Document of The World Bank FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT (CPL-36820; SCL-3682A; SCPD-3682S) ONA LOAN

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Human Development Sector Unit East Asia and Pacific Region Document of The World Bank FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT (CPL-36820; SCL-3682A; SCPD-3682S) ONA LOAN IN THE AMOUNT OF US$ 50 MILLION TO MALAYSIA FOR A HEALTH DEVELOPMENT PROJECT 12/04/2001 Report No: This document has a restricted distribution and may be used by recipients only in the perfornance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

2 CURRENCY EQUIVALENTS (Exchange Rate Effective June 31, 2001) Currency Unit = Ringgit (RM) RMI.00 = US$ 0.26 US$ 1.00 = 3.8 RM FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank AIDS Acquired hnimunodeficiency Syndrome DOC Department of Chemistry, Ministry of Science, Technology and Environment GNP Gross National Product GOM Government of Malaysia HIV Human Immunodeficiency Virus ICB International Competitive Bidding ICR Implementation Completion Report IMR Infant Mortality Rate JKR Jabatan Kerja Raya (Public Works Department) LCB Local Competitive Bidding MMR Maternal Mortality Rate MOH Ministry of Health NBC National Blood Transfusion Services Center PIC Project Implementation Committee PIU Project Implementation Unit SAR Staff Appraisal Report TMR Toddler Mortality Rate Vice President: Country Director: Sector Director: Task Manager: Jemal-ud-din Kassum Ian C. Porter Maureen Law L. Richard Meyers

3 FOR OFFICIAL USE ONLY MALAYSIA HEALTH DEVELOPMENT PROJECT CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 3 5. Major Factors Affecting Implementation and Outcome 5 6. Sustainability 6 7. Bank and Borrower Performance 6 8. Lessons Learned 8 9. Partner Comments Additional Information 9 Annex 1. Key Performance Indicators/Log Frame Matrix 11 Annex 2. Project Costs and Financing 13 Annex 3. Economic Costs and Benefits 16 Annex 4. Bank Inputs 17 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 19 Annex 6. Ratings of Bank and Borrower Performance 20 Annex 7. List of Supporting Documents 21 Annex 8. Borrower's Completion Report 22 Annex 9. Technical Assistance Program 27 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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5 Project ID: P Team Leader: L. Richard Meyers Project Name: MY-HEALTH TL Unit: EASHD ICR Tvpe: Core ICR Report Date: December 14, Project Data Name: MY-HEALTH L/C/TF Number: CPL-36820; SCL-3682A; SCPD-3682S Country/Department: MALAYSIA Region: East Asia and Pacific Region Sector/subsector: HC - Primary Health, Including Reproductive Health, Chi KEY DATES Original Revised/Actual PCD: 04/23/90 Effective: 02/10/94 Appraisal: 03/11/92 MTR: 10/15/96 10/20/98 Approval: 12/14/93 Closing: 12/31/99 06/30/2001 Borrower/lmplementing Agency: Other Partners: GOVT OF MALAYSIA/MOH & DOE NA STAFF Current At Appraisal Vice President: Jemal-ud-din Kasum Calisto Madavo Country Manager: Ian C. Porter Khalid Ikram Sector Manager: Maureen Law Jayasankar Shivakumar Team Leader at ICR: L. Richard Meyers Jo. M. Martins ICR Primary Author: Claire Voltaire 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: M Bank Performance: U Borrower Performance: S QAG (if available) Quality at Entry: Project at Risk at Any Time: No ICR S

6 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The stated objectives of this project were to support Government efforts to: (a) increase the capacity of environmental and public health laboratories for surveillance and disease control; (b) expand and improve primary health care in three states with lower health status; (c) improve the efficacy and safety of blood transfusion services; and (d) strengthen the ministry of Health (MOH) for policy formulation, management and clinical skills development, with specific attention to occupational health. These objectives were clear and were consistent with the Government Five-Year Plan. However, in comparison with the extensive policy formulation exercise initiated by the Government to reform its health system (hospital management, financing mechanisms), the project scope had a narrow focus. Strong emphasis was put on "hardware" activities (construction, equipment) which represented close to 95% of project costs. This may be explained in part by the extensive presence of the Asian Development Bank (ADB) which was then supporting GOM by financing technical assistance on policy formulation and investing in two health sector-wide projects. The narrow scope of the project limited somewhat the potential for in-depth collaboration between GOM and the Bank on more systemic issues. Within this context, the project nonetheless contributed to fulfilling the country's needs. Malaysia is now equipped with state-of-the-art facilities for laboratory and blood transfusion, which are comparable with that of the private sector in the developed world. They have the potential to become important elements of the health system. However, the project missed an opportunity in at least one important area: no component or measure was included to support the development/strengthening of the GOM monitoring and evaluation capacity. While this need was rightly identified by both the GOM and the Bank, the project did not address it by including a component or at least developing adequate monitoring and evaluation mechanisms for the project activities themselves. 3.2 Revised Objective: The objectives of the project remained unchanged through out its implementation. 3.3 Original Components: Component Cost (US$ million eq) Environment Health and Disease Control 68.0 Primary Health Care 11.5 Health Technology 19.7 Strengthening of Ministry of Health Revised Components: The contents of the components remained unchanged with the exception of the sites of some facilities and their costs as described in Annex Quality at Entry: This project preceded the introduction of this methodology in the Bank. This ICR rates its quality at entry as marginally satisfactory based on the following: - 2 -

7 Project Concept Objectives and Approach: As described above, the project served as a platform to resume a dialogue between the Bank and GOM and responded to issues shared by both, though the rationale for a mainly "hardware" project is not fully documented. The project was not conceived as a coherent entity but rather as a series of unrelated sub-projects and as such was managerially quite complex. This is particularly apparent in the implementation arrangements which involved four independent oversight (PIC) and implementation (PIU) units but no overall technical coordination (to monitor implementation, costs and financing or indicators). The lack of monitorable implementation and outcome indicators, clearly linked to the project, was a weakness of its design. Technical, economic and financial analysis: Extensive analytical work was carried out, with Bank collaboration, as part of the Sixth Five-Year Plan preparation as well as through the Japanese Grant. The scope of these analyses was much broader than that of the project itself. The design briefs for the main laboratories and the NBC were elaborated with support from international experts. No formal economic or project cost-benefit analysis was made. Environmental Analysis: The documentation specified that provisions were made for taking environmental concerns into account when designing/building health centers, labs and the NBC. The beneficial impact of the project was not documented, though likely to be significant. Institutional Capacity Analysis: No formal analysis is included in the files. With hindsight, it appears that project oversight and implementation arrangements as described in the loan agreement left some issues unresolved, in particular with regards to the responsibility for the construction component, which was particularly complex. Readiness for implementation: The GOM was committed to the project though it operated on a different implementation timetable (following its Five-Year Plan) from that of the Bank. Preparation was extensive, though the fact that the Japanese Grant to prepare the project was managed by the Bank prevented immediate MOH ownership of the project. Insufficient attention was given to establishing a realistic timeline for project implementation. In particular, full staffing of the PIUs at project inception as well as initiation of design work prior to project effectiveness would have avoided some of the bottlenecks which later appeared. Formal proof of land selection should have been secured. Risk and sustainability: The risk linked to the inexperience of the implementing agencies in Bank project implementation was identified and somewhat mitigated. The imnportance of the laboratories' staffing requirements was identified though not viewed as a risk to the project. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: All stated objectives - increasing capacity of laboratories, expanding primary services in selected areas, improving blood transfusion services and strengthening MOH in key areas - were achieved and demand for and quality of these services is growing. However, since no monitorable indicators were developed with baseline or target performance, it is not possible to assess precisely the contribution of the project. Noted improvements in staff attitude and performance are more likely attributable to improvements in organization, training of staff and equipment than to expansion of facilities, as most sites have just recently started to operate. The health status of the population in the States covered by the Primary Health Care component is now close or equal to the national average, though again the contribution of the project to this is not documented. Annex 1 lists some related indicators which - 3 -

8 provided the basis for the optimistic assessment made. 4.2 Outputs by components: The intended outputs of each component were, as described below, for the most part realized, though with a one- to two- year delay. Two critical aspects were not addressed within the project timeframe and are now being tackled by the GOM: (i) the Management Information Systems in the laboratories and in the Blood Transfusion Center are not yet developed; and (ii) the staffing requirements of the facilities developed have not yet been fully met and a critical mass of qualified staff needs to be recruited. With regards to the former, these information systems were not initially included in the project. There is general agreement however that they are essential to effective utilization of the facilities and they are being introduced by the GOM. (a) Environmental Health and Disease Control: The project developed high quality analytical laboratory services to monitor water and food quality and screening for a range of diseases of major public health importance: (i) under the Department of Chemistry (DOC): a central environmental laboratory in Petaling Jaya and four branch laboratories located in Ipoh, Melaka, Kuching and Kota Kinabalu were established and existing labs equipped. All five laboratories became operational in late 1999 and have been certified ISO G25 and/or 9002 and are pursuing ISO Despite the difficulties encountered by DOC in securing the necessary positions and attracting the qualified staff, both its capacity and efficiency at providing services have improved and client satisfaction is high (based on a survey carried out by DOC). (ii) under the MOH: one central public health laboratory in Sungai Buloh and two regional ones in Ipoh (North) and Johore Bahru (South) were developed. All sites are ready for operation and staff are testing equipment. Services are expected to commence before the end of Some technical defects are being corrected. Given the delayed completion, the last payments for civil works could not be financed under the loan and will be covered by the Government. (b) Primary Health Care: The primary care facilities were established and/or upgraded in three states with low health status (Kelantan, Terengganu and Sarawak) through the rehabilitation, furnishing and equiping of 7 existing health centers and construction of 5 new facilities. All civil works and equipping of the facilities has been completed (in for Sarawak and for the other States) and services are being provided in all but one health center for which poor contractor performance caused re-tendering and therefore exclusion from the timeframe of the project. (c) Health Technologv: The project established (built, furnished, equipped and provided related consultant services) a National Blood Transfusion Services Center (NBC) and equipped 13 major hospitals to ensure the safety of blood products. Since its handover to MOH in September 2000, the NBC has suffered from some construction defects (air balance and water proofing) which are now being addressed by GOM. Securing the required staffing, including administrative staff, for the unit (242 posts needs; 176 filled) is also of concem to GOM. (d) Strengthening of MOH: 72 staff-months (out of the 87 anticipated) of technical assistance (TA) for policy and service development and upgrading of clinical and management skills were provided. The program was advertised intemationally as a single package and covered 15 disciplines (Annex 9). It was completed successfully and strengthened the policy and service development capacity of the - 4 -

9 Ministry. The training and fellowships intended were provided, though financed mostly by GOM and ADB. In addition, due to the economic crisis, local training was preferred to training abroad whenever possible. 4.3 Net Present Value/Economic rate of return: N.A. 4.4 Financial rate of return: N.A. 4.5 Institutional development impact: The contribution of the project is rated as modest in light of its narrow focus compared to the broader sector reform in which the GOM was and still is engaged. Nevertheless, the availability of laboratory services and blood transfusion services is a key element for quality of care, which contributes to institutional development. With the great improvements in access to water achieved throughout the country, availability of quality control laboratories will become even more beneficial. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: * The economic crisis midway through the project had a strong impact on GOM's ability to recruit and offer salaries able to attract qualified candidates to staff the laboratories. * The project was designed as a series of independent sub-projects rather than as a coherent whole, thus making coordination more difficult (i.e., to ensure complementarity of mandates of the various laboratories, or monitor the project implementation and contribution towards the GOM strategy). * The low frequency of Bank supervision missions (one per year) and the absence of an architect in the team deprived GOM of the external perspective often useful to address potential issues before they become bottlenecks. 5.2 Factors generally suzbject to government control: The following are the main factors which contributed to the project success: * MOH and DOC's strong commitment to their sub-projects, and the sustained availability of counterpart funds; * the parallel efforts made in other sectors (i.e., water and sanitation) which had a positive impact on health status; and * the pragmatic attitude and receptivity to technical assistance, which facilitated rapid transfer of know-how. Constraining factors were as follows: * Changes in construction sites selection and architectural programs affected several facilities, delayed the start of design work and construction, and had a negative impact on costs. * The delegation, after the start of the project, of the responsibility for designing and supervising the construction of the laboratories and the NBC to the Public Works Department (JKR). Indeed, the -5 -

10 design and supervision of such complex buildings requires highly specialized skills which Public Works Departments rarely can (nor should) have in-house. Moreover, as JKR's participation had not been planned for in the project initial implementation arrangements, no special provisions were made to ensure that appropriate and rapid coordination mechanisms were in place between all parties. 5.3 Factors generally subject to implementing agency control: * The four-level construction supervision mechanisms put in place in DOC were a source of delays and confusion of mandates which diluted responsibility and led to some miscommunications with the consultants and contractors. * Staff tumover in the MOH-PIU, as well as the absence of a full time planner for the laboratories, made implementation more difficult. 5.4 Costs andfinancing: The costs of the project (see Annex 2) represent a 160% increase over estimates (RM million compared to the RM million appraised). This is attributable mainly to increases in the costs of civil works as a combined result of changes in design programs, delays of one to two years in construction start-up, poor contractor performance, a rapid increase in construction costs in Malaysia, and exchange rate variations. These cost increases were absorbed by the Government. The loan was closed on June 31, 2001 (18 months beyond the initial closing date) with US$43.16 million equivalent disbursed. The balance of US$6.84 million was canceled in 1999 (US$1.5 million) and 2001 (US$5.3 million) as remaining payments could not be made before the loan closing date. 6. Sustainability 6.1 Rationalefbr suistainability rating: Sustainability is rated as likely based on Government commitment to health, ability to pay and efforts already achieved to ensure appropriate levels of staffing in all facilities. 6.2 Transition arrangement to regular operations: GOM has extended the contract of PIU staff until June 2003 to ensure an adequate phasing-in to full utilization. The following will require close attention: * In view of their expanded roles, the respective mandates of the various laboratories will need to be formalized, their methodologies standardized and formal communications mechanisms established to ensure adequate complementarities and avoid any risk of over-lapping activities. * An analysis of options to optimize utilization of these state-of-the-art laboratories needs to be made. * A review of staff requirements (in numbers and qualifications) will be necessary in line with the growth in demand for laboratory services and performance targets. * A Laboratory Information Management System (LIMS) to record, track and access analytical data should be developed urgently. * Indicators to monitor the performance and effectiveness of the laboratories and of the NBC should be developed and included in MOH Health Management Information System (HMIS)

11 7. Bank and Borrower Performance Bank 7.1 Lending: The Government assessed Bank support as satisfactory and timely. The Bank's self-assessment, based on its internal files, is as follows: Responsiveness: The Bank was proactive in re-entering a dialogue with GOM on health after a gap in lending. It supported the development of the Five-Year Plan and developed a good knowledge base of sector issues. It is unclear however why a project with a wider scope was not developed, more in line with GOM's broad reform approach. The choice of MOH as the Bank's main counterpart rather than the Prime Minister's Office, which was then leading the health reform formulation effort (in particular on financing mechanisms), and the strong presence of the Asian Development Bank (ADB) may have been contributing factors. Processing: Project development took close to 4 years between identification and Board approval. The 18 months gap between appraisal and negotiations (which resulted in the need for a costly post-appraisal mission) was an oversight from the Bank since the Government had made it clear it would align project implementation with its Sixth Five-Year Plan. Bank technical support to project preparation was adequate both in terms of securing funding for recruitment of experts and supporting the process. Insufficient attention was given to: (i) securing the land needed at individual sites, despite the recurrence of this issue in previous projects; and (ii) ensuring that all partners in the project were fully on board by effectiveness. Documentation: The Bank documentation does not do justice to the analytical work undertaken before and during preparation of this project. The detailed technical work carried out to define each component was not summarized in the SAR, making it difficult for newcomers, from both the GOM or the Bank sides, to clearly understand the project's contents. Inadequate outcome and output indicators, which cannot easily be linked to the project, were selected but were defacto never monitored. Progress indicators (such as completion rates or percentage disbursements) were not clearly defined as management and supervision tools. 7.2 Supervision: The Bank supervision effort did not get translated into commensurate results. Field missions progressively slipped to only one visit per year. There was continuity of the mission team members and their technical input was of good quality. However, the team's skills mix was not optimal as there was no architect in the team after 1995, despite the complex construction component. The mid-term review mission occurred much too late in the process for any significant changes to be made. Resolution of procurement and implementation issues overshadowed the policy dialogue. No systematic monitoring of costs and disbursements was done towards the later part of the project when the disbursement lag was the greatest. Reporting was mechanical, relying on a standardized format which did not easily capture potential or existing issues. The Bank consultants' technical contribution to supervision is not documented in the files, though it was cited by GOM as highly satisfactory. Internal reporting was poor. 7.3 Overall Bank performance: The ICR rates Bank performance as unsatisfactory. - 7-

12 Borrower 7.4 Preparation: From the Bank's perspective, the Borrower's performance was adequate. In its own post-assessment, the MOH has, however, indicated that greater and quicker ownership of the project could have been achieved if the Japanese Grant had been managed by GOM rather than the Bank. With regards to land selection for the facilities, it would have been preferable to have completed the consultation process prior to signature of the loan to avoid the delays caused by the changes in sites. 7.5 Government implementation performance: The Government was prompt in complying with the covenants of the loan agreement. The Project Implementation Committees (PIC) met regularly and the Project Implementation Units (PIU) were established in due time and maintained, though not always fully staffed. Progress reports and opinions of auditors were transmitted to the Bank in a timely fashion and were of good quality. A more proactive monitoring of progress, planned and actual project costs, disbursements and implementation schedules (responsibility shared with the Bank) would have helped avoid many of the delays which plagued the project and prevented the full disbursement of the loan. 7.6 Implementing Agency: The number of sponsors and participants in the project (Central Ministries, Bank, 2 PICs, 2 PLUs, JKR, State and local authorities) made management of the project quite complex. In that context, the performance of the PIUs was quite remarkable. As mentioned above, some delays could have been avoided by a more proactive response by GOM decision-makers to problems related to costs, disbursements and implementation schedules. 7.7 Overall Borrower performance: Due to the 18-month delay in project completion, the Borrower's performnance is rated as marginally satisfactory. 8. Lessons Learned Most of the lessons that can be drawn from this project have already been identified by sector evaluations (i.e., "Investing in Health, Development Effectiveness in the Health, Nutrition and Population Sector", OED 1999) and largely integrated in recent Bank guidelines for the preparation of projects. In particular, this project illustrates that: * Keeping a project simple, in terms of objectives, components and implementation agencies increases its likelihood of being implemented in a timely and satisfactorily manner. Most of the difficulties encountered in this project stem from its complexity. * Appropriate monitoring and evaluation indicators to measure project outcome, output and progress need to be developed and their use in decision-making encouraged in both the countries and the Bank. Indeed, implementation of this project would have greatly benefited from adequate progress indicators, as well as monitorable output indicators to trigger rapid resolution of problems and to facilitate changes in GOM's strategy or implementation mechanisms when or if needed. * Supervision intensity and adequacy of the Bank's team skill-mix have been shown to have an - 8 -

13 important influence on project outcome. Despite the quality of the Bank technical input, missions did not include an architect and were not frequent enough to encompass all the requirements of an effective supervision, resulting in delays in project implementation and recurring issues. * The introduction of new Bank Procurement guidelines and standard bidding documents (which occured three times during the project life) may be better done at the country level than on a project by project basis so that all parties (Implementing agencies, Tender Board, etc) are equally informed and given full opportunity to buy into these proposed improvements. In parallel, the phasing in of these new guidelines should be discussed more systematically with the implementing agency to avoid delaying the processing of packages, with sometimes damaging consequences to the project timetable. In addition, with regards to Malaysia specifically: * The Bank should have taken better account of its previous experience in the country: in particular the consultation process for land acquisition should have been finalized and formal proof of land ownership and selection for the project purposes included as a condition of the loan. * With regards to the responsibility given to JKR for the construction component, the Bank should have substantiated its technical reservations in a clearer manner by: (i) including an architect in its team, and (ii) demonstrating the highly specialized technical skills requirements of such complex buildings as the laboratories and the NBC. 9. Partner Comments (a) Borrower/implementing agency: MOH's comments requiring factual corrections and clarifications have been integrated in the text and are not repeated here. Substantive comments were as follows (the text in italics corresponds to citations from the ICR text): " Clause 2: Principal performance ratings: The assessment on the performance of the Bank is too harsh and we would like to suggest that this be reviewed in the context of the extenuating circumstances and factors prevailing at the time of the appraisal and the implementation of the project. Clause 3.1: Original objective:... the project scope is surprisingly narrow.. It is our opinion that the scope of the project was clear although the outcome was quite specific. The objectives were clearly spelled out in the appraisal and the sub-projects were consistent with the defined objectives. The consultancy and the fellowships were wider in their scopes and objectives. So this is not a fair statement. However, the project missed an opportunity... As far as MOH is concemed, there are established mechanisms and indicators to gauge the benefits and improvements derived even from the new laboratories. Direct and indirect performance indicators are available. Clause 4.2: Outputs by components: The computerization of the laboratories was not in the original scope of the project. It was added later and discussed during some of the missions. It was agreed that computerization would be useful and the Bank agreed to include if for financing using a 2-stage bidding procedure. The failure to implement the -9-

14 computerization during the period of the loan arose from the lack of user experience and the limited software available in the market. Besides implementation issues, the computerization was also affected by the unclear policy prevailing regarding the privatization of the whole computerization program for governrent hospitals to a private company. When MOH was ready to float the tender towards the end of the loan period it did not receive a response from the Bank. This exercise had to be aborted and is currently being coordinated by the Technology Information Center of MOH. Clause 5.2: Factors generally subject to government control:... the designs and supervision of such complex buildings requires highly specialized skills which PWD rarely can (nor should) have in-house.. This matter has been discussed in detail during the missions and it was finally resolved that a consultant firm be engaged to review the final design drawings. According to PWD the firm gave its thumb-up and commented that the work was of a high quality. Furthermore, it should be pointed out that the unit of PWD undertaking this project is a special unit set up for the explicit purpose of constructing health and medical facilities. Clause 5.3: Factors generally subject to implementing agency control:... Staff turnover... were a source of delays. It is not fair to highlight this as the singular reason for the delay in the project. Admittedly the PIUs were seriously handicapped but this should not be highlighted as a major contributory factor for the eventual delay in the implementation. Clause 6.2: Transition arrangement to regular operations:... Clear mandated as well as standardized methodologies... to ensure adequate complementary between the various laboratories... The roles and responsibility of the laboratories in MOH and those in DOC were clearly spelt out in the appraisal documents. The areas covered are the same and easy to confuse the overlapping roles and responsibilities. It has been pointed out during the mission by both MOH and DOC staff that the roles and responsibilities between the two ministries are clear and is not an area of concern. Clause 7.6: Implementation agency:... many delays could have been avoided by a more proactive monitoring by GOM decision makers... We would like this statement to be substantiated otherwise it should be rephrased. (b) Cofinanciers: N.A. (c) Other partners (NGOs/private sector). Feedback from the private sector was not requested. 10. Additional Information None - 10-

15 Annex 1. Key Performance Indicators/Log Frame Matrix Outcome I Impact Indicators: Indicator/Matrix Projected in last PSR Actual/Latest Estimate A. Environmental Health and No baseline data nor target described Disease Control in SAR or PSRs In 1987 (Der pop) * Disease rates for water andfood Typhoid: contamination related diseases Cholera: 3.53 decreased. Viral Hepatitis: * Mortality due to cancer of cervix 1991: 0.43 per 100,000 population 1996: 0.49 per 100,000 population decreased B. Primary Health Care * Trends in the following rates improved: In 1991 In 1996 In 1999* B. I At national level, - Infant mortality Toddler mortality Maternal mortality B.2 In the States covered by the No baseline data described in SAR nor project: PSRs In 1991 In Infant mortality Kelantan Terengganu Sarawak NA Kelantan Terengzanu Sarawak Toddler mortality NA Maternal mortality C. Health Technology D. Strengthening of MOH - Findings of studies and training put into practice Note: Information in italics corresponds to that available in the SAR. Other indicators have been reconstituted for the purpose of this evaluation. Infant, Toddler and Maternal mortality rates are expressed by 1,000 live births. * Preliminary Data, MOH Source: Department of Statistics (1993 and 1997) and MOH HMIS, Malaysia

16 Output Indicators: Indicator/Matrix Projected in last PSR Actual/Latest Estimate Baseline 1992 Actual 200il A. Environmental Health and Disease Control DOC MOH DOC MOH * Number of water andfood control tests None defined in SAR nor PSRs 421, ,980 performed by DOC and MOH labs increased * Response time reduced (turn-around time for completing analysis, in weeks) o Water (26 tests) 12 2 o Foods - Preservatives (6 types) Heavy metals (10 metals) Microbiological testngs (5 tolo tests) Grading of rice 4 I o Testing of Food for Issuance of Certificate for Export - Chemical Analysis Microbiological analysis (5 to 10 tests) Mineral water (18 tests) Not stated 2 o Crisis (emergency) cases Top prior. 24 hrs. - Analysis of rectal swab for cholera 2-3 days 1-2 days - Analysis of food samples in cholera >5 days 3 days - Analysis of food samples in thyphoid >5 days 4 days B. Primary Health Care None defined in SAR nor PSRs. Target objective was defined for each health * Number of services delivered in States center in the appraisal working document, in concemed by the project increased terns of percentage increase in services. C. Health Technology None defined in SAR nor PSRs * Number of blood units tested increased in National collection (1991): catchment's area 280,000 KLGH* Base line 1991: 42,000 of which 20% at Center Target 1996: 100,000 of which C.]. In 13 State blood banks: 40% at Center In 1992 In blood collection 68, ,484 - blood collection at mobile sessions 37, ,866 * Number of donors found to have diseases screened for D. Strengthening of MOH * Number of staff trained * Staff-months of TA completed _ 72 Note: Information in italics corresponds to that available in the SAR. Other indicators have been reconstituted for the purpose of this evaluation. While the SAR has planned for fellowships, a mix of local training and fellowship was carried out. See detailed TA program in Annex 9. * KLGH = Kuala Lumpur General Hospital Source: Department of Statistics (1993 and 1997) and MOH HMIS, Malaysia - 12-

17 Annex 2. Project Costs and Financing A. ENVIRONMENTAL HEALTH 1. Department of Chemistry Ministry of Health Sub-total A: B PRIMARY HEALTH CARE 1. Health Care facilities C. HEALTH TECHNOLOGY 1. Blood Transfusion Center D. STRENGTHENING OF MOH TOTAL BASE COSTS Physical Contingencies Price Contingencies TOTAL COSTS NOTE - Latest estimates were provided by GOM. They include the costs of activities to be financed by the Government after the loan closing in order to complete the project

18 Project Costs tbr Procurement Arrangements (Appraisal Estimate) (US$- million equivalent) 1. Works Buildings DOC (11.2) (11.2) MOH (1.9) (6.6) (8.5) 2. Goods Furniture DOC (0.3) (0.0) (0.3) MOH (0.2) (0.1) (0.3) Equipment and vehicles DOC (4.3) (1.7) (2.2) (8.2) MOH (10.2) (3.4) (1.1) (14.7) 3. Consultancies/Services Architectural and Engineering Design and Supervisionlb DOC (3.1) (3.1) MOH (2.0) (2.0) Overseas Fellowships (0.0) (0.0) (0.0) Technical Assistance (1.7) (1.7) Total (27.6) (12.2) (10.2) (0.0) (50.0) /a Totals representotal estimated costs per category including physical and price contingencies. /b Professional fees for full services including quantity surveying. /c Includes international and local shopping and direct purchase, and consultant services. Note: Figures in parentheses are the respective amounts financed by the Bank. N.B.F.: Not Bank-Financed

19 Project Costs b Procurement Arran ements Actual/Latest Estimate US$ millione uivalent) 1. Wors Buildings DOC (11.6) (11.6) MOH (6.0) (2.9) (8.9) 2. Goods Furniture DOC (0.0) (0.0) MOH (0.1) (0.1) Equipment and vehicles DOC (4.3) (1.7) (2.2) (8.2) MOH (5.0) (2.4) (2.0) (9.4) 3. Consultancies/Services Architectural and Engineering Design and Supervision DOC (3.2) (3.2) MOH 0.1 (0.1) (0.0) (0.0) Overseas Fellowships (0.0) (0.0) Technical Assistance (1.7) _(1.7) Total (26.9) (7.1) (9.1) 0.0 (43.1) /a Includes intemnational and local shopping and direct purchase, and consultant services. Notei Figures in parentheses are the respective amounts financed by the Bank. N.B.F.: Not Bank-Financed Project Financin b Com onent (in US$ million e uivalent Base Cost Physical Contingencieat Price Contingencies Total % 158.4%

20 Annex 3. Economic Costs and Benefits No economic or cost benefit analyses were carried out during apprraisal

21 Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, I FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identiflcation/Preparation January Public Health Specialist February Health Specialist June Health Specialist Public Health Specialist November Health Specialist May Health Specialist Health Technology Specialist Environmental Heath Specialist Public Health Specialist October Health Specialist Procurement Specialist Health Technology Specialist Public Health Specialist Environmental Health Specialist Procurement Specialist April Health Specialist Medical Technology Specialist Environmental Health Specialist Public Health Specialist Occupational Health Specialist October Health Specialist Architech/Implementation Spec. Medical Technology Specialist Environmental Health Specialist Primary Health Specialist Occupational Health Specialist Health Care Mgmt. Training Spec. Appraisal/Negotiation April Health Specialist Architech/Impl. Specialist Medical Technology Spec. Environmental Health $pec. Primary Health Specialist Occupational Health Spec. May Health Specialist Architech/Impl. Specialist Medical Technology Spec. Environmental Health Spec. Primary Health Specialist - 17-

22 Supervision ICR December Health Specialist HS HS Primary Health Care Sp. Environmental Health Spec. Health Technology Specialist Proj. Implementation Spec. June Health Specialist HS HS Primary Health Care Specialist Environmental Health Specialist Health Technology Specialist Proj. Implementation Specialist January Health Specialist HS HS Environmental Health Specialist Health Technology Specialist November Health Specialist S S Primary Health Care Specialist Environmental Health Specialist Health Technology Specialist August Health Specialist S S Health Technology Specialist Environmental Health Specialist Primary Health Specialist October Health Specialist S S Health Technology Specialist Environmental Health Specialist July Sr. Operations Officer S S Health Specialist Environmental Health Specialist Health Technology Specialist July Sr. Operations Officer S S Health Specialist Environmental Health Specialist February Sr. Operations Officer S S Environmental Lab. Specialist No mission carried out (b) Staff Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Identification/Preparation 155 Appraisal/Negotiation Supervision ICR Total The cost of the Identfication/Preparation is included in the line "Appraisal/Negotiation" The table above excludes the following which was financed through Trust Funds: -- Identification/Preparation/Appraisal/Negotiations = US$683, Supervision = US$245,

23 Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating LI Macro policies O H OSUOM 0 N * NA El Sector Policies O H OSUOM * N O NA El Physical O H *SUOM O N O NA O Financial OH OSUOM *N ONA O Institutional Development 0 H O SU * M 0 N 0 NA El Environmental O H *SUOM O N O NA Social Ol Poverty Reduction O H OSUOM O N O NA El Gender OH OSUOM ON ONA l Other (Please specify) O H OSUOM O N O NA E Private sector development 0 H O SU O M 0 N * NA O Public sector management 0 H O SU * M 0 N 0 NA ZOther (Please specify) O H *SUOM O N O NA Medical Diagnostic Capacity -19-

24 Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bank performance Rating El Lending OHS *S OU OHU El Supervision OHS OS *U O HU Ol Overall OHS OS * u O HU 6.2 Borrowerperformance Rating El Preparation O HS * S O U O HU El Government implementation performance 0 HS * S 0 U 0 HU El Implementation agency performance 0 HS * S 0 U 0 HU El Overall OHS OS O u O HU

25 Annex 7. List of Supporting Documents 1. Second Outline Perspective Plan, GOM, Sixth Malaysia Five-year Plan, GOM 3. National Health Plan, GOM 4. Evaluating the Implementation of the Strategy for health for all by the year 2000, Malaysia, Ministry of Health, Indicators for Monitoring and Evaluation of Strategy for Heal for All by the Year 2000, 1993 and 1998, Ministry of Health, Malaysia 6. Communicable Diseases Control Information System, Annual Report 1997, Ministry of Health Malaysia 7. First Population Project (FY83) (Loan 880-MA, of US$5 million), Staff Appraisal Report No. PP-12 of December 21, 1972, and Project Audit Report (PPAR no 5641) 8. Second Population Project (FY79) (Loan 1608-MA of US$17 million of which only 35% disbursed) 9. Country Economic Memorandum, The World Bank, Replies to the Questionnaire for the Preparation of an Implementation Completion Report, August 2001, Department of Chemistry, Malaysia 11. Implementation Completion Report, Planning and Development Division, Ministry of Health, Malaysia, 31 October Health Development Project Bank intemal files of key documents and correspondence

26 Additional Annex 8. Borrower's Completion Report Extracts of the completion reports prepared by both MOH and DOC are presented below. The names of contractors and consultants have been eliminated for confidentiality purposes. The full texts of these reports may be found in the project files. I. Ministry of Health (MOH) All the sub-projects were completed and are fully operational while the services at the four laboratory sub-projects are being stepped-up in phases till the facilities are exploited fully and when additional manpower are expected to become available. The immediate benefits of the new facilities are evident and the early data available suggests that the facilities are being patronized and well received by the target groups. The range of services and workload has also increased proportionately to reflect the improved space, environment and equipment. Generally the Government of Malaysia, in particular the Ministry of Health Malaysia, discharged its obligations under the loan and complied with all the covenants of the loan agreement besides the timely implementation and completion of the loan sub-projects. There were some problems encountered owing to the complexity of the four laboratory sub-projects and the fact that the facilities were being built for the first time in the country. The global economic crisis midway through the loan period also presented unexpected challenges to the smooth implementation of the project arising from the weakened ringgit vis-a-vis the American dollar. New strategies had to be applied that culminated in the successful disbursement of the full loan amount. The consultancy program was satisfactorily completed. The successful completion of this program could be ascribed to the engagement of the consultants through the services of a single consultancy firm. Meanwhile, the training and fellowships program that was funded locally by the government was overachieved in spite of the prevailing economic situation. The World Bank also performed satisfactory consistent with its role and provided guidance and assistance both prior and during the full duration of the loan. Approvals and no-objections were generally issued speedily and on a timely basis. There were lessons learned that would assist in the planning and implementation of similar projects. Lessons Learned 1. Project Loan: The loan negotiated was a project loan where the financing was for specific and prior agreed projects. It was felt that there would have been more flexibility had the loan been negotiated as a As expressed in Ringgit

27 sector loan. A substantial amount of time was required to process and approve each time a project or component was changed. In a sector loan, the borrower would be able to substitute projects that are slow or that had encountered difficulties with similar projects that could be more speedily completed without any hassles. The quantum of interest and commitment charges paid on the loan was substantial. The amount of commitment charge paid during the first year of the loan was considerable. 2. Loan disbursement: The full sum of the loan amount was made available immediately when the loan was declared effective. It took sometime before MOH was able to submit the first withdrawal application. Commitment charge was imposed on the full amount from the first day. The loan amount should have been made available in installments to match the projected implementation schedule when payments were expected. By staggering the release of the funds GOM would have saved a substantial amount on commitment charges arising from non-utilization of the loan. 3. Loan effectiveness Considerable time was taken before the loan was formalized and declared effective. MOH was not fully aware of the time frame. As a result the sub-projects, especially the four laboratory sub-projects took some time to be organized. The loan was also declared effective before the additional posts in MOH-PIU was approved and filled. This contributed to the slow start in the implementation of the sub-projects. It is suggested that in future loans, efforts be taken to ensure the readiness of the executing agency before the loans are declared effective. Consultation with the executing agency is important because they are the one responsibility for the smooth implementation and completion of the project. 4. Staffing To a certain extent, the involvement of the Project Coordinator in the technical requirements of sub-projects of the loan prevented him from concentrating on the administrative aspect of the projects and the loan. Full time facility planners should have been assigned to undertake the planning and design of the four laboratories. The National Blood Center and the three public health laboratories were being built for the first time in this country. The design teams for these sub-projects depended very heavily on the input of the facility planner and the coordinators from the user division of MOH to provide decisions on operational policies and workflows of services and material in the new laboratories. This sentiment was shared by the National Blood Center that felt that the project would have benefited from the appointment of a fulltime technical project team instead of depending on existing staff at the Blood Bank who had to provide input to the design in addition to carrying out their day-today activities. 5. Consultation and involvement of the PIU Although the Bank provided technical assistance during the pre-appraisal and appraisal period of

28 the loan, the staff of the PIU was not involved. The technical assistance covered the feasibility and the preliminary design concepts. Unfortunately, many of the personnel identified and who were involved at this stage were not later involved in the planning and design of the sub-projects. The Project Coordinator and the Equipment Planners in the PIU were handicapped by their lack of knowledge of the events and discussion that led to the findings and recommendations of the consultants who provided the technical assistance. Owing to this, the sub-projects did not fully benefit from the technical assistance. 6. Rates contracts The Bank did not agree to allow any procurement through the use of existing rates contracts. It was feared that some of the rates contracts may not have been awarded under conditions acceptable to the Bank. These contracts covered common user items and may be utilized by all government and statutory departments. The rates are based on bulk orders and there are clear and detail procedures to ensure quality and performance. Generally these contracts were drawn up through an open tender process. The use of these contracts would have offered reasonable prices based on economy of scale and detailed and stringent requirements on performance and quality. They would have speeded up the purchase of common user items like furniture and vehicles. For the same reason, the Bank also did not allow procurement from the privatized central medical stores. As a result, every single purchase had to be carried out through formal ICB or LCB based on the best of a minimum of three quotations. 7. Consultancy services through engagement of a single consultancy firm Conclusion The benefit of dealing with a single consultancy firm instead of separately with numerous individual consultants was explained earlier under the relevant section of the report. MOH strongly recommends that a similar approach be adopted should a decision to engage more consultancy services in the future. I. Performance of GOM: GOM has complied with all the loan covenants. The full amount of the revised loan amount was fully applied for before the agreed loan closing date. All the financed sub-projects were completed and are operational. GOM may deem to have performed satisfactorily. 2. Performance of WB: Overall, the performance of the Bank may be considered satisfactory. Every effort was made to assist GOM, especially MOH, in the execution and implementation of the loan and sub-projects. Approvals were provided in a timely fashion whenever possible. The insistence on the preparation of a new standard bidding document midway through the loan was applied retrospectively and was the only point of contention in an otherwise satisfactory relationship