersome national procedures in procurement, contracting and obtaining approvalsgenerally could have been better understood by the Bank, and simplified by Government, withmore responsible delegation of authority to fewer people, preferably within one Department oragency;

* Government Departments could plan and budget for sustaining Project activities both duringimplementation and after its completion, especially with regard to on-going training;

* Clearer definition of tasks and accountability for any generic "Training Authority" could haveresulted in more and better trained personnel and more appropriate funding for NTCS.Strategic planning of the training function and its operation -- the purpose of this Project --could allow easier identification and more complete computerization of skill and managerialneeds in both public and private sectors, resulting in more efficient planning of trainingprovisions coordinated across both sectors. This should be seen as the essential function of aNational Planning and Training Authority which should be allocated the manpower andfinancial resources to fulfill such a mission;

* Disruption to the original Project design has more than financial implications for a project.The initially careful identification of needed technical assistance was disregarded whenfinancing of this component was drastically reduced. However, identifying clearer lines ofresponsibility and reporting and closer monitoring of actual outputs at specific intervals in theProject could have improved the impact and reduced the tensions which appeared in carryingout the technical assistance provisions of the Project; and

* Flexibility is essential throughout the life of any project. The PSTP demonstrated greatflexibility, especially in providing local fellowships and modifying the technical assistance.This showed understanding on the part of both the Bank and the Borrower to respond quicklyto identifiable changing needs during implementation.

9. Partner Comments

(a) Borrower/implementing agency:

On the whole, and against the original and revised project objectives and components, wewould like to say that much has been achieved under the circumstances in which the Project wasimplemented. Much that the components achieved during the life of the Project, especially the

- 16 -

support to the Department of Personnel Management and the PNG'Institute of PublicAdministration, has in some way formed the basis for a major public sector reform.

We have the following specific comments:

The Public Sector Training Project was designed to assist the four implementing agencies(Department of Personnel Management, Department of Labor and Employment, NationalTraining Council Secretariat, and Papua New Guinea Institute of Public Administration) developand put systems in place to assist them perform their respective roles and responsibilities, andabove all, to develop their institutional capacity. This was clearly a capacity-building project, andsuch projects are extremely difficult to implement. However, the achievement rate of this projectmust be given some merit, considering the constraints and problems that have gone with it.

The Borrower is very grateful and extends its gratitude and appreciation to the Lender forbeing very flexible in allowing a substantial portion of the Loan funds to assist in the funding ofemergency and rehabilitation projects in East New Britain following the volcanic eruption in1994. The Borrower would like to confirm to the World Bank that this portion of the Loan hasbeen put to good use in terms of restoring essential services in the Gazelle Peninsula that were'destroyed by the eruption.

Some very useful lessons can be drawn from the experience with the implementation ofthe PSTP, which will be of interest to the World Bank as well as the Government.

For the Government, the two pertinent issues pertaining to the implementation of theProject have been: (1) management design relating to project implementation, and (2) financialmanagement. These are discussed in detail below.

(1) Management Issues

At the design of the Project, the project design team failed to put in place aneffective management plan that would oversee the overall management of theProject. However, if it did, (like the Project Steering Committee), then it failed toemphasize the importance of an over-arching Committee like the PSC, which hadthe capacity to effectively and successfully oversee the implementation of theProject.

Ensuring that the full responsibility for a project be vested in the Government(through a PSC with wide representation) gives the Borrower some sense ofownership. It seemed more to the Borrower that this particular project wasmanaged more by the Lender and that things moved quickly only when reviewmissions were due to come or were in-country.

The project design therefore did not put in place an effective managementstructure to oversee and ensure that the Project would progress at an acceptablepace.

- 17 -

It was assumed that the many varying issues and problems would be attended to bythe Project Manager, whose time was thinly spread between attending toadministrative/management problems and dealing with project-specific issues.

(2) Financial Management Issues

At project design stage, the Borrower and the Lender both appreciated the factthat financial managers and accountants were very hard to attract in the publicsector. It is common knowledge in Papua New Guinea that persons with suchqualifications prefer to work in the private sector, where the terms and conditionsare much better. The fact that getting key project personnel was problematicthroughout the Project was an issue that should have been addressed prior toproject implementation, i.e., by agreeing to pay for the key personnel from theLoan funds.

During the period of implementation, the Borrower was instituting changes andimprovements with its financial management structures in an effort to improve thefinancial management of donor-funded projects, including concessional loans. Theuse of one "Parent Account" for a donor with sub-ledgers for the different loanprojects was the first attempt by the Government to look at different financialmechanisms to improve the financial management of aid-funded projects.

With the major cash crisis in 1994, the Borrower moved from this arrangement tothe use of "Special/Imprest" account arrangements, whereby the donor disburseda portion of its funding into a Special or Imprest Account and the Borrower put itscontribution into a Trust Account. Project managers then drew funds from theseaccounts for project implementation purposes.

Prior to the use of the above financial arrangement, the Borrower, in all pastarrangements, had always used the "reimbursable" disbursement arrangement,except for direct disbursements. The new arrangements above were options not inplace for use by the Borrower at the beginning of the Project. These were newfinancial arrangement developed in an attempt to further improve financialmanagement of loan-funded projects.

Considering that this project was implemented during a period in which theGovernment was implementing new financial management arrangements, it wasobvious that many project personnel needed to be trained to understand the use ofthese new arrangements.

The Borrower organized a number of training sessions prior to introducing thenew financial arrangements. In consultations with other lenders (especially theAsian Development Bank), we have piggybacked financial management trainingonto the World Bank's procurement training, conducted annually.

- 18 -

It would take time for any new financial arrangement as such to beinstitutionalized, and in time, capacity in departments will be developed. It iscommon that turnover of staff, particularly with financial qualifications, is veryhigh. This is a problem we must live with and try to make the best effort out ofwhat is available.

Finally, it is obvious to the Borrower that a few activities in the project components wereincomplete during the duration of the project life. The Borrower assumes that the activities willcontinue to be pursued and completed under the recurrent activities of the implementing agency.

(b) Cofinanciers:

Not applicable.

(c) Other partners (NGOs/private sector):

Not applicable.

10. Additional Information

- 19 -

Annex 1. Key Performance Indicators/Log Frame Matrix

Note: No performance indicators were prepared at Appraisal. The first indicators were developed by aSupervision Mission in 1996 in conjunction with the PSU and each Component Manager. These wereconsolidated into the following list:

Outcome/Impact Indicators

TargetObjective Indicator Projected Actual/latest Estimate

in 19961) Strengthen in-service a)existence of a reliable By 1998 HRS/Payroll system designed,training in the public sector database on the civil manuals prepared but system

service; incomplete. Needs TA andhardware.

(b) percentage of civil 80% by 1998, HRS/Payroll system will retrieveservants having undergone 100% by 2002 this data, but the best guess is onlysubstantive training in the about 20%.last 3 years;

2) Strengthen in-service c) existence of a reliable By 1998 DLE database designed but data nottraining in the private database on labor entered. TA required to completesector force/employment; systemn.

d) percentage of employees 80% by 1998, NTCS received data from about 150from reporting firms 100% by 2002 firms. Of these, all seem to comply.having had sub-stantivetraining in the last 3 years;

3) Increase the supply of e)percentage of high-level 50% by 1998, Data incomplete on total higherspecialized high-level staff national staff in target 75% by 2002 level staff. In 1997, 20 staff infor GOPNG policy and departments/agencies Grade 13 and above heldplanning agencies having a graduate degree; Masters/PhD.

f) percentage of high-level 15% by 1998, FWPAS designed and on-line butstaff in target departments/ 10% by 2002 some data incomplete.agencies who areexpatriates;

-20 -

Annex 1: Key Performance Indicators/Log Frame Matrix (Cont'd)

Objectives Indicator Target Actual/Latest EstimateProjected

in 19964) Help meet shortages of g) percentage of technical 30% by 1998, Data incomplete on number oftechnical skills specialists in key government 20% by 2002 technical staff. In 1997, there

departments who are were 136 expatriates.expatriates; and

h) percentage of technical 30% by 1998, FWPAS designed and on-line butspecialists in reporting firms 20% by 2002 some data incomplete.who are expatriates;

Output Indicators

Objectives Indicator Target Actual/Latest EstimateProjected

==__________________ in 19961) Strengthen in-service a) Percentage of Government 90% by 1998 TNA completed for alltraining in the public sector departments/provinces 100% by 2002 departments, workshops held,

having prepared and trainers trained, DPM preparedimplemented a staff training annual training plan.plan in the past year;

b) Preparation of annual 100% by 1998 NTC updates DPM nationaltraining plan for public training plan annually.sector;

c) PNGIPA reorganization By 1998 Completed, with reduction in staff.finished; Fee generating.

d) Percentage of public 100% by 1998 NTC has accredited all publictraining agencies evaluated training agencies.and accredited;

-21 -

2) Strengthen in-service e) Percentage of reporting 90% by 1998 All firms are submitting three yeartraining in the private firms having prepared and 100% by 2002 training plans to NTC.sector implemented a satisfactory

staff training plan in the pastyear;

f) Preparation of an annual By 1998 NTC will use Three Year Trainingtraining plan for the private Plan database to prepare annualsector; training plan.

g) Percentage of private 100% by 1998 By 1999, only 75% of privatetraining agencies evaluated training agencies evaluated.and accredited;

3) Increase the supply of h) Number of PSTP-financed About 50 by 1998 35 persons completed overseasspecialized high-level staff overseas graduate programs programs, even though it wasin policy and planning in policy/planning areas curtailed in 1995.

successfully completed;

i) Ratio of women fellows to 50% by 1998 11% were women. Since only 7%total fellows in of public servants are women, andpolicy/planning area; very few applied, the target cannot

be met.4) Help meet shortages of j) Number of PSTP-financed About 50 by 1998 16 persons completed overseastechnical skills overseas graduate programs programs, even though it was

in technical fields curtailed in 1995.successfully completed; and

k) Ratio of women fellows to 50% by 1998 13% were womentotal fellows in technicalfields.

- 22 -

Annex 1: Key Performance Indicaton/Log Frame Matrix (Cont'd)

Outputs for Project Management

Target Actual/Latest EstimateObjectives Indicator Projected

in 1996Carry out the project with a) Actual disbursement as 100% by 1998 Only 90% disbursed by Closing Datedue diligence and share of total revised Loan;efficiency

b) Civil works completed at 100% by 1998 CompletedPNGIPA;

c) Data processing By 1998 About 20% of items are still neededhardware and software to make the system workableprovided under the project;

d) Quarterly provision of Every quarter Regularly late, deposited intocounterpart funds; Government Trust Fund Account

e) Replenishment of funds Initial $1 million Replenishments made in 1997-1999.in Special Account; and deposit by All Special Account dollar funds

December 1997 spent by July 1999.

f) Regular reports Semi-annual Usually submitted, PMC meetingssubmitted and Action Plans progress reports irregular during last 18 monthsprepared. to PMC

Sources: Supervision Report, May 26, 1996; ICR Mission discussionsOriginal Indicators proposed in October 1996 PSR

- 23 -

Annex 2. Project Costs and Financing

Proect Cost by Component (in US$ million equivalent)

; J _,,,_ , : i X ~~~Appraisl ASSa/at~ In enta

DPM 3.30 1.90 57.6DLE 1.70 0.90 52.9PNGIPA 8.10 4.60 56.8FELLOWSHIPS 6.10 1.50 24.6NTCS 0.00 0.80 0GRA 0.00 13.40 0CONTINGENCIES 3.90 0.00 0

Total Baseline Cost 23.10 23.10

Total Project Costs 23.10 23.10Total Financing Required 23.10 23.10

Appraisal Estimate: Total project costs including government financingSources: SAR Table 4.1, and data provided by PSU.

Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent)

1. Works 0.00 3.30 0.00 0.00 3.30(0.00) (0.00) (0.00) (0.00) (0.00)

2. Goods 2.00 0.80 0.80 0.00 3.60(0.00) (0.00) (0.00) (0.00) (0.00)

3. Services 0.00 0.00 0.00 0.00 0.00(0.00) (0.00) (0.00) (0.00) (0.00)

4. Fellowships 0.00 0.00 9.50 0.00 9.50(0.00) (0.00) (0.00) (0.00) (0.00)

5. Consultants 0.00 0.00 5.60 0.00 5.60(0.00) (0.00) (0.00) (0.00) (0.00)

6. Miscellaneous 0.00 0.00 1.10 0.00 1.10(0.00) (0.00) (0.00) (0.00) (0.00)

Total 2.00 4.10 17.00 0.00 23.10(0.00) (0.00) (0.00) (0.00) (0.00)

Sources: SAR Table 4.4, and data from PSU" Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies21Includes civil works and goods to be procured through national shopping, consulting services, services of contracted

staff of the project management office, training, technical assistance services, and incremental operating costs related to(i) managing the project, and (ii) re-lending project funds to local government units.

- 24 -

Original and Revised Loan Amounts by Category

No./Revised No. Category Original Loan Revised Loan PercentageAmount Amount Financed

(1) (1) Civil Works 2,500,000 2,100,000 80%(2) (2) Equipment, furniture, 3,000,000 1,000,000 100% foreign &

teaching materials Exfactory local, 75%other local

(3) (3) Overseas fellowships 9,100,000 1,500,000 100%& local training

(4) (4) Consultants' services 5,000,000 3,200,000 100%

(5) Incremental salaries 0 164,000 100% 1993for PSU 78% 1994

50% 1995

25% 1996

(6) Civil Works - under 0 2,600,000 90%Part D. 1- GRA

(7) Civil Works -under 0 7,900,000 90%Part D.2 - GRA

(8) Goods - under Part 0 1,000,000 100% Foreign &D.2 - GRA local exfactory, 85%

'other local

(9) Consultants' services 0 1,000,000 100%- Part D.3

(5) Unallocated, except 1,200,000 136,000Part D

._________________ TOTAL 20,800,000 20,800,000

Sources: Loan Agreement, March 18,1991, Schedule 1 and Amendments dated December 3, 1992; March23, 1995; September 20, 1995; September 10, 1996; and May 27, 1997.

- 25 -

Revised Loan and Actual Disbursements by Category

No./Revised No. Category Revised Loan Total Disbursed PercentageAmount Disbursed

(1) (1) Civil Works 2,100,000 1,383,451 66%

(2) (2) Equipment, furniture, 1,000,000 594,863 59%teaching materials

(3) (3) Overseas fellowships 1,500,000 1,163,630 78%& local training

(4) (4) Consultants' services 3,200,000 3,313,113 104%

(5) Incremental salaries 164,000 122,637 75%for PSU

Special Account 792,926(5) (10) Unallocated, except 136,000 0

Part D

Sub-Total PSTP 8,300,000 7,370,620 89%(6) Civil Works - under 2,600,000 2,576,825 99%

Part D. l - GRA(7) Civil Works - under 7,900,000 8,135,247 103%

Part D.2 - GRA

(8) Goods - under Part 1,000,000 545,245 55%D.2 - GRA

(9) Consultants' services 1,000,000 1,242,684 124%- Part D.3

.________________ Sub-Total GRA 12,500,000 12,500,001 100%TOTAL 20,800,000 19,870,621 96%

Source: World Bank, Disbursements Division, 2 March 2000

- 26 -

Annex 3: Economic Costs and Benefits

Not Applicable.

-27 -

Annex 4. Bank Inputs

(a) Missions:StgefPrctCycle No. of Personsand S aly Pexformance Rtng

_=e g. 2Economiss, i FSetc.) implementaion DevelopmientMonth/Year "Count Secilty_ Progress Obetive

Identification/Preparation I Economist (EC)3/896/89 2 Economist, Management

Specialist (MS)10/89 3 EC, MS, Training Specialist

(TS)

Appraisal/Negotiation1-2/90 4 EC, MS, TS, Operations

Assistant (OA)12/90 4 EC, Legal Officer, Disbursement

Officer, OA6/90 (Post 2 EC, OAappraisal)

Supervision11/91 2 OA, Operations Officer (00) S HS3/92 1 00 S HS7/92 1 00 U HS2/93 1 00 S HS9/93 1 00 U S4/94 1 00 S S2/95 2 Human Resources Specialist S U

Consultant (HR/C)11/95 2 HR/C S S3/96 1 HR S U6/96 1 HR S U9/96 1 HR S U3/97 2 HR/A (Architect) S S10/97 2 HRJA S S3/98 2 HR/A S S11/98 2 HR/A S S3/99 2 HRJA S S9/99 2 HR/A S S

ICR8/99 1 Consultant

- 28 -

(b) Staff:

Stage of Project Cycle ActualLatest EstimateNo. Staff weeks US$ (,000)

Identification/Preparation 41.60 104.0Appraisal/Negotiation 16.90 53.2Supervision 64.47 268.0ICR__ _ _ _ _ _ _ _ _

Total 293.27 425.20*ICR is included in Supervision.

- 29 -

Annex 5. Ratings for Achievement of Objectives/Outputs of Components

(H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable)Rating

Macro policies O H *SUOM O N O NASector Policies O H *SUOM O N O NA

I Physical. O H OSU*M O N O NAZ Financial O H OSUOM * N O NA• Institutional Development 0 H O SU O M 0 N 0 NAZ Environmental O H OSUOM O N * NA

SocialF Poverty Reduction O H OSUOM O N * NAZ Gender O H OSUOM * N O NAZ Other (Please specify) O H OSUOM * N O NAcultural and social influences understood

I Private sector development 0 H * SU O M 0 N 0 NA• Public sector management * H O SU O M 0 N 0 NAO Other (Please specify)

- 30 -

Annex 6. Ratings of Bank and Borrower Performance

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory)

6.1 Bank performance Rating

X Lending OHS *S OU OHUX Supervision OHS OS O U O HUZ Overall OHS OS O U O HU

6.2 Borrowerperformance Rating

2 Preparation OHS *OS O U O HU

Z Government implementation performance O HS O S 0 U 0 HUX Implementation agency performance O HS 0 s 0 U 0 HU

Z Overall OHS OS O U O HU

- 31 -

Annex 7. List of Supporting Documents

Public Sector Training Project (PSTP), Implementation Completion Mission, Aide Memoire,8/23/99

Public Sector Training Project (PSTP), Implementation Completion Report, Comments by theBorrower,

National Training Council, Ministry of Employment and Youth, Public Sector Training Project,Project Completion Report, 17th August 1999.

National Training Council, Ministry of Industrial Relations, Report and Recommendations on theOperations of the National Training Council, June 1997.

National Training Council, Ministry of Employment and Youth, A Brief Report to the WorldBank on the Progress of the National Training Council, 6th November, 1998

Papua New Guinea Institute of Public Adrninistration, Year 1999 and Beyond, Course Directory.

Port Moresby Business Training Institute, Prospectus.

Papua New Guinea Institute of Banking & Business Management, 1999 Directory of Programs.

Papua New Guinea Institute of Banking & Business Management, Annual Report 1998.

- 32 -

Annex 8: Status of Legal Covenants

Agree Section Cove- Pre- Origi- Revisednant sent nal fulfill-

ment . type Status fulfill- ment Description of covenant Commentsment datedate

L3290 2.02 (b) 3 CP Open and maintain a S/A fundsArt. II Special Account on terms difficult to

and conditions satisfactory accessto the Bank

Art. 3.01 (a) (i) s CD Carry out the Project with TAIII due diligence and Contract

efficiency and in delayedconformity withappropriate practices

3.01 (a) (ii) 4 CD Provide promptly the Funds notresources required for the providedproject fro7m July

1994 untilJanuary1995

3.01 (b) 10 CD Carry out the project in Seeaccordance with the Schedule 5agreed implementation commentsprogram in Schedule 5 of belowthe Loan Agreement

3.02 10 C Procure Goods, Works,and Services inaccordance with Schedule4 of the Loan Agreement

Art. 4.01 (a) 1 C Maintain adequate records IncompleteIV and accounts and

unreliable

4.01 (b) (i) 1 CD Have accounts audited Often late

4.01 (b) (ii) 9 CD Furnish the Bank certified Latecopies of Audit

4.01 (b) (iii) 9 C Furnish the Bank otherrelated information, asrequested

4.01 1 (i) 1 C Maintain adequate recordsand accounts on SOEs

- 33 -

4.01 I (ii) I C Retain such records andaccounts at least one yearafter Bank has receivedAudit report

4.01 I (iii) 1 C Enable Bank'srepresentatives to examinerecords

4.01 1 (iv) I C Include such records andaccounts in annual audit

Sched Sch 5, para I 10 PC Take measures to Limitedule 5 maximize the availability

participation of women in ofthe overseas fellowship candidatesprogram (Policy andplanning fields)

Sch 5, para 2 10 C Obtain from participatingDepartments that staffbenefiting from overseasfellowships will be able toreturn to their previouspositions or to positionsrelevant to the trainingreceived

Sch 5, para 3 10 PC Take all measures Fewnecessary to ensure available;identification of women many morecandidates (Specialized nominatedtechnical fields) for local

trainingafter 1996

Sch 5, para 4 10 CD 07/31/91 Employ a Training Information(a) Analyst, an Information Technolo-

technologist and a Staff gist was toDevelopment & Training be sharedAdviser to assist the withDepartment of Personnel PNGIPAManagement

Sch 5, para 4 10 CD 07/31/91 Employ a Management Information(b) (i) Advisor and an Technolo-

Information technologist gist spentto assist the National little timeTraining Council workingSecretariat with the

NTC

-34 -

Sch 5, para 4 10 CD 01/31/92 Employ a Staff Incorpo-(b) (ii) Development & Training rated into

Adviser to assist the Manage-National Training Council ment

Advisor'spost

Sch 5, para 5 10 CD 07/31/91 Employ a Labor Labor(i) Economist & an Economist

Organization onlyDevelopment/Management Training Specialist toassist the department ofLabor and Employment

Sch 5, para 5 10 CD 10/31/91 Employ and Information Information(ii) Specialist and a Systems Specialist

Analyst to assist the onlyDepartment of Labor andEmployment

Sch 5, para 6 10 CD 07/31/91 Employ an Expert on Only(i) Institutional Autonomy, a Information

Management Adviser, an Techno-Information Technologist, logist andand a Course CourseDevelopment Adviser to Develop-assist the Papua New mentGuinea Institute of Public AdviserAdministration employed

Sch 5, para 6 10 . 10/31/91 06/30/95 Employ a Post not(ii) Training-of-Trainers required -

Adviser to assist the included inPapua New Guinea CourseInstitute of Public Adviser'sAdministration TOR

Sch 5, para 7 5 C Maintain within DPM a Mrs. FeliciaProject Support Unit with Dobunaba,qualified staff in adequate Projectnumbers, including: Director

Sch 5, para 7 5 C Special Project Officer Mr. Jimmy(i) (Contracts) Ipata

Sch 5, para 7 5 C Special Project Officer Ms. Lydia(ii) (Fellowships) Mulina

Sch 5, para 7 5 C Accountant Mrs. Rei(iii) Gamoga

Melepia

- 35 -

Sch 5, para 7 5 C Administrative Officer Ms. Rita(iv) Ake

Sch 5, para 7 5 C Keyboard Operator Mr. GemmaLasu

Covenant Class Status:1 = Accounts/audits 8 =Indigenous people C=covenant complied with2 = Financial performance/revenue 9 =Monitoring, review and reporting3 = Flow and utilization of project funds 10 =Project implementation not covered by categories 1-94 = Counterpart funding 11 =Sectoral or cross-sectoral budgetary or other5 = Management aspects of the project or resources allocation

executing agency 12 =Sectoral or cross-sectoral policy/regulatory/6 = Environmental covenants institutional action7 = Involuntary resettlement 13 =Other

- 36 -

Annex 9: Loan Disbursement: Cumulative Estimate and Actual (US$ million)

FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY2000

Appraisal estimate 0.00 1.60 4.40 8.40 12.40 16.20 19.20 20.80 20.80 20.80

Actual 0.00 1.00 1.00 1.47 3.94 6.70 11.99 19.52 19.89 19.87

Actual as%of 62.5 22.7 17.5 31.8 41.4 62.4 93.8 95.6 95.6Appraisal estimate

Date ofFinal disbursement -February 3, 2000

Sources: SAR Annex 11 and Supervision Report, March 1999

- 37 -

Annex 10: Consultants: Proposed and Actual (Staff-months)

Post/Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 TOTALDPM: P/A P/A P/A P/A P/A P/A P/A P/A P/A P/AInformation 6/0 610 1.5/0 1.510 0/6 0/12 0/6 15/24Technologist -Training 6/0 3/0 1/0 1/0 11/0Analyst ___Staff 6/0 12/0 12/0 6/0 4/4 0/12 0/12 0/8 40/36Development I_IProject 12/9 12/12 12/12 12/12 12112 12/12 0/12 0/12 0/9 72/102ManagerNTC_.Information 6/0 6/0 1/0 1/0 14/0Technologist .Staff 4/0 1/0 1/0 6/0Development ___Management 6/0 12/0 610 1.510 1.5/6 0/12 27118Advisor _DLE _______

Labor 6/0 12/0 0/4 0/6 0/9 18/19EconomistSystem 12/0 6/0 3/0 3/6 0/12 0/12 0/5 24/35Analyst _ _Organization 6/0 12/0 10/0 4/0 4/0 36/0Development _Information 12/0 12/0 24/0LibrarianPNGIPACourse 6/0 12/0 6/0 1.5/0 1.5/4 0112 0/8 27/24DevelopmentTraining of 12/0 1.5/0 1.5/0 15/0TrainersAutonomy 4/0 4/0Planner I I IManagement 6/0 12/0 2/0 1.510 1.5/0 23/0Advisor ______ _Information 6/0 12/0 6/0 1.510 1.5/0 27/0TechnologistShort-term 5/0 510 510 510 20/0Advisors ____

TOTAL 76/9 156/12 83/12 42/12 34/42 12/78 0/59 0/25 0/9 403/258

Sources: SAR, Annex 4 and Table from PSUP=Proposed; A-Actual

- 38-

Annex 11: Overseas FellowshipsProposed and Actual Overseas Fellowships (in Study-years)

Post/Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 TOTALstudyyears

Policy/Planning P/A P/A P/A P/A P/A P/A P/A P/A P/A P/A

Masters 2 yrs 8/0 16/0 16/8 16/3 16/0 8/1 80/12

Grad. Diploma 5/0 5/0 5/4 5/0 5/0 5/0 5/4

Short courses 5/0 5/0 5/9 5/10 5/0 5/0 30/19

Specialized Skills

Bachelor 4 yrs 8/0 16/0 20/3 20/1 12/0 4/0 80/4

Short-term courses* 4/0 4/0 4/0 4/0 4/0 20/0*

DLE

System Analyst 2 yrs 1/0 1/0 0/1 2/1

Short courses 0/1 012 months

PNGIPA

Masters 2 yrs 3/0 6/0 6/0 6/1 4/0 1/0 26/1

Grad. Diploma 0/1 0/1 0/2

Short courses 5/1 5/3 5/2 510 5/0 25/6

TOTAL 33/0 58/2 62/28 61/18 51/0 28/2 293/50*

*Actual attendees at short courses not disaggregated between Policy and Specialized Skills in data provided.

** Because of portions of years in some courses, actual total was 44 study years.

Sources: SAR Annex 4, and Table provided by PSU

- 39 -

Number of Persons on Overseas Fellowships, 1991-1996

Level of Study Planned ActualMasters - Policy 56 13Graduate Diploma - Policy 20 3Short courses - Policy 20 3Bachelors - Skills 64 5Short courses - Skills 12 27TOTAL 172 51

Source: Supervision Report, February 1995

Overseas Felowships by Specialist Area and Success Rate

Specialist Area Successful Unsuccessful Withdrew TOTAL

Management 30 1 4 35

Technical 12 1 3 16

TOTAL 42 2 7 51

Fellowships by Specialist Area and Qualifications Obtained

Specialist Area Short Diploma Post Bachelors Masters TOTALCourse Graduate Degree DegreeCertificate Diploma

Management 22 1 2 3 7 35

Technical 5 2 1 2 6 16

27 3 3 5 13 51

-40 -

Fellowships by Specialist Area and Study Country

Specialist Area Australia New Papua United United Others TOTAL.. Zealand New Kingdom States of

Guinea America

Management 18 2 0 8 4 3 35

Technical 4 0 2 9 1 0 16

Fellowships by Qualifications Obtained and Gender

Sex Short Long Courses Total Withdrew/Courses Masters PGDip Bachelor Diploma Recalled

Female 2 2 1 0 0 5 0Male 25 11 2 5 3 46 8

Source: PSU, September 1999

- 41 -

Annex 12: Local Fellowship Training, 1997-1998

Summary of Courses and Applications/Participants (if different)

. 1997 1997 1998 1998Courses No. of Courses Total Weeks National Provinces National Provinces TOTAL

App/Par App/Part App/Par App/Par App/ParMgt. Health Care 5 10 15 41 1 22 79DeliveryCertificate in 2 20 1/0 41/37 42/37Devit.. ProjectIntro. Mgt. 1 2 18 23 41Planning &ControlCert. Local Govt. 1 10 24/21 24/21Cert. Land I 10 1/0 13 14/13Admin.Managing People 2 4 36/26 34/32 70/58Motivating 2 2 13/8 14/16 27/24PerformanceMgt. Accounting 3 6 8/3 21/17 10 9 48/39Spreadsheet I 1 7 12/10 19/17DecisionsEthics & 1 0.6 11/8 6/4 17/12CorruptionCert. Middle 2 20 11/7 20/17 8/9 37/36 76/69Mgt.Organizing Data 2 2 2/1 16/10 1 13 32/25Intemal Auditing 2 4 5/3 23/21 28/24Land Dispute 1 I 1 8/7 9/8SettlementComputer Skills 1 1 7 7for TrainersCert. Prov. I 10 11 11Admin.Business 1 1 1 1ForecastingStrategic 1 2 22/19 11/8 33/27PlanningReport Writing 1 2 8 11 19Budget Prep. & 1 2 11/10 13 24/23MonitoringManaging People 1 2 9 20 29*

Field & 1 2 2 11 13CommunityDevlt. Skills *TOTAL 35 114.6 170/134 320/280 39/40 135/133 664/587

* These two courses were delayed until 1999Source: PSU, September 1999

-42 -

Analyses:

Field 1997 1997 1997 1998National Province National Province

Applications 170 320 39 135

Of whom women 48 69

Percent. Women 28% 22% ? 9

Attendees 134 280 40 133

Of whom women 42 64 11 35

Percent. women 31% 23% 28% 26%

Percent. Of women 88% 93% ?% ?%attendees to applicants

*? No data available

-43 -