World Bank. Report to the National Sudan Multi Donor Trust Fund (MDTF-N) Administrator. 4th Quarter Final Report 1 October to 31 December 2007

Transcription

1 World Bank Report to the National Sudan Multi Donor Trust Fund (MDTF-N) Administrator 4th Quarter Final Report 1 October to 31 December 2007 March 2008 A female volunteer in the Blue Nile State distributes Long Lasting Insecticidal Nets (LLINs) to a mother of two in Damazin Locality. The Decentralised Health System Development Project distributed a total of 179,100 LLINs in four states The World Bank Country Manager receives a recognition award from the Central Bank of Sudan Governor during the Sudan New Unified National Currency Project celebration of a successful completion of the new currency exchange

2 MA 4 th Quarter 2007 Report to the MDTF-N Administrator March 2008 List of abbreviations...iii Highlights of the 4 th quarter report...1 About this 4 th quarter report...1 Pledges, MDTF-N commitments and disbursement status...1 Portfolio performance...5 General issues across the portfolio...16 Section 1 Financial performance in the 4 th quarter and period to date Summary of sources and uses of funds Actual donor deposits made against commitments as at 31-Jan MDTF-N and counterpart funding to projects MDTF-N and counterpart funded expenditure MDTF-N disbursement forecast Counterpart funding forecast...26 Section 2 Results of our monitoring activities in the 4 th quarter Introduction Project status Monitoring expenditure financed under the MDTF-N grants Assessing financial management capacity of projects Monitoring procurement of goods, services and other items Compliance with legal covenants Overall portfolio performance to date...36 Section 3 Projects progress Technical Assistance Facility (TAF) Project Community Development Fund (CDF) Project The Fifth National Population Census Project (Census) Capacity Building of the Judiciary Project (Judiciary) Decentralised Health System Development Project (DHSDP) National Emergency Transport Rehabilitation Project (NETREP) Sudan New Unified National Currency Project Sudan Microfinance Project (Microfinance) South Kordofan Start-up Emergency Project Improving Livestock Production and Marketing Project (Livestock) Blue Nile State Start-up Emergency Project...94 Section 4 States activities and achievements Resource allocation to the Northern Sudan States The Three Areas North Kordofan State...97 MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers i

3 4.4 Kassala State Red Sea State Other states Issues and recommendations...98 Section 5 Planned activities for the next quarter Introduction Monitoring of effective projects Annexes: Annex A - Key tasks of the Monitoring Agent (summary of the Terms of Reference) Annex B - Status of implementation of prior period recommendations Annex 1A - MDTF-N sources and uses of funds a at 31 January 2008 Annex 1B - Sudan MDTF Donors commitments and contributions as at 31 January 2008 Annex 1C - MDTF-N disbursement plan for committed funds, updated as at 31 January 2008 Annex 2A - Project contract summary status as at 31 January 2008 Annex 4A - MDTF-N resource allocation projects with state intervention Annex 4B - Outputs at the state level MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers ii

4 List of abbreviations AWP - Annual Working Plan BHU - Basic Health Unit BNS - Blue Nile State Start-up Emergency Project CBOS - Central Bank of Sudan BoSS - Bank of Southern Sudan CAHWs - Community Animal Health Worker (CAHWs) CAP - Community Action Plan CBS - Central Bureau of Statistics CDD - Community Demand Driven CDF - Community Development Fund CPA - Comprehensive Peace Agreement DA - Designated Accounts DEX - Direct Execution Modality DHSDP - Decentralised health System Development Project EA - Enumeration Areas EOI - Expression of Interest FPIU - Federal Project Implementation Unit FPP - Final Project Proposal GA - Grant Agreement GoNU - Government of National Unity GoSS - Government of Southern Sudan HC - Health Centre HW - Health Worker IDA - International Development Association JAM - Joint Assistance Mission LIU - Locality Implementation Unit LLIN - Long Lasting Insecticidal Nets M&E - Monitoring and Evaluation MA - Monitoring Agent MARF - Ministry of Animal Resources and Fisheries MDTF-S - Multi Donor Trust Fund for Reconstruction of Southern Sudan MDTF-N - Multi Donor Trust Fund for the Reconstruction of National Sudan MFU - Microfinance Unit MoA - Memorandum of Agreement MoFNE - Ministry of Finance and National Economy (National Sudan) MoH - Ministry of Health MTRB - Ministry of Transport Roads and Bridges NETREP - National Emergency Transport Rehabilitation Project NHA - National Highway Authority NLTRC - National Legal Training and Resource Centre NJSC - National Judicial Service Commission NGOs - Non-Governmental Organisations MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers iii

5 OC - Oversight Committee PIU - Project Implementation Unit PMT - Project Management Team PPDF - Private Public Dialogue Forum s QPR - Quarterly Progress Report RRI - Rapid Results Initiative RTC - River Transport Corporation SBDs - Standard Bidding Documents SDD - Sudanese Dinar SDG - Sudanese Pound SKS - South Kordofan State Start-up Emergency Project SMoH - State Ministry of Health SMDF - Sudan Microfinance Development Facility SPIU - State Project Implementation Units SRC - Sudan Railways Corporation SSCCSE - Southern Sudan Centre for Census, Statistics and Evaluation TAF - Technical Assistance Facility TNA - Training Needs Assessment ToR - Terms of Reference TTL - Task Team Leaders TWG - Technical Working Group UK - United Kingdom UN - United Nations UNDP - United Nations Development Programme UNFPA - United Nations Population Fund UNICEF - United Nations Children s Fund UNIDO - United Nations Industrial Development Organisation UNOPS - United Nations Office for Project Services USA - United States of America US$ - United States Dollar WA - Withdrawal Application MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers iv

6 Highlights of the 4 th quarter report About this 4 th quarter report This report presents the overall and project specific progress in the 4 th quarter and period to date. The progress presented includes key developments in January Therefore most of the statistics presented in this report will be as at 31 January Section 1 of the report presents a summary of the financial performance commitments, donor deposits, disbursements, and expenditure. We present disbursement forecasts based on our assessment of the disbursement rate for each project taking into account current and future commitments. Section 2 of the report summarises our monitoring effort based on our Terms of Reference (ToRs) and is necessarily kept brief. A summary of these ToRs can be found in Annex A to this report. Section 3 contains project summaries. Each project summary contains: (i) an overview of project objectives and description; (ii) financial statistics; (iii) a matrix showing project components and achievements against targets; (iv) progress on key contracts; (v) performance rating; and (vi) key issues and our proposed recommendations. It should be noted that most of the information in (i) to (iv) is summarised from project documents, project progress reports and discussions with project management teams. It is therefore not necessarily verified. In response to donors requests in the last Oversight Committee (OC) meeting of 11 December 2007, we have included as section 4, project activities by state. We based the funding allocations on project document budgets and discussions with the Technical Task Team Leaders (TTLs). We also indicate in this section, the outputs to date in the states covered. Section 5 lists our planned activities in the 1 st quarter of Key highlights of this 4 th quarter report are summarised below. Pledges, MDTF-N commitments and disbursement status Of the 2005 Oslo pledges for reconstruction (US$ 4.5 billion), US$ 508m was earmarked for the two Sudan MDTFs. Since Oslo, donors have pledged an additional US$ 78.1m. Spain joined the MDTF bringing the number of donors contributing to the MDTF-N to 10. US$ 216 million of the Oslo and post-oslo pledges had been firmly committed to the MDTF-N. Donor deposits increased to US$ 208m. Total receipts (funds available) reached US$220m including the donor deposits and net investment income (of US$ 12m). Of the funds available, the World Bank had committed US$ 193m investment projects US$ 183m and fund administration US$1 0m. Of the investment project commitments i.e. signed grant agreements (GAs), US$ 46.3m was made between 1 October 2007 and 31 January 2008 to four projects: (i) Community Development Fund (CDF) Slice 2 of Phase 1 - US$ 27.8m; (ii) Sudan New Unified National Currency project supplemental grants - US$ 10.1m; (iii) South Kordofan State Emergency Start-up project - US$ 1.1m to UNIDO; and (iv) Blue Nile State Emergency Start-up project US$ 7.3m. MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 1

7 Highlights of the 4 th quarter report The portfolio comprises 11 investment projects. Of these, six came on board (first GAs signed) in 2006, and the rest between May 2007 and January As indicated above, MDTF-N grants to the projects amounted to US$ 183m. The corresponding Government of National Unity (GoNU) funding commitment to the projects totalled US$ 366m. Table 1 below presents a summary of projects costs. Table 1: Financial status of the MDTF-N project portfolio Project/ Component Commitments at 31-Jan-08 US$ m Disbursements at 31-Jan-08 US$ m Expenditures at 31-Dec-07 US$ m MDTF GoNU Total MDTF GoNU Total MDTF GoNU Total Closing Date Age at 31-Jan- 08 (months) TAF Sep CDF Slice Jul-09 CDF Slice Jul Census-Phase Dec Census-Phase Dec-08 6 Judiciary Jun DHSDP Dec NETREP Dec New Currency Mar-08 8 Microfinance Jun-11 8 SKS-UNICEF May-08 6 SKS-GoNU Aug-08 5 SKS-UNIDO Aug-08 4 Livestock Aug-11 5 BNS-GoNU Sep-09 2 BNS-UNIDO Sep-09 0 BNS-UNICEF Sep-09 0 Portfolio total Average 10 Key: TAF = Technical Assistance Facility, CDF = Community Development Fund, DHSDP = Decentralised Health System Development Project, NETREP = National Emergency Transport Rehabilitation Project, SKS = South Kordofan Start-up Emergency Project, BNS = Blue Nile Start-up Emergency Project. The MDTF-N: GoNU funding ratio as at 31 January 2008 was 1:2 or 33%:67% compared to 39%:61% as at 31 December Of the 11 projects, UN agencies implement two, i.e. Census (by UNOPS - US$ 7.1m and UNFPA - US$ 12m) and Capacity Building of the Judiciary Project (by UNDP - US$ 13m). In addition, 86% or US$ 12.7m of the grants to the South Kordofan and Blue Nile States Emergency Start-up projects is implemented directly by UN agencies (UNICEF and UNIDO). In total, UN agencies manage 24% or US$ 44.8m of the signed grants. Six of the eleven projects have activities implemented in the states (see Figure 1). These projects cover seven out of the fifteen Northern Sudan states and three of the Government of Southern Sudan s (GoSS s) states. MDTF-N resource allocation to the seven states as at 31 January 2008 was US$ 102m or 56% of the portfolio signed grants. The South Kordofan State had the largest allocation (18% of the portfolio grants) followed by Blue Nile (15%) and Kassala (11%). Counterpart funding corresponding to the state activities is US$ 167m or 46% of total GoNU funding. Allocation to the Three Areas was 33% or US$ 59.8m of the grants signed. MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 2

8 Highlights of the 4 th quarter report Figure 1: MDTF-N resource allocation SK, 18% NK, 6% BN, 15% KS, 11% Other, 4% RS, 1% SN, 0.3% WN, 1% GoSS, 3% National (NT) South Kordofan (SK) North Kordofan (NK) Blue Nile (BN) Kassala (KS) Red Sea (RS) Sinnar (SN) White Nile (WN) NT, 44% GoSS States (GoSS) Total portfolio disbursements (funds transferred to project accounts) had reached US$ 261.5m as at 31 January 2008 (MDTF-N US$ 72.3m and GoNU US$ 189.2m) see Table 1 above. Disbursements during the quarter were US$ 74.1m (MDTF-N US$ 18.8m and GoNU US$ 55.3). The MDTF-N cumulative disbursements as at 31 January 2008 were 73% of target compared to 49% as at 31 December Table 2 below compares the MDTF-N estimated original and actual/revised forecasts. Table 2: MDTF-N disbursement forecasts (US$ million) Bi-annual forecast 31/01/08 30/06/08 31/12/08 30/06/09 31/12/09 30/06/10 31/12/10 30/06/11 31/12/11 Original forecast Actual/revised forecast % (actual, revised/original) 73% 84% 86% 94% 97% 98% 99% 99% 100% Figures 2, 3 and 4 overleaf illustrate a trend analysis of the MDTF-N portfolio over time (30 June 2005 to 31 January 2008). A distinction is made between donor performance, World Bank performance and project performance. MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 3

9 Highlights of the 4 th quarter report Figure 2: Donor deposits vs commitments (Donor performance) US$ (Million) June Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Jan-08 Period (in calendar quarters) Donor commitments Donor deposits Figure 3: OC approvals vs signed GAs (World Bank performance) US$ (Million) June Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Jan-08 Period (in calendar quarters) OC approval Signed GAs Figure 4: Signed GAs vs effectiveness and disbursements (projects performance) US$ (Million) June Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Jan-08 Period (in calendar quarters) Signed GAs Effectiveness Disbursements MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 4

10 Highlights of the 4 th quarter report Three additional projects were under preparation: (i) Support to Poor Gum Arabic producers; (ii) Capacity Building for Public Sector Reform and Decentralisation; and (iii) Agricultural Extension Services. Expected grants to these projects are in the region of US$ 25m. In addition, two projects out of the current portfolio, i.e. DHSDP and NETREP, may require second phase funding while TAF may require a tranche replenishment all together estimated to be in the region of US$ 100m. Portfolio performance As can be seen from Table 1 above, cumulative expenditures amounted to US$ 216.3m out of which US$ 29.5m were incurred in the fourth quarter. The average portfolio age was 10 months or 39% completed age (age completed as a percentage of portfolio life). The disbursement ratio (cumulative disbursements as a percentage of total project costs) was 48%. Overall, this is a good disbursement rate when compared with percentage age completed. We rated the overall portfolio performance as moderately satisfactory. We found each of the key performance indicators (achieving grant objective, implementation of grant, project management, financial management, provision of counterpart funding, procurement administration, and monitoring and evaluation) also moderately satisfactory on average across the portfolio as Table 3 below presents. Table 3: Portfolio performance Performance parameters Overall progress rating TAF CDF Census Judiciary DHSDP SRC NETREP 1 Achieving grant objective MS S S MU S U NR MU U HS NR NR NR NR MS 2 Implementation of grant MU S MS MU S U NR MS MU HS MS NR NR NR MS Implementation performance rating 3 Project management MU HS MS MU MU U NR S MU S MS NR NR NR MS 4 Financial management MU MS MS MU S U NR MS MU U MU NR NR NR MS 5 Provision of counterpart funding S S S U HU MS NR U MU HS HS NR 5 NR MS 6 Procurement administration MS S NR NR S U NR MU U HS MU NR NR NR MS 7 Monitoring and evaluation MU MS NR NR S MS NR MS MS MS NR NR NR NR MS Overall status (4 th qtr-07)* Previous qtr rating (3 rd qtr-07) Previous year rating (4 th qtr-06) *1=Highly Satisfactory (HS); 2=Satisfactory (S); 3=Moderately Satisfactory (MS); 4=Moderately Unsatisfactory (MU) 5=Unsatisfactory (U); 6=Highly Unsatisfactory (HU); NR=Not Rated SRC=Sudan Railways Corporation; RTC=River Transport Corporation; NHA=National Highway Authority RTC NHA Average Currency Microfinance South Kordofan Livestock Blue Nile Portfolio Average MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 5

11 Highlights of the 4 th quarter report It is worth noting that the 100% disbursement on the Microfinance and New Currency projects made the counterpart funding performance favourable overall. However, inadequacy or late counterpart funding remained a big challenge to most of the projects especially Census, NETREP and DHSDP. Obligations falling due on certain contracts signed could not be honoured on account of lack of counterpart funding. Most project management teams continued to report periodically on implementation progress and achievements so far. We also supplement project efforts in monitoring implementation. The monitoring and evaluation parameter was rated moderately satisfactory on this basis. However, the current monitoring is limited to outputs/ deliverables. The challenge is to ensure that the project management teams also monitor outcomes and results. This will require each project to have a fully functioning monitoring and evaluation system. Table 4 shows elapsed time from Initial Project Proposal (IPP) approval to date of first disbursement for each project. Elapsed time (calendar days) TAF CDF Census Judiciary As at 31 December 2006 IPP to FPP approval FPP to Grant signing Grant signing to Effectiveness Effectiveness to 1 st disbursement As at 31 December 2007 IPP to FPP approval FPP to Grant signing Grant signing to Effectiveness Effectiveness to 1 st disbursement * Grants were not effective at the end of year ** First disbursement made on 28 January 2008 *** Average not weighted DHSDP* NETREP* Currency Microfinance South Kordofan Livestock** Blue Nile* Portfolio Average*** MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 6

12 Highlights of the 4 th quarter report The following Tables (5-15) summarise key progress made as at 31 January 2008 under each project, and present any issues arising together with our recommendations. Table 5: Technical Assistance Facility (TAF) Status: Moderately Satisfactory Project cost (millions): US$ 5.68 (MDTF-N: US$ 5.00; GoNU: US$ 0.68) Results/outputs/progress as at 31 January workshop on IDA procurement procedures held (26 participants). 3 workshops on project analysis and management held in Khartoum, El Fada and Yei (162 participants). 7 Ministry of Finance and National Economy (MoFNE) staff were sent on various courses in procurement and financial management in South Africa and Ethiopia. The Project Steering Committee approved eight studies worth US$ 3.8 million, contracts signed and work commenced on five. One study restructuring Sudan Gezira Board completed. Funded 6 workshops on Government Financial Statistics in the MoFNE for 195 participants from the GoNU line ministries. TAF funded two studies on the MoFNE capacity building programme. Project funded a Gum Arabic consultative workshop for 250 participants from the Ministry of Agriculture and Forestry. The Joint Secretariat of the Private Public Dialogue Forum s (PPDF s) offices at the Sudanese Federation of Employers office complex furnished and equipped by TAF. Issues The costs for new studies and additional operation costs over the project extension period have not been quantified. Also, it is not clear how these will be financed during the extension period. Recommendations The project should determine the operational funding requirements during the extension period to 30 September 2009 and take the necessary action to source the required funding. It still takes a long time to prepare Terms of Reference (ToR). Some of the independent specialists from outside the project do not have prior experience in the relevant procurement guidelines. Project management should consider training a TAF staff member on the preparation of ToRs. Going forward, he/she should assist technical committees prepare ToRs for future studies Table 6: Community Development Fund (CDF) Status: Satisfactory Project cost (millions): US$ 75 (MDTF-N: US$ 10; GoNU: US$ 10) Results/outputs/progress as at 31 January Fast Track Projects completed by the end of 2007 at a cost of US$ 1.2 million. The FTPs were in education (42), health (9) and water (13). 316 solar units at a cost of US$ 0.64 million installed in 10 villages one village in each of the 10 localities under the CDF fold. The units provide energy to 120 community infrastructure facilities and benefit approximately 38,000 people 113 subprojects (over and above the FTPs) completed in 106 communities - education (84), health (21), water (7), and electricity (1). 12,349 stakeholders trained in various aspects of project implementation for Community Demand Driven (CDD) projects. MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 7

13 Highlights of the 4 th quarter report Table 6: Community Development Fund (CDF) Monitoring &evaluation system and tools developed and cascaded down to the LIUs. Various training workshops including Gender Awareness, Rapid Results Initiative (RRI) approach and National consultative workshop were conducted to expedite effective implementation of projects. A baseline survey was completed for 50 communities in the10 localities to collect information on social economic conditions of 1,350 households to formulate policy on poverty reduction. Several project manuals including the Draft Community Contracting and Gender Mainstreaming/ HIV/AIDS manuals were completed. Numerous back-to-basics field visit trainings and supervision missions were conducted. The CDF Mid-Term Review was successfully conducted and findings shared widely. The Phase 1 Slice II Proposal document was finalised and approved. Issues With increasing number of transactions and LIUs on board, the manual accounting system presents project management with a number of challenges including susceptibility to errors, time consuming data entry, untimely reporting, etc. Recommendations In the 4 th quarter, project management commenced the procurement process for consultancy services for the design of a management information system and acquisition of an accounting package. The project s expansive nature and wide coverage affects communication and, coordination between the PIU and the LIUs and amongst LIUs. As a result, financial reports lag 4 to 6 weeks behind the end of period they relate to. Budgetary preparation, control and monitoring needs improvement. Slice II budget is not distributed down components to planned activity level. In the 4 th quarter, the World Bank approved procurement of a VSAT communication infrastructure. Once implemented, the VSAT platform is expected to link all the LIUs to the PIU and ensure effective communication and coordination between the PIU and the LIUs and amongst LIUs. Project budgets should be properly prepared in line with the project work plans and procurement plans. In addition, project management should compare actual financial results against the budget and follow up significant variances on a regular basis MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 8

14 Highlights of the 4 th quarter report Table 7: The Fifth National Population Census Project Status: Moderately Satisfactory Project cost (millions): US$ (MDTF-N: US$ 19.10; GoNU: US$ 68.52) Results/outputs/progress as at 31 January 2008 Project being implemented by UNFPA (DEX modality). Pilot census was conducted in April Census dates agreed to be 15th to 30th April 2008, decree subsequently issued in February Mapping is almost completed both in the North and South however, the coverage of parts of Darfur remains a concern (see issues below). Digitization of maps is on-going, also the production of sketch maps in the South. Principal trainers, and supervisors have been recruited both in the North and South, and recruitment of enumerators is being finalised. Training of trainers just started, to be followed up by training of supervisors and enumerators. Procurement: 80% of equipment and materials arrived to Sudan and were handed-over to the Central Bureau of Statistics (CBS) in Khartoum and the Southern Sudan Centre for Census, Statistics and Evaluation (SSCCSE) in Juba. Pending materials will arrive in March. Central storage ensured both in Khartoum and Juba. Data processing centres have been identified. Issues Although the GoNU had fully paid up its pledged contribution for 2006 and 2007, and part of 2008 budget, there was an outstanding balance. Any further delays will affect the training and enumeration exercises and advocacy and publicity campaigns. The CBS implementing the census did not transfer US$4.2 million (40% of US$11 million received on 15 November 2007 from MoFNE) to SSCCSE. Internal distribution of census items and funding of the exercise was an emerging challenge. UNFPA s responsibility is limited to delivery of materials to Khartoum and Juba by 1 March 2008.The materials require storage, repackaging into portable kits and distribution to the states and enumeration areas. Recommendations The GoNU provided for US$ 18 million in the 2008 federal development budget. The Technical Working Group (TWG) meeting held in Juba between 12 th and 13 th February 2008 recommended the immediate release of US$ 18 million. At the Juba TWG meeting, both the CBS and SSCCSE agreed to revise/adjust the budget share between North and South by end of February 2008 and process the immediate transfer of 40% of the US$ 11 million. For the North, a central warehouse has been identified; storage facilities in the states are yet to be identified. CBS started preparation of a distribution plan between Khartoum and the states. For the South, a warehouse was rented and a detailed distribution plan put together. UNMIS and WFP will provide logistical support in the distribution to the states. UNFPA requested UNICEF s support for repacking this implies additional costs of about US$ 0.4 million for both North and South (for which funds have been identified). MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 9

15 Highlights of the 4 th quarter report Table 7: The Fifth National Population Census Project Continued insecurity in Darfur, parts of South Kordofan and the contest over the status of the Abyei region affected the progress of the field mapping exercise and the effectiveness of the advocacy and publicity activities carried out so far. In Darfur 20% of its area was not covered by mapping due to insecurity. The expected intensification of the advocacy and publicity campaign in the fourth quarter, as the date of the census drew nearer, did not materialise after the GoNU decided not to provide the US$ 5.4 million originally budgeted for the campaign. UNFPA, with support from local Govt, UNAMID, other UN agencies and NGOs, is approaching rebel areas and IDPs camps to negotiate how to conduct mapping and enumeration in these areas. Joint teams from Warrap and South Kordofan will start mapping in Abyei once authorised by enter the area. The South has made big strides using US$ 1.2 million from the GoSS. Conversely, there is little coverage in the North with a recent allocation US$1 million; moreover funds had not been transferred to the states Table 8: Capacity Building of the Judiciary Project Status: Moderately Unsatisfactory Project cost (millions): US$ 18 (MDTF-N: US$ 13; GoNU: US$ 5) Results/outputs/progress as at 31 January 2008 Project being implemented by UNDP (DEX modality). The National Judicial Service Commission (NJSC) conference hall and 13 offices were rehabilitated and furnished. 8 members of the NJSC, were sent on study tours to Germany, South Africa and India to observe show case best practices in independent administration of justice. A six week judicial training course on Effective Dispute Resolution started in January 2008 with about 50 judges from all states participating. 8 judges from the central and northern states sent to a 6 week training of trainers course on English legal terminology and internet assisted research in the UK. The Judiciary and UNDP engineers completed architectural and structural designs and bill of quantities of the NLTRC in September The Judiciary completed and submitted the costing of the NLTRC subcomponent and disbursement plan to the MoFNE in compliance with the disbursement of the GoNU funding for the construction of the NLTRC. The GoNU designated land in Wad Medani in Gezira State for construction of the National Legal Training and Resource Centre (NLTRC). Architectural and structural designs completed. Construction of the Talodi courthouse in South Kordofan (US$ 94,000), and Rosseries in Blue Nile (US$ 292,000) and Al Wad El Hilaw in Kassala (US$ 175,000) commenced in November An agreement was signed with the Judiciary for the joint construction of the Al Azhari court house in Khartoum. MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 10

16 Highlights of the 4 th quarter report Table 8: Capacity Building of the Judiciary Project Issues Recommendations Counterpart funding to Judiciary for The MoFNE should expeditiously construction of a NLTRC is estimated at US$ disburse the GoNU s contributions to 5 million. The delay in securing the GoNU s the project to facilitate commencement contribution held up commencement of of construction of the NLTRC. In construction. The MoFNE has tagged addition, project management and the disbursements to submission by the Judiciary Judiciary should meet with the MoFNE to MoFNE designs, bills of quantities and a to resolve the issue. It is important that disbursement plan. These were submitted in they appraise the MoFNE of the November Further the GoNU indicated relevant terms in the GA and the that the value of land in Madani, Gezira State implications of the offset of the value of (US$ 1.5 million), designated for the NLTRC the Madani land on construction of the will be offset against US$5 million. If offset, it NLTRC. will affect the construction to the extent of the value of land. Little ownership of the project by Judiciary kept progress slow. There were significant delays in appointing members to project boards and committees and allocation of project offices at the Judiciary complex. The Judiciary should appoint attendees to training courses organised by the project on a timely basis to facilitate preparation for the courses MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 11

17 Highlights of the 4 th quarter report Table 9: Decentralised Health Systems Development Project (DHSP) Status: Moderately Satisfactory Project cost (millions): US$ 19 (MDTF-N: US$ 6; GoNU: US$ 13) Results/outputs/progress as at 31 January 2008 Medical supplies and consumables distributed to 46 health centres and 99 basic health units at a cost of US$ 121,038. Contract to supply immunisation cold chain equipment to 26 health facilities in South Kordofan signed. Deliveries will be made within the next three months. 179,100 long-lasting insecticidal nets procured at US$ 1.12 million and all distributed to 100,261 households. A contract signed with WHO (US$ 0.42 million) to design and implement a national health accounts system. Contracts signed for 45 vehicles for four State Ministries of Health and 17 localities, and 6 vehicles received. 34 medical doctors, medical assistant and nurses from Kassala state trained on Rapid Laboratory Test methodology. Contracts awarded for construction of the Blue Nile, Red Sea and Kassala State branches of the National Academy of Health Sciences (US$ 1.04 million). Provided incentives to 248 health workers at a cost of US$ 32,937 or 10% of the target (US$ 313,800) for the year. Rehabilitation of the Kassala, Blue Nile and Red Sea State Project Implementation Units (SPIUs) completed. A Monitoring and Evaluation (M&E) system developed at the federal and state levels. The project paid US$ 9,411 in operational costs for the Blue Nile State health academies in Damazin, Baw and Roseires localities. Issues Recommendations Counterpart funding was inadequate. The GoNU did not make available funds to pay 30% instalment on vehicles (contracts signed since end of August 2007). Kassala State Project Implementation Unit (PIU) suspended construction of offices in 3 localities after the GoNU delayed transfer of required funds. Unpaid obligations as at 31December 2007 were US$0.93 million. In February 2008 the World Bank wrote to the MoFNE requesting for urgent transfer of counterpart funding of US$2.6 million to cover quarter obligations. If these funds are not provided urgently, further contracts recently signed (incl. for supply of medical supplies to health facilities) will be held. The main challenge to procurement is the delays experienced in assessing the technical aspects of the scope of work to be done under the primary health care facility construction and rehabilitation civil works package (US$ 1.3million). The process was delayed because of the procurement capacity problem. The project budget did not provide for distribution of malaria nets. This held up their distribution in Kassala (US$ 10,000) and Red Sea (US$ 7,000) states. The project should provide training on preparation of bills of quantities and cost estimation techniques for the site engineers. By the end of the quarter, project management had resolved the issue by diverting GoNU funds originally planned for the procurement of mobile health promotion cinemas MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 12

18 Highlights of the 4 th quarter report Table 10: National Emergency Transport Rehabilitation Project (NETREP) Status: Sudan Railway Corporation (SRC) - Moderately Unsatisfactory, National Highway Authority (NHA) Moderately Satisfactory Project cost (millions): US$ (MDTF-N: US$ 43.40; GoNU: US$ 98.70) Results/outputs/progress as at 31 January 2008 De-mining of the Babanousa-Wau rail section (446 km) was completed, wholly financed by the GoNU under different arrangements from those envisaged in the project document. 63 km along Babanousa-Wau rail section or 37% of the 2007 target of 171 km was rehabilitated. The contracts for the construction and supervisory consultancy for the Gadamai Hamashkoraib road (US$ million) were signed in November Selection processes for construction and supervision consultancy of the El Damazin Kurmuk (US$ 45 million) and feasibility studies and detailed designs of three roads (US$ 5 million) - Damazin-Renk (200km), Kaduguli-Hegleig (130km) and Muglad-Abyei (220km) were in progress. Issues Recommendations Counterpart funding was inadequate. Progress on two contracts was slowed on non payment of US$ 3.61 million contribution from GoNU. A number of contracts are likely to be signed in 2008 which will require GoNU funding. Thus timely transfers will be critical for faster progress. Project management and the World Bank should follow up with the MoFNE to ensure GoNU contributions to project activities are released on time to avoid holding up implementation of project activities. The progress on some of the NHA activities was affected by the long time taken by the World Bank to grant approval for some stages in the procurement process. The slow pace of de-mining roads and issuing de-mining certificates by the National Mine Action Centre continued to affect implementation of NHA activities during the quarter. The lack of a dedicated procurement person at both components continued to affect procurement progress during the quarter. The project continued to experience delays because some GoNU personnel do not know the procurement procedures agreed upon during the project s set up by the GoNU and the Bank. The World Bank should expeditiously grant approvals for various stages of the procurement process to avoid holding up the procurement process and implementation of project activities. The MoFNE and Ministry of Transport, Roads and Bridges (MoTRB) should engage the relevant authorities and impress upon them the implications of the delayed demining, and agree a time table for the timely demining of the affected roads. The project should consider retaining a procurement officer for the NETREP components. The MoFNE should brief the relevant GoNU legal and procurement staff on the procurement procedures governing MDTF-N funded projects MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 13

19 Highlights of the 4 th quarter report Table 11: Sudan New Unified National Currency Project Status: Satisfactory Project cost (millions): US$ 145 (MDTF-N: US$ 25.06; GoNU: US$ ) Results/outputs/progress as at 31 January 2008 Nationally accepted designs for the bank notes and coins completed. Eight contracts worth Euro 37.7 million (US$ 51.7 million) for banknote paper and coin blanks completed. 755 million bank notes (SDG 7.9 billion) printed - 45% of the target of 1.7 billion notes (SDG 15.3 billion) and 88% of the replacement target of 855 million old notes. 92 million coins (SDG 24 million) minted - 41% of the target of 243 million coins (SDG 40 million) and 71% of the replacement target for 141 million old coins. SDG 5.5 billion (US$ 2.8 billion) and SDG14.11 million (US$ 7.05.million) worth of notes and coins respectively, exchanged. The Central Bank of Sudan (CBOS) completed the currency exchange on 31 December The Sudanese Dinar (SDD) ceased to be legal tender on 1 July Recruitment of an external auditor to the audit the project was near completion. Issues Recommendations The SDG 1 notes in circulation are getting soiled fast due to frequent exchanges and its buying power. The CBOS should consider replacing the SDG 1 note with a coin equivalent if the replacement costs for coins are lower than for notes. The closing date for this project is 31 March 2008 yet an external auditor to audit the project has not been firmly contracted. It is highly unlikely that the audit will be completed by then. An extension of the closing date may be necessary. The Project Coordination Unit was established within the CBOS and project personnel carried out project related duties on top of their normal duties at the CBOS. The lack of a dedicated project management team adversely affected the financial management environment - financial reports not very detailed. Project management should consider requesting for an extension of the grant period to enable the completion of the external audit exercise. The project is coming to an end MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 14

20 Highlights of the 4 th quarter report Table 12: Sudan Microfinance Project Status: Moderately Satisfactory Project cost (millions): US$ 20 (MDTF-N: US$ 10; GoNU: US$ 10) Results/outputs/progress as at 31 January 2008 Project to be implemented by a firm which will manage the Sudan Microfinance. Development Facility. Selection of a firm in progress. Microfinance Unit established by the CBOS to run the project until a selected firm is on board. 7 members of the project board appointed civil society representatives (3); MoFNE (1); donor community (2); and CBOS (1). First microfinance conference held in Khartoum in November Issue The CBOS did not open an autonomous bank account for the project. The account opened for the project at the CBOS, is in effect, an account code in the CBOS general ledger. Recommendation The CBOS should open an autonomous bank account for the project Table 13: South Kordofan State Start up Emergency Project Status: Not Rated Project cost (millions): US$ (MDTF-N: US$ 7.51; GoNU: US$ 6.85) Results/outputs/progress as at 31 January 2008 Supplies for 100 new hand pumps procured. 20 water sources identified in South Kordofan and contracts for drilling and installation of 20 new hand pumps were signed. Locations for 5 new water yards identified and supplies for drilling and installation procured. Procurement of generators and pumps was in progress and installation expected to commence in the first quarter. Spare parts for 100 old pumps acquired and repair work commenced. The distribution plan for education materials for 263,638 children was finalised. Issue The delayed appointment of the Project Coordinator and recruitment of other key personnel held up the commencement of project activities and disbursement of MDTF-N and GoNU funds. Recommendation Recruitment of project personnel should be done within reasonable timelines to minimise the impact on implementation of project activities MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 15

21 Highlights of the 4 th quarter report Table 14: Improving Livestock Production and Marketing Project Status: Not Rated Project cost (millions): US$ 7.7 (MDTF-N: US$ 4.0; GoNU: US$ 3.7) Results/outputs/progress as at 31 January 2008 Project management team came on board in December Selection of a firm to conduct a conflict study commenced. Selection of an NGO to assist with training, community mobilisation also commenced. Issue Recommendation The project account was opened in October However, the GoNU had not disbursed the initial deposit of US$ 0.5 million by 31 January 2008, in contrast with the GA which required the GoNU to make the initial deposit on opening the project account. The MoFNE should transfer the initial deposit to the project to ensure project activities are not affected Table 15: Blue Nile State Start up Emergency Project Status: Not Rated Project cost (millions): US$ (MDTF-N: US$ 7.32; GoNU: US$ 8.02) Results/outputs/progress as at 31 January 2008 Subsidiary agreement between the GoNU and Blue Nile State signed on 3 December Grant agreements (GAs) with UNIDO and UNICEF signed on 24 and 31 January 2008, respectively. Project activities had not commenced by the end of the quarter. Detailed tables for each project are contained in Section 3 of this report. General issues across the portfolio Several factors affected the pace of implementation of MDTF-N projects. Factors include the following: Procurement issues The perceived complexity of World Bank procurement guidelines contributory factors include lack of institutional procurement capacity, language barrier and to a limited extent, resistance to change; The perceived slow response to No Objection requests and insufficient advice and guidance from the World Bank; Limited experience of bidders in applying the guidelines. Financial management issues GoNU budget constraints leading to inadequate or untimely counterpart funding to the projects; Lack of detailed budgets/ cash flow forecasts; Unclosed project audits on account of material omissions and poorly presented financial statements; Manual accounting systems. MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 16

22 Highlights of the 4 th quarter report We provide in Table 16 on the following page a brief description of each of the issues above and our proposed recommendations or actions being taken. Table 16: Cross cutting issues and recommendations Issues Recommendations/ Actions taken Procurement issues Perceived complexity of World Bank A number of project staff have undergone procurement guidelines. Most of the project training in applying World Bank guidelines staff involved in procurement are not proficient in form of in-country workshops and outsidecountry courses. However, proficiency will in the field and have either no or limited knowledge in the World Bank procurement come from experience and this will take guidelines and international public procurement time. Procurement related training activities best practices. Moreover, there are no Arabic will be expanded and intensified. Standard Bidding Documents (SBDs). The combined effect is a feeling that the guidelines We understand from the World Bank that are foreign, complicated and tedious. As a the Arabic version of SBDs will be result the procurement documents are of poor introduced soon. quality and in many instances require several iterations before reaching an acceptable standard. Limited experience of bidders. In many cases, bids/proposals from bidders/consultants are non responsive possibly due to their limited experience in applying the guidelines. Perceived slow response to No Objection requests and insufficient advice and guidance from the World Bank. Some project management teams have complained to the World Bank about delayed responses to the requests for clearances. We agree that in some instances, it took the World Bank longer than maximum response time (of 10 working days), sometimes over a month - for example in the CDF project (on selection of a consultant to design a computerised accounting system) and NETREP (especially on big contracts). Financial management issues Inadequate counterpart funding and lack of detailed budgets/ cash flow forecasts. Inadequate or late counterpart funding remained a big challenge to most of the projects especially Census, NETREP and DHSDP. Obligations falling due on certain signed contracts could not be honoured on account of lack of counterpart funding. Moreover, the GoNU s 2008 budget allocation is US$34m lower than our initial estimate of cash flow requirements. Most projects current budgets are not adequate (i.e. are based on old or poorly prepared work plans) and unrealistic. Reasonable cash flow requirements cannot be generated with ease. Without realistic cash flow forecasts, the To unify and simplify the procurement procedures, a new country procurement law is being drafted. Once finalised, all procurements will follow this law. This will create an enabling environment both for project staff and bidders. One additional World Bank procurement staff in the Khartoum office is being recruited. With the doubling of the procurement staff, response times are expected to reduce and direct technical assistance increased. The World Bank plans to implement a simple procurement tracking system built on a Microsoft Access platform by end of April 2008 which we will monitor. Response times will be tracked. On 21 February 2008, the issue was again brought to the attention of the Under Secretary, MoFNE, who has since committed to transfer funds to projects for priority payments by the end of April 2008 based on reasonable cash flow forecasts. We will therefore work with the project teams to generate/fine tune cash flow forecasts based on signed contracts, contract terms of payment and urgent operating costs. We expect that MoFNE will henceforth make transfers based on the resultant disbursement plan that will have been agreed between the project management teams and MoFNE. In the event that the resultant cash flow MA 2007 Quarter 4 Report to the MDTF N Administrator PricewaterhouseCoopers 17