Ukraine - Social Protection Support Project

Document of The World Bank Report No. T-6957-UA TECHNICAL ANNEX TO THE MEMORANDUM OF THE PRESIDENT UKRAINE SOCIAL PROTECTION SUPPORT PROJECT AUGUST 28, 1996 Municipal and Social Services Division Country Department IV Europe and Central Asia Region  CURRENCY EQUIVALENTS July 1996 Currency Unit = Karbovanets (Krb) US$1 = Krb. 180,000 AVERAGE EXCHANGE RATES Krb per US$1 1992 - 2,212 1993 - 7,623 1994 - 63,224 1995 - 150,000 1996 (July) - 180,000 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS HMSAP - Housing and Municipal Service Allowance Program MIS - Management Information System MSP - Ministry of Social Protection PIU - Project Implementation Unit UPS - Uninterrupted Power Supply USAID - United States Agency for International Development Zhek - Municipal Housing Maintenance Organization UKRAINE - FISCAL YEAR January 1 - December 31  TECHNICAL ANNEX TO THE MEMORANDUM OF THE PRESIDENT UKRAINE SOCIAL PROTECTION SUPPORT PROJECT CONTENTS A. DETAILED PROJECT DESCRIPTION ................................ 1 Housing and Municipal Services Allowance Program ......................... 1 Rationale for Bank Involvement . ..................................... 2 Project Objectives .............................................. 3 System Needs .............................................. 3 Project Description, Costs and Financing ................................ 6 Project Benefits .............................................. 7 Project Risks ............................................... 7 B. PROJECT ADMINISTRATION AND IMPLEMENTATION ................... 9 Project Organization and Management ......... ......................... 9 Procurement ............................................... 9 Disbursement . ................................................ 10 Accounts, Monitoring and Evaluation ......... ........................ 10 Schedule 1: Summary of Objectives and Key Performance Indicators Schedule 2: Training and Technical Support Plan Schedule 3: Implementation Progress Benchmarks and Plan Schedule 4: Procurement Tables This report is based on the finding of an appraisal mission in July 1995 consisting of Y. Uchimura (task manager),EC4MS, and S. Pananon, EMTDR. The peer reviewers were K. Subbarao, PSP, and F. Konigshofer, MN2TC. The Division Chief is T. Blinkhorn, EC4MS. The Department Director is B. Kavalsky, EC4.   A. DETAILED PROJECT DESCRIPTION Housing and Municipal Service Allowance Program 1. The present govermnent moved to increase housing rents and municipal service tariffs and improve recovery of service delivery costs as part of its economic reform program. The Government issued Cabinet of Minister's Decree No. 733 in October 1994 increasing tariffs for housing, water and sewerage, hot water, heating and gas in stages in order to improve recovery of production costs to 20% immediately and eventually to 60% by July 1995. Implementation of the decree has been delayed somewhat but the Government moved to implement 60% cost recovery in January 1996. The Government is scheduling further rents and tariffs increases to reach 80% cost recovery in September 1996 and 100% in January 1997. This was the first step in dismantling a system of direct government assistance to housing maintenance enterprises (Zheks) and water, heat and other municipal service enterprises and reducing these enterprises reliance on the government budget. 2. The rapid increase in cost recovery is not sustainable without some measures to protect the poor who could not afford to pay. Housing and municipal services were highly subsidized under central planning. Households generally paid less than 5% of monthly income for housing and municipal services (compared to close to 30% in market economies). President Kuchma in his speech to the legislature introducing the economic reform program stated that people should have to pay no more than 15% of their income for housing and municipal services. 3. The Government introduced the Housing and Municipal Service Allowance Program (HMSAP) in February 1995 (through Cabinet of Ministers Decree No. 89, issued on February 4, 1995) which allowed families whose monthly payments for housing, housing maintenance, water and sewerage, hot water and heating, and garbage and liquid waste collection, exceeded 15% of monthly income to apply for an allowance equal to the difference. Subsequently, the costs of liquid and solid fuels and electricity were included. This is a key step in that it moves the government away from providing budgetary assistance directly to producers but shifts assistance to the consumer. The program is targeted towards the poor: i.e. a poor family will receive more government assistance compared with a more affluent family with the same housing and municipal service costs (because housing and municipal service payments will account for a larger proportion of a poor family's monthly income). It was reviewed positively as part of the social safety net analysis under the Ukraine Poverty Assessment (Report No. 15602-UA) completed in June 1996. 4. HMSAP started implementation in May 1995 when 754 administrative offices were opened nationwide to receive and process applications. The Ministry of Social Protection (MSP) is responsible for HMSAP and oversees the program through regional (oblast) Social Protection Departments; the HMSAP administrative offices are under the jurisdiction of the local governments'. Under the program, families are required to provide documentation on incomes and monthly payments for housing and municipal services to their local administrative office. When the documents are processed, a family's monthly payments are adjusted so that they only pay 15% of income and the difference (between the family's reduced payment and the original bill) is paid by the local government to the Zheks and other municipal service enterprises. As of March 1996, 3.2 million households had been granted allowances averaging Krb 3.0 million (about US$16) per month per household. 1/ The local HMSAP administrative offices are subordinated to the local government (district) and the Ministry of Social Protection. This reflects the fact that local governments in the Former Soviet Union were defacto local arms of the national government. Although separate, the sector departments within the local governments maintain strong links with the mother agency in the national government.  -2- 5. The number of participants in HMSAP is expected to grow as the cost recovery for rent and municipal services is increased during 1996. The number of applicants has increased significantly following the increase in rents and tariffs in January 1996. The number of households granted allowances every month has increased from around 150,000 per month between May and September 1995, to about 290,000 between October 1995 and January 1996, to 670,000 in February 1996 and to 830,000 in March 1996. It is estimated that 4.6 million families may be enrolled in the program by October 1996, an increase of 1.4 million families (or 44%) following the anticipated increase in the rents and tariffs in September 1996. 6. The HMSAP administrative offices will be hard pressed to cope with the increase in applicants and participants. Although some offices have started to automate the processing (with computers obtained through USAID or acquired with their own funds), most administrative offices process applications manually. Already there is widespread dissatisfaction with the amount of documentation required, the cumbersome bureaucracy and time required to apply for and receive the allowances. In addition, the subsidies need to be recalculated every time there is an increase in rents or tariffs. The HMSAP administrative offices are required to submit reports to the Ministry of Finance and the Ministry of Statistic but these are submitted late since they are produced manually. The Government is proposing to address these issues through simplification of the application process and automation of administration. 7. USAID, through their consultants, has been active in assisting the Government develop the HMSAP. They have been involved with the Cabinet of Ministers, MSP and the State Committee on Housing and Municipal Economy in the design and monitoring of the program. Pilot efforts to computerize the administration of the program have been carried out in several local HMSAP administrative offices and the necessary software developed and transferred to the government. USAID assisted the government carry out the overall assessment of their computerization needs and is providing some (but not all) of the required equipment. Rationale for Bank Involvement 8. Housing and municipal pricing reform is critical to Bank operations in Ukraine. Rationalizing public expenditures and improving the efficiency of public service provision is a key element in the Bank's Country Assistance Strategy. The Bank is carrying out projects in housing (Ukraine Housing Project - Loan 3985-UA, approved in March 1996) and is proposing projects in water supply and sewerage, heating and urban transport. Increased cost recovery for these (and other municipal services) is essential if the service providers are to achieve financial autonomy and if prices are to be used to reflect consumers' willingness to pay and provide suppliers with incentives to reduce waste and improve efficiency in service delivery. Incomes will not be increasing as rapidly as the rents and municipal services prices. HMSAP is critical if the government's housing and municipal service pricing reforms are to be sustainable. 9. The Bank is encouraging the government to move assistance from direct budgetary support of housing maintenance enterprises, water supply enterprises and other municipal service providers to assistance targeted towards the poor. Some government assistance is needed to assist low income households meet shelter, water and other basic needs. This can be better achieved through programs targeted to the poor and linked to a family's ability to pay. HMSAP is a move in this direction. Bank involvement with the program will provide an opportunity to further the dialogue with the government on developing a social safety net in Ukraine. 10. Finally, time is of essence. The number of HMSAP applications and hence program participants are expected to increase significantly during 1996 and 1997 if the government proceeds to increase rent and municipal service tariffs to achieve 80% and eventually 100% cost recovery levels. USAID is providing the government with assistance to meet part of the overall computerization needs.  -3- While it is possible for other donors to fill the financing gap, the proposed amount, close to US$3.0 million, may be significantly large that it cannot be accommodated within existing programs. It may not be possible for donors to make funds available within 1996 or early 1997, especially if additional approvals are to be sought. The Government has turned to the Bank to fill the gap. Project Objectives 11. The proposed Housing and Municipal Services Allowance Computerization Project aims to improve the administration of HMSAP by: (a) automating the processing of applications and data in the administrative offices; and (b) piloting a system to electronically link the local HMSAP administrative offices, regional offices and MSP and monitor and evaluate the effectiveness of the program. The summary of project objectives and key performance indicators is provided in Schedule 1. System Needs 12. The HMSAP administrative offices perform a variety of administrative functions which can benefit from automation. The administrative offices receive application forms, verify their completeness and accuracy, calculate the amount of allowance (government assistance) granted and notify the applicants about the decisions on their applications. Each month, they estimate the total value of allowances granted to families within the jurisdiction of their office and allocate this value among the Zheks and municipal service enterprises within the area. They maintain records of applicants and amounts of allowance granted and prepare monthly reports for the Ministry of Finance (value of allowances granted) and the Ministry of Statistics (the number of allowances granted, the size of families receiving subsidies and the type of ownership of the home). They recalculate the allowances when prices of any municipal services are raised (which happens nearly every month in most cities2) and, every six months, recertify participants by verifying updated information. In addition, they maintain separate records of families that enrolled in the program with outstanding debts for prior month, who are repaying their debts during the six months for which they have been granted an allowance. 13. It is estimated that one computer is needed for every 40,000 people living in an urban district (city rayon), or 25 computers for every one million people in urban areas. A HMSAP administrative office in a typical urban district with about 70,000-80,000 people is expected to handle a caseload of between 8,000 to 12,000 families. Based on existing levels of activity, this would translate into a monthly workload of about 4,000 to 5,000 applications broken down into about 1,000 new applicants, about 2,000 families applying for recertification, and about 2,000 families requesting change in allowance due to changing economic circumstances. In addition, there is the need to recalculate allowances if rents or tariffs are changed, calculate the amounts due to the Zheks and other service providers, compute about 250 debt (outstanding payments) repayment schedules and prepare monitoring reports. In the future, this could include 50-100 audits of applicant files. Based on those pilot offices where computers have been installed, an average operator can process about 100 applications per day (one every five minutes) or 2,200 a month. Therefore, an administrative office in an urban district with 70,000-80,000 people would need two computers and two full time operators for those computers. 2/ The minimum overall rate at which tariffs must be set relative to the costs of production is set by the Cabinet of Ministers. Actual tariffs in each locality are set by the regional (oblast) governments. Local utilities, such as heating companies and water suppliers, may also request tariff increases to cover the impacts of inflation. The result is frequent tariff changes.  -4- 14. Approximately 1,000 computers are estimated to be needed nationwide to complete automation of the administration of HMSAP. Local HMSAP offices in the larger urban districts will require multiple computers which would be linked together through a local network. Offices in smaller cities and towns which require one or two computers will be provided stand alone systems with their own printers. It is estimated that about 1,600 computers will be needed to computerize the HMSAP. There are approximately 200 computers already in use and another 350 computers are being provided by September 1996 through USAID. The project will be providing about 800 computers or 80% of the estimated needs, taking into consideration the possibility that some local governments would purchase some computers on their own. All HMSAP offices will be computerized at the completion of the project. 15. Software to be used on the computers is already available. USAID consultants have designed and developed a micro-based system in Clarion programming and database management language to run in a single-user or multi-user platform that calculates and handles allowances and meets most of the HMSAP information requirements. The program has been piloted and refined in an operational context in several local HMSAP administrative offices and has been transferred to the government. Additional refinement need to be made to software from time to time to incorporate changes to the HMSAP as mandated by the government and administrative improvements, such as linking the HMSAP with the database on pensioners and cost information from the Zheks. 16. The regional (oblast) governments are responsible for managing HMSAP in their jurisdiction and the local HMSAP administrative offices report to the regional government. However, these regional governments lack regular and timely reporting on the program which would allow them to identify and address problems as they occur and assess the effectiveness of different local offices. The current reporting system, where information, in many cases prepared manually, is transmitted first to the Ministry of Statistics and the Ministry of Finance, does not provide government policy makers with up to date information on progress on HMSAP. In addition, MSP is interested in developing information on regional differences in participation rates, levels of assistance and other management information. 17. Aware of the need for better management information, MSP is developing management information systems with the assistance from USAID. The information needs and software has been developed for a pilot national program to link local HMSAP office electronically with MSP through the use of modems to provide more up to date and detailed reporting on, among others, the number of beneficiaries, their characteristic and provision of allowances. MSP and the Kiev City Administration are proposing to create a pilot regional management information system that would allow regional HMSAP administrators to obtain accurate and up-to-date information on, among others, the housing and municipal service allowance expenditures, staffing levels by office, the levels of assistance provided to different Zheks and municipal service providers, appeals of decisions by applicants, average time between submission of an application and notification to applicants, calculation errors made by office staff, etc. USAID consultants are already developing a network connecting local HMSAP offices with the head office for the Kiev City Administration which is expected to be completed by September 1996.  -5- Table 1: Estimated Costs and Financing Plan Millions of US$ Forex Base Local Foreign Total Cost Project Costs A. Data Processing Site preparation 0.10 - 0.10 0% 4% Computer systems - 2.10 2.10 100% 77% B. Management Information System Computer systems - 0.14 0.14 100% 5% C. Training and Technical Support Computer systems - 0.03 0.03 100% 1% Consultancies - 0.20 0.20 100% 7% D. Implementation, Monitoring and Evaluation Consultancies - 0.14 0.14 100% 5% Base Costs (in July 1996 prices) 0.10 2.61 2.71 96% 100% Contingencies - 0.29 0.29 100% 11% Total Project Costs 0.10 2.90 3.00 97% 111% Financing Plan World Bank 0.00 2.60 2.60 Government 0.10 0.00 0.10 USAID 0.00 0.30 0.30 Total Financing 0.10 2.90 3.00  -6- Project Description, Costs and Financing 18. The proposed project will be include the installation of hardware and training of staff in system operations and will consist of: a. Automation of Data Processing in HMSAP Administrative Offices (US$2.47 million equivalent): Installation of around 800 workstations (monitor, computer and key board) with Uninterrupted Power Supply (UPS) units, around 500 printers and diskettes and other initial consumables in HMSAP administrative offices nationwide. b. Management Information System (US$158,000 equivalent): Installation of 5 workstations with UPS, modems with communications software, and initial consumables in MSP; installation of 27 workstations with UPS, modems with communications software, and initial consumables in regional (oblast) HMSAP offices; and installation of 80 modems and communication software in selected local HMSAP administrative offices. c. Training and Technical Support (US$230,000 equivalent): Provision of 10 workstations with UPS, 10 printers and initial consumables for the MSP computer training center; classroom and onsite training and follow-up assistance on software use for local HMSAP administrative offices; and additional software development. d. Project Administration. Monitoring and Evaluation (US$142,000 equivalent): Assistance for overall project administration; a study to evaluate the effectiveness of HMSAP, including the impact of automation, and recommendations on additional actions required. The computers would be powered by Pentium 100 Megahertz microprocessors and contain a minimum of 8 MB RAM and 1 GB storage hard drive. Because of the unreliability of the power supply, each computer would be backed up with a UPS unit which would allow operators to store all data and exit the system in the event of a unexpected power cut. 19. Consultant assistance will be needed to oversee project implementation, conduct training, provide technical support and carry out an evaluation of the effectiveness of the HMSAP including the impact of computerization. Proper training of operators and provision of technical support is essential for project sustainability. The training will be carried out in two steps: (a) formal training in the MSP's computer training center in Kiev prior to the delivery of the equipment, where key staff from the local HMSAP administrative offices will become familiar with the equipment and software to be provided through the project; and (b) on the job training where operators in the local offices will be trained in the use of the software immediately after installation in their offices. Consultants will also provide advisory and technical support to local HMSAP offices. The training and technical support plan is provided in Schedule 2. After the computers have been installed, an assessment will be carried out of the impact of automation. However, computerization is only the means to facilitate HMSAP achieve its program objectives. Therefore, the project evaluation study will include an assessment of HMSAP on households and municipal service enterprises. In addition to providing the basis for the project operation plan and implementation completion report, this evaluation is critical in developing the follow up actions needed to improve targeting of government assistance to the poor and strengthen the social safety. During negotiations, the terms of reference of the evaluation were discussed and it was agreed that the study will be completed by December 31, 1997. 20. The total project cost is estimated to be US$3.0 million equivalent of which US$2.9 million equivalent (or 97% of total cost) is estimated to be the foreign exchange requirement. A Bank loan of US$2.6 million will finance 100% of the foreign exchange requirements. The Bank loan will finance  -7- the purchase of equipment for the HMSAP office automation and management information system components and consultancies for project implementation. The remaining costs, US$400,000 equivalent will be provided by: (a) USAID, US$300,000 equivalent, from its ongoing assistance program with the MSP for training, technical support and evaluation; and (b) the local government, US$100,000 equivalent, for wiring and additional renovations that need to be carried out in the local HMSAP offices to accommodate the equipment. The estimated costs and financing plan are summarized in Table 1. These estimates do not include the cost of the use of the MSP training facility in Kiev for formal training which will be borne by MSP. It was agreed during negotiations that the Government will mobilize the necessary funding from alternative sources should USAID not be able to finance all the training, technical support and evaluation requirements. This is agreement is reflected in the Loan Agreement. 21. The loan will be made to the Government of Ukraine at the Bank's standard terms and conditions. The equipment will remain the property of the national government and will be rented to the local HMSAP administrative office which are under the jurisdiction of the local governments. This will ensure consistency with the USAID program and facilitate the administration of the Bank loan Project Benefits 22. The benefits are faster processing of allowance applications and faster computation of payments to be made at the end of each month to housing maintenance, water and other enterprises. Financial benefits are the additional costs that the Government would avoid incurring to met the increase in administrative workload following the rapid growth of applications. Without computerization, it is estimated that the staff of the local HMSAP administrative offices may need to be increased by 2,000 at an estimated cost of Krb 250 billion (about US$1.3 million) per annum. 23. Over the longer term, automation of administration and introduction of management information systems is critical to the success of HMSAP. The allowance program, in turn, will result in overall budgetary savings, reduction in the public sector deficit and targeting of government assistance toward the poor and truly needy. In 1994, consumers were estimated to be paying less than 5% of housing maintenance and municipal service production costs. The bulk of these costs were borne by the government budget; government budgetary assistance for housing and municipal service suppliers was estimated to be approximately 4.4% of GDP and 8% of total government expenditures. Increase in cost recovery and shift of government assistance from service suppliers to needy consumers (i.e. poor households) will result in a reduction in government assistance as those who are able to pay are asked bear a larger share of the cost of production compared to the poor who cannot afford to pay. In 1995, payments by households are estimated to have increased to around 36% of housing and municipal service expenditures. As incomes increase, the overall level of government assistance for housing and municipal services is projected to decrease. Proiect Risks 24. HMSAP is a program still in development and further changes are expected. One of the issues is the complexity of the administrative process, especially the amount of information that has to be collected by applicants and then has to be processed by the local administrative office. MSP is reviewing ways to simplify the application process which would lead to changes in the way information is processed; e.g. linking the HMSAP and pension databases so that pensioners need not obtain separate documentation on their eligibility or pension amounts. The developers of the software were aware of the potential changes and the software is designed to be flexible and accommodate modifications to the information requirements and administrative procedures. Therefore, anticipated changes in the application process would not result in the system being made obsolete.  -8- 25. The installation of the equipment wtil be a logistical challenge. When combined with the USAID program, there will be close to 700 computers being installed in several hundred local HMSAP administrative offices nationwide. Office space will have to be provided, provision made that power supply and access to telephone lines (for faxes and modem) is adequate, delivery and installation scheduled, software loaded on to the computers and training provided. The phasing of installation, delivery and training were reviewed in detail during appraisal and contracting arrangements were structured accordingly. A detailed implementation plan will be developed to assure proper coordination (para. 29). 26. While both the Bank and government are interested in proceeding very quickly with the purchase of equipment given the anticipated increase in applications for HMSAP allowances, the formal government approval process for foreign borrowings has lead to delays in past loans. Although the loan amount is small, the legislature (the Supreme Rada) would most likely be required to approve this loan before it can be declared effective. The government has been quick in processing the original request for Bank assistance. Ways to minimize the start up time were discussed with the Government during appraisal and negotiations are part of the overall implementation schedule and clear benchmarks established and agreed to monitor progress (Schedule 3).  -9- B. PROJECT ADMINISTRATION AND JIMPLEMENTATION Project Organization and Management 27. MSP will be responsible for project implementation. A Project Implementation Unit (PIU), consisting of three persons (a project manager, information technology specialist, secretary), will be established within MSP. The PIU will be responsible for: (a) phasing and coordination of purchase and installation of equipment and organization of training and follow up assistance; (b) purchase of computers, printers and other equipment; (c) maintaining project accounts and monitoring overall project implementation; (d) overseeing preparation of the evaluation report; and (e) coordination with the Bank. The training and technical support consultants will provide assistance with software installation, operator training and software trouble shooting and support. A procurement consultant will assist MSP conduct the tendering of the equipment contracts and oversee delivery of equipment. 28. Under the overall coordination of the PIU, implementation will be carried out as follows: a. Site Preparation: Local governments will be responsible for providing: adequate space with security and ventilation (temperature control); desks and other office furniture; and access to electricity and telephone line where modems are to be installed. b. Delivery of Equipment: The contractor (selected through competitive bid) will be responsible for delivery of equipment to Kiev (for testing and installation of application software) and subsequently to the local HMSAP offices. In case of network systems, the contractor will be responsible for hook-up. c. Installation of Application Software and Set-up of Network Systems: The technical support consultants will be responsible for installation of software and site testing of network systems. d. Training: (i) General Training: MSP (with assistance from the technical support consultants) will be responsible for carrying out training on HMSAP and initial orientation of the application software; (ii) the technical support consultants will be responsible for on-site training for local HMSAP staff. e. Follow-Up Support: The technical support consultants will be responsible for resolving applications software problems and carrying out additional enhancements to the application software. The implementation plan and key benchmarks for monitoring implementation progress are presented in Schedule 3. 29. Proper coordination of training and technical support with the delivery of the equipment is essential for the success of the project. It was agreed during negotiations that MSP will prepare a detailed plan for scheduling training, technical support and equipment delivery by November 1, 1996. This understanding is reflected in the Loan Agreement. Procurement 30. The procurement of goods under Bank financed components would be procured in accordance with the Bank/IDA procurement guidelines. The project components not financed by the Bank would be procured in accordance with the national regulations or the cofinancing institutions procurement regulations. The project elements, their estimated cost and procurement methods are sunmuarized in Table 1 of Schedule 4. A procurement plan detailing packaging and estimated schedules of the major  -10- procurement actions is presented in Table 2 of Schedule 4. All other procurement information, including capability of the implementing agency, estimated dates for publication of the General Procurement Notice and the Bank's review process is presented in Table 3 of Schedule 4. Disbursement 31. The Bank loan will finance: (a) 100% of foreign and local ex-factory expenditures and 75% of local expenditures for items procured locally; and (b) 100% of consultant services. Direct payments would be made to suppliers of equipment based on the contract. All equipment delivery, consultant contracts and disbursement are expected to be completed by December 31, 1997. June 30, 1998 is proposed for loan closing. Accounts, Monitoring and Evaluation 32. Since the project will consist of a limited number of contracts3, the monitoring and supervision requirements will be minimal. MSP through the PIU will maintain project accounts and arrange for project audits. No mid-term evaluation is planned. An evaluation will be carried out of the HMSAP program, including the impact of automation at the conclusion of the project. 3/ The project is expected to consist of four contracts: one goods contracts for the purchase of computers and related equipment and three consultant contracts (training and technical support, project implementation and evaluation study).  SCHEDULE I UKRAINE SOCIAL PROTECTION SUPPORT PROJECT Summary of Obiectives and Key Performance Indicators OBJECTIVES INPUTS OUTPUTS RISKS AND CRITICAL OUTCOMES AND IMPACTS [Resources provided for project [Goods and services produced ASSUMPTIONS [of project activities] activities] by the project] [The outcome is dependent ___________________________ on ..] I Improve the administrative *EBRD loan (US$2.47 million) *Automation of calculation * Ability of the government to * Efficiency of Processing efficiency in the local HMSAP Local government budget allowances per HMSAP process the loan and carry out Applications: From current administrative offices (US$100,000) allowance beneficiary, both procurement of equipment in a levels of around 30 days to new applications and timely manner. less that 2 weeks from receipt Funds will be used to: (a) recalculations (case by case) of application to notification, install workstations with UPS *Coordination of purchase and by September 1997 units, printers and other *Computer generated allowance delivery of equipment, computer equipment in notices to households (case by installation of software and the *Efficiency in Administering HMSAP offices; (b) conduct case) conduct of training. the HMSAP Program: formal and on the job training Average of 3,000 HMSAP of operators; and (c) carry out *Computer generated monthly *Availability of back up participants per workstation, additional software summaries of total allowance to technical support, especially by September 1997 enhancements be provided to each municipal with use of the software. service enterprises *Eliminate government budgetary support for housing maintenance, water and sewerage, heating, hot water and gas enterprises by September 1997. Improve information *IBRD Loan (US$130,000) *Timely monthly reports on Same as above. *Analysis of regional availability and management of USAID (US$300,000) numbers of applicants, numbers differences on participation HMSAP in pilot regions of allowances granted, amounts rates, level of subsidies, Funds will be used to finance: of allowances paid, staffing levels, effectiveness of (a) workstations and identification of recipients, local HMSAP administrative communications hardware and average time between offices and other management software to MSP with 80 submission of applications and information. sample HMSAP offices and 27 notification to applicants. regional (oblast) offices; and (b) an evaluation study. *Evaluation Study on the impact of computerization on HMSAP and HMSAP itself on the population.  -12- SCHEDULE 2 UKRAINE SOCIAL PROTECTION SUPPORT PROJECT Training and Technical Support Plan Background 1. A training program has already been developed based on the pilot Housing and Municipal Service Allowance Program (HMSAP) office automation carried out by the USAID consultants (Padco). The existing training program is targeted for training the trainers from local staff of the local administrative offices who would be responsible for supervising and/or operating the equipment and software in their respective offices. 2. The pilot program has shown that there is an adequate supply of personnel in most urban HMSAP administrative offices who have some knowledge of computers and can be readily trained in the use of equipment and software to be provided through the project. 3. The existing training has been designed to consist of two stages. First, key personnel from regional offices and local administrative offices are provided with a basic training in the use of computers and the software in Kiev prior to installation of equipment and software in their respective offices. The training session takes one week (five working days) and involves about 25 trainees (to be trainers)4. The Ministry of Social Protection (MSP) has a training facility in Kiev that includes adequate space for the temporary installation of 6 computers as well as dormitories and dining facilities for low cost accommodation of trainees. A manual for users of the subsidy software program has also been developed and is being used as the basis for training. Participants receive sufficient copies of the manual to supply all computer staff in their offices and they are provided with additional materials that explain the basics of using the computer systems. 4. This formal training session is followed by on-site training at the local office as needed. On- site training sessions are provided by the computer system technicians of the Padco's Technical Support Office5. These technicians are familiar with the use of computer systems (operating software, HMSAP and MIS application software, and other office technology equipment). Each Padco technician can provide the overall technical support by telephone/fax and/or site visits of 20 to 30 local subsidy administrative offices. Specifically, these technicians are responsible for: a. On-site training of local staff in the use of computer systems, as requested by the local offices; 4/ The one week course includes training in the use of the computers and the HMSAP administration software. MSP also offers a two week course that includes one week training on the legal basis for and administrative aspects of HMSAP and one week on the computers. 51-l Technical Support Office is currently being managed by Padco. At present, it consists of 18 computer system technicians, 6 of them are located in Kiev and the other 12 technicians are assigned in 6 regions (Oblasts) where the pilot HMSAP automation is being carried out.. It is anticipated that 14 additional computer system technicians would be required to support the upcoming nationwide system of HMSAP. In addition to the Technical Support Office, Padco also has an Application Software Development Office in Kiev, consisting of 6 systems analysts and programmers who are responsible for the development and maintenance of application software for HMSAP and MIS systems. In order to provide adequate services in the ongoing new application software development and maintenance of the existing application software in use, it is anticipated that 5 additional systems analysts and programmers would be required during the project.  -13- b. Customizing software to meet the specific requirements of local offices, where applicable; c. Provision of technical guidance associated with overall computer system administration functions, particularly in the areas of computer system security and routine data back-up and recovery; and d. Identification of administrative and/or technical problems and preparation of feedback on additional training requirements and application software system enhancements that may be incorporated into future training program and the new release of application software. In addition, these technicians also assist the local offices in dealing with the work tasks associated with the computer systems installation (e.g., cabling and connection of computer network systems, installation of the required operating and application software products) and developing long term contracts for computer assistance. While the equipment vendors are expected to provide warranties for equipment they have supplied, the local offices may also need help with various technical problems related to the use of software and equipment. In most urban areas, there are private enterprises that provide technical computer support. The process of installing equipment and training staff is designed to ensure that, when the technical specialist leaves, local office staff will be able not only to operate the equipment and use the software, but will also know how to ensure the continued effective use of the equipment. 5. USAID consultants (Padco) presently provide telephone/fax consultation to local HMSAP administrative offices on computer hardware and software issues. During the project, the MSP is expected to establish "a technical advisory hotline" initially in Kiev to provide advise, as needed, to the local administrative offices. Equipment to be Provided under the Bank Project 6. The Social Protection Support Project will provide additional equipment to the MSP and the regional (oblast) and local HMSAP administrative offices to complete the automation of program administration and introduce a management information system. The project will include the following equipment: a. Automation of Data Processing in HMSAP Administrative Offices. Installation of about 800 workstations (PCs stand-alone and peer-to-peer networks) with Uninterrupted Power Supply (UPS) units, and about 500 printers in HMSAP administrative offices nationwide; b. Management Information System (MIS). Installation of 5 workstations with UPS, printers, modems and communications software MSP; installation of 27 workstations with UPS units, modems and communications software, and printers in 27 oblast administrative offices; and installation of about 80 modems with communications software in around 80 selected local HMSAP administrative offices; c. Training. Provision of 10 workstations with UPS units and printers for the MSP computer training center. The equipment will complement and be compatable to the equipment provided through the USAID pilot program and will utilize the same software. The equipment is expected to be delivered during the first half of 1997.  -14- Training and Technical Support Under the Project 7. Provision of training and technical support will be critical to the successful implementation of the nationwide automation program. USAID will expand its technical support and training to include computers and equipment being financed through the Bank loan. This assistance would be a continuation of the support currently being provided by USAID and is expected to include: a. Assistance in the preparation of designated offices to ensure the readiness and suitability of facilities for the installation of computer systems and other office technology equipment; b. Acceptance testings for all computer systems and office technology equipment that are delivered by the selected supplier; c. Installation and testing of HMSAP and MIS application software systems for all designated local, regional, and headquarters offices; d. Formal and on-site training sessions for computer operators and end users as established in the MSP training program; e. Additional system development and up-dating of documentation (technical system design, user's manual, installation manual, and training documents); f. Assistance to MSP in the establishment of and staffing for "a technical advisory hotline" to provide the day-to-day operational guidance to the user community; g. On-the-job training in all aspects of computing to all designated MSP computer system technicians so that they will be able to take over the operational support of the automated systems at the end of this contract. This will be an expansion of the existing support under the USAID pilot project to all remaining local HMSAP administrative offices. 8. The existing training program has proven to be cost effective and successful and would be used to train staff from the HMSAP offices supported by the Bank project. MSP with the assistance of USAID consultants would continue to organize and finance the training of trainers in Kiev of about 300 additional staff in local offices from all 24 Oblasts throughout the country. Upon completion of the formal training sessions, these trainees, supported by the field computer system technicians designated to their respective regions will become the trainers in formal and on-site training sessions for the remaining staff in their own local offices.  -15- 9. To complete the required training program for HMSAP and MIS in a timely manner, the MSP would need to organize and carry out six additional formal training sessions in the Kiev training facilities according to the following tentative schedules: Session # No. of Trainees Start Date End Date (25 per class) 1 50 1/13/97 1/17/97 2 50 1/27/97 1/31/97 3 50 2/10/97 2/14/97 4 50 2/24/97 2/28/97 5 50 3/10/97 3/14/97 6 50 3/24/97 3/28/97 It should be noted that the delivery and installation of the computer systems, under the project financing, in the designated local offices are anticipated to occur from about March 3 to June 16, 1997. Therefore, on-site training sessions, if required, would need to be established for each local office in accordance with the anticipated completion date of computer system installation and acceptance testings. 10. MSP would take over the training and technical support functions once the USAID assistance is completed. Transfer of expertise and knowledge from the USAID consultants to MSP will be an important part of the training and technical assistance plan. MSP is expected to designate about 20 computer system technicians to work with and be trained by the USAID consultants during the project. 11. A detailed plan would be prepared to assure proper coordination of the delivery of equipment, formal and on-the-job training and technical support by November 1, 1996 or when the tender documents and delivery schedule of the equipment have been prepared.  -16- SCHEDULE 3 UKRAINE SOCIAL PROTECTION SUPPORT PROJECT Implementation Progress Bench Marks Target Dates Actions by the Government : Actions by the Bank ; Remarks August 29, 1996 Distribute loan documents to Documents need to be the Board of Directors distributed 13 working days l__________________________ prior to review. September 2, MSP starts to advertise tender The General Procurement 1996 (local newspaper and Notice will be advertised in notification of embassies) the July 30, 1996, edition of Development Business September 19, Present proposed loan to the 1996 Board for approval By September MSP submits tender documents 23, 1996 to the Bank for review By September Obtain CCC clearance of the 30, 1996 loan package ll By September Loan Signing Loan Signing Normally carried out in 30, 1995 Washington with an authorized representative signing on behalf of the Government By September Establish PIU 30, 1996 By October 11, Supreme Rada approval of loan 1996 By October 4, Comments and/or clearance of 1996 tender documents sent to MSP October 11, 1996 Start of equipment tender: issuance of tender documents By October 18, Ministry of Justice issues legal Supreme Rada approval 1996 opinion needed to issue legal opinion By October 25, Loan effectiveness Based on review of legal 1996 opinion By November 1, Prepare detail plan for 1996 coordinating training and computer installation and submit to Bank for review By November Comments and/or clearance of 15, 1996 training and installation plan l By November Receipt of bids 25, 1996  -17- SCHEDULE 3 UKRAINE SOCIAL PROTECTION SUPPORT PROJECT Implementation Progress Bench Marks Target Dates Actions by the Governrent J Actions by the Bank Remarks By January 1, Training and technical support 1997 consultants in place l By January 9, Submission of bid evaluation to 1997 the Bank January 13, 1997 MSP to start training of local Training to be carried out in HMSAP office staff in Kiev on groups to be coordinated with the use of computers and equipment delivery and software installation. January 30, 1997 Bank comments and/or clearance of bid evaluation March 3, 1997 MSP to receive delivery of first batch of computer equipment March 3, 1997 MSP and technical support consultants to initiate installation of application software By March 31, MSP and technical support 1997 consultants to start on site on the job training on use of computers and the software By March 31, MSP and technical support 1997 consultants to start technical support hotline By July 1, 1997 Delivery of equipment to be completed By December 31, MSP to complete review of 1997 project impact and effectiveness of the HMSAP  UKRAINE Schedule 3 SOCIAL PROTECTION SUPPORT PROJECT Implementation Plan 1996 1997 7 8 9 10 1 1 12 1 2 3 4 -5 ~6 7 8 9 10 11 12 LOAN PROCESSING By the Bank: Appraisal ++ Field Discussions of LA ++ Loan Negotiations (by fax) + Board Presentation + Loan Signing + Loan Effectiveness _ By the GOU (MSP): Field Discussions of LA =_ Loan Negotiations (by fax) CCC Submission & Approval Supreme Rada Approval (?) co Issuance of Legal Opinion MONITORING & EVALUATION By MSP: Preparation of Evaluation Report ______  UKRAINE Schedule 3 SOCIAL PROTECTION SUPPORT PROJECT Implementation Plan 1996 1997 _1__ - 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 EQUIPMENT PROCUREMENT By the Bank: Assistance in Preparation of Tender Documents ++ Tender Documents Review & Approval ++ _ Contract Award Review & Approval ++++ By the GOU (MSP): Preparation of Tender Documents Advertisement Issuance of LOI & Tender Documents Evaluation of Bids Contract Award & Signing By Equipment Supplier: Delivery of Equipment _...... ....... ....... ....... INSTALLATION & TRAINING By the Bank: ___ Review of Training & Installation Plan By MSP:__ Preparation of Training & Installation Plan = Installation of Software _ Formal (Class room) Training On Site (on the job) Training =_ = = Provision of Technical Support (hotline) ----- ----- ----- ----- ----- --- _- __ -. - _ __ - - - -_ _- - -_  UKRAINE Schedule 4 Social Protection Support Project Table 1: Procurement Plan 1 0:::::. .:.2 3 4 5 6. Estimated: schedule :i Type3 : No.of Estimatedo Procurement Prequalification Documeint Invitation to Contract Contract ect : : ::: ::::...:.slicesfltems 5 method6 preparation bid signing completion /subpackages4 : OSt Data Processing Equip- G 2,560 ICB 9/96 11/96 2/97 6/97 ment Project Implementation Cl 2 40 SSI 9/96 - 11/96 12/97 Site Preparation CW 100 NBF Training, Software Support, CF 300 NBF and Evaluation Study :I:Andicate total : Indicatei total o :3,000 2 Name of Package 3 Indicate CW (for civil works); S&I (for supply and install); G (for goods); TK (for turnkey);CF (for consultant firms); Cl (for Individual consultants); TR (for training). The type is related to the use of the relevant standard bidding documents 4 If known indicate number of slices, major items or subpackages expected in the package 5 Expressed in US$ '000; for example 5,000 = US$ 5,000,000 6 Indicate ICB, LIB, NCB, IS, NS, DC (for Direct Contracting), FA (for Force Account), SLF ( for short-listing of consultant firms); SLI (for short- listing of individual consultants); SSF (for Sole sourced of consultant firms); SSI (for sole sourcing of individual consultants), MW (for Minor works), Other (for recurrent costs procured on the basis of administrative procedures based on a schedule and budget acceptable to the Bank); CB ( for Community based work based on guidelines and procedures acceptable to the Bank); CP (for commercial practices adjudged acceptable to the Bank); NBF (Not Bank Financed)  -21- Schedule 4 UKRAINE Social Protection Support Project Table 2: Summary of Proposed Procurement Arrangements (US$ million equivalent) Project Procurement Methods Total cost ICB NCB Other N.B.F. 1 Works 1.1 Buildings - - 0.10 0.10 1.2 Infrastructure - 1.3 Rehabilitation and Maintenance 2 Goods 2.1 Equipment and 2.56 - - - 2.56 Machinery (2.56) (2.56) 2.2 Construction materials 2.3 Commodities 3 Service Contracts 4 Consultancies 4.1 Studies, - - 0.04 0.30 0.34 Engineering and Supervision (0.04) (0.04) 4.2 Technical Assistance 4.3 Training 5 Miscellaneous 5.1 PPF - - 5.2 Recurrent Costs - - - - Total 2.56 0.04 0.40 3.00 Bank/IDA (2.56) (0.04) (2.60)  Schedule 4 UKRAINE Social Projection Support Project Table 3: Procurement Information Section 1: Procurement Review Element ICB NCB is NS Consultants Other methods Percentage of loan amount subject to prior review 1. Procurement 300,000 method thresholds 2. Prior 300,000 50,000 98% Review 3. Expost Explain briefly the ex-post review mechanism: Review 7 Section 2: Capacity of the tmplementing Agency in Procurement and Technical Assistance requirements 4. Brief statement Procurement consultant will be retained by the Ministry of Social Protection to oversee procurement. 5. Country Procurement Assessment Report or Country 6. Are the bidding documents for the procurement actions of the first Procurement Strategy Paper status: year ready by negotiations Being finalized. Yes I No [i3  Section 3: Training, Information and Development on Procurement 7. Estimated date of 8. Estimated date of 9. Indicate if there are 10. Domestic Preference for 11. Domestic Preference for Project Launch publication of General projects subject to Goods Works, if applicable Workshop Procurement Notice mandatory SPN in Development Business Yes 0 No 0 10/96 7/30/96 Yes 0 No: Yes 0 No 0 No l9 6. Retroactive financing 7. Advance procurement Yes 0 No I3 Explain: Yes 0 No 1E Explain: 10. Explain briefly the Procurement Monitoring System: The main equipment contract will subject to prior review. Procurement consultant will oversee tendering and delivery. Section 4: Procurement Staffing 11. Indicate name of Procurement Staff part of Project Team: Suwat Pananon Division: EMTDR Ext: 32574 12. Explain briefly the expected role of the Field Office in procurement: The resident mission staff will oversee procurerment and provide guidance as needed.   I