The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) SOUTH ASIA | Pakistan | Finance, Competitiveness and Innovation Global Practice | Requesting Unit: SACPK | Responsible Unit: ESAF2 IBRD/IDA | Program-for-Results Financing | FY 2016 | Team Leader(s): Kiran Afzal, Amjad Bashir Seq No: 7 | ARCHIVED on 11-Dec-2019 | ISR38738 | Created by: Kiran Afzal on 28-Sep-2019 | Modified by: Kiran Afzal on 03-Dec-2019 Program Development Objectives Program Development Objective (from Program Appraisal Document) The objective of the project is to contribute to the competitiveness of Punjab (Pakistan) by reducing the cost of doing and improving the hard and soft infrastructure in support of industry. This Program for Results (PforR) credit will support the industrial development objectives of the Government of Punjab (GoPunjab). It will motivate important business environment regulatory reforms (e.g. business registration, permits and licensing, contract enforcement and property registration) as well as motivate and finance the deployment of important soft and hard industrial infrastructure along the economic spatial development plan (e.g. industrial zones andindustrial clusterdevelopment centers). The project will promote sustainable industrialization from an environmental and social point of view (e.g. Combined Effluent Treatment Plants and special amenities for female workers within industrial zones). The implementation of the actions required to achieve the results will be supported by a parallel program of Bank executed technical assistance financed by DFID. Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Satisfactory Implementation Status and Key Decisions The Punjab Jobs and Competitiveness (J&C) program for results (PforR) became effective in June 2016 and has disbursed US$60 million (60%). It has achieved the following results, as also verified by the Third Party Validation (TPV) firm: Under the Disbursement Linked Indicator (DLI) 1, the Doing Business reform efforts of the Government of Punjab (GoPunjab) have continued at an impressive pace, as a result of which Lahore’s Distance to Frontier (DTF) increased by 10 percentage points against the target of 3 percentage points. Similarly, under the DLI 2 (Steps taken to improve compliance with GSP+ Labor Conventions), Punjab's Labor Department has completed the stakeholders consultation on the draft laws. Their recommendations were also incorporated and the draft laws are being discussed in the Provincial Tripartite Consultation Committee. Once enacted, these laws will ensure the Program Implementing Entity's compliance with GSP+ Labor Conventions. The period 2 result under DLI 3 (Steps toward the improvement of investment promotion) have also been achieved, as six investment announcements were made by the leading foreign investors. The period 2 result of the DLI 4 (Steps toward developing and implementing the Provincial Spatial Strategy (PSS)) stands achieved with the approval of the PSS by the provincial cabinet in July 2019. The launch of PSS in August 2019 received wide media coverage in the national dailies. The DLI 5 (Steps toward the effective development of industrial infrastructure through PPPs) target was accomplished as the feasibility study for the establishment of a common effluent treatment plant (CETP) in Faisalabad Industrial City (M3) was completed and presented to the PPP Steering Committee. Two CETP projects each for Sundar Industrial Estate and Quaid-e-Azam Industrial Estate were also presented to this Steering Committee in July 2019. Under the DLI 6 (Steps toward designing and implementing a new institutional framework to support industrial estates and clusters), the GoPunjab has launched a Cluster Development Initiative (CDI) for four clusters, i.e.; (i) auto-parts manufactures; (ii) leather and footwear; 12/11/2019 Page 1 of 12 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) (iii) ready to wear apparel; and (iv) surgical instruments. Meanwhile, the restructuring plan for the Punjab Small Industries Corporation (PSIC) was approved by its Board in November 2019. The Periods 2 and 3 results for this DLI haven't been fully achieved yet. In collaboration with the GoPunjab, the World Bank organized a workshop on the sustainability of industrial estates in Lahore during September. The participants and subject experts discussed the findings of a study on the eco-industrial parks jointly done by the World Bank, UNIDO and GIZ. The experts also shared global best practices on CETPs. On account of program's achievements over past 6 months, its implementation progress rating is being upgraded from 'Moderately Satisfactory' to 'Satisfactory'. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P155963 IBRD-86000 Effective USD 100.00 100.00 0.00 60.13 39.87 60% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P155963 IBRD-86000 Effective 31-Mar-2016 17-Jun-2016 30-Jun-2016 31-Dec-2021 31-Dec-2021 DLI Disbursement Achievement Disbursed amount in Disbursement % DLI ID DLI Type Description Coc DLI Amount Status Coc for DLI Loan: IBRD86000-001 Partially 1.ii Regular Aggregate improvement USD 20,000,000.00 13,174,160.47 1.5 % Achieved Improve contri w/ 2.ia Regular USD 2,000,000.00 Fully Achieved 2,000,000.01 1% GSP+Labor conventions Improve contri GSP+labor 2ib Regular USD 2,000,000.00 Fully Achieved 2,000,000.01 1% con intro PDBI Improve contri GSP+labor Partially 2.ii Regular USD 3,000,000.00 2,771,504.01 1.1 % con new LL Achieved Improve contri GSP+labor 2.iii Regular USD 3,000,000.00 Not Achieved 0.00 con LL submit Improve contri GSP+labor 2.iv Regular USD 3,000,000.00 Not Achieved 0.00 con submit PAP Improvement investment 3.i Regular USD 3,000,000.00 Fully Achieved 3,000,000.00 1% promotion PD 1 Improvement investment Partially 3.ii Regular USD 1,000,000.00 923,834.66 1.1 % promotion PD 2 Achieved Improvement investment 3.iii Regular USD 2,000,000.00 Not Achieved 0.00 promotion PD 3 12/11/2019 Page 2 of 12 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Improvement investment 3.iv Regular USD 3,000,000.00 Not Achieved 0.00 promotion PD 4 Improvement investment 3.v Regular USD 3,000,000.00 Not Achieved 0.00 promotion PD 5 Devt/Implemnt strategy 4.i Regular USD 6,000,000.00 Fully Achieved 6,000,000.00 1% public invest P1 Devt/Implemnt strategy 4.ii Regular USD 6,000,000.00 Not Achieved 0.00 public invest P2 Devt/Implemnt strategy 4.iii Regular USD 6,000,000.00 Not Achieved 0.00 public invest P3 Devt/Implemnt strategy 4.iv Regular USD 6,000,000.00 Not Achieved 0.00 public invest P4 Devt/Implemnt strategy 4.v Regular USD 6,000,000.00 Not Achieved 0.00 public invest P5 Effective devt Ind Infra thru 5.ia Regular USD 1,000,000.00 Fully Achieved 1,000,000.00 1% PPP 1ex/ne Effective devt Ind Infra 5.ib Regular USD 1,000,000.00 Fully Achieved 1,000,000.00 1% PPP P1 new CETP Effective devt Ind Infra Partially 5.ii Regular USD 2,000,000.00 1,847,669.34 1.1 % PPP P2 Achieved Effective devt Ind Infra 5.iii Regular USD 2,000,000.00 Not Achieved 0.00 PPP P3 Effective devt Ind Infra 5iv Regular USD 4,000,000.00 Not Achieved 0.00 PPP P4 Effective devt Ind Infra 5va Regular USD 4,000,000.00 Not Achieved 0.00 PPP P5 2ex/new Design/imple new 6.i Regular USD 3,750,000.00 Not Achieved 0.00 framewrk supp IE P1 Design/imple new 6.ii Regular USD 4,000,000.00 Not Achieved 0.00 framewrk supp IE P2 Design/imple new 6.iii Regular USD 3,000,000.00 Not Achieved 0.00 framewrk supp IE P3 Program Action Plan Action Description Reinforcement of PRMP (now PIU), starting with designation of project heads. Source DLI# Responsibility Timing Timing Value Status Technical Client Due Date 29-Jan-2016 Completed Completion Supervision Missions and TPV report Measurement A dedicated PIU for J&C and SMART PforRs has been established by the client. Its staffing is ongoing and recently Comments two program managers were hired for the PIU. The PIU has also provided backstopping arrangements on the PTEG project. 12/11/2019 Page 3 of 12 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Action Description Program Steering Committee set up to review progress on a quarterly basis. Source DLI# Responsibility Timing Timing Value Status Technical Client Recurrent Semi-Annually Completed Completion Minutes of the PSC. Measurement P&D constituted the Program Steering Committee comprising 24 members through a notification. The Committee Comments convened its first meeting on June 16, 2016. So far it has met 8 times, the last three meetings took place in Jun and Sep 2018 and April 2019. Action Description Development of Program Manual for activities related to PforR, including verification protocols. Source DLI# Responsibility Timing Timing Value Status Technical Client Due Date 12-Feb-2016 Completed Completion TPV firm Measurement Comments Action Description Internal audit function in PRMP (now PIU) established. Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems Client Due Date 29-Dec-2017 Completed Completion Audit reports Measurement Comments Internal auditor has been hired by the client after initial delays. Action Description Reinforcement of Punjab's Department to undertake labor reforms. Source DLI# Responsibility Timing Timing Value Status Client Due Date 31-May-2016 Completed Completion Measurement Comments Consultants were hired to support the Labor Department. Action Description Reform and reinforcement of PBIT. Source DLI# Responsibility Timing Timing Value Status 12/11/2019 Page 4 of 12 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Technical Client Due Date 31-Jan-2017 Completed Completion Information provided by the Labor Department Measurement The Board of Directors of PBIT was reconstituted under a notification. The first phase of development of investor Comments targeting system i.e. IRMS went live on May 08, 2017. Establishment of the expert panel for the Punjab Spatial Strategy (PSS). Action Description Source DLI# Responsibility Timing Timing Value Status Technical Client Due Date 12-Feb-2016 Completed Completion PSS report approved and launched Measurement P&D has constituted a Technical Committee of Experts for PSS comprising of 2 national and 2 international Comments members. Public disclosure of assessment of the panel of experts assessing the economic viability of proposed new sites for Action Description new city based on the pre-feasibility study. Source DLI# Responsibility Timing Timing Value Status Technical Client Due Date 01-Jan-2017 In Progress Completion Verification by the TPV Measurement The assessment of panel of experts on viability of proposed new sites was uploaded on the official website of Urban Comments Unit in September 2017. However this needs to be finalized. Action Description Development of operating procedures and regulatory framework for enforcement of the spatial strategy. Source DLI# Responsibility Timing Timing Value Status Technical Client Due Date 31-Dec-2018 In Progress Completion Notification/details provided to the TPV firm Measurement Comments Action Description Updates to the Medium Term Development Framework based on outcomes of the Punjab Spatial Strategy (PSS). Source DLI# Responsibility Timing Timing Value Status 12/11/2019 Page 5 of 12 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Technical Client Recurrent Yearly Delayed Completion This will be achieved during next FY as the approval of PSS was delayed. The DLR on the PSS approval was Measurement achieved in period 4 instead of period 2. Comments Capacity building for line departments to submit sectoral plans for the Annual Development Plan consistent with the Action Description PSS. Source DLI# Responsibility Timing Timing Value Status Technical Client Recurrent Yearly Delayed Completion Due to the delayed approval of PSS, this action will now move into next FY. Measurement Comments Reinforcement of capacity of DoI/PIEDMC/FIEDMC to build PPP pipeline and ensure compliance with higher labor Action Description and environmental standards. Source DLI# Responsibility Timing Timing Value Status Client Due Date 31-Dec-2016 Completed Completion Measurement A new unit was established in Department of Industries (GoPunjab) named special purpose unit (SPU). The details of Comments capacity reinforcement of PIEDMC/FIEDMC are awaited. Creation of Steering Committee to lead the institutional reforms to improve public support to industrial estates and Action Description clusters. Source DLI# Responsibility Timing Timing Value Status Client Due Date 31-May-2016 Completed Completion Measurement Comments Action Description PRMP (now PIU), PIEDMC, FIEDMC, PSIC to fill vacant positions. Source DLI# Responsibility Timing Timing Value Status Client Due Date 01-Jan-2017 Completed 12/11/2019 Page 6 of 12 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Completion Measurement Comments PSIC to clear its audit backlog since 2010–11 by outsourcing it to a chartered accounts firm under multiyear audit Action Description engagement letter. Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems Client Due Date 29-Dec-2017 Delayed Completion This is a complicated exercise and requires persistent follow up by the Industries Department of Punjab. The issue Measurement has been flagged in the last supervision mission. Audit reports for the years ending June 30th, 2011 and June 30th, 2012 have been issued. The audit of year ending Comments June 30th, 2013 is in the process of finalization and an audit firm has been hired. Establish an effective internal audit function at PRMP (now PIU). Internal audit to carry out FM, procurements, fixed assets and performance audit at the Program level and reports to the Program Steering Committee on a quarterly Action Description basis. Source DLI# Responsibility Timing Timing Value Status Client Due Date 01-Jan-2017 Completed Completion Measurement Comments Internal audit function established and will be reviewed by the WB team during the next mission in October. Action Description Complaint Management System is consistently implemented. Source DLI# Responsibility Timing Timing Value Status Client Recurrent Continuous Completed Completion Measurement The PRMP (now PIU) has established a Grievance Redress Mechanism (GRM) to hear the complaints regarding Comments procurement and safeguards. Action Description Establishment of Social Units in PIEDMC/FIEDMC. Source DLI# Responsibility Timing Timing Value Status 12/11/2019 Page 7 of 12 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Environmental and Social Client Due Date 01-Jan-2017 Delayed Systems Completion Confirmation from PIU awaited Measurement The Bank teams observed that evidence for the establishments of these units is yet to be provided to the TPV and Comments Bank. Capacity building and establishment of Environmental Monitoring center and management information system for Action Description EPA. Source DLI# Responsibility Timing Timing Value Status Environmental and Social Client Due Date 29-Dec-2017 Delayed Systems Completion The capacity building assessment of the EPA was completed and the recommendations are yet to be fully Measurement implemented. The PC-II for these targets was approved during April 2017 and the project is in the process of implementation. The Comments next TPV report to confirm the status. Action Description Implementation of the Recommendations of Section 7 (Recommendations and Proposed Actions) of ESSA. Source DLI# Responsibility Timing Timing Value Status Client Due Date 30-Jun-2019 Not Yet Due Completion Measurement Comments Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Substantial Substantial Macroeconomic -- Substantial Substantial Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Moderate Moderate Institutional Capacity for Implementation and Sustainability -- Moderate Moderate Fiduciary -- Moderate Moderate 12/11/2019 Page 8 of 12 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Environment and Social -- Moderate Moderate Stakeholders -- Moderate Moderate Other -- Moderate Moderate Overall -- Moderate Moderate Results PDO Indicators by Objectives / Outcomes Improve investment climate & promote investment & jobs in more inclusive & sustainable IEs in Punjab IN00749325 ►Improvement in aggregate Doing Business performance for Punjab (business registration, contract enforcement, construction permit and property registration) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 61.00 68.19 70.05 75.00 Date 30-Jun-2016 28-Feb-2019 16-Sep-2019 30-Jun-2021 The target of attaining an increase in DTF by 3 points in period 3 has been accomplished and has been Comments validated by the TPV firm. IN00749326 ►Progress made by Punjab on GSP+ Labor conventions as reported in the bi-annual EU evaluation (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 2.00 3.00 4.00 Date 30-Jun-2016 28-Feb-2019 16-Sep-2019 30-Jun-2021 Year-1: Legal gap analysis and improved labor inspection system Status: Legal gap analysis completed. Year-2: New Labor laws drafted that would ensure compliance with GSP+ conventions Status: This has been achieved with the help of a consulting firm. Comments Year-3: Stakeholder consultation completed, revised draft also compliant with GSP+ Status: This has been achieved and the Labor Department has completed the consultations and revised the drafts to incorporate the comments. Year-4: New GSP + compliant labor laws presented to the Provincial Assembly IN00749327 ►Increase in number of workers in existing industrial estates (of which women) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 82,000.00 120,000.00 120,000.00 140,000.00 Date 30-Jun-2016 28-Feb-2019 16-Sep-2019 30-Jun-2021 This will be updated during the mid term review (MTR) in December 2019. The exact numbers are yet to be Comments received from PIEDMC and FIEDMC. IN00749328 ►New investments in existing industrial estates (of which percentage of FDI) (Amount(USD), Custom) 12/11/2019 Page 9 of 12 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 3,000,000.00 Date 30-Jun-2016 28-Feb-2019 16-Sep-2019 30-Jun-2021 This has not been reported by the client or TPV firm. Comments Intermediate Results Indicators by Results Areas Aggregate improvement of Punjab’s performance with respect to business registration, contract enforcement, construction permits and property registration. IN00749329 ►DLI-1 Doing Business Performance (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 61.00 68.19 70.05 75.00 Date 23-Dec-2015 28-Feb-2019 16-Sep-2019 30-Jun-2021 Change in aggregate Distance to Frontier (DTF) as measured by the WBG Doing Business (DB) Report Year-1: 61% Status: Achieved. Year-2: 64% Status: Achieved, and verified by the TPV firm. Comments Year-3: 67% Status: Achieved. The DTF is 70.05. Verified by the TPV. Year-4: 70% Year-5: 75% Disbursement Linked Indicators DLI_IND_TABLE ►DLI 1 Aggregate improvement of Punjab’s performance with respect to business registration, contract enforcement, construction permits and property registration (Outcome, 33,500,000.00, 43%) Baseline Actual (Previous) Actual (Current) 2021 Value 61.00 68.19 70.05 75.00 Date 30-Jun-2016 28-Feb-2019 16-Sep-2019 -- The DTF of 70.05 verified by the TPV firm. Comments ►DLI 2 Steps taken to improve compliance with GSP+ Labor Conventions (Process, 23,000,000.00, 17%) Baseline Actual (Previous) Actual (Current) 2021 Value 0.00 2.00 3.00 4.00 Date 30-Jun-2016 28-Feb-2019 16-Sep-2019 -- Comments Year-1, Step 1: Legal gap analysis and improved labor inspection system 12/11/2019 Page 10 of 12 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Status: Legal gap analysis completed Year-2, Step 2: New Labor laws drafted that would ensure compliance with GSP+ conventions Status: The client has achieved this and this has been captured in the TPV report. Year-3, Step 3: Stakeholder consultation completed, revised draft also compliant with GSP+ Year-4, Step 4: New GSP + compliant labor laws presented to the Provincial Assembly ►DLI 3 Steps toward the improvement of investment promotion (Intermediate Outcome, 21,000,000.00, 14%) Baseline Actual (Previous) Actual (Current) 2021 Value 0.00 5.00 6.00 45.00 Date 30-Jun-2016 28-Feb-2019 16-Sep-2019 -- PBIT has captured 6 investment announcements worth US$198 million. This has been verified through the TPV report of June 2019. Already US$3 million have been reimbursed against this DLI due to the achievement of 3 critical milestones in year 1, i.e.: (a) the approval by the PBIT Board of PBIT’s strategy which will specify the priority industries and Comments countries for targeting foreign investors, the implementation plan, the key performance indicators and targets, (b) the completion of a database of potential foreign investors and (c) one overseas outreach mission targeting sector(s) identified in the strategy and involving substantive discussions with a minimum of 20 potential investors ►DLI 4 Steps toward developing and implementing the Punjab Spatial Strategy to prioritize and coordinate public investments (Intermediate Outcome, 54,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) 2021 Value 0.00 0.00 0.00 80.00 Date 30-Jun-2016 28-Feb-2019 16-Sep-2019 -- The PSS was approved by the provincial cabinet in July 2019. Comments ►DLI 5 Steps toward the effective development of industrial infrastructure through public private partnerships (Process, 24,000,000.00, 8%) Baseline Actual (Previous) Actual (Current) 2021 Value 0.00 3.00 3.00 7.00 Date 30-Jun-2016 28-Feb-2019 16-Sep-2019 -- Feasibility of a CETP at Faisalabad Industrial City (M3) presented to the PPP Steering Committee by FIEDMC. Comments ►DLI 6 Steps toward designing and implementing a new institutional framework to support industrial estates and clusters (Intermediate Outcome, 22,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) 2021 Value 0.00 2.00 2.00 7.00 12/11/2019 Page 11 of 12 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Date 30-Jun-2016 28-Feb-2019 16-Sep-2019 -- The Punjab Industrial Policy 2018 was approved by the provincial cabinet in November 2018. The Restructuring Plan of PSIC is in draft and pending approval. Four CDI projects have been launched Comments already in Lahore and Sialkot. 12/11/2019 Page 12 of 12