Nicaragua - Institutional Development Project

C/2! 2 c So - Docummt of The World Bank FOR OmaAL USE ONLY Rqont No. P-6534-NI MEMORANDUM AND RECONNENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 15.7 MILLION TO THE REPUBLIC OF NICARAGUA. FOR AN INSTITUTIONAL DEVELOPMENT PROJECT FEBRUARY 24, 1995 MICROGRAPHICS Report No: P- 6534 NI Type: MOP  CURRENCY EQUIVALENTS US$ I = 7.2 Nicaragua C6rdobas (January 1995) FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS CERAP Committee for the Reform of Public Administration (C6mile para la Reforma de la Administraci6n Publica) DIGEFUP Directorate General for Public Administration (Direccidn General de Funcion Pztblica) ERC Economic Recovery Credit ICB International Competitive Bidding IDA International Development Association 1DB Inter-American Development Bank IDF Institutional Development Fund INAP Government Training Institute (Inslitufo Nicaraguense de Administraci6n Puiblica) LIB Limited Intemational Bidding PFP Policy Framework Paper PHRD Policy and Human Resources Development Fund SDS Service Delivery Survey SIGFA Integrated Financial Management System (Sistema Integrado de Gesti6n y A2udiloria Financiera) TA Technical Assistance UCRESEP Coordinating Unit for the Reform of the Public Sector (Unidad Coordinadora para la Reforma de Sector Publico) UNDP United Nations Development Programme USAID United States Agency for International Development  FOR OFFICIAL USE ONLY NICARAGUA INSTlTUTIONAL DEVELOPMENT PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Nicaragua Implementing Agency: Committec b-or the Reform of Public Administration (CERAP) and Ministry of Finance Beneficiaries: Ministry of Finance and participating public sector agencies to be determined Poverty Category: Not applicable Amount: SDR 15.7 million (US$23 million equiivalenre) Terms: Standard IDA terms with an amortization of 40 years, i-..cluding 10 years of grace. Commitment Fee: 0.50%/o on undisbursed credit balances, beginnirg 60 days after after signing, less any waiver Financing Plan: See Schedule A Net Present Value: Not applicable Staff Appraisal Report: There is no StaffAppraisal Report  MEMORANDUM A ND RECOMMENDATION OF THE PRESIDENT OF TEHE IDA TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDrT TO NICARAGUA FOR AN INSTITUTIONAL DEVELOPMENT PROJECT 1. I submit the following memorandum and recommendation on a proposed development credit to the Republic of Nicaragua for SDR 15.7 million, the equivalent of US$23.0 million, on standard IDA terms, with a maturity of 40 years, to help finance a project for Institutional Development. 2. Background: When the current Government of Nicaragua assumed office in April, 1990 it faced severe challenges. The economy, devastated by mismanagement and civil war, was characterized by a cumbersome, centralized public sector, a small overregulated private sector, and atrophied market institutions. During 1991 and 1992 the Govenmment implemented a strong stabilization program supported by the IMF and initiated an IDA supported structural adjustment program aimed at transforming Nicaragua into a market economy capable of achieving sustained growth. Despite considerable progress, by early 1994 private sector investment and economic activity had not rebounded as anticipated. A major contributing factor was the continuing drag of the public sector on the economy. Even after privatizing over 300 firms, sizable reductions in the public sector labor force, and major efforts at budget restraint, the non-financial public sector remains large, accounting for 40 percent of GDP, and the 1994 fiscal current deficit in the non- financial public sector, before donations, is about 8 percent of GDP. Moreover, service delivery is weak as public sector financial management processes are rudimentary, human resource management is nearly non-existent, and the mission, structure and function of individual rninistries remain, in many instances, outdated and inadequate. 3. To address these problems the authorities embarked on an intensified program of adjustment with increased attention directed at fiscal restraint and public sector reform. IDA supported this initiative with a second Economic Recovery Credit (ERC II) approved in June, 1994, which aims at, among other goals: (i) a 15 percent reduction in public employment; (ii) continued privatization of public enterprises; and (iii) reform of state banking institutions. Preparation of a Technical Assistance (TA) project to provide further design assistance for public sector modernization began in early 1994. In light of the progress achieved during project preparation in both assessing public sector weaknesses and in designing a comprehensive reform program, the authorities requested that the TA credit be expanded into an implementation oriented Institutional Development Project. 4. Project Objectives: President Violeta Chamorro issued Decree 44-94 in October, 1994 launching a public sector modernization program and creating a cabinet level Commnittee for the Reform of the Public Administration (CERAP) to oversee the program. CERAP has been empowered to articulate policy and strategy, approve draft laws for submission to the President and legislature, and oversee program implementation and the institutional restructuring process. CERAP is chaired by the Minister of the Presidency and is comprised of the Ministers of Finance,  2 Construction and Transport, Social Action, Economy, Government, the two Vice Ministers of the Presidency and the Vice Minister of Finance. Several members will chair sub-commissions overseeing specific reforms issues (e.g. financial management, infrastructure, decentralizatiorn, etc.). The goal of the reform is the creation of a state which is "small, strong, efficient... [and which] acts as a facilitator to the private sector." In direct support of this program, which aims to advance the country's structural adjustment, the proposed project's objectives are to assist the Government: (i) implement its program for restructuring the public sector; (ii) improve the delivery of essential public services; and (iii) further rationalize fiscal expenditures. 5. Project Concept: Institutional restructuring is the heart of the reform program. It would involve the systematic re-engineering of up to 20 ministries and decentralized agencies over a five year period. Project execution would be phased with no more than five institutions joining the program in any given year in order to limit demands on the Govermnent's overall reform management capacity. An important degree of institutional "self-selection" would be utilized in determining the order of entrance into the program to ensure commitment and "buy-in" by the participating institutions. Institutional Restructuring Agreements (IRAs), negotiated betweern CERAP and each candidate institution, would serve to guide and discipline the institutional restructuring process. The IRAs would establish objectives and performance benchmarks for an initial two year restructuring period, as well as delineate the resources (technical assistance, training, information technology, etc. financed by IDA or other donors) to be made available to each participating IRA institution. In addition to IDA and other donor resources, Government sponsored incentives would include increased responsibility in budget fornulation and execution, improved human resource management and training, and scope for selective pay adjustments for essential professional and technical personnel in each participating IRA institution. Annual performance reviev.s would establish the basis for modifying, terminating or enhancing the IRA for the following year. Three cross-cutting project components (civil service reform, financial management reformn, and investments in information technology) would provide critically important complementary support to sustain improved service delivery in the participating IRA institutions. Training would also constitute an important aspect of the reform effort, to be delivered by the substantive consultants in each project component. The focus of these cross- cutting components would be first targeted on those organizations with IRAs. The credit would also complement the Government's on-going decentralization policy and prograrm by providing training to local officials and by facilitating and deepening, through the IRA process, various decentralization initiatives currently underway in several central govermnent institutions. 6. Project Description: The proposed project activities and outputs would provide the Government with the means to effect a coherent reform program based on critically needed and mutually reinforcing components. The credit would finance long and short term consultant services, training, and information technology. The attached Technical Annex provides a detailed project description, including the linkages among the various components. Terms of reference for all major consultancies, as well as several background studies completed during project preparation are available in the Project File. The Technical Annex also provides details on project administration and implementation arrangements. The Matrix of Key Project Activities and Implementation Targets, which summarize objectives, activities, and timetables for project supported outputs, are presented in the Technical Annex Schedule I (a) and 1 (b). The project  3 Training Plan is presented in Schedule 2. The proposed credit would support the following four major components: 7. The Institutional Restructuring Component ($7.05 million, including training, 22% of total base costs) would finance a competitively awarded, two-year renewable contract with a firm with relevant international experience to: (i) assist the CERAP Commission for Administrative Reform establish and operate the IRA process in all participating institutions; (ii) provide direct assistance (both management and sector specific) to the institutions implementing IRAs; (iii) design and carry out diagnostic studies for prospective IRA institutions; (iv) support CERAP in its effort to establish and implement Service Delivery Surveys; (v) help CERAP conduct annual IRA performance reviews; (vi) provide professional expertise to design and implement core management training programs; (vii) assist CERAP establish the overall management framework to implement the public sector modernization program; and (viii) assist in the coordination of other component contractors providing technical assistance to participating IRA institutions. Additionally, this component would assist the Nicaraguan Institute for Public Administration (INAP) expand and replicate the management training programs for participating IRA institutions initially developed and pilot tested by the technical assistance contractor. 8. The Civil Service Component ($3.34 million, including training, 10% of total base costs) would finance a competitively awarded, two-year renewable contract with a firm specialized in human resources management and with relevant international experience to assist the Civil Service Commission and the Directorate General for Public Functions (DIGEFUP) within the Ministry of Finance to: (i) draft, and implement upon enactment, a merit based civil service code; (ii) develop a standard code of regulations covering all aspects of personnel administration; (iii) further develop and maintain a government-wide job classification system and supporting computerized establishment register; (iv) develop a service-wide, incentive based salary structure and the capacity to periodically update the salary schedule through labor market wage surveys; (v) design and carry-out effectively targeted staff reductions arising from the functional review and institutional restructuring process; (vi) develop and apply appropriate recruitment and staff selection processes; and (vii) strengthen the management and technical capacity of DIGEFUP to meet its responsibilities as the rector of the civil service system. At the participating IRA institutional level, the contractor, in conjunction with DIGEFUP, would provide technical assistance to: (viii) upgrade personnel management divisions and practices. The contractor would also: (ix) assist DIGEFUP and INAP design and carry out a core program of training in human resources management; and (x) coordinate the training activities associated with the Integrated Financial Management and Information Technology components (see paras. 9 and 10). This training would be initially developed and delivered by the consultants retained under the respective components and administered by INAP and UNDP. The Government, IDA, and UNDP have reached understandings on the administrative and financial agreements to effectively manage training activities under each of the respective project components. 9. The Integrated Financial Management Component ($11.16 million, including training, 34% of total base costs) would assist the Ministry of Finance and the Commission for Govemment Financial Administration and Control develop an Integrated Financial Management System (SIGFA) based on the concept of operational decentralization of financial management  4 authority and responsibility to spending units within the framework of centralized policy guidance, anchored in the establishment of a uniform and automated accounting system. The Government has secured assistance from several donors to support discrete sub-components of the overall SIGFA system, including: $4.4 million from USAID to develop the accounting sub-system and strengthen the external audit capacity of the Comptroller General's Office; $0.9 million from UNDP to train audit staff, and $1.5 million from the IDB to develop the treasury, public credit, and procurement sub-systems. The IDA component would finance a competitively awarded, two year renewable contract with a firm with relevant international experience and the associated training costs to assist the Ministry of Finance, the Financial Administration Commission and participating institutions to: (i) strengthen and better execute budget formulation, programming, and evaluation processes, and (ii) establish well functioning internal audit units in each paiticipating IRA institution. These two activities constitute critical components of the Government's integrated financial management program. Consultants working on individual SIGFA sub-systems, regardless of the source of donor financing, would be members of a team supervised by an internationally experienced Technical Director reporting to the Minister of Finance and Comptroller General, wvithin the overall policy framework of CERAP. The Government would seek USAID, IDB, and IDA advice in the selection of the Technical Director, who will be financed by USAID. 10. The Information Technology Component ($6.91 million, including training, 21% of total base costs) would finance a competitively awarded, two-year renewable contract with a firm with relevant international experience in information technology systems. The selected firm would assist the National Directorate for Information Systems design and implement its information technology development program specifically related to financial management and human resources systems development. IDA would also finance the procurement, installation, and core training for the hardware, software, and network communications required for the Ministry of Finance and all participating institutions. This investment would take account of existing information technology in the public sector, but is considered the minimum necessary to support the policy and procedural reforms contemplated in the institutional restructuring, financial management, and civil service components. Like the other component activities, information technology support would b_ structured and delivered through the IRA process. 11. The Reform Management Component ($4.24 million, including training, 13% of total base costs) would support the development of the policy-making and management capacity of CERAP and the Coordinating Unit for the Reform of the Public Sector (UCRESEP). The Vice Minister of Finance has been appointed as the CERAP Executive Secretary responsible for the continuous oversight and management of the public sector modernization program and the project. The Executive Secretary would be supported by a Project Coordination Unit (UCRESEP) with a full time staff including a Director, Chief Financial Officer, a Procurement Officer and other Nicaraguan professionals respectively assigned to oversee the following central project activities: Institutional Restructuring; Civil Service Reform; Integrated Financial Management; Information Technology; Decentralization; Training; and Service Delivery Surveys. These surveys, being developed with the support of the Economic Development Institute (EDI), would be an innovative and essential management tool both in establishing initial IRA performance objectives and assessing annually service delivery performance improvements for  5 each participating IRA institution. IDA financing would provide technical assistance, training and equipment to UCRESEP, and support the analytic2' work of the various commissions created under Presidential Decree 44-94, the Service Delivery Surveys, and annual project audits. 12. Project Cost and Financing: The credit would finance the cost of consultant services, training, information technology, and reform management requirements. Total project costs are estimated at $33.5 million equivalent of which $23.5 million (70 percent) would be foreign exchange. The $23.0 million IDA credit, of which approximately $16.5 million would cover foreign exchange costs, would finance approximately 69 percent of project costs. Already committed financing to the project includes inputs by USAID ($4.4 million) and IDB ($1.5 million), with the UNDP expected to contribute up to an additional $2.3 million. The Government would provide counterpart financing of $2.3 million (consisting of counterpart staff, local consultants, purchase of some equipment, office space, supplies, secretarial services, vehicle operation and training support costs). Approximately $16.9 million of the IDA credit would finance consultant services including training and $2.6 million would be allocated for the purchase of computer hardware and software. Cost estimates and the financing plan are shown in Schedule A. Procurement and disbursement tables are provided in Schedule B. A timetable of key project processing events and the status of Bank Group operations in Nicaragua are provided in Schedules C and D. 13. Project Implementation Arrangements: CERAP would be responsible for overall project implementation. As indicated in paragraph 11 above, the Vice Minister of Finance would oversee project implementation as well as serve as Executive Secretary to CERAI The Executive Secretary would be supported by UCRESEP, which would be staffed by I licaraguan professionals responsible for specific project components and oversight of the relevant institutional contractors. The IRAs to be negotiated by CERAP with c .didate institutions would constitute the principal management tool to guide and give discipline to the institutional restructuring process. The Government has developed a model IRA (Technical Annex, Annex 1) and, as a condition for loan effectiveness, it would negotiate and sign at least one institution specific IRA satisfactory to the IDA. UCRESEP would be responsible for all administrative tasks relating to the project including procurement, disbursements, and audits. Once core training has been developed and pilot tested by consultants under the four institutional contracts (i.e. training of management and mid-level staff and of trainers), INAP would manage the remainder of the training program with assistance from UNDP as the disbursing agent, with the fee to be financed from the IDA credit (Technical Annex, Schedule 2). The project would be jointly reviewed by IDA and the Government annually. A comprehensive mid-term review to monitor implementation progress and agree on any necessary changes to the project would be conducted after the second year of project implementation. 14. Procurement: Contracts for goods (computer equipment and software) shall be packaged in lots valued at $100,000 equivalent or more and would be procured through Limited International Bidding (LIB) for an estimated aggregate amount of $2.6 million. LIB procedures are justified given the small number of providers with after-delivery service in Nicaragua. Contracts for other goods and equipment with estimated values of less than $100,000 equivalent would be procured using international shopping procedures; and contracts below $25,000  6 equivalent for other goods and equipment would be procured through local shopping. Local and international shopping proccdures combined would be applied to contracts up to an aggregate amount of $500,000 equivalent. Standard IDA bidding documents would be used for LIB. All procurement for training under the various components would be in accordance with IDA guidelines. INAP would administer training activities with the assistance of UNDP (see Technical Annex, Schedule 2, para. 4). Consultant services would be procured in accordance with IDA Consultants Guidelines dated August, 1981. For the four large institutional consulting contracts, IDA's standard consulting services contract would be used. Terms of reference for all consultant contracts would be satisfactory to IDA. All LIB procurement of goods, all iiidividual consulting contracts above $50,000 equivalent, and all contracts with consulting firms above $100,000 equivalent, including the four major institutional contracts, would be subject to prior review by IDA. The exemption from prior review for consulting contracts below the $50,000 and $100,000 thresholds would only apply to contracts up to an aggregate value of $1 million equivalent. Finally, to ensure consistency in the administration of individual consultant contracts valued below $50,OUC equivalent, the first three contracts in each calendar year would be subject to prior review by IDA. These review arrangements would provide for IDA review of approximately 80 percent of the value of all contracts financed by IDA. 15. Disbursements and Financing: The project is expected to be implemented over a five year period. Disbursements would be made as specified in Schedule B and would be administered by UCRESEP. All withdrawal applications would be fully documented, except for expenditures under contracts for goods valued below $100,000 equivalent, individual consultant contracts valued at or below $50,000 equivalent after the first three approved each year and consultant firm contracts valued at or below $100,000 equivalent up to $1 million which would be made on the basis of Statements of Expenditure (SOEs), for which detailed documentation would be retained by the UCRESEP and made available for review by auditors and by IDA staff. UNDP would provide "bridge" financing, as needed, to cover project activities initiated prior to credit effectiveness. Retroactive financing up to SDR 1,360,000 ($2.0 million equivalent), approximately 9 percent of the credit, would be authorized for eligible expenditures incurred after January 30, 1995. This financing would cover the cost of additional diagnostic work and project start-up activities. A Spccial Account in US dollars would be opened in the Central Bank, with an authorized allocation of $1.5 million equivalent. Annual audit reports would be produced, starting in December 1995, at the end of each calendar year and submitted to IDA within six months after year end. Thte expected project completion date is June 30, 2000 and the credit closing date would be December 31, 2000. An implementation completion report would be prepared by the Governmmnt and submitted to IDA no later than June 30, 2001. 16. Lessons Learned and Project Design: The preparation of this project has benefited from previous LAC regional TA experiences in which the following constraints were identified: (i) lack of well-designed and monitorable action plans for TA implementation; (ii) soft budget guidelines and weak management that allowed the use of resources for purposes beyond the objectives of the project; (iii) widespread proliferation of individual consultancies that became difficult to coordinate and control and costly to administer; and (iv) weak counterpart participation and support of the beneficiary institutions. The design of the proposed project has addressed these constraints as follows: (i) specific but flexible actions plans have been prepared  7 for each component focusing on outputs and defining evaluation criteria and performance indicators to judge project progress; (ii) criteria to ensure careful administration and IDA supervision of the project, especially with respect to procurement and supervision of consultants, have been established and agreed with the Government; (iii) the use of four large institutional contractors, satisfactory to IDA would facilitate accountability and supervision. Additionally, UNDP would be engaged to assist INAP in the management of the sinall training consultancies; and (iv) counterpart responsibilities of the beneficiary agencies, i.e. those institutions participating in the institutional restructuring process, would be clearly spelled out in each IRA, monitored on a continuous basis and formally reviewed annually. 17. Rationale for IDA Involvement: The proposed project is fully consistent with tlhe Country Assistance Strategy and Policy Framework Paper discussed by tlr Board of Executive Directors on June 21, 1994, which emphasized the need to consolidate and deepen the adjustment process, particularly with respect to institutional development and Lhc modernization of the state. The proposed project would support implementation of Nicaragua's adjustment effort as embodied in ERC II, by supporting the Government's ability to plan and implement public employment reductions and modernization of institutions. It would facilitate coordination of technical assistance from other donors, contributing to a more coherent program which reinforces and promotes the execution of the Government's structural adjustment and institutional capacity building programs. The Government has also requested further IDA support through a third adjustment credit, whose design would be supported by the proposed project. 1 8. Agreed Actions: During negotiations agreements were confirmed on: (a) the matrix of key activities and implementation targets for each component, including a clear understanding with the government on component objectives, activities, outputs, performance indicators, technical assistance, and institutional arrangements; (b) the five institutions to join the institutional restructuring process during the initial project year; (c) the requirements and incentives to be included in each IRA; (d) the staffing requirements of UCRESEP; (e) the counterpart contribution of the government, including support for INAP overhead training expenses; (f) coordination of cfforts among the various donors and the creation of a Public Sector Reform Donor Advisory Group; and (g) the project performance review schedule, which includes: (i) submissions no later than November 30 of each year, starting in 1995, of the CERAP/UCRESEP Reform Management Action Plan for the coming year, and agreement thereon with IDA; (ii) annual reviews no later than March 30 of each year, starting in 1996, of project performance during the previous year; and (iii) a joint mid-term review under terms of reference satisfactory to IDA, to be held no later than June 30, 1997. Conditions for credit effectiveness include: (a) the publication and application of CERAP's operating procedures; (b) the complete professional staffing of UCRESEP as agreed with IDA; and (c) the signing of at least one IRA between CERAP and a participating ministry or decentralized agency. A condition of disbursement for training funds to be administered by INAP (i.e., other than for the training activities specified under the institutional contracts) is the signing of an agreement or other arrangement satisfactory to IDA between CERAP and INAP. 19. Environmental Aspects: The proposed project has an environmental category of "C". The component for strengthening the institutional and legal framework for environmental  S management would support, inter alia, the incorporation of environmental cost/benefit analysis into the decision-making process for public investment projects. 20. Program Objective Categories: By helping improve the Governmelit's institutional capacity and assisting in a sustained reduction in the size of the state and redefinition of its role, the project would support Nicaragna in economic management and private sector development. 21. Project Benefits: The Government's program and the supporting Institutional Development Project reflect a coherent and comprehensive approach to public sector modernization. The project would help the Government shed activities best conducted by the private sector while simultaneously strengthening the public sector's capacity to perform its core functions. The focus of the credit on well designed institutional restructuring programs supported by IRAs, annual performance reviews and surveys, and incentives to participating institutions, reflect the Government's desire for measurable and timely improvements in the delivery of essential public services to its citizens. Supported by horizontal reforms in the civil service and financial management, selective investments in information technology, and training for key staff, the proposed program should measurably improve the efficiency, effectiveness, and transparency of public sector operations. Success in terms of improved delivery capacity and lower costs, in turn, would permit the Government to better implement its investment and social programs, provide basic services to the poor, reduce demands on scarce national and international resources, and positively affect business confidence and investment. 22. Project Risks: The credit faces two main risks. Fi rst,political uncertainties in Nicaragua, including elections in late 1996, could jeopardize timely implementation of the reform measures. This risk is balanced by the Government's track record of satisfactory implementation of stabilization and structural adjustment programs, a perceptible lessening in political polarization and violence in Nicaragua during 1994, complemented by a moderate improvement in macroeconomic performance, md the Government's recognition that intensification of public sector reform is critical to continued macroeconomic progress. Moreover, supervision of the project would be intensive and a mid-term review scheduled for June, 1997 would ensure continued agreement between the Government and IDA on the uses of the credit. Second, the project is complex and would tax the capacity of the Government to implement and IDA to supervise. The authorities recognize this risk but believe that all project components are both critical given the serious weaknesses within the public sector and mutually reinforcing. A coherent reform management structure has been designed taking into account the strengths of the Government, including its commitment to reform and willingness to take and implement decisions. The structure of CERAP should facilitate appropriate commitment and timely support from the highest levels of Government. The reliance of UCRESEP on institutional contractors (inevitable given current technical capacity limits in the public sector) should reduce the difficulties in project implementation, especially as each project component would be supervised one on one by a Nicaraguan counterpart. Close project supervision by IDA and the use of a long term resident advisor to assist in overall reform oversight would provide additional support for program implementation.  9 23. Recommendation: I am satisfied that the proposed credit would comply with the Articles of Agreement of IDA and recommend that the Executive Directors approve it. Ernest Stern Acting President Attachments Washington, D.C. February 24, 1995  10 Schedule A Page 1 of 1 NICARAGUA INSTITUTIONAL DEVELOPMENT CREDIT Estimated Costs and Financing Plan (US$ Millions equivalent) |Institutional Restructuring 4.6 _ 1. 6.3 Civil Service Reform 2.2 0.8 3.0 Integrated Financial Mgt. 7.7 2.3 10.0 Infbrmation Technology 2.4 1.2 3.6 Sub-Total Consultancies 16.9 6.0 22.9 Computer Hardware/Software 2.6 O 2.6 l ~~~ ~ ~~~ ~ ~~~~1.8 1.6 3.4 1.6 2.2 3.8 l BASE COST ESTIMATE 22.9 9.8 32.7 Contingencies 0.6 0.2 0.8 l TOTAL COST 23.5 10.0 33.5 Government 2.3 IDA 23.0 USAID 4.4 UNDP 2.3 IDB 1.5 Total Cost 33.5  II SCHEDULE B PAGE I OF I NICARAGUA INTITUTIONAL DEVELOPMENT CREDIT Procurement Methods and Disbursement (US $ million equivalent) _~~ ~~~ ~~~ ~~~ ~~~ ~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1. Consultant Services 17.1 7.2 b/ 24.3 l ______________________ __________ __________ (17.1) (0.0) (17.1) 2. Goods/Equipment 3.3 3.3 l________ (2.9) c/ (2.9) 3. Training/Travel Tours 3.0 0.6 bl 3.6 l_________ (3.0) d/ (090) (3.0) 4. Incremental Operating Costs 2.3 2.3 0.0) (0.0 Note: IDA financing is in parentheses aq/ Non-Bank Financed. b1 Consultant services financed in parallel by USAID/IDB/UNDP; procured in accordance with each donor's regulations and acceptable to IDA. -. Procurement of computer equipment under LIB and other equipment under local shopping up to US$500,000. d/ All training procurement in accordance with IDA guidelines. DISBURSEMENTS | 1. Consultant Services 16.0 100% 2. Goods/Equipment 2.5 100% of foreign expenditure 100% of local expenditures (ex-factory cost) and 85% of other locally procured imported items 3. Training/Travel Tours 2.5 100% 4. Unallocated 2.0 Total 23.0 Annual ~~~~~ ~~3.0a/ 5.5 6.2 5.6 2.7 Cumulative ~~~ ~ ~~3.0