Document of The World Bank

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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 PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF US$13.9 MILLION TO EAST TIMOR FOR THE TP-EMERGENCY SCHOOL READINESS PROJECT June 21, 2000 Report No: TP

2 CURRENCY EQUIVALENTS (Exchange Rate Effective January 30, 2000) Currency Unit = U.S. Dollar US$ 1.00 = US$ 1.00 US$ 1.00 = US$ 1.00 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS CEP CNRT DCC ESRP INEA IPMU MOEC OM PIP PKF PMU SC SSRP TFET UNICEF UNTAET WFP Community Empowerment Project (A TFET-Financed Project) Conselho Nacional da Resistencia Timorense (National Timorese Resistance Council) District Construction Consultant Emergency School Readiness Project Interim National Education Authority Interim Project Management Unit Ministry of Education and Culture, Indonesia Project Operations Manual Project Implementation Plan UN Peacekeeping Force Project Management Unit School Council School System Revitalization Program Trust Fund for East Timor United Nations Fund for Children United Nations Transitional Administration in East Timor World Food Program of the United Nations Vice President: Country Manager/Director: Sector Manager/Director: Task Team Leaders/Task Managers: Jemal-ud-din Kassum Klaus Rohland Alan Ruby H. Dean Nielsen and Robin S. Horn

3 EAST TIMOR TP-EMERGENCY SCHOOL READINESS PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key performance indicators 4 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 5 2. Main sector issues and Government strategy 6 3. Sector issues to be addressed by the project and strategic choices 9 C. Project Description Summary 1. Project components 9 2. Key policy and institutional reforms supported by the project Benefits and target population Institutional and implementation arrangements 11 D. Project Rationale 1. Project alternatives considered and reasons for rejection Major related projects financed by the Bank and other development agencies Lessons learned and reflected in proposed project design Indications of borrower commitment and ownership Value added of Bank support in this project 15 E. Summary Project Analysis 1. Economic Financial Technical Institutional Environmental Social Safeguard Policies 22 F. Sustainability and Risks 1. Sustainability Critical risks Possible controversial aspects 25

4 G. Main Loan Conditions 1. Effectiveness Condition Other 25 H. Readiness for Implementation 26 I. Compliance with Bank Policies 26 Annexes Annex 1: Project Design Summary 27 Annex 2: Project Description 30 Annex 3: Estimated Project Costs 36 Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 37 Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 39 Annex 6: Procurement and Disbursement Arrangements 40 Annex 7: Project Processing Schedule 49 Annex 8: Documents in the Project File 50 Annex 9: Statement of Loans and Credits 51 Annex 10: Country at a Glance 53 MAP(S) EBRD No.30626

5 Date: June 19, 2000 Country Manager/Director: Klaus Rohland Project ID: P Lending Instrument: Emergency Recovery Loan (ERL) EAST TIMOR TP-Emergency School Readiness Project Project Appraisal Document East Asia and Pacific Region EASHD Team Leaders: H. Dean Nielsen and Robin S. Horn Sector Manager/Director: Alan Ruby Sector(s): EY - Other Education Theme(s): Education Poverty Targeted Intervention: N Project Financing Data Cl Loan 1 Credit Z Grant D Guarantee O Other (Specify) For Loans/Credits/Others: Amount (US$m): 13.9 Financing Plan: Source Local Foreign Total GOVERNMENT SPECIAL FINANCING Total: Borrower: EAST TIMOR Responsible agency: UNTAET (UN TRANSITIONAL ADMINISTRATION IN EAST TIMOR) Contact Person: C'ecilio Adoma, UNTAET, Dili, East Timor Tel: Fax: Project implementation period: July June 2001 OCS PAD F- R.~ M."0, 2000

6 A. Project Development Objective 1. Project development objective: (see Annex 1) A. Background East Timor's school system, crippled in the post-referendum violence at the end of 1999, is capable of functioning today only because of the spirit of hope and independence-inspired enthusiasm. Thousands of volunteers, both Timorese and international, under the inspiration and leadership of CNRT, the Catholic Church, local and international NGOs, and international organizations such as UNICEF and WFP, have been bringing children together, putting roofs on school buildings, cleaning up rubble in the hundreds of school buildings targeted by fire bombs, distributing books, paper, pencils and school meals, and serving as teachers. As inspiring and laudable as this is, it is unreasonable to expect that a high quality educational system can be built upon volunteerism alone. The revitalization of a school system requires the mobilization of vast stores of human and physical resources. The pre-referendum educational system in East Timor was under-resourced to begin with. School buildings and equipment were of very poor quality, barely maintained, and not conducive to modern pedagogy. With the post-referendum violence and the pull-out of the Indonesian administrative structure, however, the system was all but demolished. Besides the destruction of the schools, teachers fled their posts, students became refugees, and school administration fell apart. So, while teachers and students are struggling to get back to normal life, there is little left to work with: few workable buildings, meager inputs and only an ad hoc administrative structure. This difficult situation, however, provides opportunity as well. Exactly because so much of what existed previously has been swept away, East Timor has an historic opportunity to build a new and modem education system, relevant to its own needs and context, that meets both quality and affordability standards. This system may be designed around lessons learned from similar countries around the world that have succeeded in establishing effective school systems. The project described below will be the first in a series of steps in this direction, concentrating on East Timor's most urgent short-term educational challenge, revitalizing its basic education infrastructure with functional schools (primary and secondary), furniture and equipment, books and learning materials, and management support. B. Program Purpose and Phasing Contributors to the Trust Fund for East Timor and other donors envisioned education as one of the priority sectors on the new nation's reconstruction agenda. Building upon the Joint Assessment Mission of late 1999, the first annual Work Plan in Education developed by the United Nations Transitional Administration for East Timor (UTNTAET), the initial educational policy work undertaken by the Conselho Nacional da Resistencia Timorense (CNRT) and inputs from a Joint Program Development Mission organized by the Trust Fund managers, the World Bank (February 24 to March 3, 2000), an educational sector plan was designed and summarized in the form of a Matrix of East Timorese Educational Development Activities for the Transitional Period (Years ). Besides setting up a comprehensive development framework for education, the matrix was also expected to facilitate a coordinated program of financial and technical assistance from development agencies in the following major activity areas: -2-

7 [1] Restoring primary and secondary school attendance; [2] Establishing national consensus concerning mission, vision, and key policies; [3] Establishing a National Education Authority and East Timor School System; [4] Developing pilot programs for early childhood education; [5] Developing adult education and training programs; [6] Revitalizing primary education; [7] Revitalizing secondary education; [8] Revitalizing post-secondary education; [9] Providing human resource development for educational personnel (including teacher training); [10] Developing national cultural and sports programs. Prerequisite policy decisions, key actions, and timeframes for these actions have been agreed under each of these major activity areas. Moreover, each activity area is associated with the main implementing agencies responsible for supporting the specified actions under each activity area, and the likely source of funds for these actions. These agencies include UNICEF, USAID, and various NGOs. The sector plan sets out, in a general way, most of the issues involved in educational development over the next several years. C. The School System Revitalization Program It is within this framework that a school system revitalization program (SSRP) will be developed with support from the Trust Fund for East Timor and other donors. The program will concentrate on activity areas six and seven from the East Timor Education Development Matrix, "Revitalizing Primary Education" and "Revitalizing Secondary Education." The TFET assisted components consist of a series of interrelated and overlapping projects (initially three), with the overall purpose of improving the quality and relevance of education available to East Timorese children and youth. The phasing of these projects will proceed according to a strategy of progressive quality improvements. Phase One. In the first phase of the revitalization program all children will have access to schools operating at a "basic operationalevel." At this level, schools buildings will be clean, safe and covered, will be supplied with basic furniture, books and other learning-teaching materials, and will operate with teachers and principals, who have received at least minimal training. Teacher training will not be covered by the trust fund project, but will be provided with support from other development agencies. Communities will contribute to school physical improvement and repair. Phase Two. In phase two schools will operate at the "fundamental quality level." At this level, new buildings will replace those judged to be beyond repair, existing buildings will be upgraded to a comparable standard of quality, and permanent furniture will replace temporary furniture. School councils will be strengthened. Phase Three. In the third phase schools will be raised to the "enhanced quality level." At this level school-community councils will be given the responsibility to manage a block grant (equivalento a few dollars per student) for school improvement, giving them choice over how to enhance school quality. This will encourage parents, teachers and other community members to take more responsibility for school results. During this phase, support could also be given to programs of professional support to teachers consistent with East Timorese educational policy. All Phases. Quality improvement in the successive phases will be enhanced by three kinds of institutional support programs: a) social mobilization and communications; b) institutional strengthening and capacity building; and c) educational policy development

8 a) Social Mobilization and Communications. Revitalizing the education system in East Timor will require a substantial shift in perceptions, attitudes, and behavior on the part of local leaders, teachers and headteachers, parents, and even children. Influencing these attitudes, encouraging participation, and disseminating the reasons for and results of these changes are crucial to project implementation success as well as the institutional sustainability and expansion of these new approaches across the country. Such programs will be organized and managed by the interim educational authorities in East Timor. b) Leadership and management capacity building. School system revitalization is not just a matter physical infrastructure. School quality also depends on effective leadership at the school, district and national levels. In all SSRP projects, interim educational authorities will develop simple, effective management routines and leadership training. At the school level this will mean focusing on and support both the principal (head teacher) and the school-community councils; at the district level the establishment of simple systems of monitoring and professional support in the attainment of school quality standards; at the national level, capacity building both within a project management unit and the National Educational Authority. Capacity building will be needed in relation to all features of the country's new educational system. This project will concentrate on that related to specific aspects of the school revitalization program. This component will not be financed by TFET, but by other funding sources. c) Policy Development. School revitalization will unfold in a dynamic policy environment. In some cases short-term reconstruction efforts will run ahead of relevant policy making; in some cases it will follow policy development. In any case, there is a need for constant interaction and accommodation between policy and action. As an act of creativity and change in East Timor's new educational system, policy making requires careful identification and analysis of alternatives, wide-ranging consultations, and agreed upon adoption processes. In support of such efforts (especially in relation to school revitalization), the SSRP project will allocate resources to interim educational authorities for policy development, including funds for information/data collection (e.g., school mapping, information on innovation in other countries), policy studies, workshops, consultants, and study tours. D. Projects to be Mounted under School System Revitalization Program Three projects will be mounted corresponding to the three phases of the revitalization program (SSRP), as follows: SSRP-I: Emergency School Readiness Project SSRP-II: Fundamental School Quality Project SSRP-III: Enhanced School Quality Project 2. Key performance indicators: (see Annex 1) The development objective for the school system revitalization program (to be achieved by December 2003) is to assure that all East Timorese children and youth who seek access to primary and secondary education will be able to enroll in a school which meets or exceeds agreed upon quality standards in terms of: (a) physical infraslructure, (b) furniture and school equipment, (c) curriculum, books, and other teaching materials, - 4 -

9 (d) community participation, (e) professional competence of principal and teachers, and (f) student performance levels (for SSRP-III). B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: Date of latest CAS discussion: There has been no time to prepare a Country Assistance Strategy for East Timor. There has, however, been a Joint Assessment Mission in November This mission found that: (a) Virtually the entire governance structure has vanished at every level along with the technical sector; (b) Built structures and other material goods have been extensively destroyed; and (c) Much of the infrastructure such as roads, electricity and water has been largely spared from the post-referendum violence. As a result the economic structures of East Timor have been extensively destroyed. Transportation, supplies, and commercial warehouses have been looted. Virtually all supplies must be imported. Markets, government and other regulatory institutions have been disorganized to the point of ineffectiveness. Flight from violence and the departure of many Indonesians has caused an acute shortage of technical and other qualified personnel, which were not in plentiful supply even before the referendum. The destruction and disorganization of the economy has brought on a supply shock whose consequences are an estimated 45% drop in GDP. The structure of the economy, state, and society that will emerge from this process is still unknown. In the weeks following the ballot, perhaps 75% of the population was displaced. Of a pre-crisis population of 850 thousand people, approximately thousand are still refugees within Indonesian camps. Along with physical destruction and population displacement, the institutional framework for governance has vanished. At all levels the civil service is either entirely gone or barely functioning. This, however, presents an opportunity for reform. The Indonesian administration was excessively centralized, had little or no community participation, underpaid, and was renowned for its corruption and nepotism. East Timor is being administered by the United Nations Transition Administration for East Timor (UNTAET), that was established on October 25, 1999 by the Security Council Resolution This administration is expected to continue for 2 to 3 years before devolving control to an elected Timorese administration. The expected date for elections is March The length of the transitional period has not yet been decided. Until that time, UNTAET is responsible for overseeing the country's reconstruction, developing local administration and technical capacities, and constituting a strategy for handing over its functions to an elected East Timor administration. Funding for East Timor is provided for through the following: (i) a UNTAET trust fund, funded by UN member states that supports UNTAET administrative costs; (ii) a short term humanitarian pledge; and (iii) a medium term development trust fund managed by IDA, referred to in this document as the Trust Fund for East Timor (TFET). Additional resources, both financial and technical, are being provided through by bilateral and NGO contributions. These resources appear to be considerable, but so far have been very difficult to mold -5 -

10 into coordinated reconstruction and development strategy. This lack of coordination has often led to poor allocation of resources and wastage, and is an issue which UNTAET, the East Timorese, and their development agency partners have been trying to address, with varying levels of success. UNTAET's main task is to pave the way for national self-reliance. In the short term this means building a partnerships with the local leadership represented by the Conselho Nacional de Resistencia Timorense (CNRT), an umbrella group for East Timorese political groups. In education, this partnership will be manifest in the formation of an Interim Education Authority (IEA), the precursor to a future Ministry or Department of Education. The Department of Education, which is expected to be established in July, 2000, will have mostly East Timorese managers. At the district level, educational management is currently under the District Administration of UNTAET, although there are also CNRT educational committees at that and the subdistrict level. When the Department of Education is organized, it will maintain offices at least at the district level. Education is also being supported at the grassroots level by the work of the Church, which operates in close cooperation with UNTAET/CNRT committees, UNICEF, and numerous national and international NGOs. Independent East Timor will be born under challenging circumstances. It currently has few exploited natural resources that are valued on world markets, almost no physical capital stock, and a small internal market. East Timor's greatest asset will be its people and their human capital. Whether East Timor remains a poor country in the coming decades or begins the leap out of poverty will depend greatly upon the educational system that is built over the next few years. Inequality is also closely related to education - in almost all known countries, an individual's educational level is the best determinant of his income level. A democratic and equitable educational system will help ensure that growth in incomes will also be equitable. For both these reasons, success in revitalizing education will be one of the nation's keys to dealing with the challenges present at its birth. 2. Main sector issues and Government strategy: The previous educational system in East Timor, built and run by Indonesia, is widely considered to be of very low quality. Physically, the schools were built to unacceptably poor standards and have never been adequately maintained. The textbooks, reflect the overloaded curriculum and are generally deemed difficult to use. School administration was non-participatory, centralized and plagued by corruption. After the violence and destruction following the independence vote, an already poor situation became even worse: schools were burned, had their roofs torn off, or were otherwise damaged or destroyed. Books were burnt and both students and teachers fled the violence. Today, in addition to all the physical shortcomings, schools are functioning on an ad hoc basis. Both regular and volunteers teachers are trying to teach without a supply of textbooks, proper chalkboards, instructional aids, furniture, or new curricular guidelines. Also, since screening for and appointment into the civil service will only occur in May, 2000, teachers so far have not received a regular salary. The only incentive most have received to date has been a small stipend (around $20 per month) and an allocation of rice, provided by UNICEF and the World Food Program, respectively. Since there are virtually no books in the school, a regular curricular program has not been followed in most places; thus, it is agreed that most students will have to repeat the same grade next school year. At the primary school level, this means that next year's ( ) grade one intake will be twice as large as normal (this year's cohort plus next year's). There is also mounting evidence that next year's enrollment will further increase due to higher than previous years' net enrollment rates (previously only 70%), brought on by the higher levels of -6 -

11 community support for schooling and the elimination of many of the former cost items (e.g., the need for uniforms). Next year's primary and secondary school enrollments are now expected to exceed last year's, and soar to above 200,000 students. A. Destroyed, Unsafe, or Inadequate School Buildings The urgent reconstruction of school buildings must be the main objective of any emergency education project at this time - without safe, covered school buildings there can be no formal education. Before the referendum there were around 950 primary and secondary schools, public and private, in East Timor. An exact count of the current number of functioning schools is not available given poor record keeping and the recent devastation which left many schools dysfunctional. The best data is for primary schools gathered by UNICEF. The March 2000 UNICEF count places the count at 693 primary schools in East Timor's 13 districts and 64 sub-districts. According to this same count, there are close to 150 thousand students and somewhat more than six thousand teachers, although many of them are not qualified to teach. At the secondary school level, the accurate numbers are even harder more difficult to obtain, but last year's figures are a clue: 32,000 students at the junior secondary level and about 19,000 at the senior secondary (general and vocational streams). It must be stressed that this information is preliminary and subject to rapid change, not only because the information systems are virtually nonexistent, but also because reality is rapidly changing. Schools can be classified into three categories of damage. First, although no schools are in good condition, a number require only minor repairs and refurbishing. These schools were not targeted during the disturbances, but most are still in poor condition because they were built poorly or not maintained properly. In many cases, roofs for this category of schools need to be replaced as roofing sheets have disappeared in the months following the militia rampage. A second category includes those schools that appear to be structurally sound, but that require a considerable amount of reconstruction because of damage to or destruction of walls, roofs and roof structures, ceilings, floors, or other components. This category of school can be further subdivided into those which are sound enough for further upgrading to a new quality level (e.g., receiving electricity and running water) and those, which due to structural weaknesses, can only last a few more years (most Indonesian built schools). Finally, there are those schools that have sustained serious damage or are structurally unsound. For these schools, it is more efficient in terms of cost and time to rebuild than to attempt to fix them. IJNICEF, USAID, the PKF, along with several bilaterals and NGOs have an emergency program for replacing roofs on approximately 2700 classrooms. Some work has already been done in surveying schools in order to assign them into the most appropriate damage category. UNICEF undertook an initial nontechnical survey of about 410 schools and their physical situation. The CNRT has also evaluated a number of schools deemed by the school communities as in need of repairs. This survey was conducted by educators, not technical specialists and does not include engineering data. During the preparation of ESRP, a team of East Timorese engineers and school architects was hired to carry out a civil engineering survey. The engineers' report showed that nearly half of the schools surveyed required demolition and replacement. These technical surveys include a damage status report on each school building (most schools consist of one or more 2-3 classroom modules). This effort will be completed for all schools by mid May, 2000 and the information will be entered in a data base. B. Widespread Lack of Furniture and Equipment Furniture and equipment were wrecked along with buildings. Being relatively easy to carry off or destroy, furniture and school equipment disappeared almost completely from most schools. This includes - 7 -

12 student desks as well as shelves, cupboards, teachers' desks, office furniture and even blackboards. These must be restored before the beginning of the school year in October C. Complete Absence of Teaching and Learning Materials Teaching materials were mostly burned, destroyed or lost. The teaching materials that teachers are used to do exist in Indonesia, and virtually all students and teachers can use the Indonesian language. Given that there is insufficient time to create an new national curriculum and new curricular materials before the new school year, the use of Indonesian language materials as a transitional measure has been agreed upon by the major educational stakeholders. Eventually a new, more appropriate and more effective curriculum will need to be produced and materials developed. In addition, there are no visual aids in the school and no teaching materials such as chalk, paper, science equipment, maps or reference books. Moreover, the student have little access to school supplies such as paper, copybooks, pens and pencils, rulers and school bags. Such items are not available in the local market place and even, if they were, most families have virtually no buying power. D. Disrupted Teaching Force According to the Joint Assessment Mission of late last year about 80% of pre-independence primary school teachers were East Timorese who have since remained in the country; on the other hand, only about 20% of secondary school teachers have remained, leaving that level with a serious teacher shortage. During the past few months many volunteer teachers have entered the classroom, both at the primary and secondary school levels. Thus, there now appears to be a surplus of primary school teachers, although many are underqualified. A decision has been made to test teachers by means of a national exam in May and take the best qualified into the National Teaching Service. This is likely to eliminate the unqualified teachers at the primary school level, but it will do little to relieve the shortage of qualified teachers at the secondary level. For that level, provisional measures will be needed such as recruiting and upgrading interested primary school teachers, and using university students (with or without some emergency teacher training). Various formns of inservice teacher education will also be needed in support of new teaching methods and higher levels of professionalism among teacher, perhaps leading to teacher self-help networks based at resource schools (school clusters). Teacher provision and training are currently being dealt with by UNTAET/CNRT, assisted by UNICEF and bilateral donors like the Portuguese government. In the third school revitalization program, focusing enhancing school quality, this crucial ingredient will be supported under the trust fund. A final point concerning teacher preparation is the orientation of head teachers. When the new school begins next October, many of the primary school principals and most of those at the secondary school level will be undertaking school management tasks for the first time. Thus, each will need intensive orientation concerning new rules and regulations and management roles. In addition, school councils will be reactivated and given more responsibilities. Training for school principals and school councils will be provided under the emergency school readiness project. E. Management, Information, and Technical Staff Central and regional management and administration of the school system was basically in the hands of the Indonesian Department of Education (DEPDIKB UD). After the referendum, those offices - 8 -

13 were dismantled and most of the managers returned to Indonesia. Consequently, accurate information on the school system has been difficult to collect and confirm, and few resources remain for managing educational resources and supervising school operations. Management and school supervision systems have yet to be institutionalized. While there is no time to prepare an effective education management unit by October, the project can support capacity building for a "project management unit" and will assist in creating simple monitoring and supervision systems at the district level. F. Government strategy The East Timor School System Revitalization Program constitutes UNTAET/CNRT's central strategy for school system reconstruction and represents the combined efforts of UNTAET itself, CNRT, UN agencies, international and national NGOs, and the International Development Association (IDA). The overriding concern of the Interim National Educational Authority and its partners is that all children aged 6 to 15 have access to schools by October, Concurrently, plans are being developed to remodel the educational system over the next two-three years so that it reflects the values and needs of independent East Timor and promises an overall higher standard of quality than in the past. 3. Sector issues to be addressed by the project and strategic choices: See above. C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdoxxn): A. The Project Development Objective for ESRP The development objective of the Emergency School Readiness Project is to provide school age children and youth with opportunities for education at the "basic operational level." In the context of this project, "basic operational level" means a school with a safe and clean building(s) having a roof and school furniture, textbooks and learning materials, and management support. (Teacher provision and reorientation will be through other programs at this stage.) Access to such a school at the primary and junior secondary level will be made available by the start of the school year beginning October (At one location per district -- three in Dili -- access to upper secondary education will also be made available.) A feature of this project will be a community awareness campaign which will explain how the readiness project is the first step in creating a modem school system, relevant and responsive to national needs, and meeting both quality and affordability standards. Other features will be capacity building for school system managers and support for policy development. B. Project components 1. Rebuilding school physical infrastructure (a) Carrying out school rehabilitation, including essentail repairs of damaged school buildings; (b) Provision to schools of basic operationalfurniture (student and teacher desks and chairs, cffice furniture, and blackboards); and (c) Construction of about four prototype new schools, including about two resource schools in sub-districts, and about two three classroom community school modules, and provision of prototype -9-

14 furniture. 2. Providing learning-teaching materials (a) Acquiring and distributing student materials; and (b) Acquiring and distribution teachers 'guides. 3. Social mobilization and communications (a) Identifying appropriate audiences and media; and (b) Propagating messages and gatheringfeedback. 4. Support for policy development (a) Conducting school mapping; and (b) Supporting workshops, study tours and preliminary studies related to policy development in education. 5. Management and implementation support Strengthening the Project Management Unit through provision of technical assistance. C. Project Cost Summary Component,Indkative Bank- % oif Sector costs % of financing Bank- ~~~~~~(UxS$M) Total (US$M)} financing 1. Rebuilding school physical Other Education infrastructure. 2. Providing teaching-learning Other Education materials. 3. Social mobilization and Institutional communications. Development 4. Support for policy development. Institutional Development 5. Management and implementation Institutional support. Development Total Project Costs Total Financing Required Key policy and institutional reforms supported by the project: The Emergency School Readiness Project will be conducted under the Governance and Public Administration Pillar of UNTAET in collaboration with CNRT. Key policies already formulated by UNTAET/CNRT and supported by this project are: * Primary and secondary schools should be operational (having safe and functional buildings,

15 furniture, teachers, textbooks and other teaching-learning materials) by the beginning of the coming school year (October 2000). * Since upper secondary schools will be restructured, a subset of the existing schools should be prepared for use by October 2000 (at least one in every district). * During this period of transition to a new curriculum, schools will use textbooks in the Indonesian language. First grade books will be mostly in pictures. * Portuguese and English language programs in schools will require new textbooks in those languages and curricular assistance provided through bilateral donors * The school buildings from the Indonesian period that will be retained may eventually need to be upgraded to the same standard of quality. * Furniture purchased during the emergency readiness period will eventually be replaced by furniture that meets higher standards of quality and will be locally produced. * Whenever possible, local builders and community members will carry out school rehabilitation, new school construction, and the production of furniture. * Educational policy will be formulated and adopted through IEA channels during and in interaction with project implementation. The project will provide a fund to cover workshops, data collection, studies, consultants, and study tours in support of policy development. 3. Benefits and target population: The direct beneficiary of the Project is the primary and secondary school-age population currently in school or entering school in the near future. The most important stakeholders for the program are teachers, community and parent organizations and other clients and providers of education. Concerning learning materials, children and teachers in all grades will have access for the first time to adequate quality textbooks, selected by East Timorese educators, in all subjects. The access to lively and interesting non-textual materials in Grade I will help to boost the development of literacy and numeracy. The East Timorese who will be contracted to participate in the evaluation process will be exposed to new ideas and influences from a variety of foreign educators and will develop skills that will be beneficial either in their continued jobs as teachers or if they become members of a core group of education specialists with an initial background in curriculum and educational materials issues. 4. Institutional and implementation arrangements: The largest, most costly, and most complex component of the Project is the first one: "Rebuilding School Physical Infrastructure." This will consist of rehabilitating damaged and poorly maintained buildings, providing school furniture, and constructing prototype school buildings to replace buildings destroyed beyond repair. The former will be implemented by UNTAET/CNRT through cooperative agreements with UNICEF (mainly responsible for school reroofing) and the TFET-financed Project Management Unit. Damage surveys will be conducted at every school and a report of building conditions will be made. This report will be discussed by District/Subdistrict committees, which will decide which buildings to rehabilitate based on both damage reports and enrollment estimates. At the school level, rehabilitation work on those buildings will be managed by school principals (or authorized equivalents) in consultation with school councils, or, if the councils are not constituted, specially created "school rehabilitation committees," including representative of prominent social groups and

16 community leaders (the formation of which will be based on project guidelines). Supervising Engineers, to be coordinated by the head of the project's Construction Management Sub-Unit (see below) will work with the school principals and their councils/committees in the development of a rehabilitation plan using a standardized rehabilitation checklist, which will be included in the project operations manual. The engineers will "check off' the kind of repairs needed - roof replacement, wall and floor patching, windows, doors, painting, removing rubbish and cleaning grounds; and specify the number of standard packages (roof, window, door, flooring, etc.) needed to carry out the specified repairs for each classroom. The packages will also specify the amount and kind of labor that school principals will need to recruit. As part of completing the checklist, the principals and their councils/committees will indicate who they will recruit as work crews (firms or individuals) and whether they will purchase some materials (e.g., sand and gravel) locally. The principals will then attach the rehabilitation checklist to a "Participation Agreement" (signed by the principal and witnessed by the council or committee) and obtain approval signatures from a Supervising Engineer and from Project Management in the PMU. The signed Participation Agreement will authorize the principal to pick up the building materials" packages"-- including tools -- identified in the rehabilitation checklist, and to withdraw the first installment of the Rehabilitation Sub-grant for the mobilization of the work crews. The principal will then be responsible for publicly displaying a standardized "School Rehabilitation Information Poster" on the school grounds, for hiring work crews, and for managing the rehabilitation project, the specifications of which will also be included in the Project Operations Manual. Subgrant funds will be disbursed and accounted for by PMU-fielded project assistant accountants placed in each District. Each time a rehabilitation benchmark is reached, the principal solicits a visit by a Supervising Engineer or assistant, who fills out and signs the standardized inspection report to be included in the manual. If the engineer concludes that the benchmark is achieved, he signs on the appropriate line in the Participation Agreement, which in turn authorizes the principal to withdraw the second installment of the subgrant. If the Supervising Engineer or representative is not satisfied, he or she will advise the school principal on the additional work needed to reach the benchmark, using a form and following procedures to be included in the Project Operations Manual. The Engineer will also schedule a re-inspection visit for this benchmark. The final payment will be released after a similar inspection process. Building materials and tools financed by TFET (except for materials like sand and gravel, which can be purchased locally with funds from the subgrant) will be procured centrally by UNTAET/CNRT with the help of the PMU procurement specialist. They will be distributed to and warehoused in centrally or each district and a distributed to schools according to their needs. The PMU will procure school furniture (student desks and chairs) from the international market and arrange for shipment to (and, when necessary, local assembly at) the school sites. Teachers' furniture, office furniture and blackboards will be produced locally and delivered to the school site. Prototype school construction will be implemented by international and local firms selected by UNTAET/CNRT with the help of the PMU. The firms will arrange for their own materials. Construction will be supervised by a prototype school construction manager within the Construction Management Sub-unit. Textbooks will use the Indonesian language for grades 2 through 12, except for use in language and religious instruction. These books will be purchased directly from the Indonesian publishers. Committees of local educators, coordinated by UNTAET/CNRT, will select the titles to be purchased from among those available from Indonesia. New covers will be designed though a contest conducted by UNTAET/CNRT and a local preface will be prepared for insertion in these books. Inappropriate material,

17 as identified by local review, will be eliminated during the review committee evaluations. For grade 1, books in Bahasa Indonesia will not be procured. Instead, the same review committee will recommend picture books from international publishers for procurement and distribution to the schools. Components 3 (Social Mobilization and Communications), and 4 (Support for Policy Development) will be implemented through the establishment of UNTAET/CNRT task forces (one for each component). In accordance with the Project Operations Manual, each task force will consist of local and international specialists who would be charged with developing the terns of reference for each of the activities to be specified in the Project Operations Manual for that component and with contracting the services needed to carry out these terms of reference as needed. Component 3 would include the development of community mobilization campaigns and the promotion of participation in school rehabilitation and education support activities. Component 4 will support school mapping, educational research, policy analysis, and knowledge enhancement related to educational development. It might also include beneficiary assessments, and pre-investment studies for subsequent school revitalization projects. A Project Management Unit (PMU) will be established initially within Government and Public Administration Pillar of UNTAET to serve as the principal implementing agency for the cooperative project; once a Department of Education is established the PMU will be placed under that body. A Project Director will be appointed to lead the PMU and will be responsible for overall project administration, general coordination, and quality control. Project implementation will be the responsibility of the Project Manager and Deputy Project Manager. These will work through the following operational sub-units: An Education Management Sub-unit (including procurement staff for other than construction materials procurement); a Financial Management Sub-unit; a Project Monitoring Sub-unit; and a Construction Management Sub-unit, including staff for construction materials procurement. (The latter is expected to be funded directly by AusAID.) The project is committed to employ East Timorese in key positions as soon as feasible. After the establishment of a Department of Education, it is expected that the Civil Service Commission, in consultation with UNTAET and East Timorese leadership, will detemine how East Timorese civil servants will be recruited to the PMU and for which posts. Details on the function and staffing of the Project Management Unit are found in Annex 2. At the district level implementation of the school rehabiliation works will be coordinated by the following PMU staff members, all East Timorese: * Supervising engineers (one per district); * Construction supervisors (average three per district); * District assistant accountants. The first two will be coordinated by the Construction Management Sub-Unit; the third by the Financial Management Sub-unit. A Project Operations manual including guidelines for the implementation of activities under five project components will be created by the PMU prior to the beginning of project disbursement. Accounting, Reporting, Auditing, and Monitoring Arrangements. TFET funds would be disbursed into a Special Account (SA) in a commercial bank acceptable to the IDA, which would be managed UNTAET through the PMU. The PMU would be responsible for: (a) preparing quarterly reports would include project financial statements, a progress report on actual physical and financial progress in project execution, and procurement management reports; (b) conducting the midterm review; and (c) contracting annual and concurrent audits of the Project, conducted by external, independent auditors. The monitoring and reporting arrangements would include parts of the school rehabilitation component covered -13 -

18 by both UNICEF and the Trust Fund. The PMU will also be responsible the design and implementation of a computerized financial management system that would enhance the project's financial management and overall implementation capacity. This system will be operational by December 31, D. Project Rationale 1. Project alternatives considered and reasons for rejection: A number of alternatives associated with education quality, access, and management as well as other education levels were considered. Two alternatives were considered for addressing the devastated infrastructure. In one alternative, every effort would be directed towards the rapid construction of new schools. In another model, efforts would be divided between new school construction and rehabilitation of existing schools. Both of these alternatives were rejected under the consideration that the SSRP project will have a limited quantity of material, logistical, human, and financial resources to manage. Given that the primary objective for East Timor is to give as many children as possible the opportunity to resume their educational programs at the start of the upcoming school year, any distraction or diversion of resources would be inappropriate and neglectful. Alternatives for rehabilitating schools for the start of the school year included: (a) establishment of a completely bottom-up, local school-driven model for determining rehabilitation needs and resources; and (b) implementation of a entirely top-down, externally contracted model of school rehabilitation in order to ensure effective control at the national level. The fully bottom-up alternative was rejected based on the evaluation of capacity at the school and system level that indicated that school directors are not yet politically or technically capable of adequately expressing and rapidly attaining their needs for school inputs, repair needs, or equipment requirements. Moreover, there is no local supply of either engineering services nor building material and furniture. On the other hand, centralized management and control, using expatriate technical staff and builders, would further preclude school directors and communities from taking control and effectively ensuring the best interests of the school and its children. Moreover, it would eliminate any possibility of local ownership and would reduce incentives for participation. For these reasons, a more integrated form of project implementation that includes both top-down and bottom-up methods was selected. 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). Latest Supervision Sector Issue Project : L : X u (PSR) Ratings (Bank-financed proects Implementation Development Bank-financed Progress (IP) Objective (DO) Communicty involvement and East Timor Community S S decision-making. Empowerment Project. Use of Local Contractors. East Timor Small Enterprise S S Project. Emergency readiness efforts. UNICEF. S S Use of picture books for initial literacy Papua New Guinea. S S and numberacy. only) -14 -

19 School mapping, closing redundant Indonesia Basic Education S S schools, school building renovation. Projects. Other development agencies IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) 3. Lessons learned and reflected in the project design: The various components and operating philosophies have been tried in and been successful in various other World Bank-financed projects. First, the use of fundamental quality level standards as a means for making possible a higher quality of leaming in an equitable manner has been successfully applied in 6 projects around the world. Most recently, it is being used in the US$1.3 billion Fundescola Program in Brazil, financed by the World Bank. Second, the use of a school-level survey by the project has been shown to be necessary in successfully identifying construction material needs. Past projects that have relied upon the normal channels of education offices at the national and district levels have proven incapable of targeting interventions needed to the right schools. Third, the use of direct transfers to school community for small repairs and improvements has been shown effective when there is involvement of the school and its community. Fourth, the use of adequate and rigorous technical specifications when procuring furniture and equipment has proven fundamental in guaranteeing adequate quality. These specifications were difficult to elaborate according to international norms, but once done they can be used in a wide variety of situations. Finally, coordinating donor assistance for all phases of the project ensures more efficient and effective use of funds. Explicit understandings have been reached among the principal donors associated with school rehabilitation to focus assistance according to comparative advantage to achieve synergy through economies of scale. 4. Indications of borrower commitment and ownership: The Project is an integral part of the East Timor School System Revitalization Program, which constitutes UJNTAET's education program. Commitment by UNTAET is therefore the strongest possible. In addition, CNRT, other UN agencies and NGOs, all of which participated in its formulation, support the Program and are committed to its execution. In other words, the process by which the actions to be financed by the Project were decided was highly participatory and guarantees ownership and commitment. 5. Value added of Bank support in this project: The value added of Bank (IDA) support for this Project goes far beyond the financial resources it is providing. Other IDA financed projects have extensive experience in defining and implementing minimum standards and in developing school autonomy through small grants. This institutional knowledge, available both at the IDA and in these Projects' implementation units in Brazil, has been important avoiding the repetition of errors and inducing the repetition of successes. IDA flexibility in approving funds quickly is also important, given that this is a most urgent Project. Would this project have to go through the normal channels of multilateral or bilateral funding, it

20 would begin far too late for any of its objectives to be achieved. E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): * Cost benefit NPV=US$ million; ERR= % (see Annex 4) O Cost effectiveness O Other (specify) The usual economic assessment methodology relies upon a household survey to provide data to determine private rates of return to education, usually according to a log-linear equation estimated by OLS or some other equivalent procedure. This generates a private income stream that can then be combined with project costs to generate a social income stream from which internal rates of return may be calculated. This cannot be done for East Timor as there are no household surveys available. Even if there were, the economic structure has so thoroughly changed that they would be clearly out of date. Nonetheless, using historical data for East Timor student flows from Indonesia, using estimates of project benefits from similar countries, and rates-of-return to schooling, also based upon Indonesian studies, it is possible to carry out a suggestive economic analysis. The starting point of ESRP's economic analysis is the fact that historically low enrollment rates and high dropout rates have produced low educational attainment rates. These, in turn, resulted in a high loss of potential labor and agricultural productivity. Low enrollment rates are a consequence of poor school placement in rural communities, and a generalized low demand for education given its poor performance. The high dropout rates are related to high repetition rates, which are documented in the historic data. The fact that 12 years of enrollment are necessary to produce one 6th grade graduate, instead of the 6 that would be necessary if the flow of students were ideal. ESRP's main weapon against low enrollment rates, and high repetition and dropout rates, is the greater participation in and ownership of schools by parents and teachers. The other components in the Project are aimed primarily at creating the environment where the greater levels of participation and ownership are more likely. The two variables that will determine how much repetition and dropout decreases are: (i) the percentage of schools raised up to Basic Operational Level, and (ii) the degree of participation of the community and teachers in school improvement. The cost-benefit analysis of ESRP was undertaken in the following manner: (i) a student enrollment and completion flow model was estimated based upon student flows in other participatory systems in countries with similar poverty levels; (ii) a historical trend was applied to project base on how the flow of students would look without the project; (iii) the impact of the project on this flow was estimated using the two key variables described above; (iv) the difference between the two flows was taken; (v) given this difference, the savings in enrollment and increases in academic achievement were calculated; (vi) these savings and increases were converted into two monetary flows up to the year 2012 using per student costs and average rates-of-return to schooling based upon Indonesia data; and finally (vii) the internal rates of return for each of the two flows were calculated for five to ten and 15 years of project life. Even under the most unfortunate and bleak of scenarios, the social rate of return after 15 years is quite satisfactory. The reasons for these results is the dismal state of the flow of students in East Timor prior to the project. High repetition rates make each student cost from twice to three times what he might under a perfect flow. The consequence is that even small increases in approval rates can have large effects

21 2. Financial (see Annex 5): NPV=US$ million; FRR = % (see Annex 4) ESRP is not a loan. It will never be repaid and none of its components are reimbursable. The schools it will pay for, once built, will have to be staffed and run and this will have an impact on the US$ million annual budget expected by East Timor once it becomes an independent state. However, providing education is one of the main functions of any national government. Because the project will finance school rehabilitation via grants to school councils, there is no public cost recovery, although though the contribution to economic life in the communities associated with the rehabilitated school will provide both short term and long term economic benefits. As with the Community Empowerment Project, the fiscal impact of financing school rehabilitation is minimized because high rates of transparency and ownership will minimize leakage and because school councils will be responsible for managing and maintaining the schools that they reform. Because all project costs will be 100% financed from international grant funds, there are no fiscal or deadweight costs from the project for the Government of East Timor. Most national level financial issues are irrelevant for this project. Project accounting and management will meet all WB and UN standards. As discussed in the Project Management and Administration Component description, a specialized accounting specialist familiar with both systems will be included in the PMU in order to prepare the relevant financial management reports. Financial controls may be linked to the CEP, through which all transfers of funding and all payments could be channeled. Nonetheless, it is expected that the most effective controls will come from the school councils themselves. Councils that do not comply with project guidelines will be given a period to remedy deficits, after which they will be dropped by the project. Fiscal Impact: N/A. 3. Technical: The Technical Assessment focuses on the three, most costly items of the project: Infrastructure, Furniture., and Textbooks. Infrastructure. Apart from the few schools that were built by the Portuguese and that are now considerably more than 25 years old, most primary schools have been very poorly built, have had little or no maintenance and have in some cases been located far from the centers of population that they should serve. Redundant primary schools is another problem that has resulted from the way that school construction was planned and financed under Indonesian rule. Some schools are also redundant because they were built to serve communities (brought in under the Indonesian 'transmigrasi' policy) that do not now exist. A further problem in that, in some geographic locations, landowners may be refusing to allow school buildings to be used by the public because they claim that the schools were built by the Indonesians on land that is subject to a title dispute. These problems have been exacerbated by the recent disturbances that damaged or destroyed many schools and caused the movement of large numbers of the population. The key technical issues here is how to carry out basic renovations to enough schools to accommodate all pupils by October 2000 and then how to make fundamental improvements to the quality of primary schools in the medium to long term

22 Surveys of a approximately 12 percent of the schools in East Timor (148) were carried out during project preparation by a 20-person team of qualified Timorese civil engineers and architects to ascertain which schools can be rehabilitated, which can be upgraded to a higher standard than the original standard, and which schools would need to be demolished and replaced. The results of this survey formed the basis of all project estimates for the first two components. Of East Timor's 630 non-redundant primary, 115 junior secondary, and 15 senior secondary schools, comprising approximately 4050 classrooms, approximately 3,240 (or 80%) require some degree of rehabilitation. An estimated total of 1,124 classrooms have been completely destroyed or damaged beyond repair. Consequently, ESRP will concentrate on the rehabilitation of approximately 2100 classrooms. Furniture. At present, the vast majority of school have no furniture at all or if they do, it is insufficient and in disrepair. It is important that pupils have furniture that fits them and is comfortable in order that they can concentrate on what is happening in the classroom. It is also important that the furniture is robust enough to stand up to rough treatment. There are two main technical issues with regard to the supply of furniture to schools: (a) the supply of sufficient furniture to ensure that all schools that can open in October 2000 will be able to function at a basic operational level, and (b) the supply of furniture in the long-term that is well designed, robust and can be manufactured and repaired locally. Consequently, given the objective of ESRP, the project will source and purchase in bulk a sufficient quantity of furniture for the schools that are to open during the next school year starting in October The furniture will have to be very inexpensive but should be good enough to last until locally made furniture can be produced. A general conclusion of the technical analysis during project preparation is that this emergency supply of school furniture will be manufactured from synthetic material and will be imported. In subsequent projects in the SSRP program, furniture to replace the imported furniture should be easy to make, adapted to local conditions and educational/pedagogical requirements, and robust. Designs that fulfill these criteria have been developed by UNESCO and have been used successfully in Asia and Africa, or could be developed locally by design teams and consultants. Skilled carpenters should be available in most parts of the country to make and repair this furniture, and timber for the furniture could be donated by communities as part of their participation in the development of the schools. If timber is not available, it will have to be supplied by the project. Textbooks. Even though language continues to be a complex issue for East Timor, discussions among Timorese leaders, UNTAET-CNRT officials, and IDA technical staff concluded with an agreement that Bahasa Indonesian textbooks would be used for instruction in the upcoming two-three school years (except for primary grade one, which will primarily use picture books). The publisher for official primary school books in Indonesia, Balai Pustaka, was contacted and agreed to publish an East Timor edition (possibly with a new East Timorese cover and introduction). An estimate of production time is six weeks. There are at least seven publishers in Indonesia who publish textbooks for the secondary level of education. With the facilitation of an IDA consultancy, UNTAET and Timorese educators will be reviewing both primary and secondary level textbooks to select titles to be purchased. The project preparation team obtained copies of most of the titles for examination during this review process. Non-Indonesian books will need to be selected for teaching English and Portuguese as subjects in secondary schools. 4. Institutional: A Project Management Unit will be established in UNTAET to serve as the principal implementing agency for the project. As executing agent, the PMU will receive financing for project administration and execution. The PMU's main responsibilities will include administration of the financial resources of the project and financial oversight, management of all aspects of physical and financial implementation, - 18-

23 management of all TFET funded procurement and distribution activities, contracts management, analysis and approval of all school-based rehabilitation projects, definition of all tools and operating criteria, monitoring and evaluation to ensure project quality and effectiveness, coordination with district administrators and other projects, and in general operating as the IDA's counterpart. CGiven the need to rapidly start-up the ESRP project, during the initial project implementation period (a period of six to seven months) project management responsibilities will need to be contracted out to a management firm. This firm will have responsibility for all aspects of project management, and will set up a PMU structure capable of fulfilling all of the PMU's responsibilities listed above. It is expected that by Grant effectiveness, a PMU will be set up in UNTAET to assume the management responsibilities of the project. 4.1 Executing agencies: The project will be executed by the Governance and Public Administation Pillar of the United Nations Transitional Admininstation in East Timor (UNTAET). 4.2 Project management: The Emergency School Readiness project will be implemented by the Project Management UJnit, which will be established and maintained by the Governance and Public Administation Pillar of the United Nations Transitional Authority (UNTAET). At the point that UNTAET establishes ministries and/or departments for the sectoral management, the PMU will work under the ministry or department of education. For the appointment of key PMU staff, the qualifications, experience and terms of reference, short list of candidates, and recommendations will be furnished to the IDA for no-objection. In the period preceding the establishment of a department of education, all line functions in the PMU will be exercised by UNTAET/GPA staff. In some cases, where highly technical expertise is required (finanical management or school building design) private firms or individuals will be constracted to provide the expertise, with the provision that they mentor East Timorese in the given specialties. After the establishment of a ministry or department of education, it is expected that the Civil Service Commission, in consultation with UNTAET and East Timorese leadership, will determine which posts and in which manner, East Timorese staff would be recruited into key positions in the PMU. Project funds will be allocated to cover capacity building for East Timorese staff members whose expertise needs strengthening. 4.3 Procurement issues: Given the emergency nature of this project, procurment will be under heavy time pressure. Also, given the devastation of the East Timorese infrastructure, very few goods and materials are available in the local market. For these reason, most procurement for construction materials and school materials and equipment (books and desks) will be done through international shopping (construction materials) or direct contracting (books). Also, given the need for quick procurement of construction materials, a partner organization, UNICEF, will use its already established pipelines to provide roofing materials and tools (under parallel funding arrangements). Other construction materials arrrangements will be managed by a construction firm, which is familiar with suppliers in the region and IDA procurement regulations. 4.4 Financial management issues: The Project's Chief Financial Officer will have the overall responsibilities for establishing adequate procedures for accounting, internal controls and periodic reporting of project expenditures order to ensure that (i) the project funds flow where required in a systematic and timely fashion; (ii) that the funds are spent for purposes eligible under the Project; (iii) that these are properly recorded, documented and reported periodically to UNTAET and IDA, and (iv) all project expenditures are audited by an external independent auditors as required under the Trust Fund Grant Agreement. Past IDA experience in East

24 Timor has revealed difficulties in locating within UJNTAET financial managers having time for the project and the appropriate level expertise and familiarity with IDA financial management regulations. Thus, the project is expected to contract an outside firm or consultant as the Chief Financial Office, at least initially. During the project the firm or consultant will transfer financical management expertise to local financial managers. Also, since district and subdistrict government offices currently do not have adequate financial management capacity, the project will place well trained project accountants to handle disbursement and record keeping for the school rehabilitation sub-grants, under the guidance of the Chief Financial Officer. 5. Environmental: Environmental Category: C (Not Required) 5.1 Summarize the steps undertaken for environrnental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. There are no major environmental risks associated with this project. Individual project activities are small and do not involve environmentally damaging technologies. Very minor environmental risks include those normally associated with community-based rehabilitation. The most relevant examples is that of landfill associated with the disposal of construction debris. This will be mitigated through the project's collaboration with the Peace Keeping Force, who has agreed to assist in the removal from school grounds, and eventual disposal of building rubble from demolished schools. 5.2 What are the main features of the EMP and are they adequate? N/A. 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: N/A. 5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted? N/A. 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP? N/A. 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. ESRP's ability to achieve its objectives may be affected, both positively and negatively, by identified social factors. Three of the most positive factors at play are the solid political support provided by UNTAET-CNRT basic education, the brand-new and many-faceted East Timorese conmmitmento education, and parents' increased demand for schooling for their children as evidenced by record enrollments in first grade during the current transition year and especially considering the serious economic constraints East Timor families are facing. Several social factors, however, may still deter people from taking advantage of the newly rehabilitated and equipped schools. The first factor is that even after renovating thousands of classrooms, many families will still be beset by an insufficient supply of primary school places, particularly in parts of the country devastated by militia groups. This under-supply will mean that many schools will need to operate on a dual-shift schedule--a first for East Timor. A second issue is children's (and parents') discouragement with the education system associated with the loss of the school year (requiring that all students will need to repeat, in the upcoming school year, the grade level they attended in the current year. The third factor has to due with persistent complications

25 resulting from the post-independence conflict. These would include an continuing instability in the teaching force, returning refugees, internal migration, and other related issues. ESRP will address these negative factors by rationalizing and maximizing the use of school facilities, especially in devastated areas and in rural and dispersed areas; and (b) by implementing a communication strategy aimed at both communicating the transitional education strategy and by mobilizing families to participate in education. In addition, the design of the school rehabilitation component will create in parents and teachers a sense of ownership of the schools that heretofore had not existed. Improving the closeness between schools and their communities have been shown repeatedly in countries throughout the world to improve school participation and completion rates, especially of children from poor families. There will be no land acquisition in the ESRP as all rehabilitation work will be undertaken on existing school buildings located on existing school sites. 6.2 Participatory Approach: How are key stakeholders participating in the project? a. Beneficiaries: Beneficiaries Identification/Preparation Implementation Operation Students IS IS + CON Teachers IS + CON IS + CON IS + CON Parent and IS + CON IS + CON IS + CON+COL Community Organizations b. Primary Stakeholders: Stakeholders Identification/Preparation Implementation Operation UNTAET IS+ CON IS + CON IS + CON + COL CNRT IS+ CON IS + CON IS + CON + COL DONORS IS +CON COL IS + CON+COL (IS, Information Sharing; CON, Consultation; COL, Collaboration) This project draws on participatory approaches. At the macro-level, despite the six-week preparation period, key stakeholders were consulted and most have been involved in different aspects of the project's design. These include UNTAET-CNRT education staff, UNICEF staff and consultants, international and national NGOs, the church, CNRT's national and regional offices, and the UNTAET-CNRT education council. A key series of consultations took place between project staff and CNRT throughout the preparation process. Project methodologies call for additional consultations at the local or school-level. At the micro level, consultations have been less structured, although fairly regular. The IDA project preparation team, together with UNTAET and East Timorese representatives, have visited dozens of

26 schools and conduced numerous focus groups with teachers, parents, and local education leadership. These consultations have led to (a) improvements in the design of the project that have made it more practical and more school-based, and (b) greater involvement of Timorese engineers and architects. Other important stakeholders for this project include many representatives of the donor community. Consultations have been held with the key bilaterals, including Portugal, Australia, and the United States, with Peace Keeping Force officers, and with other donors including the Gulbenkian Foundation and local NGOs. The objective of this consultation was to agree on a coordinated program of financial and technical assistance from development agencies and NGOs. This World Bank-facilitated consultation process resulted in an agreement over a detailed, year UNTAET work plan for education in East Timor that includes key reforms recommended for the full transitional period to self-government (at least two years). 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? The project will shift much of the responsibility for school rehabilitation to the school and its community. School rehabilitation planning will be conducted by the school principal and a school council (if one exists) or a school rehabiliation committee (if not), which will include representatives of the community's main social organizations (church groups, women's groups, local NGOs, etc.), constituted according to project guidelines. These councils or committees will sign the rehabilitation sub-grant agreement ("participation agreement") as witnesses. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? The school councils or school rehabilitation committees will act as watchdogs to make sure that the school rehabilitation grants are used for their intended purposes. In addition, the rehabilitation participation agreement and accompanying checklist of rehabilitation plans, budget and construction team members, will be posted on the school grounds so that all community members can see the details of the agreement. Finally, during the school rehabilitation efforts, project construction supervisors will visit the construction sites regularly to inspect progress and ascertain adherence to project standards and agreed upon procedures. Any school's deviation from project standards in terms of construction quality and transparency of the process will mean the delay of sub-grant disbursement to that school until the irregularity is dealt with. 6.5 How will the project monitor performance in terms of social development outcomes? T his will be managed through the use of the above mentioned construction supervisors, who will be coordinated by the Supervising Engineers in each district. In addition, there will be a Project Monitoring Unit, which will keep records of social development progress and monitor project implementation indicators (see Annex 2). 7. Safeguard Policies: 7.1 Do any of the following safeguard policies apply to the roject? p6a p ~ p g ^ -= Applicability L Environmental Assessment (OP 4.01, BP GP 4.01) C Yes N No El Natural habitats (OP 4.04, BP 4.04, GP 4.04) El Yes X No El Forestry (OP 4.36, GP 4.36) D Yes Z No El Pest Management (OP 4.09) El Yes Z No El Cultural Property lopn 11.03) E Yes 1 No El Indigenous Peoples (OD 4.20) El Yes 1 No

27 El Involuntary Resettlement (OD 4.30 C Safety of Dams (OP BP 4.37) El Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) ED Projects in Disputed Areas (OP BP 7.60 GP 7.60E a Yes [K No = Yes 1 No EI Yes 3 No l Yes Z No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. N/A. F. Sustainability and Risks 1. Sustainability: The project is designed to be mostly completed during the UNTAET's governance. Program costs are expected to drop off significantly by the end of the first six months of project implementation. Nonetheless, sustainability is an important issue. The primary objective of this project is to make sure East Timor children do not sacrifice any more years of education. To do this, project will invest in raising the quality of dilapidated schools (those that are still structurally sound) to a functional level. This investment does not need to be sustained for these structures since they will be upgraded in subsequent projects under SSRP. What does need to be sustained is headmaster and community participation in the process of school repair and maintenance. This project is clearly designed to promote this type of participatory behavior and ownership. In subsequent projects, a school grant will be devolved to each school with the objective of facilitating school maintenance. This grant, accompanied by the experience the school community gains under SSRP-2, will help guarantee that the investments made in school improvement will be sustained. 2. Critical Risks (reflecting assumptions in the fourth column of Annex 1): Risk Risk Rating Risk Minimization Measure From Outputs to Objective Complicated coordination between M UNTAET/CNRT's PMU will help monitor and agencies involved in education. coordinate programs across the agencies. Schools may not be ready by start of S Flexible procurement procedures and project shcool year. design. School councils/principals may not be S District offices work to strengthen school capable of developing school rehab plans leadership, but will take over a school rehab and/or organizing the rehab activities. program if necessary; may invite PKF to assist community. Lack of ownership by the Timorese H Involve Timorese as much as possible in the people. execution of the project. Tight procurement and distribution S Involve many stakeholders, including PKF, in schedule may delay educational materials, the distribution system. construction materials and furniture. UNICEF, the project's partner M The allocation of supplementary funds from organization, may not be able to provide TFET has been agreed to, in case UNICEF all of the required roofing materials on materials are not sufficient to project needs. time. From Components to Outputs Overall Risk Rating Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) S

28 Any undertaking in a situation as volatile and uncertain as the one in East Timor is fraught with risk. With 10% of the population still refugees, an economy in shambles and the country's first free and fair election around the corner, any undertaking in East Timor must count on a high level of risk. In addition, there are multiple actors involved in providing educational services and funding, from multilateral and bilateral organizations to NGOs. Within this context, however, the Project is using operating methods that IDA is experienced in and have been tried and tested in many different contexts around the world. School construction and equipment, the main components of the project, are straightforward actions well known by the Bank. In other words, the project is in itself a low risk project, albeit in a high-risk environment. Specific risks are as follows: I. Complicated levels of coordination between agencies involved in education creates one of the most serious risks in this Project. UNTAET, UNICEF, CNRT, the PKF, the Portuguese government and numerous NGOs are all involved in school construction or renovation in some way or another. If they do not coordinate their efforts, these institutions may find themselves working at cross-purposes. The existence of the East Timor School System Revitalization Program that all these institutions participate in and agree to, such as through the cooperative school rehabilitation program, minimizes this risk but does not eliminate it. 2. Another risk is the school calendar. It is very important that as many schools as possible be ready for use and fulfill minimum standards by October, when classes start. Any delays beyond this date will hinder, rather than help, education in the coming school year. This risk is reduced by adequate and flexible bidding procedures capable of contracting as fast as possible the delivery of furniture and equipment. An important means of starting the flow of materials for reroofing is to work with UNICEF, which already has such materials in the pipeline. However, there is a risk that UNICEF will not obtain enough funding to cover roofing materials for all school buildings scheduled to receive them. In this case, the project will seek supplementary funding from TFET. 3. A third risk concerns the current decision on grade repetition. Almost all of this year's students will be asked to repeat the same grade next year, since lacking books and a formal program of instruction, it is thought that they will not be prepared to advance-to the next grade. This will mean a double intake into grade one next year, a bulge with will pass through the system for the next twelve years, creating many difficulties. UNTAET/CNRT authorities need to consider the experience of other countries and their decisions to grant automatic promotion because of school-year disruptions similar to those in East Timor. 4. A fourth risk, affecting the school rehabilitation component is the possibility that school councils and or principals will be unable to develop a rehabilitation plan and/or organize local construction workers. District education managers must work on strengthening school/community leadership where necessary. Where leadership does not develop in time, district managers, with help from subdistrict committee members, can take over the organization of rehabilitation activities at a school. Alternatively, the Peace Keeping Forces in a district can be invited to help. 5. Perhaps the most serious risk is lack of ownership, not by the implementing agency, UNTAET, but by the Timorese people. It is true that the school rehabilitation work will be basically driven by the school heads and community councils, with workers being recruited from the community. Still, major roles will be taken by UNTAET international staff and expatriate contractors. Where ever possible, e.g., in the PMU, tasks forces, and steering committees, East Timorese nationals should be involved or in charge. Also, any time foreign consultants are recruited, they should paired within an East Timorese counterpart

29 6. Concerning teaching-learning materials, the schedule for procurement for the school year 2000/1 is extremely tight, though feasible. Slippage at any stage of the process will almost certainly mean books will not be in schools at the beginning of the school year. Thus the monitoring process and observation of the benchmarks will be critical. Teachers of Grade I students will almost certainly find the use and adaptation of non-textual materials challenging, though this could be alleviated. There is little experience of book evaluation procedures amongst the East Timorese teachers, and it may even be difficult to find suitably qualified teachers for the secondary levels, particularly in the sciences. The number of organizations and" voluntary" nature of the proposed distribution system will mean that the planning and logistics of the distribution process must be worked out well by UNTAET/CNRT (through its PMU) in advance with guarantees of participation and performance during the month of September. 3. Possible Controversial Aspects: The language of instruction: The CNRT favors the use of Portuguese. Other groups favor different languages. The project provides books in the language currently understood by most students, Bahasa Indonesia, as a interim solution. Pressure in mounting on/by CNRT to move to Portuguese as soon as possible. Most outside observers favor widespread consultations before the formalization of a school language policy. G. Main Loan Conditions 1. Effectiveness Condition (A) (B) (C) (D) The Interim Education Authority has been established; The Project Management Unit has been established; An action plan for the financial management of the Project, acceptable to the Trustee, has been adopted; and An action plan for procurement under the Project, acceptable to the Trustee, has been adopted. 2. Other [classify according to covenant types used in the Legal Agreements.] a. In carrying out Component 1 a of the Project(sub-grants for school rehabilitation), the Recipient shall ensure that: i. A Participation Agreement, acceptable to the Trustee, has been entered into between the Project Manager and the school principal or District Education Officer or such other person as shall be agreed with the Trustee; 2. A sub-grant to be financed out of the proceeds of the Grant shall not exceed the sum of $10,000 (amount being subject to change from time to time as determined by Trustee, in consultation with the Recipient); 3. A sub-grant shall be used to finance expenditures for the acquisition of labor and materials for the rehabilitation of school buildings. b. In, carrying out Component 1 c of the Project, the Recipient shall take all measures to avoid the acquisition of land or assets of urban or rural dwellers and to avoid the displacement of said dwellers. c. The Recipient shall: 1. maintain policies and procedures adequate to enable it to monitor progress on an ongoing basic according to the following indicators: (a) Primary and junior secondary students enrolled in classrooms meeting basic operational

30 standard: by October 31, 2000, more than 50%; by project completion, more than 90%. (b) Student with textbooks: by October 31, 2000, more than 80%; by project completion, more than 95%. (c) Classroom rehabilitated to basic operational standard: by October 31, 2000, more than 1200; by project completion, more than (d) School mapping survey completed, by project completion. (e) New prototype school completed, by project completion. 2. Prepare and furnish to the Trustee on or about December 15, 2000 a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph 1 of this section, setting out measures recommended to ensure the efficient carrying out of the project during the period following such date. 3. Review with the Trustee, by January 15, 2001, or such later date as the Trustee shall request, the report referred in paragraph 2 of this section, and thereafter, take all measures to ensure the effective completion of the project. H. Readiness for Implementation E 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. K 1. b) Not applicable The procurement documents for the first year's activities are complete and ready for the start of project implementation The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. [ 4. The following items are lacking and are discussed under loan conditions (Section G): 1. Compliance with Bank Policies Z 1. This project complies with all applicable Bank policies. C 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. H. Dean Nielsen Alan Ruby Klaus Rohland Team Leader Sector Manager/Director Country Manager/Director Robin S. Horn Team Leader - LCSHD

31 Annex 1: Project Design Summary EAST TIMOR: TP-Emergency School Readiness Project Key Performance Hierarchy of Objectives Indicators Monitoring & Evaluation Critical Assumptions Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) Rebuild East Timor's Increase in the educational UNTAET/CNRT Surveys. Country makes smooth education system. attainment of the population. transition to self rule. Project Development Outcome / Impact Project reports: (from Objective to Goal) Objective: Indicators: Provide emergency schools Provide functioning UNTAET-CNRT/UNICEF/P UNTAET-CNRT and the new and furniture for the school emergency schools meeting MU reports. government continue year beginning in October basic operational level criteria commitment to education for to 75% of East Timorese all. children wishing to enroll. Provide primary and junior secondary school children with access to schools meeting a basic operational level of quality

32 KeyPrfmac AHiearchy of Qbj;c;ives i;dicators Moniring 00 & Evaluation Critical Assumptions Output from each Output Indicators: Project reports: (from Outputs to Objective) component: 1. Maximum number of 1. I Community repair and UNTAET-CNRT/UNICEF/P East Timorese people believe schools raised to basic roofing for damaged or MU reports. in project and are involved to operational level by October deteriorated school buildings. a great degree in project 2000 execution. 1.2 Emergency furniture. Off the shelf purchase of plastic Disparate players (PKF, chairs and desks at low prices. NGOs, UJNTAET-CNRT district administrations) pitch 1.3 Emergency textbooks in to make sure books, bought from Indonesian furniture, equipment, and publishers for 160 thousand building material is delivered students. 1.4 Emergency picture books bought for 1 st grade students. 2. Basic operational furniture 2.1 All students have desks ULNTAET-CNRT/PMU provided to all schools. and chairs. reports. 2.2 All teachers have desks, chairs, and cupboard. 2.3 All schools have blackboards. to the schools as soon as they arrive in the warehouses. Plentiful supply of East Timorese local construction workers, builders, and carpenters to work with each school being rehabilitated. Availability of technical staff (especially engineers and architects) to specifh civil works and to supervise local workers. Timely processing of procurement actions and delivery of inputs including UNICEF roofing materials to the warehouses in Dili and the districts. The PMU will manage the flow of fnpds to finance rehabilitation grants

33 3. Teaching-learning material 3.1 All students have UNTAET-CNRT/PMU available to all students. textbooks. reports. 3.2 All teachers have teachers' guides. 4. Social mobilization 4.1 Social mobilization UNTAET-CNRT/PMU Communities participate. campaign. campaign completed. reports. 5. Policy studies. 5.1 Policy studies executed. UNTAET-CNRT/PMU reports 6. PMU operational 6.1 PMU staffed and UNTAET-CNRT/PMU reports operational. 6.2 Construction Management Unit (firm) operational. Project Components I Inputs: (budget for each Project reports: (from Components to Sub-components: component) Outputs) 1. Rebuilding infrastructure US$ 8.75 million A. Emergency re-roofing. B. Community Repair. C. Emergency off the shelf acquisition. D. Destroyed building demolition. E. Building 4 prototype schools. 2. Providing teaching-learning US$ 3.2 million materials. 3. Social mobilization and US$0.15 million communications. 4. Support for Policy US$0.5 Development. 5. Management and US$1.3 million Implementation Support

34 Annex 2: Project Description EAST TIMOR: TP-Emergency School Readiness Project By Component: Project Component 1 - US$8.75 million Rebuilding school physical infrastructure Objectives: The objective of this component is to rehabilitate 2100 classrooms, and provide furniture for 2500 classrooms, and design and build prototype new schools. The project will operate through the school system and will involve local workers whenever possible. For the school inspections, local engineers will be hired to conduct damage assessments and determine needs for materials. The damage assessments will be presented to the central and district offices of UNTAET/CNRT (eventually the Department of Education). Using these assessments and other data (such as projected school enrollments) the district offices will work with subdistrict committee members in determining which school buildings to rehabilitate. Building materials and tools will be procured by UNICEF (mainly roofing materials and tools) and by the Project, the latter through a procurement manager attached to the PMU. Internationally procured materials will be received at various East Timorese ports and shipped to district depots by the suppliers, or, if that is not possible, by PMU-arranged shipping companies or international agencies (WFP or the Peace Keeping Forces). Funds for shipment of materials from district depots to schools will be included in the school rehabilitation subgrant. The school may choose to hire transportation with funds from the subgrant, or may sign over their funds for this purpose to the project for use of a project truck. Details are to be included in the Project Operations Manual. Rehabilitation will be carried out by local construction crews recruited and coordinated by a school principal or, if not yet appointed, the District Education Officer or such other person as agreed with the Trustee, acting together with a school council, if constituted, or if not, a school rehabilitation committee created according to project guidelines. The above-referenced team of engineers will help the school principal and council/committee fill out the "rehabilitation checklist" that specifies the work to be done at the school and the construction materials needed for that work. The principal will then attach this checklist to a "participation agreement," which he/she signs and gets witnessed by the school council or rehabilitation committee. The participation agreement will be submitted to the District Office of the PMU, where it will be reviewed and approved by the supervising engineer and accountant. A sample of agreements will be forwarded to the central PMU for review. Once the "participation agreement" is countersigned by the PMU, the principal or authorized representative will have the right to receive from the project a rehabilitation grant to finance local construction crews and agreed materials (e.g., sand and gravel) available locally. The countersigned "participation agreement" will also authorize the school to "order," from the district depot, the materials specified on the rehabilitation checklist. This rehabilitation effort will be coordinated at the district level by an East Timorese "supervising engineer," supported by an expatriate district construction consultant and assisted by 2-3 full-time engineering assistants, depending on the number of schools scheduled for rehabilitation per district

35 Startup Phase School rehabilitation will follow the following sequence: 1. Engineers conduct damage assessment. 2.. A preliminary list of materials and costs is determined. 3. Schools are approved for rehabilitation. 4. Rehabilitation packages are designed (for roofs, for windows, etc.). 5. Materials and labor skill, and labor time (person-days) are established for each package. 6. Standardized rehabilitation checklist is designed based upon item 5. Checklist indicates the specific types of repair work that the subgrant could finance, the rehabilitation packages approved for each type of repair, and the estimated cost for each package. These rehabilitation packages would include a materials component, a labor component, and a transport component for getting building materials directly to the repair site. 7. The Participation Agreement model is designed. The Participation Agreement includes a section that specifies inspection benchmarks. 8. Finally, a standardized inspection report is designed for use by the project engineers during benchmark inspections. Full Implementation Phase 1. With help project engineer, the school principal or equivalent (with school council or school rehabilitation commnittee) fills out school rehabilitation checklist. 2. Participation Agreement form is filled out, and checklist attached. Both are signed by the Project Engineer and the school principal or equivalent, and witnessed by school council or school rehabilitation committee. 3. Participation Agreement, with annexed checklist, submitted to the District Office of the PMU where it is reviewed and approved by the Supervising Engineer and Accountant. (A sample of agreements will be reviewed by the central PMU office.) 4. Principal or equivalent now authorized to pick up materials from the district warehouse or to purchase locally available materials. 5. Principal or equivalent also authorized to pick up the first installment of the school rehabilitation subgrant. This installment has two components: (i) funds for the local purchase, if any, and transportation of materials to the site (the Principal/equivalent can sign the transportation funds over to the project engineers, who will arrange the delivery of materials using project vehicles), and (ii) funds for the initial contracting and mobilization of workers. 6. Principal/equivalent now prepares and displays the School Rehabilitation Information Poster. This

36 includes information on the name and code of the school, the name of the principal and members of the school council or rehabilitation committee, the amount of the subgrant, the budget, the workplan, subgrant installments and inspection benchmarks, fee scale for workers, and schedule. Once workers are hired, their names are added to the poster. 7. The principal/equivalent can now hire the workers or local contractors, and supervises the work. 8. Once the principal/equivalent believes the rehabilitation benchmark (specified on the participation agreement) is reached, he or she solicits a visit from a project engineer for the inspection. 9. The project engineer fills out and signs the standardized inspection report and includes photographs of the completed work. 10. The principal/equivalent takes the signed inspection report to the Engineering Consultant and Project Assistant Accountant for approval and signatures. 11. The signed inspection reports authorizes the principal/equivalent to withdraw additional installments of the subgrant. The final installment is received after the final inspection. Furniture: The PMU, acting under the authority of the Education Office, will, with the help of the procurement agent, procure school furniture (student desks) from the international market and arrange for shipment to (and, when necessary, local assembly at) the school sites. Teachers' furniture (desk, chair, lockable cabinet), office furniture and blackboards will be produced by Timorese craftsmen, preferably and to the extent possible, at the district level (design to be agreed upon by the stakeholders). The same distribution networks as used for school rehabilitation materials can be used for furniture. Prototype new schools: Two kinds of prototype schools will be designed and constructed. The first is conceived as a resource school to be built in subdistrict centers. It would basically serve as a junior secondary school, but could be double shifted to cover primary school students, and would also serve as a meeting place and resource center for both primary and junior secondary education. It is expected to contain 4 three classroom blocks and one library/office/meeting room block, plus restrooms. At least two of these building will be constructed during the project under the supervision of the project's Construction Management Unit, one in the highlands and one in the lowlands. Preliminary designs suggest the use of steel frames and roofs provided by international contractors plus "infill"(partitions, walls, floors, and ceilings) using local materials and contractors. The second prototype school would be a small, community school "module," consisting of three classrooms plus restrooms. This is the kind of module that could replace totally damaged buildings in primary and junior school complexes. At least two of these will be constructed during the project, using local contractors, also under the supervision of the Construction Management Unit. Project Component 2 - US$3.20 million Providing Teaching-Learning Materials Objectives: The objective of this component will be to provide all students and teachers in primary and secondary schools with textbooks and other learning-teaching materials, mostly in Bahasa Indonesia, to be used during the transition period to a new national curriculum. Students entering the first grade in October, 2000 will be given materials for literacy and numeracy that contain little or no textual material, so that teachers will be able to apply them against the linguistic base of their own choosing, be it a local language, Portuguese or Bahasa Indonesia. Textbook series for Grades 2 to 12 will be procured from

37 existing sources on a local shopping basis. New covers will be designed for the selected materials to reflect the interim nature of the books and to remove references to the Indonesian education system. A foreword will be written by a prominent East Timorese and inserted in each book. During the current transition period (school years , and ) textbooks created in Indonesia will be used in schools, except those for grade 1 (mostly picture books), which will be purchased on the international market. Committees of East Timorese educators, coordinated by INEA, will select the titles to be purchased from among those available from Indonesia (from other locations for grade 1). Books for the teaching of Bahasa Indonesia as a language and religion (grades 2-6) will not be included. New covers will be designed though a contest conducted by INEA and a local preface will be prepared for insertion in the books. INEA committees will also work on removing inappropriate materials from the imported books. The publisher of each recommended title will be offered a contract, written CIF for delivery to Educational Materials Warehouse in Dili. Pledges have been made by organizations in the country (PKF, WPF) for physical distribution to schools or district warehouses for further shipment to schools. Project Component 3 - US$ 0.15 million Social Mobilization and Communications Objectives: Revitalizing the education system in East Timor will require a substantial shift in perceptions, attitudes and behavior on the part of local leaders, teachers, principals, parents and students. Influencing these attitudes, encouraging participation and disseminating the reasons for and anticipated results of these changes are crucial to project implementation success as well as to the institutional sustainability and expansion of these new approaches across the country. An INEA task force will be appointed to oversee this project component and write its operational plan, with assistance from the Project Management Unit. Likely organizational strategies would be for the task force to seek the help of communications consultants (international and domestic) in designing and implementing the program. The task force will recommend to the PMU the hiring of groups and individuals to assist with production of materials, delivery of messages, organization of meetings and campaigns, and evaluation activities. Project Component 4 - US$0.50 million Support for Policy Development Objectives: This component provides financial and technical resources in support of policy development relevant to the revitalization of schools in East Timor. An essential subcomponent will be the development of a school mapping program, providing data and information to be used in informing decisions about placement of new schools. Funding will also be available in support of work in other priority policy areas as articulated by INEA, in the fonn of policy studies, workshops, short-term consultants or study tours. Project Component 5 - US$1.30 million Management and Implementation Support Objectives: The objective of this component is the establishment a Project Management Unit (PMIJ) within the Interim National Educational Authority capable of managing all aspects of project implementation at both the central and district levels. In addition, the PMU will be assist in the preparation of subsequent projects in the SSRP program

38 The Project Management Unit: Structure and Function The Project Management Unit will be report to the UNTAET/CNRT (and, when in place, the head of the Department of Education), which will have ultimate authority over project decisions and expenditures. The PMU's main responsibilities will include: (a) management of the financial resources of the project and financial accounting; (b) management of all aspects of physical implementation; (c) management of all procurement and distribution activities; (d) contracts management; (e) preparation of all school-based rehabilitation subgrants; (f) management of project monitoring and evaluation activities; (h) coordination with UNICEF, UNTAET district administrators, and other projects, such as the TFET-funded Community Empowerment Project. The head of the PMU will be the Project Director, who will have signature authority. Day-to-day project implementation will be the responsibility of a Project Manager and Deputy Manager. The Project Manager and Deputy Manager will be responsible for: (a) developing and managing the operational plan for the project; (b) coordinating the sub-units which will implement the project (see below); (c) maintaining a working relationship with other elements of UNTAET as needed to assure effective project implementation; and (d) coordinating work plans and school rehabilitation activities with UNICEF and other development agencies; and (e) maintaining a close working relationship with the IDA project supervision team for the ESRP. At the central level, the PMU will consist of the following sub-units: * Educational Management Sub-unit, also covering all non-construction materials procurement; * Financial Management Sub-unit; * Project Monitoring Sub-unit; and * Construction Management Sub-unit, also covering construction materials procurement (funded directly under AusAID). PMU staffing at the district level, all East Timorese, will include: * Supervising Engineers (one per district); * Construction supervisors (average 3 per district); and * District assistant accountant (one per district). The Supervising Engineers will oversee the school rehabilitation process in the districts including the development of school rehabilitation checklists and participation agreements, the inspection of construction progress, and the flow of construction materials at the district level. They will be assisted in this at the school level by the construction supervisors (2 to 4 per district depending on number of schools to be rehabilitated). The district assistant accountants will be responsible for disbursing and accounting for subgrants to schools for the school rehabilitation activities. District construction advisors (volunteers) may be mobilized as resource persons for the school rehabilitation task

39 Implementation ESRP is expected to be implemented over a 12 month period, from July 2000 through June The project will be subject to two evaluations, once each six months, with first one being an intense" midterm" evaluation scheduled six months into the implementation of the project. The Project Operations Manual (OM): The PMU will draft an Operations Manual, based on the Project Implementation Plan, which will set out in operational terms the procedures, conditions, methodology, goals and phases for each of the components, sub-components and elements of the project. Once approved by UNTAET/CNRT and IDA, it will become the principal and uniform point of reference for consultation and implementation of all activities at all project levels by all implementing agencies, including school councils

40 Annex 3: Estimated Project Costs EAST TIMOR: TP-Emergency School Readiness Project LoVal Foreign Total Projct Cost By omponent US $million US $million US $million 1. Rebuilding School Physical Infrastructure Providing Teaching-Learning Material Social Mobilization and Communications Support for Policy Development Management and Implemenntation Support Total Baseline Cost Physical Contingencies Price Contingencies Total Project Costs Total Financing Required Local Foreign Total Proiect Cost BIy Category US $million US $million US $million Civil Works Goods Sub-grants Annual Project auditing costs Consultants' services and studies Total Project Costs Total Financing Required

41 Annex 4: Cost Benefit Analysis Summary EAST TIMOR: TP-Emergency School Readiness Project Summary of Benefits and Costs: The usua] economic assessment methodology relies upon a household survey to provide data to determine private rates of return to education, usually according to a log-linear equation estimated by OLS or some other equivalent procedure. This generates a private income stream that can then be combined with project costs to generate a social income stream from which internal rates of return may be calculated. This cannot be done for East Timor as there are no household surveys available. Even if there were, the economic structure has so thoroughly changed that they would be clearly out of date. Nonetheless, using historical data for East Timor student flows from Indonesia, using estimates of project benefits from similar countries, and rates-of-return to schooling, also based upon Indonesian studies, it is possible to carry out a suggestive economic analysis. The starting point of ESRP's economic analysis is the fact that historically low enrollment rates and high dropout rates have produced low educational attainment rates. These, in turn, resulted in a high loss of potential labor and agricultural productivity. Low enrollment rates are a consequence of poor school placement in rural communities, and a generalized low demand for education given its poor performance. The high dropout rates are related to high repetition rates, which are documented in the historic data. The fact that 12 years of enrollment are necessary to produce one 6th grade graduate, instead of the 6 that would be necessary if the flow of students were ideal. ESRP's main weapon against low enrollment rates, and high repetition and dropout rates, is the greater participation in and ownership of schools by parents and teachers. The other components in the Project are aimed primarily at creating the environment where the greater levels of participation and ownership are more likely. The two variables that will determine how much repetition and dropout decreases are: (i) the percentage of schools raised up to Basic Operational Level, and (ii) the degree of participation of the community and teachers in school improvement. The cost-benefit analysis of ESRP was undertaken in the following manner: (i) a student enrollment and completion flow model was estimated based upon student flows in other participatory systems in countries with similar poverty levels; (ii) a historical trend was applied to project base on how the flow of students would look without the project; (iii) the impact of the project on this flow was estimated using the two key variables described above; (iv) the difference between the two flows was taken; (v) given this difference, the savings in enrollment and increases in academic achievement were calculated; (vi) these savings and increases were converted into two monetary flows up to the year 2012 using per student costs and average rates-of-return to schooling based upon Indonesia data; and finally (vii) the internal rates of return for each of the two flows were calculated for five to ten and 15 years of project life. Even under the most unfortunate and bleak of scenarios, the social rate of return after 15 years is quite satisfactory. The reasons for these results is the dismal state of the flow of students in East Timor prior to the project. High repetition rates make each student cost from twice to three times what he might under a perfect flow. The consequence is that even small increases in approval rates can have large effects. Main Assumptions: 1. With the rehabilitation of school buildings, East Timorese school children will return to school in

42 pre-independence numbers or greater; 2. Double shifting in the rehabilitated buildings will be possible during the transition period (the next three years); 2. Teacher recruitment and teacher training will be covered by UNTAET and bilateral funding; 3. Learning outcomes will be positive enough to affect the productivity of school completers. Sensitivity analysis / Switching values of critical items: N/A

43 Annex 5: Financial Summary EAST TIMOR: TP-Emergency School Readiness Project Years Ending F Yeari [ Year 2 Year 3 I Year 4 Year 5 Year 6 I Year 7 Total Financing Required Project Costs Investment Costs Recurrent Costs Total Project Costs Total Financing Financing IBRD/IDA Government Central Provincial Co-financiers User Fees/Beneficiaries Others Total Project Financing Main assumptions: UNICEF funding will cover roofing materials. UNTAET/CNRT will fund some PMU staff members

44 Annex 6: Procurement and Disbursement Arrangements EAST TIMOR: TP-Emergency School Readiness Project Procurement Works and goods will be carried out in accordance with the IBRD's "Guidelines for Procurement under IBRD Loans and IDA Credits" (January 1995, revised in January and August 1996, September 1997 and January 1999). Consultants services will be procured in accordance with the provisions of the "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" (January 1997, revised in September 1997 and January 1999). UNTAET's Social Services Department/Office of Education and CNRT (soon to be joined as the Interim National Education Authority) will organize a Project Management Unit (PMU), which will be staffed by individual consultants and firms, the latter for carrying out specialized tasks such as monitoring and evaluation, and construction management and construction materials procurement The PMU will be directly responsible for preparing all procurement documents for school books, furniture, vehicles and consulting contracts, and all other goods other than construction materials, based on the procurement procedures agreed in the Grant Agreement, and as detailed in the Project Operations Manual. The Construction Management Unit (not funded under the project but answerable to the PMU) will prepare procurement documents for school rehabilitation materials and prototype school construction according to the Operations Manual. The PMU will ultimately be responsible for all project procurement actions. The Operations Manual will include, in addition to the procurement procedures, the Standard Bidding Documents to be used in each case, as well as the list, types, and estimated values of contracts to be awarded on the basis of quotations. The Construction Management Unit will supervise the execution of the school rehabilitation plans, whereas the Financial Management Unit in the PMU will oversee the disbursement and accounting for rehabilitation subgrants, all in accordance with the Operations Manual. School Rehabilitation Subgrants. Given the small size of the works, and the wide range, dispersion, and timing of individual school subprojects, and their urgency, the consolidation of works and items into larger procurement packages is not feasible. Consequently, school rehabilitation subprojects will be carried out through the provision of Subgrants to schools, signed by the Principal and witnesses by a school council or school rehabilitation committee member. The school principal, will be duly authorized as the school site manager by UNTAET to: (a) represent the school; (b) receive the subgrant on behalf of the school; (c) hire workers, under arrangements acceptable to the IDA, to execute the subproject (that is, rehabilitate and clean up the school); and (d) use all funds from the subgrant only for investment in the school. With the help of project engineers, rehabilitation plans will be specified and the cost of the subgrant to cover them will be estimated for each school. The average cost of each individual subproject (say, a three-classroom school building) will be approximately US$2,000, with a small number of subprojects costing as little as $700 and as much as (but no higher than) US$10,000. The aggregate amnount for these school rehabilitation subgrants is US$1.5 million. The procedures to be followed will be detailed in the Project Operations Manual, and are summarized in Annex 2 to this Project Appraisal Document. The Manual will also detail supervision, reporting, and auditing requirements to ensure the intended use of the resources. The IDA will also carry out procurement audits twice a year to assure that the procedures use follow the Operations Manual. Procurement Capacity Assessment. A capacity assessment was not conducted for the proposed project given the obvious lack of procurement capacity in the country. To minimize the risk of delays, in addition to the hiring of the above consulting firm, the IDA will carry out frequent supervision visits, as -40 -

45 well as raise the number of contracts that will subjected to prior review. General Procurement Notice. A General Procurement Notice was published in the April 16, 2000 edition of the Development Business. Procurement Methods Procurement of Civil Works Limited International Bidding (LIB). Will be used for the contract for the construction of the frame and roof for prototype resource schools in amounts equivalent to US$250,000 or more. The aggregate amount is US$700,000. Small Works (SW). These works will cost less than US$250,000 per contract, up to an aggregate amount of US$500,000. These small works will include infill construction for prototype resources schools, the building of community school modules, the construction of district warehouses, renovation of buildings for office space. The procurement of small works will be under lump sum fixed price contracts awarded on the basis of quotations obtained from at least 3 qualified domestic contractors in response to written invitations, consistent with IDA guidelines. The invitation will include a detailed description of the works, including basic specifications, the required completion date, a form of agreement acceptable to IDA, and relevant drawings where applicable. The award will be made to the contractor offering the lowest price quotation for the specified work who has the experience and resources necessary to complete the work successfully. Community Participation under School Rehabilitation Subgrants (CP). For school rehabilitation works, school principals, together with a school council or school rehabilitation committee, will hire community members as skilled and unskilled laborers in accordance with section 3.15 of IDA Procurement Guidelines. The labor to be provided will be financed by school rehabilitation subgrants (see Table A) according to procedures described in the Operations Manual and at an aggregate cost not to exceed US$1.5 million. Procurement of Goods International Shopping (IS). Will be used for temporary student furniture (desks and chairs), project vehicles, laptop computers and printers, satellite telephones, and packages of construction materials and tools. This procurement methodology is being used because all student desks and chairs, vehicles (trucks and motorcycles), computers, and satellite phones will be required during the first three months of project execution. For student furniture, there will be two to three package costing $500,000 or less from two to three countries, the aggregate amount for which will be $1.7 million. There will be two vehicle packages: the first for 26 one-ton pick-up trucks, for a total cost of approximately $650,000; a second package for 60 motorcycles, for a total cost of $90,000. The aggregate amount for vehicles will approximately US$740,000. For laptops and printers there will be one package of 20 sets, with an aggregate value of about $110,000, and for satellite phones another package covering 13 districts, amounting to about $150,000 in aggregate. With respect to contracts for construction material and tools the total amount is expected to be about US$2.8 million. Consequently, the total aggregate amount of purchases under the IS methodology is estimated at US$5.5 million. Nafional Shopping (NS). Will be used for the acquisition of teacher's desks, other classroom and school furniture, office materials and supplies, fuel for motorcyles, and miscellaneous items costing less

46 than US$150,000, up to an aggregate amount of US$500,000. Direct Contracting (DC). Will be used to buy the replacement books and their corresponding teacher guides. Direct contracting from Indonesian suppliers of titles purchased in previous years will be necessary since the titles to be acquired are copyrighted. Prices will be evaluated as to their comparability with the prices for the same titles purchased in Indonesia during previous years. No single contract is expected to exceed US$400,000, and the aggregate amount for school books and teacher guides is US$3.2 million. Procurement methods (Table A) Annex 6, Table A: Project Costs by Procurement Arrangements (in US$ million equivalent) "Cst LIB IS NS DC Other 1. Civil Works Goods (including transportation) Sub-grants Annual Project Auditing Costs Consultants' services and studies TOTAL Procurement of Services Contracts for services, including technical assistance, capacity building activities, community mobilization and training will be procured following the IDA's Guidelines and using standard contracts, as follows: Single-Source Contract International firms will be contracted to assist in the school mapping activities, and in Project Management and Implementation, including project financial management, project monitoring, and coordination of project engineers and construction advisors. Given the emergency nature of this project, and the fact that the services are to begin within the project's first three months, these contracts will be awarded on a single-source basis. The amount for any consulting contract will not exceed US$500,000; the aggregate amount in this category will be about US$900,000. Individual Consultants. Consultant services including foreign and local ad hoc expertise and -42 -

47 contractual services - for which individual qualification and experience are the paramount requirement for the assignment - will be procured under contracts awarded to individual consultants in accordance with the provisions of Section V of the Consultant Guidelines, up to an aggregate amount of US$1.1 million. Annex 6, Table Al: Consultant Selection Arrangements (optional) (in US$million equivalent) -Ek e*_.. -'. QCBS CQ SSS N.B.F. A. Firms (0.9) (0.0) (0.9) B. Individuals Total (2.0) (2.0) Note:. QCBS = Quality- and Cost-Based Selection QBS = Quality-based Selection SFB = Selection under a Fixed Budget LCS = Least-Cost Selection CQ = Selection Based on Consultants' Qualifications SSS = Single source selection (per Section V of Consultants Guidelines) N.B.F. = Not IDA-financed. Figures in parenthesis are the amounts to be financed by the Grant. Prior review thresholds (Table B)

48 Annex 6, Table B: Thresholds for Procurement Methods and Prior Review US $ thousands US $ millions 1. Works >250 LIB Goods >100 IS/NS 6.0 <100* IS/NS 0.2 >300 DC Consulting Services -firms >100 SSS 0.6 -Individuals >50 SSS 0.8 *First two goods procurements Total value of contracts subject to prior review 10.3 m Overall Procurement Risk Assessment: High Average Low Frequency of procurement supervision missions proposed: One every 3 month(s) for the first 9 months, one every 6 months thereafter (includes special procurement supervision for postreview/audits) Procurement Review For works, prior review by the IDA (Table B) will include all Limited International Bidding contracts costing US$250,000 or more. For goods, prior review by the IDA (Table B) will include: (i) national and international shopping contracts costing US$100,000 or more, and the first two contracts for goods costing less than US$100,000 and (ii) every contract for books using Direct Contracting procedures costing US$300,000 or more (approximately US$2.0 million in total). For consulting services, prior review by the IDA (Table B) will include all consultant contracts costing US$100,000 or more (for firms) and US$50,000 or more (for individuals). Moreover, the IDA will

49 prior review all terms of reference for contracts with individual specialists or firms costing less than US$50,000 or US$100,000 respectively. The rest of the procurement of works and goods will be subject to ex-post review by the IDA. To facilitate the process, the PMU will submit to the IDA a plan for the contracting of consultants with relevant TORs and cost estimates as part of the Operation Plan every six months. A procurement plan for the six months of the project, indicating the needs, procurement methodology, time frames and other relevant details will be presented during negotiations. Such a plan will be updated on a six month basis during the entire life of the project, and whenever it is considered necessary by the IDA. Under these arrangements, the prior review of approximately 75 percent of the estimated value of project items is expected. Additionally: (i) external procurement auditors, contracted by the PMU under the grant, will conduct quarterly performance audits covering technical, environmental, managerial and procurement aspects of a sample satisfactory to the IDA; (ii) this audit of procurement aspects will include both physical audits and the procurement procedures used, so that the IDA can judge whether procurement implementation is satisfactory; (iii) the project information and monitoring system will be used to compare costs of similar subprojects in order to detect possible discrepancies which might indicate procurement problems and the need for further analysis; accuracy of data in the project information system will also be checked through the audits; and (iv) the IDA's supervision missions will conduct random reviews, including frequent field visits and review of procurement documentation. The systematic review of all procurements through Limited International Bidding, and the first procurement in every category of goods to be obtained by international shopping will help monitor quality and consistency in the application of IDA Guidelines and procurement procedures agreed for the project. Efforts would be made for a procurement specialist to be part of the supervision missions, which are expected to be a minimum of four the first year

50 Disbursement Allocation of grant proceeds (Table C) Annex 6, Table C: Allocation of Grant Proceeds WI 011 F u " A. Civil Works B. Goods (includin2 transportation) C. Sub-2rants ofsub-grantamt D. Annual Proiect Auditiniz Costs E. Consultants' services and studies Total Use of statements of expenditures (SOEs): Disbursements for contracts at or above US$250,000 for civil works, US$300,000 for books, US$100,000 for goods other than books, US$100,000 for consulting firms, and US$50,000 for individual consultants would be fully documented. Disbursements for all other expenditures, would be against statements of expenditure, whereby supporting documentation is to be retained by the implementing agencies and made available to the IDA for review during supervision. Special account: To facilitate timely project implementation UNTAET will establish a Special Account denominated in US$ under terms and conditions acceptable to IDA with a commercial bank acceptable to IDA. The authorized allocation for the Special Account will be US$ 1 million. The replenishment applications should be submitted by PMU and/or LNTAET/CFA on a monthly basis or when the balance of the SA is 20 percent of the initial amount, whichever occurs earlier. The Special Account will be audited annually by independent auditors acceptable to IDA. Retroactive Financing: Given the compressed time schedule for rehabilitating schools and providing school books, project personnel and civil works need to be mobilized as soon as possible. Thus, retroactive financing of up to $100,000 is authonzed on account of payments make for expenditures in category one (civil works) and five (consultants' services and studies) which are made before the date of the Grant Agreement but after June 15, Financial Management Assessment The UNTAET Financial Office in Dili is currently responsible for all accounting and reporting activities. There is a proposal to establish a Central Fiscal Authority (CFA) to assume financial management responsibilities of UNTAET. The financial management functions of CFA are being established and the staff are being recruited. Therefore, the basic institutional framework is present to establish sound internal control procedures and accounting and reporting arrangements. Most of the staff currently on board need to be trained on IDA disbursement procedures. A senior IDA Disbursement Specialist visited Dili at the end of March and conducted a training seminar on IDA disbursement procedures. However, as most of the financial staff are still not recruited, IDA will have to program -46 -

51 further training workshops as various projects become effective. Subject to the above, it is the assessment of the IDA mission that UNTAET is taking adequate steps to meet the minimum standards of financial management and accountability as required by IDA. The following paragraphs describe the financial management arrangements expected to be put in place for accounting, reporting and auditing of project expenditures. IDA and UNTAET/CFA will have to work closely in the coming months to establish policies, procedures, staffing and systems to implement the agreed FM arrangements. Arrangements and Action Plan for Financial Management of the Project 1. A key element of implementation of this project is that the usual functions of a PMU (Project Management Unit) will be contracted out to a private management finns. These functions will include procurement work, contract management, management of cash flow within the project, operation of the Special Account, maintenance of all accounting of project expenditures, retention of all receipts, vouchers and justifications, periodic reporting to UNTAET and the IDA, preparation of annual financial statements of the project, recruitment of external auditors and submission of annual report to UNTAET and the IDA. 2. UNTAET will appoint a Project Director who will be the focal point for all financial and (operational) matters between UNTAET and the PMU and also between the IDA and UNTAET. 3. In the above context, for an adequate financial management for the project it will be critically important to ensure that the contract between the PMU and UNTAET clearly specifies the financial management responsibilities of the PMU. These should include: * Establishment of an adequate accounting and internal control systems to ensure that grant funds flow for all components of the project in a timely fashion; * Management of Special Account to be established wider the Project, including requesting replenishments into the SA in accordance with IDA procedures; - Maintain adequate accounting records for all project expenditures and its components; * Prepare and submit Quarterly Project Monitoring Reports, with contents and formats agreed with the IDA; * Retain all vouchers, receipts, evidence of payments to substantiate project expenditures; * In consultation with UNTAET recruit external auditors for biannual audits; * Prepare biannual financial statements for the project, for audit and submit the biannual audit report not later than three months after the middle and end of the project year. 4. Financial management of the School rehabilitation component will merit special attention. It is intended that the works for school rehabilitation will be carried out by local builders and community members organized by the school principals and supervised engineers under Construction Management Unit. The school principal will draw construction materials from a depot at the district level; funds for labor will covered in school rehabilitation subgrant. The materials to be provided and the grant amount and installments will be specified in a "school participation agreement" signed by the principal and a project engineer, reviewed by the PMU management. The contract with Construction Management Unit should ensure that construction Management Unit remains responsible for: * Establishment of adequate systems and procedures for management of all agreement letters for such rehabilitation work; * Technical supervision and certifications as works progress and are completed. 5. The Project Management Unit, through its district-based project accounting will be responsible for:

52 * Flow of funds and payment to grantees for works completed; * Maintenance of adequate accounting records to record all expenditures for this subcomponent. These procedures will all be specified in the Operations Manual for the component. 6. For the execution of the above accounting functions, the PMU will need a fairly senior, experienced, Project Accountant (or Finance Manager) and supporting staff. Recruitment of such Project Accountant should be a specific clause in the PMU-UNTAET contract. Accounting and Reporting The primary responsibility for maintaining accounting records for the project will be with the Project Finance Manager in the PMU. The Project Finance Manager will establish appropriate accounting and internal control procedures for authorizing payments, recording of all project related expenditures, periodic financial reporting and preparation of annual financial statements for external audit. The accounting system should be designed to maintain separate project accounts for IDA funded activities in accordance with the Trust Fund Grant Agreement. The Project Finance Manager will ensure that quarterly and annual financial reports comparing budgeted and actual expenditures are prepared for the Project. The draft formats of the reports will be agreed at negotiations. The financial reports shall be prepared and submitted to IDA no later than 60 days following the end of the quarter. Auditing UNTAET will be responsible to carry out internal auditing of the project activities. The PMU will prepare biannual financial statements for the Project and have them audited by an independent external auditor acceptable to IDA. The auditor will be required to provide an opinion on the financial statements, the operations of the Special Account and the withdrawals from the grant based on statements of expenditures (SOEs). The independent auditor will appointed on terms of reference acceptable to IDA

53 Annex 7: Project Processing Schedule EAST TIMOR: TP-Emergency School Readiness Project Project Schedule Planned Actual Time taken to prepare the project (months) 3 5 First Bank mission (identification) 02/24/ /24/2000 Appraisal mission departure 05/27/ /27/2000 Negotiations 06/13/ /13/2000 Planned Date of Effectiveness 07/01/2000 Prepared by: H. Dean Nielsen and Robin S. Horn Preparation assistance: Helen Vanwel (consultant), Nigel Billany (consultant), Nigel Wakeham (consultant), Lisa Campeau (consultant), Sergei Bank staff who worked on the project included: Name Speciality H. Dean Nielsen Education Specialist, Task Team Co-Leader Robin S. Horn Senior Educational Economist, Task Team Co-Leader Sarah Cliffe Bank Resident Representative, East Timor Filomeno Cruz Education Advisor, East Timor Abdul Haji Financial Management Specialist Sandra Erb Cost Analysis Dingyang Hou Sector Analysis Luiz Gazoni Procurement Specialist Ronald Isaacson Interim WB Deputy Res Rep, East Timor Dorothy Judkins Cost Analysis Assistant Hilary Kiell Procurement Specialist Maurice LeBlanc Regional Procurement Advisor Natacha Meden Operations Assistant Parivash Mehrdadi Team Assistant Karin Nordlander Senior Counsel Hung Kim Phung Loan Officer Paul Stott Interim WB Deputy Res Rep, East Timor

54 Annex 8: Documents in the Project File* EAST TIMOR: TP-Emergency School Readiness Project A. Project Implementation Plan Project Implementation Plan, May 2000 B. Bank Staff Assessments Matrix of East Timor Educational Development Activities for Transition Period, Years C. Other -School Reconstruction in East Timor, April, (88 pp.) -School Damage Report Data Base, June 2000 *Including electronic files

55 Annex 9: Statement of Loans and Credits EAST TIMOR: TP-Emergency School Readiness Project Difference between expected and actual Orginal Amount in US$ Millions disbursements Project ID FY Borrower Purpose IBRD IDA Cancel. Undisb. Orig Frm Rev'd Total: o

56 EAST TIMOR STATEMENT OF IFC's Held and Disbursed Portfolio In Millions US Dollars Committed IFC Disbursed IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic Total Portfolio: Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic Total Pending Commitment:

57 Annex 10: Country at a Glance EAST TIMOR: TP-Emergency School Readiness Project The school infrastructure in East Timor has been 70-80% destroyed. Below are photographs showing a typical primary and secondary school following the destruction created anti-independence militia. 1. Public Primary School at Atsabe, showring burned out buildings

58 ,~~~~~~~~~~~~~-e- 2. Public Junior Secondary School at Maubara, showing administration building

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