Document of The World Bank Report No: 70787 v1 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE EMERGENCY SCHOOL CONSTRUCTION AND REHABILITATION PROJECT ESCRP GRANT TF053545 BOARD APPROVAL DATE OCTOBER 7, 2004 TO THE REPUBLIC OF IRAQ June 14, 2012 Regional Vice President: Inger Andersen Country Director: Hedi Larbi Sector Manager / Director: Mourad Ezzine/Steen Jorgensen Task Team Leader: Lianqin Wang RESTRUCTURING PAPER (Extension of Closing Date) IRAQ EMERGENCY SCHOOL CONSTRUCTION AND REHABILITATION PROJECT (P087907) GRANT 053545 1. The closing date for the Iraq Emergency Construction and Rehabilitation Project (ESCRP - TF053545) will be extended from June 30, 2012 until June 30, 2013, as per the request from the Minister of Education dated March 11, 2012. 2. The Project became effective on October 14, 2004, and the original closing date was June 30, 2007. The Project closing date was extended twice before a Level 1 restructuring took place in September 2010 (which included the third closing date extension to June 30 2012 and added a new component to build 20 six-classroom block additions). The Project Development Objective was revised during the September 2010 restructuring as follows: to improve the conditions of learning of students in primary and secondary schools through the construction of new schools, the extension of existing schools, and the rehabilitation of schools in need of urgent repair. To date, the Project has completed the rehabilitation of all targeted 133 schools. For the construction of new schools and extensions of existing schools, all bidding and contract award activities have been completed, including resolving all suspended construction contracts. Construction is well underway as follows: (i) new schools: a total of 37 new schools have been completed, and the construction work at the remaining 13 sites is progressing well; (ii) six-classroom blocks: all contracts for the 21 six-classroom additions (one more than the target of 20) have been signed and construction is underway. With the exception of about US$2 million in contingency funds, all project funds have been committed and disbursement has reached 75 percent of the grant amount. 3. The proposed one-year extension is necessary to make up the time lost mainly due to: (i) meeting new Government regulations on construction; (ii) low response rates from contractors to the advertisements for the six-classroom block additions, which caused a prolonged procurement process; and (iii) underperforming contractors, whose contracts had to be terminated and re-tendered. These issues have now been resolved, and implementation has improved considerably because of the efforts of the Minister of Education and the Project Management Team (PMT), combined with close monitoring and implementation support from the Bank. Based on the recent progress and the current momentum, the Project is expected to be successfully completed by June 30, 2013 with all school construction finished and all funds disbursed. The Results Framework will also be updated to reflect the proposed closing date extension (annex 1). 4. During the January and April 2012 missions, a number of measures were agreed upon with the MOE/PMT to expedite implementation: (i) enhance the supervision of construction through the establishment of Directorate of Education (DOE) supervision committees with close oversight from PMT technical staff; (ii) continue to provide extensive technical and operational support to DOE supervision committees and contractors; and (iii) address contractors’ cash-flow issues by speeding up the payment cycle. Many of these actions have already being taken by the MOE and PMT. The PMT has also provided extensive support to DOEs and enabled direct communication with contractors to address implementation issues. The MOE allocated additional engineers from other parts of the ministry to the PMT to strengthen the operational support and assigned technical staff for regular oversight of school construction through field visits. In addition, the PMT Leader was granted increased authority which led to expediting of the payment process and overall implementation. Close monitoring of the payment cycle has become a daily activity of the PMT to identify payment issues and bottlenecks through the use of the payment monitoring table. Finally, the PMT has overcome the past problem of obtaining data from the Kurdistan region on Project indicators (the required data was received in March 2012 and will be updated regularly in the future). There are no outstanding audit reports or overdue financial reports for this Project. 5. Over the past months, the Project has witnessed improvement in terms of implementation progress. The MOE/PMT continues to show commitment and increasing capacity to resolve challenges and constraints. The overall physical progress for the 13 remaining new school constructions has improved from 66 percent in January 2012 to 72 percent in April 2012. Work is also in progress for all of the 21 six-block classroom extensions and the average progress rate has improved from 6 percent in January 2012 to 27 percent in April 2012. It is expected that cumulative disbursements will reach USD 46 million will by June 30, 2012; USD 50 million by December 31, 2012; and 69 million by June 30, 2013. 6. In November 2011, the Project ratings for both DO and IP were upgraded to moderately satisfactory (MS) after being rated as moderately unsatisfactory for several years. The latest supervision mission in April 2012 confirmed that the Project is largely on track, and maintained the same rating of MS. 7. To date, conditions for Closing Date extension have been met, namely: (i) the project objective continues to be achievable; (ii) the client has prepared an action plan acceptable to the Bank for the remainder of the project; (iii) there are no outstanding or unsatisfactory audits; and (iv) the project rating remains as MS since November 2011. 8. This will be the fourth and last extension of the Project. 3 ANNEX 1: Results Framework and Monitoring IRAQ: EMERGENCY SCHOOL CONSTRUCTION AND REHABILITATION PROJECT Project Development Objective: The objective of the project is to improve conditions of learning of students in primary and secondary schools in Iraq through the construction of new schools, the extension of existing schools, and the rehabilitation of schools in need of urgent repair. D=Dropped Responsibility C=Continue Data Source/ Cumulative Actual Values (2005 to 2012) and Target Values (2013) Frequency for Data Core PDO Level Results N= New Unit of Baseline Methodology Collection Indicators* R=Revised Measure (2004) 2013 2005 2006 2007 2008 2009 2010 2011 2012 target Indicator One: C Students 0 22,0541 39,3271 59,194 44,848 Quarterly MOE PMT Number of students benefiting from improved conditions of learning in rehabilitated schools Indicator Two: C Students 0 0 0 0 4,0762 12,4802 15,4702 16,1003 19,924 23,040 Quarterly MOE PMT Number of students benefiting from improved conditions of learning in new school buildings Indicator Three: C Students 0 0 0 0 0 0 0 0 0 4,800 Quarterly MOE PMT Number of students benefiting from improved learning conditions in additions of six-classroom blocks (including toilets) in 20 Baghdad schools INTERMEDIATE RESULTS Intermediate Result C Schools 0 59 106 133 133 indicator One: Number of schools rehabilitated Intermediate Result C Schools 0 0 0 0 14 31 33 36 37 48 indicator Two: Number of new schools completed Intermediate Result C Schools 0 0 0 0 0 0 0 0 0 20 indicator Two: Number of additions built (six-classroom blocks) Notes: 1 Data for 10 schools in Kurdistan region not included, due to difficulties in data collection (MOE is still trying to collect the missing data). 2 Data for 2008-2010 are based on enrollments in 2011 in the schools that were opened in 2008-2010. The data does not include 8 schools from the Kurdistan region due to difficulties in data collection (MOE is still trying to collect the missing data). 3 Data does not include 8 schools from Kurdistan, 1 from Dewaniya, and 1 from Karbala, due to difficulties in data collection (MOE is still trying to collect the missing data). 5