Document of The World Bank Report No: 70636 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF UGANDA POST-PRIMARY EDUCATION AND TRAINING PROJECT BOARD APPROVAL DATE: MARCH 31, 2009 TO THE THE REPUBLIC OF UGANDA JULY 18, 2012 Education Sector Country Department AFCE1 Africa Region UGANDA - GOVERNMENT FISCAL YEAR July 1 – June 30 CURRENCY EQUIVALENTS Exchange Rate Effective as of February 3, 2009 Currency Unit Ugandan Shilling US$1.00 UGX 2,480 Weights and Measures: Metric System ABBREVIATION AND ACRONYMS AfDB African Development Bank CAS Country Assistance Strategy CFAA Country Financial Accountability Assessment ESCC Education Sector Coordinating Committee ESIP Education Sector Investment Program ESSP Education Sector Strategic Plan GDP Gross Domestic Product GNP Gross National Product GER Gross Enrolment Ratio HIPC Heavily Indebted Poor Countries IBRD International Bank for Reconstruction and Development IDA International Development Association IFC International Finance Corporation IMF International Monetary Fund JSAN Joint Staff Advisory Note LDP Letter of Development Policy MDGs Millennium Development Goals MoES Ministry of Education and Sports MoFPED Ministry of Finance, Planning and Economic Development MOH Ministry of Health MTEF Medium-Term Expenditure Framework NER Net Enrolment Ratio PEAP Poverty Eradication Action Plan PRSP Poverty Reduction Support Paper PER Public Expenditure Review PHRD Japan Policy and Human Resources Development Trust Fund PIU Project Implementation Unit PRSC Poverty Reduction Support Credit ROSC Report on the Observance of Standards and Codes S1 Senior One, First year of Secondary School SDR Special Drawing Rights SWAp Sector-Wide Approach TMM Top Ministry Management UJAS Uganda Joint Assistance Strategy UNDP United Nations Development Program UPE Universal Primary Education UPPET Universal Post-Primary Education and Training Program Regional Vice President: Makhtar Diop Country Director: Philippe Dongier Sector Manager / Director: Sajitha Bashir/Ritva Reinikka Task Team Leader: Sukhdeep Brar POST PRIMARY EDUCATION AND TRAINING PROJECT Restructuring Status: Draft Restructuring Type: Level two Last modified on date : 07/18/2012 1. Basic Information Project ID & Name P110803: UG-Post Primary Educ & Trg APL-1 (FY09) Country Uganda Task Team Leader Sukhdeep Brar Sector Manager/Director Sajitha Bashir Country Director Philippe Dongier Original Board Approval Date 03/31/2009 Original Closing Date: 07/31/2012 Current Closing Date 07/31/2012 Proposed Closing Date [if applicable] 07/31/2014 EA Category B-Partial Assessment Revised EA Category B-Partial Assessment-Partial Assessment EA Completion Date 06/19/2008 Revised EA Completion Date 06/19/2008 2. Revised Financing Plan (US$m) Source Original Revised BORR 0.00 0.00 IDA 150.00 150.00 Total 150.00 150.00 3. Borrower Organization Department Location 4. Implementing Agency Organization Department Location 5. Disbursement Estimates (US$m) Actual amount disbursed as of 07/18/2012 72.23 Fiscal Year Annual Cumulative 2013 49.37 121.60 2014 28.30 149.90 2015 0.10 150.00 Total 150.00 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured projects trigger any new safeguard policies? If yes, please select N from the checklist below and update ISDS accordingly before submitting the package. 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The Development Objectives of the project are (a) improve access to post-primary education, (b) improve the quality of post-primary education and training; and (c) improve efficiency in the delivery of post- primary education. 7b. Revised Project Development Objectives/Outcomes [if applicable] 6513 UGANDA: POST PRIMARY EDUCATION AND TRAINING PROJECT (P110803) Credit Number 4570-UG Restructuring Paper 1. The Closing Date for the Uganda Post-Primary Education and Training Project (the Project) will be extended by 24 months from July 31, 2012 to July 31, 2014. 2. Key Project achievements to date include (i) the reduction of Student: Textbook ratios to 1:3 compared to the target of 1:4; (ii) the reduction of Student: Classroom ratios to 44:1 compared to the target of 72:1; (iii) development and Cabinet approval of a 10 year Strategic Plan for Business, Technical, Vocational Education and Training; and (iv) the development and implementation of the Strategy for Upper Secondary Education. Project performance is currently rated Moderately Satisfactory for Implementation Progress due to unforeseen delays in some implementation activities. On the Project Development Objective, the Project is rated Moderately Satisfactory due to declining trends in learning outcomes in key subjects as well as in transition rates from primary to lower secondary education. The declining percentages are a consequence of the introduction of the universal secondary education policy. This policy has been successful in sharply increasing enrolments, as well as the absolute number of students who are achieving better learning outcomes. However, due to inadequate readiness to address quality issues, several results have not yet been achieved. In particular, the values of indicators which measure trends in quality have declined. For example, between 2008 and 2012, the transition rate to secondary education fell from 68 percent to 65 percent, and the share of students achieving the minimum competency level in Mathematics declined from 69 percent to 34 percent. Completion of project activities is expected to help reverse this trend once the impact of project inputs (such as textbooks and classrooms) on the quality of education materializes, which is expected to occur during the project extension period. 3. Progress of major activities under the Project by project component is summarized below. 4. Component 1: Increase access to lower secondary education. The Project supports the provision of additional facilities in 759 lower secondary schools. For ease of management and supervision, construction in schools under the Project is being executed in three phases. In phase 1, which covers 217 schools, approximately 75 percent of schools are in final stages of construction and are expected to be completed by September 31, 2012. In phase 2, which covers 442 schools, construction has commenced in 287 schools. Contracts for the remaining 155 schools are in process. Contracting for the 127 schools to be covered in phase 3 is expected to commence in October 2012, and be completed 12 to 16 months thereafter. Progress in Phase 1 was affected by the unprecedented inflation not anticipated at the time of contracting. The rest of the phases are expected to proceed more quickly given the experience built and lessons derived from phase 1. 5. Component 2: Improve the quality of lower secondary education. The project is in the process of completing delivery of textbooks, having reduced textbook ratios from the targeted 1:4 under the project to 1:3 overall and 1:2 in the seven core subjects. Science kits are in final stages of delivery to more than 1,340 schools across the country. Procurement for a second lot of textbooks is underway and delivery is expected to be completed by June 2013. A comprehensive review of the lower secondary curriculum is ongoing. Procurement for a needs assessment of two National Teacher Colleges is at the final stage and will be executed during the period of proposed extension, along with the planned rehabilitation of one National Teacher College. 6. Component 3: Enhance the enabling environment for post-primary education and training. A strategic plan for Skilling Uganda was prepared and approved by the Cabinet. The study for the flow and use of capitation grants 7. The project was optimistically designed for implementation within a three-year period, particularly considering that it contains a large construction program. Government capacity and time required for implementation preparedness was underestimated. This resulted in delays at start-up. Additionally, some activities have experienced unforeseen delays, in particular: (i) execution of civil works was delayed due to the extensive planning and capacity-building activities undertaken prior to contracting; and (ii) a number of procurements (such as text books, and technical assistance for curriculum reform) also experienced delays due to capacity constraints. 8. Despite initial delays, the pace of activities has picked up and, to date, the project has disbursed $72.23 million (48%). Nevertheless, various project activities, including construction of schools and procurement of the second batch of textbooks, will not be completed by the current Closing Date. The extension of the Closing Date is required to not only complete these activities (as is reflected in the revised procurement plan for the proposed two year extension), but also to enable utilization of key inputs by teachers and schools in order to improve educational quality, which is part of the Project Development Objective. 9. Ideally, the project would have been restructured at the same time as this extension. However, due to time constraints the project is being extended by the current closing date of July 31, 2012. This will provide sufficient time by the end of September 2012 to undertake an extensive review and do an appropriate restructuring. Such a restructuring would include not just physical completion of the schools but make them fully functional and focus on learning outcomes and quality aspects; revise the results framework to include intermediate or project level indicators; and reallocate some of the funds from the last phase of the school construction program to quality aspects if these schools cannot be completed within the 24 month extension period. 10. At this time, this extension is the first restructuring of the project and does not entail any change in: (i) the project development objective; (ii) the results framework; (iii) the description of the project or components of the project as described in the Financing Agreement; or (iv) the safeguards category. The Task Team confirms that the requirements of OP/BP13.30 (Closing Dates) have been met, specifically, (i) the project objectives continue to be achievable; (ii) the performance of the Borrower is satisfactory; (iii) the team has received an implementation plan as well as an updated procurement plan from government to complete the project within the revised closing date; and (iv) there are no outstanding audits, or IFRs for the credit.