Papua New Guinea - Public Sector Training Project

Docwnent of The World Bank FOR OFFICIAL USE ONLY kA/. 39g5o- F1- Report No. 8592-PNG STAFF APPRAISAL REPORT PAPUA NEW GUINEA PUBLIC SECTOR TRAINING PROJECT DECEMBER 5, 1990 Country Department V Asia Regional Office This document bas a restricted distribulion and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank autborization.  CURRENCY EQUIVALENTS Currency Unit - Papua New Guinea Kina (K) US$1.00 = KO.967 (November 1990) WEIGHTS AND MEASURES Metric System FISCAL YEAR January 1 - December 31 ACADEMIC YEAR January - December ABBREVIATIONS Adcol - Administrative College CHE - Commission for Higher Education CIDA - Canadian International Development Agency DFP - Department of Finance and Plai.iing DLE - Department of Labor and Employiient DoW - Department of Works DPM - Department of Personnel Management ETD - Employment and Training Division FAS - First Assistant Secretary ICB - International Competitive Bidding IT - Information Technology LCB - Local Competitive Bidding MDTRD - Manpower Development, Training and Resource Division NTP - National Training Policy PETT - Pre-employment Technical Training PCC - Project Coordinating Committee PCR - Project Completion Report PIP - Public Investment Program PPAR - Project Performance Audit Report PNG - Papua New Guinea RMS - Resource Management System RTC - Regional Training Center SDU - Staff Development Unit SOE - Statements of Expenditure TTU - Transitional Training Unit TLP - Training and Localization Plan UNDP - United Nations Development Program UPNG - University of Papua New Guinea WPS - Work Permit Scheme  FOR OFICAL USE ONLY PAPUA NEW GUINEA PUBLIC SECTOR TRAINING PROJECT Table of Contents Page No. LOAN AND PROJECT SIMMARY .... . . . . . . . . . . . . . iii I. INSTITUTIONAL REFORM IN PAPUA NEW GUINEA . . . . . . . . . .1 A. Introduction .1... . . . . . . . . . . . . . . . . . . B. Reform Program .... . . . . . . . . . . . . . . . . . 2 I. ISSUES AND POLICIES IN THE TRAINING SECTOR . . . . . . . . . 6 A. Introduction .... . . . . . .. 6 B. Issues .... . . . . . . . . . . . . . . . . . . . . . 6 C. Policies .... . . . . . . . . . . . . . . . . . . . . 9 D. Bank's Experience in Education, Training and Institutional Develcpment . . . . . . . . . . . . . . . 12 III. THE PROJECT .15 A. Origin of the Project . . . . . . . . . . . . . . . . . . 15 B. Project Rationale, Objectives and Scope . . . . . . . . . 15 C. Project Description . . . . . . . . . . . . . . . . . . 16 IV. PROJECT COSTS, FINANCING AND IMPLEMENTATION . . . . . . . . 25 A. Costs . . . . . . . . . . . . . . . . . . . . . . . . . . 25 B. Financing .... . . . . . . ....... . . . . . . . 27 C. Project Management and Implementation . . . . . . . . . . 28 D. Environmental Impact .33 E. Impact or Women .33 V. BENEFITS AND RISKS ..33 A. Benefits .33 B. Risks ..33 This report is based on the findings of a preappraisal mission which visited Papua New Guinea (PNG) during October 1989 and an appraisal mission consisting of Messrs. W.E. Rees (task manager), M. Bray and M. Turner (consultants), and Ms. Mieko Masuda (project cost analyst) which visited PNG during February- March 1990. Peer reviewers were Mr. T. Schmidt (institutional issues) and Ms. R. Hees (educational issues). This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Table of Contents (Cont'd) Page No. VI. AGREEMENTS REACHED AND RECOMMENDATION . . . . . . . . . . . 34 TABLES IN TEXT 4.1 Summary of Project Costs by Component . . . . . . . . . . 25 4.2 Summary of Project Costs by Category of Expenditure . . . 26 4.3 Financing Plan . . . . . . . . . . . . . . . . . . . . . 27 4.4 Project Expenditure by Procurement Category . . . . . . . 31 ANNEXES 1. Enrollments and Staffing in Training Institutions 2. Planning and Coordination of Training 3. Organization Chart - Department of Personnel Management 4. Summary of Technical Assistance and Fellowships 5. Organization Chart - Department of Labor and Employment 6. Organization Chart - Administrative College 7. Summary Account by Project Component 8. Summary Account by Year 9. Implementation Schedule 10. Organization Chart - Project Management and Coordination 11 Estimated Schedule of Disbursements 12. Selected Documents Available in the Project File MAP: IBRD No. 22739  - iii - PAPUA NEW GUINEA PUBL-C SECTOR TRAINING PROJECT Loan and Proiect Summary Borrower: Independent State of Papua New Guinea Amount: US$20.8 million equivalent Terms: Repayable in 20 years including 5 years of grace at the Bank's standard variable interest rate Project The basic objectives of the project are to strengthen in- Description: service training in the public and private sectors and increase the supply of specialized high-level persannel to staff the Government's policy and planning agencies and meet personnel shortages in te-hnical fields. Specific_lly the project would: (a) support the implementation of the National Training Policy (NTP) through strengthening the capacity of the Department of Personnel Management (DPM) to promote, coordinate, monitor and evaluate training in the public sector and strengthen the capacity of the Department of Labor and Employment (DLE) to play a similar role in the private sector; (b) upgrade and reorient the Administrative College (Adcol) towards its new role as defined under the NTP namely to focus on short, intensive skill development courses and executive development programs and place greater emphasis on research, curriculum development and the training of trainers; and (c) finance an overseas fellowship program for training in policy and planning fields and in specific technical fields which is not presently available in PNG. The project would finance civil works, equipment, teaching and consumable materials, fellowships and experts. Benefits and The project would assist in improving the quality of in- Ricks: service training in the public sector and improve its relevance to clients' needs. The project would also increase the supply of key high-level policy, planning and technical personnel thus strengthening public sector agencies. It would lead to more effective training in the private sector. The major risk concerns the ability of the relatively inexperienced project institutions to implement the project efficiently. The risk will be reduced through the establishment of a high-level Project Coordinating Committee and the appointment of an experienced project manager.  -iv- Proiect Costs: Local Foreian Total -----US$ million--- Implementation of the National Training Policy 1.0 4.0 5.0 Strengthening of the Administrative College 2.9 5.2 8.1 Overseas Fellowship Program 0.3 5.8 6.1 Baseline Cost 4.2 15.0 19.2 Contingencies Physical 0.3 1.0 1.3 Price Increase 0.7 1.9 2.6 Subtotal 1.0 2.9 3.9 Total Project Cost /a 5.2 17.9 23.1 /a Project expenditures are exempt from duties and taxes. Financing Plan Local Foreign Total ------USS million------ Government 2.3 - 2.3 IBRD 2.9 17.9 20.8 Total 5.2 17.9 23.1 Estimated Disbursements: Bank FY 1992 1993 1994 1995 1996 1997 1998 ------------- US$ million ------------__ Annual 1.6 2.8 4.0 4.0 3.8 3.0 1.6 Cumulative 1.6 4.4 8.4 12.4 16.2 19.2 20.8 Economic Rate of Return: Not applicable MAP: IBRD No. 22739  - 1 - PAPUA NEW GUINEA PUBLIC SECTOR TRAINING PROJECT I. INSTITUTIONAL REFORM IN PAPUA NEW GUINEA A. Introduction 1.1 Papua New Guinea's overall economic performance improved during the latter half of the 1980s. The decline in public investment was halted and some recovery was made in the growth of per capiLa income. Sound macroeconomic management was achieved and this was reflected in solid improvements in the economy's fiscal, balance *. payments, external debt and inflation indicators. However, growth was based mainly on increased activity in the mining sector and less progress was made in the structural adjustment and institutional development needed to promote growth in the non-mining sector. The absence of broad-based growth has increased regional in"ome disparities and this trend has been exacerbated by the fall in agricultural commodity prices. The situation has deteriorated further following the closure of the Bougainville copper and gold mine in May 1989. The mine contributed about 35 percent of export earnings. 15 percent of government revenues and 8 percent of GDP in recent years and its closure has clearly had a major economic and financial impact. The Government has responded vigorously with stabilization measures which include reductions in government spending and public external commercial borrowing, slower growth in domestic credit and higher interest rates, and wage moderation. However, the importance of the stabilization measures should not detract from the longer- term need for higher levels of investment, growth and income generation in the non-mining sector. 1.2 In pursuit of accelerated and more broad-based development, two basic constraints must be addressed -- the country's relatively weak institu- tional capacity and the low level of human resource development. In general, PNG lacks strong institutional capabilities in the form of organizational structures, administrative policies and procedures and management systems to plan, design, implement and sustain effective development programs. Funda- mental to this problem is the weak human resource base. In the post- independence period, the education and training system 1/ has in general 1/ The school system in PNG comprises a six-year primary cycle (grades 1-6), followed by a lower secondary cycle of four years (grades 7-10) and two years of upper secondary education (grades 11-12). In 1988 enrollments at these levels were 395,000; 51,300; and 1,890 respectively. Provincial governments are responsible for the provision of primary and lower secondary education and the national government is responsible for curriculum development, teacher training and all aspects of upper secondary education. Higher education and training (post-grade 10) is carried out in 55 institutions with a total full-time equivalent enroll- ment of 9,800 (para. 2.1).  - 2 - been quite well-financed but even so has fallen short of delivering the skilled and educated personnel necessary to manage a rapidly changing economy. The result is seen in the modern-sector workforce in which little more than half the workers have completed primary or some lower secondary education and miniscule numbers have completed upper seconda-y or higher education. Consequently, there is still heavy (although declining) reliance on expatriates to fill technical, professional and managerial positions. B. Reform Program 1.3 Institutional weaknesses in PNG's administrative system have been reviewed regularly since independence and included a major contribution by the Bank.2/ However it was not until late 1983 that a concerted reform effort began to address the institutional deficiencies which by then were well- documented. The more important deficiencies were: insufficient clarity and lack of prioritization in defining national development strategies; insufficient linkage between central agencies which formulated projects and the provincial authorities responsible for implementing them; a budgetary process which was effective in controlling expenditure but which paid inadequate attention to ensuring that products and services were delivered efficiently; a highly centralized persotsnel system which lacked the flexibility and incentives to allow sectoral and provincial departments to manage scarce manpower resources efficiently; and a planning and budgetary system which gave little guidance to predicting future human resource needs and developing the education and training programs to meet them. 1.4 The reform program, currently under implementation, is a comprehen- sive effort to address a broad range of issues which would lead ultimately to strengthening the entire administrative system.3/ A central element of the program is the Resource Management System (RMS) which aims to link the objec- tives of development to the programs and projects necessary to achieve them. The RMS calls for the definition of national and provincial objectives through a consultative process involving political and community groups and government departments. Each objective is allocated to a 'lead agency' which develops a program to meet the objective in conjunction with other relevant agencies. Actual investments are defined in a series of projects relevant to each objective. The aim of the RMS is to provide clear and meaningful performance 2/ Public Sector Management in Papua New Guinea. An Administrative Overvi- ew, World Bank Report, No. 4396-PNG, June 1983. 3/ For a detailed discussion of the program, see Papua New Guinea, Policies and Prospects for Sustained and Broad-Based Growth, World Bank Report, No. 7121-PNG, Chap. VI., April 1988.  - 3 - indicators for each program/project and thereby permit an assessment to be made of the degree to which outcomes have been achieved in relation to inputs utilized.4/ 1.5 Major projects are combined in the Public Investment Program (PIP) which is the primary means by which the Government implements its development strategy. It contains a detailed and comprehensive set of projects covering a rolling five-year period and these are prioritized to reflect overall develop- ment priorities as defined by the RMS. New project cycle procedures have been introduced which aim at improving interdepartmental and central-provincial coordination in project planning while at the same time establishing a consistent process for project preparation, implementation and monitoring. This process will be reinforced by new procurement procedures, currently being implemented, which aim to reduce time lags for tendering and procurement by half. A proposed Technical Assistance Management Facility will direct short- term technical assistance and training to improving the preparation and processing of PIP projects. To complement these improvements in investment planning and consistent with the RMS's emphasis on measuring outputs, the Government is in the process of introducing a new budgeting system--program budgeting--to shift the focus of expenditures from identify ing and controlling inputs to specifying the outputs of goods and services to be produced by specific organizational units. Program budgeting will lead to a clearer statement of institutional objectives and allocate resources more effectively to achieve them. 1.6 The impact of improved planning mechanisms and administrasive processes will be greatly reduced unless appropriate attention is given to ensuring that competent personnel are available to carry through the improve- ments. Thus the Government has also turned its attention to refoLms in personnel and training p-actices in recognition that human resource issues lie at the heart of the admi.aistrative reform program. At the center of personnel reforms is the Departmer.t of Personnel Management (DPM) which has replaced the colonial era regulatory-style Public Service Commission. In recognition of the great diversity of activities undertaken by public service departments and the need for flexibility in meeting their staffing needs, the Government has opted for the gradual decentralization of personnel functions. The role of the DPM, when fully operational, will therefore focus mainly on policy development, technical support to departments and monitoring their performance in relation to delegated personnel functions. Decentralization has started with the delegation of authority to departments for the recruitment of staff below the senior management level. The decentralization process will proceed at a pace consistent with the capacity of departments to perform the delegated functions. 4/ The RMS is being implemented by 10 provincial governments and implementa- tion is under consideration in the remainder. The introduction of RMS in the central government departments is currently under review with a view to simplifying its structure so that it can be implemented more effectively in the face of substantial public service personnel reduc- tions.  - 4 - 1.7 The Government has long recognized the value of in-service training in improving the productivity and effectiveness of personnel. It has recognized also that while large investments have been made in training programs, there is much scope for improving their relevance to job performance and the efficiency with which training is delivered. In response to these problems, the National Training Policy (NTP) has been approved and is currently being implemented. This calls for the strengthening of the Depart- ment of Personnel Management to promote, coordinate. monitor and evaluate in- service training in the public sector and strengthening of the Department of Labor and Employment (DLE) to perform similar functions for training in the public sector. The NTP would also establish a National Training Council (NTC) which would be responsible for advising the Government on training policies, priorities and resource requirements. This advice would be based on analyses by DPM and DLE of the Three-Year Training Plans which are required to be sub- mitted by all public sector agencies and major private firms under the NTP. 1.8 The NTP also calls for the strengthening of the Administrative College (Adcol) to play a pivotal role in in-service training. Adcol was established in 1963 to train public servants in basic administrative skills. The focus was originally on practical training but also on general education courses to make up for the lack of formal education of many public officials in the 1960s. Early training reflected the colonial status of PNG and empha- sized district administration and the maintenance of law and order. With independence, the focus changed to training for economic and social develop- ment as health, education, infrastructure, small business, e__., expanded. Adcol has made a major contribution to PNG's development and has many dist4n- guished alumni. However, in recent years, Adcol has suffered from weak management associated with a rapid turnover among its directors. It has become increasingly out of touch with the skill development needs of its public service clients and has focused too much of its resources on long, academically-oriented courses more suited to the neighboring University of Papua New Guinea (UPNG). A new director has recently been appointed and he is charged with moving Adcol in the directions mandated by the NTP. Adcol will reorient its activities towards short intensive skills development courses aimed at rtising the performance levels of working public servants. Particu- lar emphasis will be placed on short executive development courses for managers who find themselves working increasingly in a rapidly changing And more complex operational environment. But Adcol will also extend its activi- ties beyond the delivery of training programs. It will develop the capacity to become a training resource center for public service departments respon- sible for research and consultancy on training issues, curriculum development, training of trainers, etc. 1.9 The high priority being given to improving management training is underscored by the work of the Transitional Training Unit. The TTU which ope:ated during 1987-90, was set up as an interim arrangement to improve the delivery and quality of management training while Adcol underwent its program of strengthening and reorientation. The TTU designed and tested management training materials through courses given to central and provincial depart- ments. It also institutionalized management training in the departments through the training of trainers, promoting training technologies and establishing working relationships between TTU, Adcol, DPM and the  - 5 - departmrents. The staff of the TTU were recently transferred to the Program Management Unit of the Department of the Prime Minister where they are now workirg mainly in support of the development of the RMS.  II. ISSUES AND POLICIES IN TdE TRAINING SECTOR A. Introduction 2.1 The success of Papua New Guiniea's ambitious plans to create more effective administrative processes and a better managed public sector will depend crucially on the ability of the training system to produce skilled and motivated personnel who are not merely able to perform their designated tasks effectively but also are amenable to change and improvement in tthe administra- tive system. Tiius training is an integral part of PNG's program of administrative reform. It is carried out in a great variety of institutions. At the post-secondary level, training is undertaken in 55 institutions offer- ing about 350 courses with a full-time equivalent enrollment of about 9,800. Apart from the two universities, the post-secondary system has a strong sectoral orientation with heavy concentration in teacher training, health and agriculture/forestry. MIddle level skill training .s carried out in 8 technical colleges (enrollment 1900) and the apprenticeship scheme (900). In addition to formal institutional training, in-service training courses are widespread in the public sector and among the larger private firms but to a much lesser extent in smaller firms in the private sector. Annex 1 provides enrollment and staffing data on the major training institutions. 2.2 The above data characterize a training system which is highly fragmented, with a large number of institutions enrolling a relatively small number of students. Student/staff ratios are low and unit costs high. Moreover, the system is heavily subsidized with most students receiving generous allowances. The system is almost totally government-financed and there are few incentives for the private sector to finance training. However, the major constraint to the system's expansion is not lack of budgetary resources, which in general have been adequate, but rather the lack of graduates from the secondary schools with sufficient levels of achievement to qualify for entry to training courses. These issues are described in more detail belcw. B. Issues 2.3 Inadequate Capacity. Nearly 15 years after independence, Papua New Guinea's low level of human resource deve.opment stands out as one of the major constraints to the country's development. In the post-independence period, the training (and education) system has fallen short of delivering the skilled and educated personnel necessary to manage a rapidly changing economy. Consequently, the modern sector workforce is still heavily dependent on expatriates who occupy about half the administrative and managerial positions and about 17 percent of the professional and technical positions. 2.4 A major constraint which has restricted the capacity of the training system to meet the denmand for skilled personnel has been the inability of the secondary schools to provide adequate numbers of graduates qualified to enter training courses. This has been especially true for higher level courses. The expansion of upper secondary schooling has been restricted by the desire to avoid educated unemployment. This cautious approach to expanding  enrollments wh3n combined with the high dropout rates within the system and the demand by employers for the direct employment of upper secondary gradu- ates, has greatly reduced the flow of qualified graduates to the training system. At the middle level of skill training, enrollments in the technical colleges and the apprenticeship scheme have been constrained by the supply of quality inputs but also by a lack of demand by employers for the outputs of thase institutions whose training is perceived to lack quality and relevance. The result has been declining enrollments in pre-employment technical training (PETT) courses and apprenticeships and in static enrollments in technician courses. 2.5 Efficiency. The training system, especially at the higher levels, is highly fragmented into a multiplicity of institutions and courses (para. 2.1). As a result, the system has failed to achieve economies of scale, which has led to the costly underutilization of physical and teaching resources. The situation is further exacerbated by high dropout rates and the result is high unit costs per graduate throughout the system. In contrast, the training system enjoys high levels of external efficiency at the higher levels. This is to be expected to some extent, since many training institu- tions are run by government departments and the majority of their graduates are targeted for departmental employment. Furthermore, high employment levels would also be expected given the general scarcity of citizens with higher training. This is borne out by a recent tracer study of 1987 UPNG graduates which showed that about 80 percent were in employment immediately after graduation or were intending to pursue further education. Over 90 percent of the employed were in jobs relevant to their training. However, at the middle levels of skill training, a recent study showed that only 52 percent of PETT trainees were employed in occupations relevant to their training. Although the information is too limited to draw firm conclusions, the study should be taken as a warning sign about the relevance of middle-level skill training to the needs of the labor market. 2.6 Quality and Relevance. At the middle level, the skill training system suffers from the usual problems--poorly trained instructors, inadequately equipped workshops and curricula which may not be relevant to the skill needs of the labor market. The appropriate mode of training also emerges as an issue. It is likely that too much training is taking place in expensive formal institutions which lack the flexibility to respor.d quickly to rapidly changing skill needs. This suggests that more training should be shifted to the workplace while the formal training institutions concentrate on providing short modular courses in basic skills and in skill upgrading. Training in the workplace ensures a high degree of relevance to employers' needs while at the same time having the flexibility to respond quickly as skill needs change. 2.7 At the higher levels of training, courses are in general well- financed and studant/staff ratios are low. However, the structure of enroll- ments does not seem to be particularly relevant to the needs of PNG's develop- ing economy which would seem to require a strong concentration on science/ technology based courses. Within the university system as a whole, the University of Technology acc.,Ants for only 27 percent of total enrollments. Within UPNG, enrollments in the science faculty account for only 15 percent of  - 3 - total enrollments compared to 40 percen; for the faculty of arts. The key institutions serving primary industries (agriculture, forestry and fisheries) account for only about 6 percent of total enrollments in higher education. 2.8 Enrollment Disparities. Enrollments in training courses reflect the fact that female enrollment rates decline at each subsequent level of schooling. Girls comprise 44 percent of total enrollments at the primary level, 38 percent at lower secondary and 27 percent at upper secondary. Consequently enrollments in training institutions are only about 33 percent female. Moreover, this proportion is inflated by enrollments in traditionally strong female fields such as nursing and teacher training where females account for 69 percent and 46 percent of enrollments respectively. In the universities, female enrollment is only 14 percent in bachelors' degree courses, concentrated mainly in the arts and education faculties. This situa- tion reflects traditional attitudes which have devalued the need for female education. Although these attitudes appear to be changing as evidenced by the high access rate to grade 1 (95 percent), girls are still leaving school at disproportional rates as they progress through the system. 2.9 In-service Training. Within the public sector, in-service training activities are widespread but are hampered by poor planning, coordination and delivery. The core of the system, the Administrative College, is not perform- ing effectively in providing an appropriate range of skills upgrading courses, especially intensive management courses for middle-level and senior managers (para. 1.8). The latter are of particular importance to public sector managers as they contend with increasingly complex management decisions and a rapidly changing policy environment. The recently established Department of Personnel Management has been given the mandate, under the NTP, for the planning, coordination, monitoring and evaluation of training within the public sector. When fully operational, the DPM is expected to achieve substantial improvements in in-service training in the sector. Information on in-service training in the private sector is limited. Large enterprises have a strong commitment to in-service training but smaller enterprises less so. The Department of Labor and Employment has a similar mandate for promoting training in the private sector as the DPM does in the public sector. However, implementation of this function is impeded by lack of trained staff within DLE. 2.10 Financing of Training. The inability of the training system to meet the country's requirements for skilled citizens has been not so much a matter of inadequate allocation of budgetary resources as a lack of qualified inputs to training courses. This is borne out by the high unit costs of enrollments and graduates which are due, in large part, to small enrollments (and high dropout rates) in many courses. Thus although overall resource allocations seem to have been adequate in terms of the size of the training system, the quality of training has not been consistent with this level of support. Within training institutions, salaries are the major category of exper.diture reflecting the high salary levels in general in the public sector and, especially in higher level courses, the employment of expensive expatriates. Salaries together with other overheads (especially boarding), leave only limited funding for the investments necessary to improve quality such as learning materials, up-to-date equipment, consumable materials, etc.  2.11 Cost sharing in the training system is almost non-existent and subsidies for students increase with the level of training. In vocational centers, fees account for about 5 percent of unit costs; in the technical and teacher training colleges there are no fees and students receive a stipend. In the -niversities fees are paid by the Government and a higher stipend is paid to students. Cost sharing with the private sector (apart from the apprenticeship scheme) is also almost non-existent. Although the private sector has access to the graduates of the public sector training institutions and tax rebates are available to encourage training, there is at present inadequate incentive, in the face of high occupational mobility and doubts about the quality and relevance of training, for private employers to share the cost of training beyond the few students now sponsored directly by them. 2.12 Planning, Management and Coordination. The public sector pre- service training system comprises the autonomous universities and clusters of other training institutions under the direct control of line departments (Education, Public Health, Agriculture, etc.). This fragmentation in the management and delivery of training has precluded the development of overall planning for the system. It is difficult to specify overall objectives for training, allocate resources and monitor progress in achieving the objectives. It is not possible, under present conditions, to specify a 'higher education' budget. Moreover, although the training system is supposed to serve the human resource needs of the economy, there is no effective mechanism for measuring these needs and relating them to the outputs of the training system. This situation has resulted in many proposals for the rationalization of the training system but little progress has been made to date. Nevertheless, a first step was taken in 1983 with the establishment of the Commission for Higher Education. The CHE has an advisory role which includes advice to the Government on the allocation of budgetary resources to the training institu- tions and policies regarding the award of scholarships within PNG and overseas. It also administers the National Tertiary Scholarship Scheme. However, CHE has no direct responsibility for the operations of the training institutions and thus cannot compel institutions to conform to its recommenda- tions. The influence of CHE, in its present form, is thus potential rather than real. A second step towards reform and rationalization is at present underway in the form of the preparation of a higher education plan, a first draft of which was recently completed. The plan will recommend a substantially more powerful role for CHE in the planning and coordination of higher-level training. UNDP is expected to provide expert assistance to CHE in developing its new role. C. Policies 2.13 The Government has reversed recent trends towards a lower priority for the social sectors and has called for a massive increase in budgetary allocations for education and training--almost doubling the allocations in the  - 10 - 1989-93 PIP compared with the previous one.5/ Also indicative of the new priority for human resource development in the PIP is the large number of projects in economic and infrastructure sectors with training components. 2.14 The Government's strategy calls inter alia for: (a) the rapid expansion of upper secondary enrollments to break the bottleneck caused by the shortage of graduates qualified to enter higher education and training; (b) expansion of training capacity to absorb all available grade 10 outputs; and (c) a doubling of university enrollments. The Government has also established several medium-term objectives relevant to the training sector namely: (i) to strengthen the links between enrollment targets and curricula and priority needs for higher-level skill training; (ii) rationalize higher education and training to focus on high priority subjects, improve internal efficiency and reduce unit costs; (iii) provide incentives for private employers to undertake employment-specific training for school leavers; and (iv) restructure student financial support to ensure that the beneficiaries of higher-level training contribute to its cost. 2.15 While addressing a priority need, the target of an eight-fold increase in upper secondary enrollments and a doubling of university enroll- ments over the next 10 years seems unachievable in the face of current constraints. At the upper secondary level, the major constraint is likely to be lack of qualified teachers especially in math, science and English. These are in short supply everywhere and it is unlikely under existing employment conditions, that PNG would be able to attract sufficient numbers to support the planned expansion. The long-term solution is to staff the national high schools with citizen teachers but the scarcity of teacher trainees means that there will continue to be heavy dependence on expatriate teachers in the foreseeable future. The constraint on the target for doubling university enrollments is likely to be the shortage of grade 12 entrants rather than lack of teachers. Although university teachers will continue to be largely expatriate, requirements are relatively few and the recruitment market fairly extensive. On the other hand, the pool of grade 12 graduates has remained static at about 800 p.a. in recent years and the demand from other higher level institutions and from employers for direct employment, restricts the pool of potential university entrants even further. This situation will improve over time as the expansion of upper secondary enrollments takes effect. 2.16 The proposal to permit all grade 10 leavers to proceed to some form of training does not seem to be a viable one at this stage. At present only about 35 percent of grade 10 graduates proceed to further education and training. Thus under the proposed policy over 6,000 additional school leavers would have to be trained each year. However the formal sector workforce, where the ma;ority of trained workers would seek employment, would be unable to absorb the annual increase in the face of cutbacks in public sector employ- ment and poor investment prospects in the non-mining private sector. While 5/ The 1990-94 PIP showed a further increase of 15 percent over the preceding PIP in resources to be allocated to education and training.  - 11 - widespread skill shortages exist in PNG, the problem cannot be solved through a mass training effort. The shortages will be most effectively overcome through a steady expansion of training efforts in line with identified demand in the labor market and with due regard to maintaining quality and relevance. If greatly expanded training opportunities for grade 10 leavers are to be considered, they should focus on preparation for self-employment in the non- formal sector and combine training with access to such complementary inputs as start-up credit and technical assistance. 2.17 The Government's medium-term objectives are sound and are directed towards making bigher education and training more relevant to labor market needs, improving the efficiency and cost effectiveness of higher education and training and getting private employers and students to make a greater contri- bution to the costs of education and training. Progress is being made in meeting these objectives. A Human Resource Planning Branch is to be established in the Department of Finance and Planning (DFP) which would be responsible for human resource planning at the macro level utilizing data provided by such key agencies as CHE, DPM, DLE, etc. Its work would provide the analytical basis for strengthening the linkage between enrollments and skill needs. Such linkage would be further strengthened with data from the Three Year Training Plans now being implemented under the NTP (para. 1.7). Progress is also being made in rationalizing higher education. The recently- completed draft of a higher education plan makes recommendations for a more cost-effective .tilization of training institutions and for strengthening the role of CHE in planning and coordinating higher education and training. As an incentive to the private sector to undertake training, a two percent payroll levy has been introduced from which would be deducted the costs of training actually undertaken by firms. A start has also been made on the restructuring of student financial support. Regarding the latter, the continued award of scholarships will depend in future upon student performance with failing students losing their scholarships and marginal students being required to pay a penalty. 2.18 Inadequate planning, coordination and delivery of in-service training programs is being addressed in the National Training Policy which is an ambitious attempt to solve these problems and create a rigorous framework for the delivery of quality training. The NTP defines priorities, objectives and guidelines for the organization and management of training. Its implemen- tation will be largely the responsibility of DPM, DLE and Adcol. Considerable strengthening of these bodies will be necessary before they have the capacity to effectively implement the NTP. When the latter is achieved it will permit the National Training Council, being set up under the NTP, to become a powerful mechanism for contributing to the achievement of the Government's medium-term objectives in the education and tr,4ning sector. 2.19 Policies currently in place, or being formulated, will result in a much more rational mechanism for planning and coordinating both pre-service and in-service training. A strengthened CHE (para. 2.12) will be responsible for planning and coordinating a restructured and more efficient system of higher-level pre-service training institutions. Although operational responsibility for the individual institutions will not be transferred to CHE, the latter's role as adviser to the Government is expected to be greatly  - 12 - strengthened in dealing with the size, structure and content of the higher education and training system and with the level of resources necessary for its cost-effective operation. The planning and coordination of in-service training will likewise be strengthened under the National Training Council. Its terms of reference and associated regulations have been formulated and it has met already as an interim body. The NTC will appoint a director, who will act as chief adviser to the Government on in-service training issues and policies. Under the NTC, DPH will handle in-service training matters for the public sector and in parallel, DLE will carry out a similar function in rela- tion to the private sector. Thus there will be clear lines of authority for planning, policy and coordination of pre-service training running from the institutions/departments to the Government through the CHE. For in-service training, the line will run from public sector departments through DPM and the NTC to the Government and from private firms through DLE via the NTC to Government. This is represented diagrammatically in Annex 2. D. Bank's Experience in Education, Training and Institutional Development 2.20 The Bank's lending strategy in the education and training sector has been consistent with the Government's priorities and has been supported by three lending operations. The first (Credit 661-PNG in 1976) focussed on strengthening training for middle and higher level personnel in agriculture, health, teacher training and technician training for industry. The project performance audit report (PPAR-No. 5126 of June 15, 1984) concluded that while project implementation was satisfactory, enrollment and employment targets were not reached due primarily to changing skill requirements and the lack of qualified secondary school entrants to the training courses. These outcomes indicate that project design should have paid greater attention to estimates of human resource requirements and the likely level of outputs from the secondary school system. In the case of technician training, inadequate attention was given to the relative lack of incentives for employers to release and pay trainees and to the opportunity cost of training to the self- sponsored trainees. Nevertheless some success was achieved in the teacher training component. Although output targets were not achieved, the actual outputs did lead to a significant replacement of expatriate teachers in the provincial high schools with a concomitant reduction in recurrent costs. 2.21 The second project (Credit 1087-PNG/Loan 1934-PNG in 1981) assisted in strengthening management of the education system, improving quality in primary education through curriculum development and expanding textbook supply, strengthening student assessment and teacher training and expanding primary schooling in underserved provinces. The PCR for the project indicates that enrollment targets were exceeded and substantial progress was made in reducing enrollment disparities among provinces. However, the project was not successful in improving retention rates. Localization of staff in the teacher training colleges was improved and substantial numbers of personnel were trained in various fields of educational development. Textbooks were produced in record volumes but there were problems in distributing the materials. The PCR concludes that institution building related to the strengthening of curriculum, examinations and project monitoring and evaluation was successful and sustainable. The project's contribution to institutionalizing planning  - 13 - procedures represented a first step in what must be a long-term process. Project management was highly satisfactory. The third project (Loan 2395-PNG in 1984), which is currently being implemented successfully, responds to the need to expand secondary education and improve its quality while containing costs. The project will ease the bottleneck in the supply of adequately prepared secondary school graduates which has retarded the expansion of higher education and failed to meet the demand of employers for recruits with a sound general education. The project will provide about 5,000 new secondary school places, strengthen curriculum development and teacher training and improve educational planning, cost control and the linkage between secondary education and labor market needs. 2.22 The two completed projects offer two major lessons of relevance to the design of the proposed project. First, careful attention needs to be given to assessing training requirements and ensuring that training is flexible enough to respond to changing demand for different types of training. In the proposed project, the prime responsibility for defining the major training needs and the identification of the majority of candidates for fellowships will lie with the individual departments thus ensuring that the immediate employer determines training needs and priorities and is well-placed to adjust the fellowship program to changing needs as necessary. Second, the two completed projects were implemented satisfactorily largely because special attention was given to developing sound project management units staffed with experienced personnel. In the design of the proposed project, special emphasis has been given to project management and coordination including careful attention to appropriate mechanisms and procedures and to the employ- ment of outside experts. 2.23 Although only three projects have been processed in the education sector in PNG, the Bank's lending has probably had more influence on educa- tional development that the small number of operations might imply. The last two projects have had some sector-wide impact on improving management, planning and the quality and relevance of education and are contributing to the development of a more efficient and cost-effective education system. This impact has been reinforced by recent sector work on the financing of education (Report No. 6767-PNG, June 1987) which the Ministry of Education has indicated is a valuable input to policy formulation. A similar contribution was made by the extensive treatment of human resources issues ir the 1988 Economic Report (Report No. 7121-PNG. April 1988). Additional sector work has also been completed recently on issues and policies in training. 2.24 The Bank has been asked by the Government to take the lead role among donors in the education and training sector. The implications of this request are not clear at this stage and consequently a sector strategy paper is under preparation to provide guidance on future activities. Nevertheless, the Bank sees a possible substantial role in two major areas--the restructuring of the higher education system into a smaller, better managed, more relevant and cost-effective system and the expansion and quality improve- ment of upper secondary education to provide better quality inputs to higher level training courses and for direct entry to employment. Support in both these areas would assist in alleviating PNG's severe shortage of high-level personnel, accelerate localization and strengthen PNG's ability to handle the  - 14 - development challenges of the future. Such assistance would reinforce the country's ongoing efforts in institu-ional reform and also reinforce support for strengthening public sector training under the proposed project. 2.25 The tank has supported the Government's administrative reform program through an ongoing dialogue and sector work aimed at improving public sector management (para. 1.3) and through recent sector work on absorptive capacity problems. The latter report reviewed the institutional constraints to the implementation of PNG's development program. It reviewed issues relating to: the shortage of skilled personnel; procedural and regulatory constraints in inter-agency coordination, project preparation, funding and monitoring; and bottlenecks which retarded actions in land acquisition, project audit and evaluation, management of technical assistance, etc. The Bank's report made a number of recommendations aimed at alleviating many of the above problems. These are now being implemented or are under consideration by the Government.  - 15 - III. THE PROJECT A. Origin of the Proiect 3.1 Possible Bank assistance for public sector training was a topic in discussions between the Bank and the Government in April 1988. This was followed by an official request for assistance in September 1988. The proposal was further refined during management discussions with Government in November 1988 and a mission identified and started preparation of the project in February 1989. The project was pre-appraised in October 1989 and appraised in February-March 1990. B. Proiect Rationale, Objectives and Scope 3.2 The Bank has previously assisted institutional improvement and personnel training in PNG. It is therefore well-placed to continue support in these areas. The Government's ongoing administrative reform program includes more effective training as a major ingredient to be achieved through implementation of the NTP. The key to the successful implementation of the NTP is the effective performance of DPM, DLE and Adcol. The proposed project would strengthen the capacity of these agencies to carry out their roles under the NTP. In the longer term, this would result in a better managed, more cost effective and relevant training system. The project would also assist in filling important skill gaps by providing overseas training opportunities in fields which are not available in local institutions. The project is consist- ent with previous Bank assistance to agricultural, health, teacher and technical training (1976) and to the expansion of secondary education to increase the supply of qualified secondary graduates for entry to the training institutions (1984). The basic objectives of the project are to strengthen in-service training in the public and private sectors and increase the supply of specialized high-level personnel to staff the Government's policy and planning agencies and to help meet shortages of technical skills. The overall impact of the project would be to assist in strengthening the management, planning and technical capacities of the public sector and improve the effectiveness of training in the private sector. 3.3 Specifically the project would: (a) support the implementation of the National Training Policy through strengthening DPM's capacity to promote, coordinate, monitor and evaluate training in the public sector. Strengthen DLE's capacity to play a similar role in the private sector; (b) upgrade and reorient the Administrative College towards its new role as defined under the NTP namely to focus on short, intensive skill development courses and executive development prngrams and place greater emphasis on research, curriculum development and the training of trainers; and  - 16 - (c) finance an overseas fellowship program for training in policy and planning fields and specific technical fields which is presently unavailable in PNG. The project would finance civil works, equipment, teaching and consumable materials, fellowships and experts. C. Project Description Implementation of the NTP (Estimated baseline cost, US$5.0 million) 3.4 Department of Personnel Management (US$3.3 million). While DPM is responsible for a range of personnel functions--policy and planning, industrial relations, personnel placement, organization and methods--it is the training function which will be assisted under the proposed project. The organizational structure of DPM is shown in Annex 3. The NTP gives DPM the mandate for promoting, coordinating, monitoring and evaluating training in the public sector and the unit responsible for training in DPM is the Manpower Development, Training and Resource Division (MDTRD). This division is responsible for handling the Three Year Training Plans being produced under the NTP. Thirty-six of the scheduled 44 such plans have been prepared to date and are currently being implemented. Apart from extracting and analyzing bids for donor-financed training, the MDTRD will take responsibility for overall analysis of the plans and for making appropriate recommendations on opera- tional and policy issues to the Government through the National Training Council. The implications of these activities are not yet clear especially in terms of data-base requirements and appropriate mechanisms for utilizing data. To assist in clarifying these issues the project would finance 11 months of consultant services for a training analyst to advise nPM on how best to utilize the Training Plans to meet long term training needs and to develop a mechanism to link data analysis to policy development to ensure that training is planned and executed in a rational and cost-effective manner. The project would also finance 15 months of consultant services for an information technologist to develop a computerized data base to serve as the basis for the analytical work to be done on the training plans. The consultant would also be responsible for training staff of the MDTRD in operating the data base and for advising on computer software and hardware requirements. During negotia- tions, the Government gave assurances that the training a2alyst and the infor- mation technologist would be appointed by July 31, 1991. 3.5 The Training Plans produced to date are of variable quality and will need further development and refinement. ;. model plan needs to be developed which would provide common stiucture and content and provide the standard from which agencies would work in producing plans. Although there would be some flexibility in the standardized approach in recognition of the different structures and objectives of the various agencies, enough commonality would exist to provide consistent sets of data and clear statements of institutional objectives relating to training. The MDTRD would take the lead role in the further development of the Training Plans, working through the departmental Staff Development Units (SDUs). The project would finance 40 months of consultant services for a staff development and training advisor to assist in further improvement of the Three Year Training Plans and in training staff of  - 17 - the SDUs in training needs analysis and plan preparation. Similar training would also be provided for staff of the MDTRD. The consultant would also assist MDTRD in strengthening the linkage between training and career progres- sion. During negotiations, the Government gave assurances that the staff development and training advisor would be appointed by July 31, 1991. 3.6 The project would also assist in establishing and making operational the National Training Council. An interim NTC has already been convened but much work needs to be done in setting it up on a permanent basis, developing its policy role and establishing its operational procedures. DPM is coordinating this activity. When fully established, thL NTC will be responsible for the oversight of the NTP and its review and revision as necessary. The NTC will advise the Government on training priorities and policies in relation to in-service training in the public and private sectors. The NTC will have a secretariat which will analyze information made available to it by DPM and DLE and provide appropriate advice to the NTC. The secretariat's director has been identified and staff profiles are currently being drafted for the secretariat's supporting staff. Recruitment of staff is expected to be completed by the end of December 1990. The project would assist the NTC to become fully operational by providing 14 months of consultant services for an information technologist to assist in the develop- ment of a data base, training of staff of the secretariat and provision of advice on appropriate software and hardware. Because the NTC is a new body which must develop its own operational procedures, and in view of the likely initial inexperience of its staff, the project would finance 27 months of consultant services for a management advisor to assist in putting the NTC on a sound management basis and to support the establishment of appropriate mechanisms for policy development and advice. A staff development and training advisor would be financed under the project for six months to assist in drawing up a staff development plan for the NTC secretariat together with appropriate training materials. Terms of reference for the consultants to assist DPM and NTC have been agreed with the Bank. During negotiations, the Government gave assurances that the management advisor and the information technologist would be appointed by July 31, 1991 and the staff development and training advisor by January 31, 1992. 3.7 Department of Labor and Employment (US$1.7 million). The DLE has multiple functions covering the private sector relating to industrial rela- tions, policy and research, labor administration, employment, training, etc. (Annex 5). At present, the training function, which is the responsibility of the Employment and Training Division (ETD) is largely concerned with the implementation of the work permit scheme (WPS) and apprenticeship training. In addition to this training responsibility, the NTP calls for DLE to carry out a role in the private sector similar to DPN's in the public sector, namely, to promote, coordinate, monitor and evaluate training. Thus, EDT will be required to ensure that private firms produce the Three Year Training Plans as required under the NTP, analyze data from the Plans and advise the NTC on needs and priorities for training in the private sector. These requirements considerably enlarge the training role of DLE and to be able to implement it, significant institutional strengthening will be required. The computerized data-base needs to be expanded and upgraded. The current system cannot cope with the present work permit scheme and its training and localization  - 18 - implications and so will be inadequate to meet the extra data demands of the NTP, especially for processing data from the Training Plans. Therefore the proposed project would finance 18 months of consultant services for a labor economist to define the nature of the data to be collected, the method of collection and the type of analysis required to meet the needs of ETD (and other divisions of DLE which might need training data such as the Policy and Research Division ard the National Employment Service). The result would be a system which would permit expanded data analysis, wider accessibility to departmental staff and promote the use of information as an input to the policy process. During negotiations, the Government gave assurances that the labor economist would be appointed by July 31, 1991. 3.8 The core of the data system would be the information extracted from the Training Plans. But the opportunity would also be taken under the project to include other relevant data related to employment, skill structure, labor mobility etc. These data, which have been identified within DLE, would be used by other divisions of DLE and also by the national planning authorities. Much data are stored in conventional files in a haphazard manner and data retrieval is difficult. To address these issues the project would finance the establishment of an integrated microfiche system for ETD which contains facilities for photography, storing, displaying and photocopying. Since there is no central location for the collection, classification and storage of printed material, the project would also establish an information unit for DLE to collect, and provide easy access to, a wide variety of relevant publica- tions. The project would finance library furniture, a cataloging system, a microcomputer, training materials and equipment and book purchases. The project would also finance the services of a consultant information specialist for two years to set up the unit and provide in-service training. During negotiations, the Government gave assurances that the information specialist would be appointed by October 31, 1951. 3.9 To handle information-related issues on a continuous basis, DLE has an established position for a systems analyst. However it has not been able to fill the position with a qualified citizen. The post is an important one if DLE is to maintain over the long term, the improvements to its information base proposed under the project. The project would therefore finance two staff years of consultant services to fill the post with a qualified systems analyst. Working in close consultation with the labor economist, the systems analyst would evaluate present data base capabilities and make recommendations for expansion and improvement in relation to DLE's overall information requirements regarding training and related activities. A suitable citizen would be recruited and sent overseas for training as a systems analyst under the project. During negotiations, the Government gave assurances that the consultant systems analyst would be appointed by October 31, 1991 and that the timing of recruitment of the trainee systems analyst would permit an appropriate period of overlap with the expert. The consultant systems analyst would also identify all the hardware and software requirements to be financed under the project to service DLE's data processing needs and also provide in- house training as necessary. 3.10 The expanded and improved data base would support several major functions within DLE including training, localization planning, expatriate  - 19 - employment, etc. However, in order to ensure that these functions are carried out effectively, DLE needs to strengthen its administrative capacity, upgrade management skills and clarify its operational objectives and the organizational structure needed to achieve them. Strengthening DLE in these areas would provide a sound administrative context for the improvements being sought under the proposed project. The project would therefore include three years of consultant services for an organizational development/management training specialist to review organizational structure and management procedures, make appropriate recommendations and provide the necessary in- service training. During negotiations, the Government gave assurances that the organizational development/management training specialist would be appointed by July 31, 1991. Draft terms of reference for all the consultants to assist DLE under the project have been agreed with the Bank. Strengthening of the Administrative College (Estimated baseline cost, US$8.1 million) 3.11 Adcol is the key institution responsible for in-service training in the public sector in PNG. Its overall aim is to raise the productivity of public employees through training in practical skills and management. It comprises a main campus in Waigani and three regional training centers (RTCs) in Waigani, Madang and Rabaul. Adcol is headed by a director who is responsible to the Secretary, DPM. Following a series of acting directors. a permanent director has recently been appointed and this will give firm direc- tion to Adcol's management. The director will be supported by a governing Board which is currently being set up as required under the NTP. The Board would oversee Adcol's long-term development which under the NTP calls for increasing autonomy and revenue-earnizj capacity. Each RTC has a Regional Training Advisory Committee to guide its operation. Adcol's main campus has three main branches which focus on research and development, development studies, and management and accounting, plus administrative support facilities (Annex 6). Adcol currently has 90 courses in its calendar ranging from 40 week courses in accounting and auditing to 2 day introductory computer courses.6/ A recently completed training needs analysis has reviewed all course offerings and will make recommendations on future course development in line with the NTP's emphasis on short practical courses and executive develop- ment programs. Currently, 16 short courses and 5 long courses are being offered with enrollments of 240 and 98 respectively. 3.12 Adcol has an academic establishment of 52 posts on the main campus of which 33 are currently filled, 11 by expatriates. The recently completed training needs analysis which will define future course offerings will clearly have important implications for future staffing. Changes which will be required in staffing structure will be greatly facilitated by the 37 percent vacancy rate among academic posts by permitting new recruitment to be closely 6/ The RTCs focus entirely on short (1-6 week) courses which have a strong practical skills orientation related to local needs. Examples are report writing (1 week), basic bookkeeping (2 weeks), cash accounting procedures (3 weeks), training skills for extension officers (6 weeks), etc.  - 20 - related to new training needs.7/ Further flexibility is provided by the 11 expatriates who are on short-term contracts which provides fairly rapid turnover and therefore further opportunity to change the skill-mix of the academic staff. The present situation in which 58 percent of academic posts are either vacant or filled by short-term expatriates will also assist Adcol in recruiting staff for the increased emphasis to be given to research and development, training of trainers, curriculum development and consultancy services as mandated under the NTP. The RTCs are staffed by a full establish- ment of 26 personnel of which 11 are expatriates. The administrative establishment of the main campus is 94 posts of which 63 are currently filled. 3.13 Staff development is given high priority in Adcol to ensure that teaching staff have appropriate academic qualifications and the skills necessary to teach practical courses. Staff development is provided through release of staff to study at UPNG, overseas fellowships funded bilaterally to pursue graduate programs and through attendance at short skill-oriented courses within Aecol and overseas. At present, three academic staff are studying at UPNG and four are in Canada studying for masters' degrees in public administration financed by CIDA. The proposed project would support an overseas graduate fellowship program of about 25 staff years. This would extend the CIDA program, which terminates in 1990, and broaden its base to include masters programs in business administration, communications, social work. etc.. The project would also support the development of practical skills to permit academic staff to respond to Adcol's increased future emphasis on short, skill-intensive courses. Although there are 80 short courses of 12 weeks or less in Adcol's calender, only 16 are currently being run. Teaching staff who are well-qualified academically need to strengthen their capacity to teach specific skills and also broaden the range of courses they can handle. The project would finance 25 staff years of overseas and local training and also include attachments to relevant institutions for practical learning experience. To reinforce the staff development program, the project would finance 15 months of consultant services for a training-of- trainers adviser to train faculty in instructional methodology, student assessment, etc. During negotiations, the Government gave assurances that the training-of-trainers' adviser would be appointed by October 31, 1991. Details of fellowship and training programs are in Annex 4. 3.14 The project would also assist in the physical upgrading of Adcol's main campus and the RTCs. Adcol's main campus has deteriorated in recent years reflecting its decline in status and the concomitant squeeze on budgetary resources. If Adcol is to achieve the expanded role and enhanced status proposed for it under the NT!, a good deal of physical renovation and 7/ The relatively high vacancy rate does not reflect particular difficulties in recruitment but rather is part of an explicit policy not to fill posts until future needs, related to institutional reorientation, are clarified.  - 21 - some new construction would be needed.8/ On the main campus, general maintenance (carpentry, plumbing, painting) would be financed under the project. In addition, the library would be upgraded through the provision of furniture, audio-visual equipment, air conditioning plant and printing equip- ment. Additional equipment would be provi.dJ for the kitchen/dining hall and storage space extended. Dormitories woulc be renovated including two to be brought up to sufficient standard to house the senior officials who will be resident for the executive development program. Six additional staff houses would be provided to ease the existing housing shortage and solar heaters would be installed in all existing houses as an energy saving measure. Computer capacity, mainly for teaching, but also for administrative purposes would be enlarged. At present Adcol has very limited computer facilities, mainly a few donated PCs ani additional terminals. Computer training is seen as a priority area under the NTP and Adcol plans to greatly expand its capacity in this field. It is also important to extend computer training to the RTCs. The project would finance 131 PCs with associated peripherals and software and a mini computer for use by Adcol's management. The project would also finance a consultant in information technology for 27 months to assist in developing appropriate programs relevant to clients' needs and also to advise Adcol's management on relevant systems for internal administration. During negotiations, the Government gave assurances that the consultant information technologist would be appointed by July 31, 1991. 3.15 The project would support the upgrading of the RTCs and the re- establishment of the Highlands RTC. The RTCs were established in the early 1970s to bring training closer to clients in a more cost effective way. They were abolished in 1982 as an economy measure but three of them were reopened in 1985. The re-establishment of the Highlands RTC in an existing facility is called for under the NTP. It is proposed to do this by sharing the facilities of the Education Resource Center in Mount Hagen. These include existing offices, classrooms, library, dormitory, kitchen and dining facilities. Additional facilities to be provided under the project would include four staff houses, furniture and equipment, toilet and sewerage facilities, library books, audio-visual equipment and improvements to dormitory and kitchen facilities. The Northern RTC at Madang has a well-equipped campus. The major problem is staff housing and it is proposed to construct three new houses under the project. One classroom will also be converted and air conditioned as a computer teaching facility to handle the planned increase in computer training courses. For the Islands RTC at Rabaul, the project would finance renovation of housing, classrooms and dormitories, provide furniture and equipment for the administrative building and kitchen/dining room facilities. The Southern RTC is adjacent to the main campus at Waigani and shares its facilities. The project would provide only limited assistance, namely the 8/ Adcol's requirements for physical renovation. new construction and related equipment were prepared and costed in conjunction with the Department of Works (DoW). Standard designs are available for new construction, including staff housing. Additional land acquisition will not be required.  - 22 - conversion of the old mess building into an executive development center to serve the strong demand for management training. 3.16 Adcol's move towards autonomy and an increasing revenue-earning capacity will require new approaches to management. This will be supported by 4 months of consultant services to develop a plan for institutional autonomy and 23 months of consultant services for a management advisor to develop appropriate internal management systems to govern the main campus and the RTCs. The latter would be assisted by the information technology expert to be financed under the project (para. 3.14). Increasing emphasis on curriculum development, course selection, monitoring and evaluation will require the development of new systems and this will be supported through the provision of 47 months of consultant services comprising a course development adviser (27 months) and various short-term advisers (20 months). During negotiations, the Government gave assurances that the consultant on institutional autonomy, the management advisor and the course development advisor would be appointed by July 31, 1991. The technical assistance program, totalling 116 staff-months, would help to equip Adcol with the sound management and professional capacity to achieve the role defined for it under the NTP. Terms of reference for the above consultants have been prepared and are acceptable to the Bank. Overseas Fellowship Program (Estimated baseline cost, US$6.1 million) 3.17 Papua New Guinea's universities have not been able to meet the demand for high-level personnel in the post-independence period. Although a wide range of degree and diploma programs is offered, expansion has been constrained by the shortage of qualified graduates from the high schools and to some degree by budgetary constraints, especially in recent years. Problems of declining quality also exist in the universities. Although the supply of trained personnel has been deficient in most major skill areas, the problem is especially acute in the fields of policy and planning. There is a widespread perception that citizens with superior qualifications relevant to policy and planning activities--economists, financial analysts, planners, managers, etc.--are in short supply in the key departments. In addition, there are shortages of graduates in specialized technical fields such as petroleum engineering, geology etc. for which training is not available in PNG. The long term solution to these problems is to be found in expanding the universi- ties and improving the quality of their programs. However, in the shorter term, the problem can be addressed through overseas training in programs relevant tc skill shortages and in fields not catered for at present in the local universities. High level training is being assisted by several donors and focusses particularly on graduate programs. This fills a gap in local university education which remains largely undergraduate. 3.18 The proposed project would expand the opportunities available for high-level training overseas. Procedures for identifying and processing over- seas fellowships are firmly established in PNG due to the extensive donor- sponsored training programs which finance around 100 overseas university fellowships annually. Overall responsibility for the process lies with DPM. However, the actual identification of training needs lies with the individual departments which are also responsible for nominating individuals to receive fellowships. This ensures that the training priorities of the employing  - 23 - departments are met and that suitably qualified individuals are nominated for fellowships. This process will be reinforced with the introduction of the Three-Year Training Plans under the NTP which will require clear statements of departmental priorities and associated training needs. Departmental training bids are sent to DPM which reviews them in terms of the country's overall development priorities. DPM also reviews individual nominations for fellow- ships to confirm eligibility for entry to overseas programs. DPM then draws up a prioritized list of fellowships and negotiates with donors to procure appropriate financing. When the list of fellowships is finalized, donors liaise with client departments regarding the administrative processing of individual fellows. Sim.ilar procedures, suitably adjusted to the needs of the proposed project, will be followed for the fellowship component. 3.19 Fellowships amounting to a total of 240 study years would be financed under the project and are summarized in Annex 4. Fellowships would be awarded in two general areas - policy and planning (140 study-years) and specialized technical fields (100 study-years). In policy and planning, fellowships would be awarded in two fields: (a) economic policy including macro-economics, finance, labor, human resources, trade and industry. This part of the program will cover the Departments of Finance and Planning, Labor and Employment, Personnel Management, Trade and Industry, Education, and Health; and (b) policy relating to natural resources management, environment and conservation covering the Departments of Agriculture and Livestock, Environment and Conservation, Minerals and Energy, Fisheries and Marine Resources, Lands and Physical Planning, and Forests. Fellowships would be awarded mainly for graduate study for masters' degrees and graduate diplomas but short courses for developing specific skills and job attachments to provide practical experience would also be included. Require- ments for policy and planning fellowships have been identified by DPM, in conjunction with participating departments. The fellowship program defines the general areas of priority for training and relevant fields of study. The fellowship program would be updated annually and reviewed by the Bank. Fellowships to be financed during the first year of the program have been reviewed and are acceptable to the Bank. Fellowships would be awarded to serving officials in the participating departments. Recipients of fellowships would be occupying positions dealing with policy andlor planning issues or more junior officials who show the potential to move into such positions. The assessment of such potential would be made by the individual departments. Special attention would be paid to maximizing the participation of women in the fellowship program to reflect the fact that female representation declines at each higher level of education, thereby reducing the pool of qualified applicants. During negotiations, the Government gave assurances that age and position levels would not be applied rigidly to women candidates so as to ensure that younger, more junior women, with high potential, would be considered as applicants. 3.20 Fellowships to be awarded for training in specialized technical fields would be mainly at the undergraduate level but some provision would  - 24 - also be made for shorter, skill intensive courses of up to one year's dura- tion. Skill needs would be identified during the preparation and annual updating of the Three-year Training Plans. This information would be passed to DPM which would coordinate the matching of skill needs with training opportunities and the identification of candidates. This would result in an annual fellowship program for each year of the project which would be reviewed by the Bank. Since most of the training would be at the undergraduate level, some of the candidates would be school leavers. Information on this category would be provided to DPM by the Commission for Higher Education which is responsible for the award of national scholarships to school leavers. Women are poorly represented in technical fields in PNG which is partly due to the low proportion of women entering higher education and also to their preference for nontechnical courses. In recruiting candidates for fellowships in technical fields, the Government gave assurances, during negotiations, that special attention would be given to identifying female candidates. 3.21 There is no formal "bonding" system for returning fellows in PNG to ensure that returnees enter jobs for which they have been trained. However, since fellows must be recommended by their departments and remain on the departmei t's establishment while studying, return to the parent department would seem to pose no problem. For the most part it appears that fellows return to their previous positions or to positions relevant to their training. No data are available on the placement of returnees but there is anecdotal evidence that some fellows return to their departments to find that their positions have been filled or in some cases abolished. In view of this uncertainty, the Government agreed during negotiations, to obtain a written undertaking from sponsoring departments, that fellows being financed under the project would return to their previous positions or to positions within the departments which were relevant to the training programs undertaken by the fellows. In the case of fellows who have not been previously employed, such as school leavers, no written undertaking would be required and returnees would be free to seek employment in the public or private sectors.  - 25 - IV. PROJECT COSTS, FINANCING AND IMPLEMENTATION A. Costs 4.1 The cost of the project is estimated at US$23.1 million equivalent net of duties and taxes. The estimated cost by project component is summarized in Table 4.1 and by category of expenditure in Table 4.2. Detailed costs by component and category are given in Annex 7 and project expenditure by year and category in Annex 8. Table 4.1: SUMMARY OF PROJECT COSTS BY COMPONENT Foreign Component Kina Million US$ Million as 2 of Local Foreign Total Local Foreign Total total Implementation of NTP: DPM 0.8 2.4 3.2 0.8 2.5 3.3 75 DLE 0.2 1.4 1.6 0.2 1.5 1.7 89 Subtotal 1.0 3.8 4.8 1.0 4.0 5.0 79 Strengthening of Adcol 2.8 5.0 7.8 2.9 5.2 8.1 65 Overseas Fellowship 0.3 5.7 6.0 0.3 5.8 6.1 95 Program Baseline Cost 4.1 14.5 18.6 4.2 15.0 19.2 78 Contingencies: Physical 0.2 1.0 1.2 0.3 1.0 1.3 80 Price Increase 0.7 1.8 2.5 0.7 1.9 2.6 71 Subtotal 0.9 2.8 3.7 1.0 2.9 3.9 74 Total Project Cost 5.0 17.3 22.3 5.2 17.9 23.1 78 Note: Equipment and materials imported under the project would be exempt from duties and taxes.  - 26 - Table 4.2: SUMMARY OF PROJECT COSTS BY CATEGORY OF EXPENDITURE Foreign Item Kina Million US$ Million as Z of Local Foreign Total Local Foreign Total total Civil works 2.0 0.8 2.8 2.0 0.9 2.9 30 Furniture 0.2 0.1 0.3 0.2 0.1 0.3 30 Equipment 0.2 2.0 2.2 0.2 2.1 2.3 90 Teaching materials 0.1 0.4 0.5 0.1 0.4 0.5 80 Technical Assistance: Project implementation 0.1 0.5 0.6 0.1 0.5 0.6 90 Organization improvement 0.4 3.5 3.9 0.4 3.6 4.0 90 Fellowships and training 0.9 6.6 7.5 1.0 6.8 7.8 88 Consumables and supplies 0.2 0.2 0.4 0.2 0.2 0.4 50 Allowance overseas 0.0 0.4 0.4 0.0 0.4 0.4 95 Baseline Cost 4.1 14.5 18.6 4.2 1 .0 19.2 78 Contingencies: Physical 0.2 1.0 1.2 0.3 1.0 1.3 80 Price Increase 0.7 1.8 2.5 0.7 1.9 2.6 71 Subtotal 0.9 2.8 3.7 1.0 2.9 3.9 74 Total Project Cost ' 17.3 22.3 5.2 17.9 23.1 78 4.2 Base costs are estimated at November 1990 prices. The estimated cost of the overseas fellowship program is based on the current tuition charges and other costs and allowances of the overseas training programs being implemented in PNG (US$24,000 per study year). In Papua New Guinea, participants in long-term overseas training programs (nine months or longer) are allowed to have their families accompany them during the period of their studies, subject to prior approval by their own department and DPM. Therefore, family allowances, based on the standard rate of allowance, are included in the project costs and would be financed by the Government. These are estimated to cover about 30 percent of the participating fellows. Civil works costs for renovation and upgrading of the buildings and expansion of housing of the Adcol main campus and the four RTCs are based on standard cost estimates from the Department of Works. Equipment and furniture costs are estimated on the basis of agreed lists of equipment and furniture and recent catalogue prices. Equipment and materials imported under the project would be exempt from duties and taxes. Import duties or taxes on construction materials have not been identified separately in project costs since such taxes are negligible. The estimated costs of expert services are based on unit costs of similar services and activities in programs currently being implemented in Papua New Guinea.  - 27 - 4.3 The contingency allowances of US$3.9 million (about 202 of base costs) include contingencies for unforeseen physical conditions and for estimated price increases. Physical contingencies were estimated at 51 for civil works, furniture, fellowships, equipment and materials, and 102 for expert services. Price increase contingencies were calculated for both local and foreign costs in accordance with the following expected annual average price increase percentages; local cost 7.OZ in FY91 and 5.5Z thereafter and foreign cost 3.6Z throughout. Accordingly, aggregated price contingencies are estimated at about 13 percent of base costs plus physical contingencies. 4.4 The foreign exchange cost of US$17.9 million, (about 78 percent of total estimated project costs) has been calculated on the basis of the following foreign exchange percentages: civil works - 302; furniture - 302; equipment - 902; teaching materials - 802; fellowships - 95Z; experts - 902; and consumables - 502. B. Financing 4.5 The proposed loan of US$20.8 million would finance 902 of total project cost. This level of cost sharing is based on the increasing need of PNG for external assistance which is partly due to the recent oil price increase as PNG is an oil importing country. The Government would be responsible for the remaining 102 or US$2.3 million. Retroactive financing amounting to US$0.7 million would be provided under the loan for expenditures incurred after December 1, 1990 for civil works, equipment, fellowships and consultant services. Table 4.3: FINANCING PLAN Category of expenditure Government Bank Total ---------- US$ million ---------- Civil works 0.7 2.6 3.3 Furniture, equipment and teaching materials 0.5 3.1 3.6 Fellowships and training - 9.5 9.5 Consultants - 5.6 5.6 Consumables and supplies 0.6 - 0.6 Overseas family allowances 0.5 - 0.5 Total 2.3 20.8 23.1  - 28 - Recurrent Expenditures 4.6 The project would not generate any significant additional recurrent expenditures. The only incremental recurrent expenditure generated when the project is fully operational would be consumable materials and supplies for Adcol. These would amount to about US$0.1 million per year which is equiva- lent to about 3 percent of Adcol's recurrent budget for 1990. This additional expenditure could be accommodated by Adcol without difficulty. C. Project Management and Implementation 4.7 The implementation schedule is shown in Annex 9. The project components would be managed by the respective agencies which have functional responsibilities in the fields concerned: DPM, DLE and Adcol. A Project Coordinating Committee (PCC), with suitable terms of reference, has been established by the Department of Personnel Management (DPM). It is chaired by the Secretary of DPM, and its members include the Secretaries of DLE and the Department of Finance and Planning (or their nominees), the Director of Adcol, the Director, Office of International Development Assistance, and the First Assistant Secretary (FAS) of the Manpower Development, Training and Resource Division of DPM. The PCC would be responsible for the overall coordination of project implementation, provide directives on policy issues and resolve major problems which might arise during project implementation. The PCC would periodically review progress in the implementation of all the components. During negotiations. the Government gave an assurance that the PCC would remain operational throughout the project implementation period. The organizational structure for project coordination and management is shown in Annex 10. 4.8 The Project Manager, who would be responsible to the Secretary of DPM (the Chairman of the PCC) for the overall coordination and management of the project, has been appointed and would be retained throughout the project period. The manager, whose terms of reference have been agreed to by the Bank, would be responsible for coordinating, monitoring, reviewing and evaluating project activities, loan administration, including disbursements, preparing consolidated semiannual progress reports and Part II of the project completion project, arranging for annual audits of project accounts, routine correspondence and reporting to the Bank, and for ensuring that all the project activities are implemented in accordance with the plans agreed to. The manager would assist in the preparation of annual work plans and budgets, procurement of works, goods and services and coordination and supervision of consultant services. The manager would be provided with necessary administra- tive support by DPM and her salary would be financed under the project. 4.9 The First Assistant Secretary of MDTRD would be responsible for implementing the DPM component (strengthening the capacity of DPM to effectively implement the NTP for the public sector) and for the overseas fellowship program. In the context of implementing the overseas fellowship program, the FAS would cooperate with the departments participating in the fellowship program. Management of the DLE component, which would strengthen the capacity of DLE to implement the NTP for the private sector, would be the responsibility of the Employment and Training Division of DLE. ETD would be  - 29 - responsible for planning, budgeting, procurement of services and monitoring of the component's activities. It would also be responsible for staff develop- ment and tra!aing of DLE staff. The Management Services Division of DLE would be responsible for financial administration of the component and accounting staff of the division would be assigned to assume this responsibility. The Assistant Secretary of ETD has been designated project manager for the DLE component with terms of reference acceptable to the Bank. 4.10 The Director of Adcol would be responsible for management and implementation of the Adcol component including the four RTCs. The Director would be supported by an implementation committee, headed by a project manager, appointed from existing staff, and consisting of representatives from the Administration Branch, and the Research and Development Braich of Adcol, the Department of Works and the RTCs. The committee would be responsible for the preparation of annual plans and budget, financial administration, procure- ment of works and services, coordination and supervision of expert services, monitoring and evaluation of the component's activities and for coordination with DoW for civil works. Civil works would be managed by DoW. DoW is at present successfully managing all civil works included under the secondary education project (Ln. 2395-PNG) and has the capacity to manage the works included under the proposed project. The existing staffing of Adcol would be adequate to implement this component. The implementation committee with suit- able terms of reference has been established and the project manager appointed. 4.11 The proposed implementation period is six years (Annex 9). To allow sufficient time for submission of final withdrawal applications following the scheduled completion date of March 31, 1997, the Closing Date would be March 31, 1998. Due to the relative inexperience of project institutions and the complexity of project design, above-average supervision coefficients of about 15 staff-weeks per year would be required in the first 3 - 4 years of project implementption. The Bank would supervise the project around March and September in each year, which would coincide as far as possible with the preparation of the semi-annual progress reports (para. 4.20). A third mission would be scheduled as necessary. Overall implementation would be the responsibility of the task manager who would be assisted by a project architect to handle civil works procurement and an operations officer to oversee the procurement of expert services and fellowships. Status of Project Preparation 4.12 Physical inputs required for the upgrading of the main campus of Adcol and the four RTCs have been identified. Equipment needs, including computer hardware and software, have also been identified together with consultant services necessary for reorienting course structure and for strengthening the management of Adcol. Equipment specifications and standard designs and bidding documents for civil works are available. Overall fellowship requirements have been identified and the detailed first-year program has been prepared. Consultant services for the institutional strengthening of DPM and DLE have been identified. Project management procedures and staffing have also been agreed upon. Draft terms of reference for consultant services have been prepared and are acceptable to the Bank.  - 30 - Procurement 4.13 Procurement arrangements are summarized in Table 4.4 and procedures would be as followss (a) Civil works (estimated value US$3.3 million) would comprise renova- tion and upgrading of buildings and expansion of housing of ,.he main campus of Adcol and the RTCs in four provinces. Individual contracts for specific locations ranging from less than US$100,000 equivalent to US$l million would not attract foreign bidders. Local construction contractors are available in PNG. Contracts for civil works would thus be awarded on the basis of local competitive bidding (LCB) procedures accept&ble to the Bank. (b) Equipment, furniture, teaching materials and consumables. Equip- ment, would be grouped, to the extent practicable, to facilitate bulk procurement, and bid packages exceeding US$100,000 equivalent (estimated value US$2.0 million) would be awarded in accordance with Bank guidelines for international competitive bidding (ICB). Equipment in packages not exceeding US$100,000 equivalent and furniture (estimated value US$0.8 million) would be procured in accordance with local competitive bidding (LCB) procedures acceptable to the Bank. Items of less than $25,000, up to an aggregate of US$0.2 million, may be purchased by shopping on the basis of at least three competitive price quotations from suppliers eligible under Bank guidelines. Books and teaching materials (estimated value US$0.6 million) would be procured in accordance with Government regulations which are acceptable to the Bank. Consumables (estimated value US$0.6 million) would be procured in accordance with government procurement procedures which are acceptable to the Bank. (c) -The major expenditure for fellowships would comprise actual costs for tuition, international travel and authorized allowances in accordance with the agreed unit costs. Fellowship placements would be made in accordance with standard Government procedures which are acceptable to the Bank. (d) ConsultancZ services financed under the Bank loan would be procured in accordance with Bank guidelines.  - 31 - Table 4.4: PROJECT EXPENDITURE BY PROCUREMENT CATEGORY Total Category of expenditure ICB LCB Other /a N.A. cost ---------------- US$ million --------------- Civil works - 3.3 - _ 3.3 (2.6) (2.6) Furniture, equipment and teaching materials 2.0 0.8 0.8 - 3.6 (2.0) (0.5) (0.6) (3.1) Fellowships and training - - - 9.5 9.5 (9.5) (9.5) Consultants - - 5.6 - 5.6 (5.6) (5.6) Consumables and supplies - - 0.6 - 0.6 (0.0) (0.0) overseas family allowances - - - 0.5 0.5 (0.0) (0.0) Total 2.0 4.1 7.0 10.0 23.1 (2.0) (3.1) (6.2) (9.5) (20.8) /a Other procurement procedures include: (a) international and local shopping; (b) direct purchase after negotiations for best discounts for books and teaching materials; and (c) consultant services. NOTE: Figures in parentheses are the respective amounts to be financed by the Bank. 4.14 Prior Bank review would be required for all technical assistance contracts and annual fellowship programs financed under the Bank loan, and for procurement documentation and contracts for procurement of equipment awarded on the basis of ICB. This would represent about 80 percent of the total loan amount. Analyses of bids and recommendations for awards for all civil works contracts awarded under LCB would be subject to post-review by the Bank. Disbursements 4.15 The proposed loan would be disbursed over a period of seven years which is in line with the standard disbursement profile of 7.5 years for Bank projects in Papua New Guinea. Disbursements (Annex 11) are expected to be completed by the Closing Date of March 31, 1998. Disbursements would be made  - 32 - on the basis of: (a) 802 of civil works expenditures; (b) 1002 of foreign expenditures for directly imported equipment, furniture and teaching materials, 1002 of the ex-factory costs of locally manufactured goods, and 75? of the costs of other items procured locally; (c) 1002 of the cost of consultant services; and (d) 1002 of the costs of fellowships, and training. 4.16 Disbursements for civil works, equipment, furniture, books and materials costing less than US$100,000 equivalent would be made against state- ments of expenditure (SOEs). Documentation supporting these SOEs would be retained by DPM and DLE for all project institutions and made available for review, as requested, by visiting Bank missions. All other expenditures would be fully documented. DPM and DLE would be responsible for preparing withdrawal applications which, following review and processing by DFP would be submitted to the Bank. 4.17 In order to expedite disbursements, the Government would establish a Special Account at the Bank of Papua New Guinea. It would be maintained in kina with an authorized allocation of the kina equivalent of US$1.0 million, the estimated average of four months' expenditures, and the account would cover all categories of expenditures financed by the Bank and be used for both foreign and local expenditures. Monitoring and Evaluation 4.18 Implementation of project activities would be monitored closely through semi-annual progress reports to the Project Coordinating Committee and to the Bank around March and September in each year. Specific monitoring indicators would be included to cover the implementation of the overseas fellowship program for each year of the project. These would include numbers of fellowships awarded and completed, participation of women, type of program, field of study and re-entry plans. Long-term evaluation of the on-the-job performance of returned fellows would be carried out through the staff perfor- mance appraisal procedures that DPM currently uses as part of its staff development procedures. Accounts, Audits and Reporting 4.19 Separate project accounts would be maintained by the implementing units in DPM, DLE and Adcol. During negotiations, the Government gave assurances that: (a) each unit would maintain accounts in accordance with sound accounting practices and that project accounts and separate accounts of statements of expenditure would be prepared annually by the implementing units and cousolidated by DPM for audit by independent auditors acceptable to the Bank; and (b) certified copies of the audited accounts and financial state- ments for each financial year, together with the auditors' reports would be submitted to the Bank as soon as they are available but not later than nine months after the end of each financial year. The Government would submit semi-annual progress reports to the Bank around March and September in each year, provide status reports to visiting missions, and within six months of the Closing Date, submit Part II of the project completion report.  - 33 - D. Environmental Impact 4.20 The project will not have any negative impact on the environment. The fellowship component will place strong emphasis on natural resources management, environmental policy and conservation. Fellowships will be awarded to policy and planning personnel in key departments in these areas such as Agriculture, Forestry, Minerals and Energy, Environment and Conserva- tion, etc. The project would strengthen the ability of these departments to contribute to the development of the country's natural resources in an efficient, environmentally sound manner. E. ImPact on Women 4.21 Overall, women account for only 33 percent of enrollments in higher- level training courses and this has led to their under-representation in higher-level jobs. The project would benefit women through the award of fellowships and special attention will be given to maximizing their participa- tion in the fellowship pr_gram. This will ultimately enhance their qualifica- tions and promotional opportunities and expand the employment of women in technical fields. The project, through assistance in implementing the NTP, especially the development of the Three-Year Training Plans, will enable the training needs of women to be more clearly identified and permit a more effec- tive matching of needs with training opportunities. V. BENEFITS AND RISKS A. Benefits 5.1 The project would assist in the effective implementation of the NTP. This would lead to higher quality in-service training in the public sector, which would be of greater relevance to clients' needs and more efficiently delivered. The project would also increase the supply of trained high-level personnel which, in turn, would improve the management, planning and technical capacities of key agencies thereby enhancing their performance as agents of development. The project would lead "o more effective training in the private sector. In the longer term, the projet.t would accelerate the localization process. B. Risks 5.2 The major risk associated within the project concerns the capacity of the relatively inexperienced project institutions to implement the project. The risk will be reduced through the establishment of a high-level Project Coordinating Committee and the appointment of an experienced project manager.  - 34 - VI. AGREEMENTS REACHED AND RECOMMENDATION 6.1 The Government has agreed to the followings (a) consultants to assist DPH would be appointed as follows: training analyst and information technologist by Ju.j 31, 1991 (para. 3.4); staff development and training advisor by July 31, 1991 (para. 3.5); the NTC's management advisor and information technologist by July 31, 1991 and the staff development and training advisor by January 31, 1992 (para. 3.6); (b) the timing of recruitment of the trainee systems analyst for DLE would permit an appropriate period of overlap with the expert systems analyst (para. 3.9); (c) consultants to assist DLE would be appointed as follows: labor economist by July 31, 1991 (para. 3.7); information specialist by October 31, 1991 (para. 3.8); systems analyst by October 31, 1991 (para. 3.9); and organizational development/management training specialist by July 31, 1991 (para. 3.10); (d) consultants to assist Adcol would be appointed as follows: training-of-trainers' advisor by October 31, 1991 (para. 3.13); information technologist by July 31, 1991 (para. 3.14); expert on institutional autonomy, management advisor and course development advisor by July 31, 1991 (para. 3.16); (e) age and position levels would not be applied rigidly to women candidates for policy and planning fellowships so as to ensure that younger, more junior vomen with high potential would be considered as applicants (para. 3.19); (f) special attention would be given to identifying women candidates for fellowships in technical fields. (para. 3.20); (g) for students being sponsored by a department, a written undertaking would be given by sponsoring departments that fellows being financed under the project would return to their previous positions or to positions within the departments which were relevant to the training programs undertaken by the fellows (para. 3.21); (h) the PCC would remain operational throughout the project implementa- tion period (para. 4.7); Mi) annual accounts would be maintained by each project unit and consolidated for audit by DPM (para. 4.19); and (j) audit reports would be submitted to the Bank within nine months of the end of the financial year (para. 4.19).  - 35 - 6.2 Subject to tihe above conditions, the project constitutes a sultable basis for the Bank loan of US$20.8 million equivalent to Papua New Guinea for a term of 20 years, including 5 years of grace at the Bank's standard variable interest rate.  - 36 - ANNEX= 1 Page 1 of 3 PAPUA NEW GUINEA PUBLIC SECTOR TRAINING PROJECT Enrollments and Staffing in Training Institutions (1987) Student/ Enrollmenmts Teaching Teacher Training Institutions /a Staff /b Ratio UNIVERSITIES PNG University of Technology 979.5 136.0 7.2 University of PNG - Waigani 2,049.4 144.0 14.2 University of PNG - Taurama 155.8 35.0 4.5 University of PNG - Goroka TC 395.0 52.0 7.6 Sub-total 3,579.7 367.0 9.8 TECHNICAL COLLEGES Arawa Technical Collerge 198.5 22.0 9.0 Goroka Technical College 206.0 24.0 8.6 Lae Technical College 400.7 40.0 10.0 Madang Technical College 126.0 18.0 7.0 Mt.Hagen Technical College 269.2 31.0 8.7 Port Moresby Sec.College/ 201.0 15.0 13.4 Business School Port Moresby Technical College 337.5 na na Rabau. Secretarial/Technical 60.0 4.6 13.0 College Sub-total 1,798.9 154.6 9.5 TEACHERS COLLEGES Balob Teachers College 310.0 20.0 15.5 Dauli Teachers College 149.0 10.2 14.6 Gaulim Teachers College 202.0 13.0 15.5 Holy Trinity Teachers College 230.0 16.9 13.6 Madang Teachers College 363.0 26.0 14.0 OLSH Teachers College 149.0 15.2 9.8 St.Benedict's Teachers College 230.0 12.2 18.9 St.Paul's Teachers College 149.0 11.0 13.5 Port Moresby Inservice Teachers 152.0 20.0 7.6 College Sub-total 1,934.0 144.5 13.4 /a Equivalent full-time students. /b Equivalent full-time teaching staff. Note: Enrollment data for 1987 are incomplete. Using data in previous years as a guide, total EFTS enrollment is about 9,800. Source: Commission for Higher Education  - 37 - ANNEX 1 Page 2 of 3 Enrollments and Staffing in Training Institutions (1987) Student/ Enrollmenmts Teaching Teacher Training Institutions /a Staff /b Ratio SCHOOLS OF NURSING Arawa School of Nursing 35.0 5.0 7.0 APCM School of Nursing 65.0 3.0 21.7 Highlands Regional School of 78.0 11.0 7.1 Nursing Lae School of Nursing 55.0 7.0 7.9 Lutheran School of Nursing 95.0 10.0 9.5 Mendi School of Nursing 69.0 6.0 11.5 Nazarene College of Nursing 77.0 5.0 15.4 Rabaul School of Nursing 60.0 5.0 12.0 Sacred Heart School of Nursing 48.5 9.0 5.4 Sopas College of Nursing 45.0 5.0 9.0 St.Barnabas' School of Nursing 37.0 5.0 7.4 St.Gerard's School of Nursing 26.0 3.0 8.7 St.Mary's School of Nursing 164.8 17.3 9.5 Tinsley School of Nursing 31.4 4.1 7.7 Wewak School of Nursing 20.0 4.4 4.5 Sub-total 906.7 99.8 9.1 PARA-MEDICAL COLLEGES CASH (Madang) 125.0 33.1 3.8 CASH (Port Moresby) 181.0 34.5 5.2 Sub-total 306.0 67.6 4.5 PRIMARY INDUSTRY COLLEGES Highlands Agricultural College 53.8 11.0 4.9 Popondetta Agricultural College 51.0 14.0 3.6 Sepik Agricultural College 110.0 na na Vudal Agricultural College na na na National Fisheries College 53.0 8.0 6.6 PNG Forestry College 96.0 10.0 9.6 Timber Industry Training College 32,0 na na Sub-total 395.8 43.0 5.9 /a Equivalent full-time students. /b Equivalent full-time teaching staff. Note: Enrollment data for 1987 are incomplete. Using data in previous years as a guide, total EFTS enrollment is about 9,800. Source: Commission for Higher Education  - 38 - ANNEX I Page 3 of 3 Enrollments and Staffing in Training Institutions (1987) Student/ Enrollmenmts Teaching Teacher Training Institutions a/ Staff b/ Ratio OTHER GOVERNMENT INSTITUTIONS Administrative College of PNG 318.4 53.0 6.0 Civil Aviation Training College na 17.0 na CIS Staff Training College 1.2 10.0 - Customs Training Center na 3.0 na Defence Force Training na na na Elcom Training College na na na Fire Services Training Center na na na Legal Training Institute 38.0 2.0 19.0 National Arts School 97.0 11.0 8.8 National Postal & Telec. 85.0 64.0 1.3 Training PNG Maritime College na na na Police College Bomana na na na Sub-total 539.6 160.0 4.1 TOTAL 9,460.7 1,036.5 8.8 Lc La Equivalent full-time students. /b Equivalent full-time teaching staff. ,L Does not include Other Government Institutions. Note: Enrollment data for 1987 are incomplete. Using data in previous years as a guide, total EFTS enrollment is about 9,800. Source: Commission for Higher Education  PAPUA NEW GUINEA PUBUC SECTOR TRAINING PROJECT PLANNING AND COORDINATION OF TRAINING <30VERN (NATIONAL EXECUTIVE PAE48ERVICE IN-SERVICE C8SIONrFOR mNATONALTRAINING MOMMMMAMM ~~~~~~~~~COUJNCIL | TRARINING | OF PERONEm OF LBR AND| |INSY1TUTIONSMANAGlEMENT EMP LOYMENT PUBLIC ECTOf L PFtVATE jDEPATENT8 SECTOR FIFAM ~ ~ ~ ~ ~  PAPUA NEW GUINEA PUBLIC SECTOR TRAINING PROJECT Organization Chart DEPARTMENT OF PERSONNEL MANAGEMENT SECRETARY DEPARTMENT OF PERSONNEL MANAGEMENT EXECUTIVE EXECUTIYE SECRETARY OFFICER EXECUTIVE OFFICER FAS1FS WPOVGER FAS _ MANPOWER PLANNING & I EVELOPMENT, ORGANISATION IREC TRAINING DEVELOPMENT _____C& RESOIRCE SER ASS PRINC. ADVISER ASSISTANT PRING. ADVISER REGONAL ASSISTANT I PRINO. A SECRETARY MiPOWER POUCY MANAGER SECRETARY I PAY POLICY MWPOWER DEVELOP, DEVELOPMENT & PERSONNEL (SOUTH) POICY COORD. & I DEVELOPT & TRAINING & CONTROL _CENTRALISATION CONTROL RESOURCE ASS. REGOA.SITN ASSISTANTPICPAMTF SECRI ARSECRETARY R SECRETARY DEVELOPMENT ORGANISATIONMAAGERFINANCE & I INDUSTRIALOFIE DEEANAOMENT PEFSONNEL (NORTH) PERSONNEL RELATIONS ASSISTANT PRINC. ADVIISER REGIONAL INTERNAL SECRETARY PRINC. MANPOWER MANAGEMENT MANAGER - (YSEAS STAFFING PLACEMENT EFFICIENCY PERSONNEL NGO ~ AUDTOR & CONTROL OFFICER ____________ ___________ ~~ ~~~ADMINISTRATION _ _ _ _ _ _ REGIONAL 1 MANAGER I PERSNL (H.LANDS) | FAS - FbIst Assita Soety IREC - hiduss Relanions and Enyoye Conion EIQSadSW469SS  - 41 - ANNEX 4 Page 1 of 2 PAPUA NEW GUINEA PUBLIC SECTOR TRAINING PROJECT TECHNICAL ASSISTANCE PROGRAM Summarv of Consultant Services - bv Comoonent and Year (staff-months) ---------------------------------------------------------__------------------__----------------------------- Component 1991 1992 1993 1994 1995 1996 Total ------------------------------------------------------------------__---------__----------------------------- I. Imolementation of National Training Policy Deot. of Personnel Management For DPM Capacity Building: -Information technologist 6 6 1.5 1.5 - 15 -Training analyst advisor 6 3 1 1 - - 11 -Staff dev. & training advisor 6 12 12 6 4 - 40 -Project manager 12 12 12 12 12 12 72 For National Training Council: -Information technologist 6 6 1 1 - - 14 -Staff dev. & trainLng plan consultant 4 1 1 - - 6 -Management advlsor to NTC Secretariat 6 12 6 1.5 1.5 - 27 Subtotal 42 55 34.5 24 17.5 12 185 Deot. of Labor and Emnloyment -Labor economist 6 12 - - - - 18 -System analyst/trainer - 12 6 3 3 - 24 -Organization development/management trainer 6 12 10 4 4 - 36 -Information specialLst/librarian - 12 12 - - - 24 Subtotal 12 48 28 7 7 0 102 II. Strenathenina of the Administrative College -Course Development Unit advisor 6 12 6 1.5 1.5 - 27 -Training of Trainers advisor - 12 1.5 1.5 - - 15 -Autonomy plan consultant 4 - - - - - 4 -Management advisor to administration 6 12 2 1.5 1.5 - 23 -Information technologist 6 12 6 1.5 1.5 - 27 -Short-term advisors - 5 5 5 5 - 20 Subtotal 22 53 20.5 11 9.5 0 116 TOTAL 76 156 83 42 34 12 403 ________________________________________________________________________________________---_---------------  - 42 - ANNEXK 4 Page 2 of 2 PAPUA NEW GUINEA PUBLIC SECTOR TRAINING PROJECT TECHNICAL ASSISTANCE PROGRAM Summarv of Overseas Fellovships by Year and Level (study-year) Total No. of Study ComponentlLevel Courses Years ic 1 1992 1993 1994 1995 1996 OVERSEAS FELLOWSHIP PROGRAM (OFP) Strenathen Poliey and Plannunm Canacity: - Masters degrees (2-yrs) 40 80 8 16 16 16 16 8 - Graduate diplomas (1-yr) 30 30 5 5 5 5 5 5 - Short courses/job attachments NA 30 5 5 5 5 3 5 Subtotal 140 18 26 26 26 26 18 InDrove Soecialised Skills - BA degrees (4-yrs) 20 80 8 16 20 20 12 4 - Short-term courses (1-yr) 20 20 4 4 4 4 4 0 Subtotal 100 12 20 24 24 16 4 Subtotal (OFP) 240 30 46 50 50 42 22 DEPARTMgT OF LABOR & EMPLOYMNT - System analyst (2-yrs) 1 2 - 1 1 - - _ ADMINISTRATIVE COLLEGE - Masters degrees (2-yrs) 13 26 3 6 6 6 4 1 - Short courses/job attacbments NA 25 - 5 5 5 5 5 Subtotal S1 3 11 11 11 9 6 TOTAL 293 33 58 62 61 51 28 ----------------------------------------------------..-------------------__--__-------------------------------  PAPUA NEW GUINEA PUBUC SECTOR TRAINING PROJECT Organizatlon Chart DEPARTIENT OF LABOR AND EMPLOYMENT SECETARY r________ -