Papua New Guinea - Primary Education Project

Document of The World Bank RLE CP FOR OFFICIAL USE ONLY Report No. 3027b-PNG PAPUA NEW GUINEA STAFF APPRAISAL REPORT PRIMARY EDUCATION PROJECT November 18, 1980 Projects Department East Asia and Pacific Regional Office 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.  CURRENCY EQUIVALENTS US$1.00 = K 0.67 K 1.00 = US$1.50 GLOSSARY CDC - Curriculum Development Center ERC - Educational Resource Centers ICB - International Competitive Bidding NDOE - National Department of Education NPEP - National Public Expenditures Plan NPO - National Planning Office NWS - National Department of Works and Supply OPC - Office of Project Coordination PDOE - Provincial Division of Education PMC - Project Management Committee POMITC - Port Moresby In-service Teachers College Provincial Fund - Provincial Primary Education Fund UPNG - University of Papua New Guinea FISCAL YEAR January - December ACADEMIC YEAR January - December  FOR OFFICIAL USE ONLY PAPUA NEW GUINEA PRIMARY EDUCATION PROJECT Table of Contents Page No. GLOSSARY BASIC DATA 1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . I The Education System . . . . .. .. . . . . . . .. 1 Education Costs . . . . . . . . . . . . . . . . * . . . . . . 1 Bank Participation . . . . . . . . . . . . . . . . . . . . 2 2. ISSUES IN PRIMARY EDUCATION . . . . . . 2 Overview.. . . . . . . . 2 Management . . * . . . . . . . . ... . . . . . . 3 Quality . .. .. .. .. . . . . .. .. .. .. 4 Enrollvent Stagnation ................. 8 Financial Constraints . . . . . . . . . . . . . . .. . .. 11 Unit Costs . . . .. . . . . .. . . . . . . . . . . . 12 Goverment Plans . . . . . . . . . . . . . . . . . . . . . . . 14 3* THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Strategy ......... . . . .... . . . .... . . ........ ..... . 15 Educational Resources Management . . . . . . . . . # . . , 15 Quality Improvement . . . ......... .. . . . . . . 15 Enrollment Expansion .......... . . 16 Project Components . . . . . . ... . . . 16 Administration . . . . . . . . . . . . . . . . . . . .. . 16 Curriculum, Textbooks, Examinations and Testing . . . . . . 17 Teacher Training . . . . . . . . . . . . . . . . . 0 . . .. 20 Provincial Primary Education Fund ("The Provincial Fund"). . 22 Project Evaluation and Management . . . . . . . . . . . . . 23 Other Components ....... . o 24 IThis document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contenst may not otherwise be disclosed without World Bank authorization.  Page No. 4. MANAGEMENT AND IMPLEMENTATION . . . . . . . . . . . . . . . 24 Administrative Responsibilities, Organization and Staffing . 24 Provincial Fund Implementation Procedures . . . . . . . . . . 27 National Responsibilities . . . . . . . . . . . . . . 27 Provincial Responsibilities . . . . . . . . . . . . . . . . 29 Criteria for Use of the Fund . . . . . . . . . . . . . . . . 29 Guidelines for Allocations of NPEP Funds . . . . . . . . 29 Approval of Provincial Projects . . . . . . . . . . . . 30 Implementation Schedule . . . . . . . . . . . . . . . . . . 30 5. COSTS AND FINANCING ....... .. .. ...... .. . . . . 31 Costs . . . . ..................... . 31 Bases of Cost Estimates .... ..... . . . . . .. . .. 34 Contingency Allowances . . . . . . . . . . . . . . . . . . 34 Foreign Exchange Component .... .. .. 35 Duties and Taxes . . . . . . . . . . . . . . . . . . . . . . 35 Project Financing . . . . . . . . . . . . . . . . . . . . . . 35 Incremental Recurrent Costs . . . . . . . . . . . . . . . . . 37 Procurement ........... .... .. .. . . . 38 Disbursements . . . . . . . . . . . . . . . . . . . . . . . . 39 Documentation, Accounts and Audits . . . . . . . . . . . . . 40 6. BENEFITS AND RISKS . . . . . . . . . . . . . . . . . . . . . . . 41 Benefits .............. ..... .... . ... 41 Risks ........... ................. 42 7. AGREEMENTS REACHED AND RECOMMENDATIONS....... 42 LIST OF TABLES, CHARTS AND ANNEXES Tables 1.1 Structure of Education . . . . . . . . . . . . . . . . . . . . 1 2.1 Grade 6 Achievement Scores in 19 Schools (1977) . . . . 4 2.2 Test Results From Grade 10, 1968-77 . . . . . . . . . . . . . 6 2.3 Enrollment Ratios for Grade 1 and Grades 1-6 by Sex: 1971-78 9 2.4 Estimates of Enrollment Resulting from Elimination of Wastage and Equal Enrollment of Girls . . . . . . . . . . 10 2.5 Comparison of Unit Costs . . . . . . . . . . . . . . . . . . . 13 2.6 Comparison of Recurrent Cost Estimates with Data for Other Developing Countries ................. 14  - iii - Page No. 3.1 Estimates of Numbers of Classes and Pupils in Grades 4, 5 and 6, 1984 . . . . . . . . . . . . . . . . . . . . . . . . 18 3.2 Parameters of the Textbook Program . . . . . . . . . . . . . 19 3.3 In-service Training Courses at POMITC . . . . . . . . . . . . 21 3.4 Localization Targets for Primary Teacher Training Staff . . . 22 5.1 Project Costs by Project Item . . . . . . . . . . . . . . . . 32 5.2 Project Costs by Type of Expenditure . . . . . . . . . 33 5.3 Annual Cost Escalation . . . . . . . . . . . . . . . . . . . . 35 5.4 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . 36 5.5 Recurrent Costs of Primary School Expansion . . . . . . . . . 37 5.6 Schedule of Expenditure and Disbursement . . . . . . . . . . 40 Charts 22095 Organization of Education (National and Provincial). . . . . 5 22239 Project Organization Chart . . . . . . . . . . . . . . . . 25 Annexes 1. Comparative Education Indicators 2. Provincial Primary Education Fund - Eligibility Criteria 3. Implementation Schedule 4. Selected Documents and Data Available in Project File Map Primary School Enrollment by Province, 1979   PAPUA NEW GUINEA PRIMARY EDUCATION PROJECT Basic Data (1979) Enroll- Gross enroll- oment ment ratio Education Data (-000) (%) Primary school (Grades 1-6) ('000) 283.2 { International primary schools 5.4 { 58 Provincial high schools (Grades 7-10) ('000) 35.1 { International high schools (Grades 7-10) ('000) 0.8 { 13 Vocational schools ('000) 4.3 Primary school teacher training colleges ('000) 2.2 Secondary school teacher training colleges ('000) 0.5 In-service teacher training 0.7 National high schools (Grades 11 & 12) ('000) 1.5 Technical colleges ('000) 1.5 Universities (-000) 2.7 Public Education Expenditure Total public expenditure (1979) K 537.6 million Expenditure on education (1979) K 94.8 million As % of total public expenditure 16.4% As % of GNP 5.4% As % of public - education K mln expenditure Expenditure on primary schools (1978) 30.0 29.9 Expenditure on high schools (1978) 8.8 9.3 Expenditure on vocational schools and technical 4.0 4.2 institutions (1978)   1. INTRODUCTION 1.01 The Education System. Papua New Guinea has built a complete educa- tion system within a short period - its first senior high school was opened only about 20 years ago. The country has adopted a four-tiered education system - primary, lower secondary, upper secondary and higher education (Table 1.1). The problems within the education system are severe and can be traced Table 1.1: STRUCTURE OF EDUCATION Percent of age group served in Level Grades Ages Name Control 1978 Primary 1-6 7-12 Community school Province 58 Secondary Lower 7-10 13-16 Provincial H.S. Province 13 Upper 11-12 17-18 National H.S. Central Govt. 2 Higher - - UPNG and others " " - to inadequacies in primary education. Selection processes (based on student performance) which take place between grades 6-7 and 8-9 leave only about 20% of the grade 6 cohort to sit for grade 10 examinations. But despite this selection process, standards of grade 10 examinations have steadily declined during the 1970s. The number of graduates at secondary and higher levels is insufficient to meet urgent manpower needs, but quality problems in basic education prevent an effective enrollment expansion at upper levels. 1.02 Education Costs. Despite the sharply tapered education pyramid (para. 1.01) expenditure on education, measured as a proportion of GNP, is the highest in the Region at 5.4%. Recurrent unit costs are high,/1 particularly above grade 10, which is predominantly taught by expatriates and is entirely residential. Relatively small class size (31) and high teacher salaries at the primary level also contribute to high unit costs. Taking into account the wastage within the system, (30% dropout within the primary level and 35% "force out" between grades 8-9) the unit cost per graduate at each level is unacceptably high. Improved quality of education, reduced wastage, increased reliance on local teaching staff above grade 10 and increased class size are the principal requirements to reduce costs per graduate. /1 National High Schools cost US$1,330/student/year and the University of PNG US$5,860/student/year in 1976.  - 2 - 1.03 Bank Participation. The Bank has been involved in one previous education project, Credit 661-PNG of 1977, which is primarily concerned with satisfying immediate manpower needs. It assists in training agricultural extension workers, health inspectors, primary- and secondary-level teachers and middle level industrial technicians. Project implementation is generally progressing well, but difficulties associated with reaching enrolment targets for females indicate a socio-cultural constraint, which should be taken into account in future project design. All project-financed facilities are operational. 1.04 The proposed project was identified by a joint Bank/Unesco subsector mission in April 1979 and prepared by the Government and a Unesco mission in September 1979. The findings of these missions formed the basis for pre- appraisal, which was conducted in November/December 1979 and appraisal which was conducted in July/August 1980./1 The proposed project would be assisted by an IDA credit of US$12.0 million and a Bank loan of US$6.0 million and would aim at: (a) enhancing the capabilities for effective management of education at national, provincial and school levels; (b) raising the quality of primary education through improved textbooks, materials and teacher training; and (c) promoting greater access to primary education by assistance to the provinces to expand and improve existing schools and establish new schools. The proposed project is recommended for IDA/Bank financing because it: (a) supports the Government-s development strategy for primary education, (b) addresses major issues in the education sector; and (c) is well organized to achieve its goals. 2. ISSUES IN PRIMARY EDUCATION /2 Overview 2.01 Significant progress was made prior to 1970 in expanding primary education in PNG, but the primary enrollment ratio stagnated in the 1970s and serious quality problems developed. Concentrated' efforts are needed to improve access and quality in the 1980s. Problems in the subsector fall into four broad categories: /1 Mission members at preappraisal were S. Sigurdsson (architect and mission leader), F. Farner (general educator) and 0. Fajana (economist). Appraisal was conducted by S. Sigurdsson and P. Aprieto (textbook specialist, consultant). /2 The primary education system is described in Working Papers, Section B.  - 3 - (a) Management. The 1978 decentralization policy transferred most of the administrative and financial responsibility for primary education from the national Government to the provinces, but the provinces lack trained staff to manage the work. (b) Quality. Test results show that standards have steadil]- declined during the 1970s. (c) Enrollment Stagnation. Primary school enrollment ratios levelled off at less than 60% during the 1970s. (d) Financial Constraints. The Government has put a 3% growth ceiling on its overall annual expenditures because of financial resource constraints. Expansion of the education system should be linked with economies to make better use of scarce resources. Management 2.02 The Organic Law of 1977, which controls the decentralization policy, became effective in 1979. In the education system the Central Government retains exclusive control over education above grade 10 and school inspec- torates at all levels. Control over curriculum at and below grade 10 is shared between central and provincial governments; planning and management of primary and lower secondary education rests primarily with the provinces. Responsibilities of the Provincial Divisions of Education (PDOE) in primary and lower secondary education include appointment of teachers, establishment of new schools and related educational planning. Disbursement of funds and adoption of curricula in subjects other than English, mathematics, science and national or international components of social science are also provincial responsibilities. Lack of adequately trained staff in each of the 20 provinces to carry out these diverse responsibilities is a serious constraint to successful implementation of the decentralization policy. The provincial education staff in each province includes only four educational managers, of which only the superintendent has been trained in education admjnistration or other relevant areas./l Thus the Organic Law delegated much of the decision-making powers to the provinces, but the manpower to exercise this power is often lacking. 2.03 The decentralization process is incomplete and uncertainties exist about roles to be played by the national and provincial authorities. Parts of the decision-making power are being transferred to the provinces, but defini- tion of responsibility is often lacking, particularly in the areas of shared control (para. 2.02). A case in point is the development and production of /1 Each province has 4-6 inspectors, but these are national officers (para. 2.04 and Chart A).  -4- teaching materials and textbooks in subjects outside national control (para. 2.02). This activity is a provincial responsibility, but the "critical mass" needed for a textbook program requires a major national involvement. Anomalies also exist in the present staffing structure, developed in 1977. According to this structure, provincially based education staff report to the Provincial Superintendent of Education, with the exception of the inspectors who report to the National Government (Chart 22095). The result is that the two essential elements of the team responsible for management and improvement of primary education -- administration and supervision -- are separated organizationally rather than placed under a single authority. A coordinated program is needed to resolve issues arising from the decentralization process. Such a program should include: (a) technical assistance for the preparation of provincial plans and definition of responsibilities; and (b) intensive training of local staff to assume managerial responsibilities. Quality 2.04 Education standards are low and have been falling during the 1970s. Shortage of qualified teachers and lack of instructional materials were major causes of this decline. Concentrated efforts, particularly in teacher training and provision of textbooks, are needed to reverse the trend. Systematic, objective primary school achievement measurements to identify and quantify decline in primary education standards over time are not available in PNG, but two partial indicators show that standards are low and falling. Scores on the national examination given at the end of grade 6 for selecting students to enter grade 7 show poor results. The only detailed study available is based on 1977 data in 19 schools located in rural and urban areas of 9 provinces. Scores were as follows in this study:/l Table 2.1: GRADE 6 ACHIEVEMENT SCORES IN 19 SCHOOLS (1977) Community Life (Social Studies Composite English Mathematics & Science) total Maximum possible score 37.0 40.0 40.0 39.0 Mean for highest school 22.9 21.5 28.5 24.1 Mean for all schools 16.5 15.3 20.4 17.4 Mean for lowest school 9.5 10.1 12.4 11.2 Score attainable by chance (25%) 9.3 10.0 10.0 9.8 /1 Salome Cayago, "Community School Characteristics," in D.F. Lancy, ed. The Community School, PNG Journal of Education, Volume 15, Special Issue, 1979.  -5- PAPUA NEW GUINEA ORGANIZATION OF EDUCATION (NATIONAL AND PROVINCIAL) PROVINCIAL AGENCIES NATIONAL GOVERNMENT AND OFFICERS AGENCIES AND OFFICERS Provincial Ministry of Education, Legislature Science & Culture Il Provincial Executive Provincial Department of of Education Secretariate the Province |_ Secretary of Education Education Services Provincial Wing Eight Other Division of Divisions Education Divisions ~~Provincial Provincial Division of Superintendent Education Provincial Standards Iof Education Board Chaired by Prov. Supt.._ _. Inspection Insection Deputy Primary Secondary Superintendent (Planner) r-_I___|_Senior_| Admin. Adult Educ. Inspector | Officer Officer lsl t l Ins pectors Inspectors Provincial Community High Schools Schools ---- - -- -_ _- - (N = 2-8) IN = 49-163) Posted to provinces - --Indicates informal liai son as distinguished from line authority. World Bank-22095  The mean total score for the 19 schools (16.5 + 15.3 + 20.4) was 52 out of a possible 117. Analysis of a sample of scores from the 1979 examination produced a mean of about 45 out of a possible 115, or slightly lower than the 1977 results shown above./l These data suggest that in the vital subjects of arithmetic and English, the typical child can correctly answer less than half of the examination items. The 1977 study also indicates that scores in rural areas are significantly lower than in urban areas./2 Better statis- tical evidence of downward trend in test results is available for the lower secondary grades as shown in Table 2.2. While evidence at grade 10 does not directly measure primary achievement, the problem can in part be attributed to weaknesses at earlier levels of education and a persistent 25% decline over a decade in the above six measures is significant. The large enrollment increase in grades 7-10 between 1970-78 (from 17,600 to 33,000 while enroll- ment in grades 1-6 grew only from 206,000 to 263,000) accounts for some of the drop in standards, but the mission estimated weaknesses in primary education to be a larger factor. Table 2.2: TEST RESULTS FROM GRADE 10, 1968-77 Mean scores for Grade 10 students /a Language Numeracy Reasoning Word Word Number Numerical Overall Verbal knowledge formation attainment reasoning reasoning reasoning 1968 - 34.9 22.5 - 35.4 1969 25.2 34.5 - 13.3 - - 1970 24.5 31.9 - 14.0 - 15.9 1971 24.2 31.0 - 14.5 - 16.8 1972 23.4 30.0 - 13.4 - 16.2 1973 22.5 28.8 - 12.3 - 15.8 1974 20.6 - 16.5 12.3 30.7 15.4 1975 19.5 - - 12.0 - 14.8 1976 18.2 - 11.7 30.2 14.6 1977 18.0 - 10.5 29.5 14.0 /a The six tests are standardized so year-to-year comparison is valid. Source: National Department of Education. /1 Grade 6 examinations were not standardized from year to year so trend analysis is difficult. /2 Nine of the 11 higher scoring schools in the study cited were urban or close to urban centers while none of the 8 lower scoring schools were urban. The Chi Square on this distribution is significant.  - 7 - 2.05 The decline in primary education standards during the 1970s resulted from several factors: (a) during the middle of the decade expat- riate managers and teachers were replaced by local staff, half of whom had (in 1979) a level of schooling of less than grade 10; (b) an annual 10% erosion of funds available per pupil to purchase textbooks ane 'eaching materials; and (c) required teaching methods were frequently beyond the capability of the newly appointed staff. 2.06 As a consequence of the low quality at the primary level, output and quality suffered at upper levels. Quality standards in lower secondary schools fell as teachers found it necessary to provide remedial work to overcome primary deficiencies. Despite severe screening processes between grades 8 and 9, achievement levels declined among those who completed grade 10 (Table 2.2). 2.07 In terms of numbers, no shortages of primary teachers are expected in the 1980s but the Government recognizes that there are qualitative shortcomings in teacher training, curricula, and materials. An initial constructive step towards making better use of well-qualified teacher trainers was taken in 1979 by consolidating all in-service teacher training at a former preservice teacher training college, the Port 14oresby Inservice Teachers College (POMITC). However, the institution is handicapped by the lack of facilities, equipment and staff. It needs further development and expansion to discharge adequately its new responsibilities. A new program of residential in-service training was started two years ago. This program, which is intended primarily for minimally trained teachers /1 is a good start, but requires refinement to make it practical and relevant to the conditions under which primary schools operate in rural areas. POMITC also operates newly developed six-month and shorter courses for headmasters, which also address the quality issue. These courses need continued review to ensure that the actual problems encountered by headmasters are adequately covered. While concentrating residential in-service training at POMITC is a constructive step, more attention should be paid to recurrent in-service training in the provinces to supplement the residential program and reach a larger audience. The annual provincial teacher training weeks conducted between school terms have been found to be less helpful than expected. POMITC should, as part of its new responsiblity, revitalize and expand this program. 2.08 The Curriculum Development Center (CDC) of the Department of Education has also received special attention in'recent years. The professional staff has been expanded from 10 in 1974 to 25 in 1979 and the organizational structure has been altered to place the entire unit under a single administration and to improve its internal structure. However, /1 About 600 teachers have been trained in the two years the consolidated program has been in operation.  -8- much remains to be accomplished in the CDC which is now scattered in three locations around Port Moresby. Of particular importance are: (a) coordinating curriculum and materials development with teacher training through staff and facilities sharing, (b) developing curricula more relevant to village life; and (c) expanding the availability of printed and other simple teaching aids to pupils and teachers. 2.09 Language is closely associated with quality standards. English is the official language of instruction in the absence of a viable alternative. It is, however, spoken in less than 3% of the homes. Other homes use one of the estimated 700 local vernaculars. Pidgin and to a lesser extent Hiri Motu are widely used as lingua franca. In the minority of situations where it is possible, teachers of children in the lower primary grades use local vernacular as the language of instruction. Other teachers receive no particular training in bridging language communication gaps which generally exist between teachers and pupils. Special training programs in communication skills for teachers need to be introduced at POMITC. Such programs would help improve communications, but the language problem will remain a long- term issue. 2.10 In summary, a comprehensive program is needed to improve educa- tional standards. This program should focus on teacher training, textbooks and examinations. Textbooks should be provided in all major areas and distributed so that every child has access to them. Library books and other teaching materials should be made available. Pre- and in-service teacher training should be improved by introducing practical methods of instruction, multi-grade teaching, language communication skills, school- community relations and techniques of school and classroom management. The emphasis of the examination program should be on testing children before the end of grade 6 and oriented toward diagnosis of learning problems instead of screening students for future education. Finally, education management should place its main emphasis on improvement of teacher performance and student learning achievement. Enrollment Stagnation 2.11 During the immediate postwar period enrollment grew rapidly and reached about 208,400 in 1970 or about 55% of the age group. Enrollment has remained at about this ratio over the last decade. The overall enrollment ratio was 58% in 1979, but five provinces (all in the Highlands) remained at less than 50% while most New Guinea off-shore island provinces were above 80%. During the 1970s enrollment increased only moderately to 277,500 in 1979 and enrollment ratios of the 1970s remained stagnant both for grade 1 and for grades 1-6 as shown in Table 2.3./1 In 1978 the Government announced its target of achieving universal (95%) enrollment in /1 Complete provincial data are provided in Working Papers, Section B.  - 9 - grades 1-6 by 1996. Little can be done to achieve this target until the causes of the enrollment stagnation have been removed. The main causes have been identified as: (a) Educational. Children react to low quality with poor attendance leading to dropout. (b) Social and Economic. In the late 1960s the number of primary school graduates grew rapidly and children, parents and community leaders began to observe that grade 6 completion did not necessarily lead to employment or entry into the monetized economy. Also, since places in grade 7 are limited to only one-third of those who finish grade 6, the temptation to drop out became great for those students who knew they were behind their peers in their studies. Enrollment of girls lagged behind that of boys at a rate of about 2:3 because parents keep girls at home to care for younger children and other tasks. Many parents in the rural highland provinces do not wish their daughters to be educated because of perceived nega- tive effects on matrimonial eligibility of educated girls. Lack of communications between parents and school is also a factor. (c) Geographical - About 20% of the primary school-age population resides too far from an existing school to enroll or attend. Dropout in rural schools is also high. Table 2.3: ENROLLMENT RATIOS FOR GRADE 1 AND GRADES 1-6 BY SEX: 1971-78 Enrollment Ratios (%) /a Grade 1 Grades 1-6 Year Male Female Total Male Female Total 1971 80 50 65 69 41 55 1972 74 44 60 70 40 56 1973 83 50 67 70 40 55 1974 73 48 61 71 42 56 1975 82 53 68 69 44 57 1976 78 54 66 71 44 58 1977 85 60 73 68 44 57 1978 73 54 64 67 46 57 1979 83 62 73 64 48 58 /a These ratios have been rounded to whole percents from more detailed Unesco figures to emphasize the erratic nature of the figures. Consistency in school-age population figures necessary to compute the ratios is lacking because census figures are about ten years out of date. Source: 1971-1978 Unesco Sector Study, pp. 58-59; 1979, NDOE estimates.  - 10 - 2.12 Enrollment stagnation means that over 40% of primary school-age children (203,000) are not receiving basic education. These children may be divided into two categories: (a) those who live near an existing school and are not enrolled; and (b) those who live beyond a reasonable travel distance or time to an existing school. Estimates for each category were developed by analyzing enrollment ratios for 1974-1979 as follows (Table 2.4): (a) Eliminating dropout of once enrolled children would raise the enrollment ratio from 58% to 68%. (b) Enrolling girls at the same ratio as boys could further increase enrollment in areas served by existing schools and bring the overall ratio to 82%. (c) The residual is composed of two groups: (i) those who live near, but were never enrolled in, existing schools (estimated at 5%); and (ii) those living outside the area of existing schools (estimated at 10-15%). Table 2.4: ESTIMATES OF ENROLLMENT RESULTING FROM ELIMINATION OF WASTAGE AND EQUAL ENROLLMENT OF GIRLS /a Number of Percentage of Children ('000) in 1979 Age Group Male Female Total Male Female Total School-age population 241 241 482 100 100 100 Enrolled in existing schools 164 115 279 68 48 58 Enrolled if: Dropout had been avoided 197 123 320 82 54 66 Dropout had been avoided and girls had been enrolled in equal proportion to boys 197 197 394 82 82 82 Residual 43 44 87 18 18 18 Near existing schools 8 8 17 4 4 4 In unserved areas 35 35 70 14 14 14 /a The analysis differs substantially among the 20 provinces: in the Highlands equalizing enrollment of girls would make the greatest difference while in the Capital and Manus it would not. Details in Working Papers, Section C. Source: National Department of Education enrollment figures, December 1979 Residuals: mission estimate.  2.13 Table 2.4 shows the effect of eliminating dropout and enrolling girls at the same rate as boys. Hypothetically the overall enrollment ratio would increase from 58% to 82% because of the 115,000 additional enrolled children. This is a substantially larger group than the residual of 86,000 children most of whom are not enrolled because of lack of access. The retention/enrollment of children who live within commuting distance of existing schools is therefore of high priority. 2.14 Improved management, enhanced school-community relations /1 and teaching methods sensitive to local languages and customs should assist in attracting more children to enroll in grade 1. Improvements in education quality should improve satisfaction of children and parents with the school and contribute to reduced dropout. For those admitted to grade 7, improved quality of primary education would help overcome the present low state of readiness to benefit from secondary education. 2.15 A two-fold approach is needed to raise enrollment ratios above the present 55-60% plateau towards the Government's 95% target by the end of the century (and an interim 68% target by 1987). Existing schools can provide a partial solution through: (a) improved teaching methods and parental guidance; and (b) concentration on special programs to identify and enroll children, especially girls, living within commuting distance of the school area. Existing school locations could, with the addition of about 2,000 new classrooms and teachers, and an increased pupil/teacher ratio from 31 to 35, accommodate over 100,000 children and result in an enrollment ratio of about 80% without requiring children to travel excessive distances. New schools would be required for the remaining 20% of the children who reside too far from any existing school. Most new schools should be small and use multigrade teaching and/or alternate year intake, but some of these schools should eventually become complete six grade (six room) schools. School maps and related data should be prepared and plans developed to determine the need for expansion and establishment of new schools. Financial Constraints 2.16 The PNG Government has for the past decade been faced with a continued shortage of domestic revenue. Domestic revenues are typically only about 60% of expenditures. Over 80% of this revenue deficit has been covered by Australian aid; the remainder through other external assistance. An increasingly self-reliant economy and reduced dependence on external aid is a declared government policy,/2 and a 5% annual reduction in Australian aid has become a working assumption of the Government. Accordingly, the Govern- ment has limited the annual growth rate of public expenditure to 3% p.a. /1 A dropout study concluded in September 1980 identifies lack of school-community relations as a major cause of dropout and non-enrollment. /2 PNG Government White Paper, October 1976 (see NPEP 1980-83, paras. 2.3 and 2.7).  - 12 - in most sectors, but as a priority sector, primary education will be allowed a growth rate of 5%./1 At the provincial level there are also financial constraints. Revenue-earning powers of most provinces are limited and unconditional grants from the Central Government constitute the most important source of funds. Provincial governments are, as a result, cautious in introducing items likely to remain a long-term financial liability, such as new teaching posts. 2.17 Unit Costs. Unit costs of all levels of education, especially post-primary are above world and Asian median (Table 2.5). Two factors in PNG account for this difference: low teacher/pupil ratio and high primary teacher salaries. Primary teachers in PNG teach fewer pupils and receive pay corres- ponding to 11 times the GNP/capita despite the fact that about 25% are still minimally trained. Additional causes of the high unit costs at post-primary levels include: (a) Secondary (Grades 7-10) (i) use of expensive expatriate teachers (slightly under 30%); (ii) continuation of residential programs at nearly all secondary schools, (75% of students); and (iii) the low tuition and boarding fees paid by students or parents; (b) Post-secondary (beyond Grade 10) (i) use of expensive expatriate teachers; (ii) continuation of expensive residential programs for all students; and (iii) the reluctance of National Government to require students or parents to shoulder part of the recurrent costs either in the form of moderate tuition or residential fees./2 /1 NPEP 1981-84 (draft). /2 At UPNG neither tuition nor fees are charged. In addition, students are given a weekly personal spending allowance.  - 13 - Table 2.5: COMPARISON OF UNIT COSTS Annual recurrent cost/pupil in US$ (1976) Asia Level of general education Papua New Guinea/a median/b Primary 114 79 Post primary - 556 Lower secondary 404 Upper secondary 1,330 Teacher training 1,500 Universities 5,860 /a Source: PNG "National Education Plan Review and Proposals, 1979, p. 124. /b Source: IJnesco, The Allocation of Resources to Education Throughout the World, March 1980 (page 97). The Unesco source provides only a single figure for all post-primary education. 2.18 The high cost of education must be taken into account when assessing the Government's ability to achieve its targets in primary education: (a) enrolling 68% of the age group by 1987 and over 90% by the end of the century; (b) improving primary level retention from current 70% to over 75%; and (b) raising standards of teaching and learning. These goals can only be met if government plans to reduce costs are imple- mented, e.g. by increasing the primary pupil/teacher ratio; and introducing economies at the upper secondary and higher levels through localization of staff, reduced boarding, and charging of tuition fees.  - 14 - Table 2.6: COMPARISON OF RECURRENT COST ESTIMATES WITH DATA FOR OTHER DEVELOPING COUNTRIES (x) Developing countries (1973) Papua New Guinea All countries 1979 1987 2000 Upper Asia Measurement Actual Projected quartile Median Median Total education expenditures/GNP 5.4 /a 5.4 5.7 5.1 3.5 3.0 Primary education expenditures/GNP 2.1 2.4 3.2 - 1.7 1.3 Education/total expenditures 16.4 17.3 16.5 21.2 16.3 - Primary/total educa- tion expenditures 39.0 44.0 56.0 54.0 48.0 43.0 /a Comparable figures for specific countries in the Region are: Indonesia, 2.2%; Thailand, 3.0%; Korea, 3.4%; Philippines, 4.9%; and Malaysia, 5.0%. Sources: PNG actual from Department of Finance. Projected costs from simulation (Working Papers, Sec. C). Other developing countries: "Patterns of Educational Expenditures," World Bank Staff Working Paper No. 246, and "Comparative Education Indicators," IBRD, February 1980. Government Plans 2.19 The National Public Expenditures Plan (NPEP) is the National Government's chief instrument to direct incremental budgetary support (both internal revenues and external aid) to priority sectors and to under- privileged provinces. NPEP is a "rolling" plan, building on the existing system of annual budget preparation, but with a four-year planning horizon. It is reviewed and extended each year so that it always covers four years. The current NPEP, 1980-83, is the third such plan. The NPEP has established a set of criteria for resource allocation, a consistent procedure for the evaluation of new expenditure proposals, and it exercises firm and centralized control over public expenditure decisions. A special feature of the latest NPEP is allocations to selected sectors and subsectors of high priority. Primary education is one of eleven such sectoral programs. 2.20 Under the sectoral program in primary education, the provinces submit to the National Government their proposals for subprojects to improve  - 15 - quality of and access to primary education. The first set of proposals was submitted to the National Government in 1979 and included a varied collection of capital and recurrent cost items, depending on perceived needs and priorities in each province. Construction of new primary school buildings and new teacher housing was, however, specifically excluded from the proposals because this activity is a community responsibility. Evaluation of the provincial proposals by the National Government has been difficult because provincial strategies and targets have not been specified. 2.21 The primary education sectoral programs are expected to play an increasingly important role in future years and to become the principal instrument in reaching the Government's target of full enrollment by the end of this century. The Government decided in 1978 to retain the size of untied primary education grants to the provinces at K 30.0 million p.a. (in real terms) and to funnel the annual 5% increment over the next eight years through the sectoral program. Although the 1980 sectoral program is only K 3.1 million (or 9% of total primary education program), this figure will by 1986 have increased to K 14.3 million (or 32% of the total) if the program continues as planned. In view of the growing importance of the sectoral programs, the need for preparing plans and strategies for these programs is becoming increasingly important. 3. THE PROJECT 3.01 The proposed project would: (a) help improve the management of educational resources; (b) assist the National Department of Education (NDOE) improve the quality of primary education; and (c) help provinces increase quality of and access to primary education. The project strategy is divided into these three broad headings. Strategy 3.02 Educational Resources Management. The proposed project would assist in training educational administrators, planners and teachers to: (a) make better use of human resources; (b) help implement the Government s decentralization policy; (c) accelerate the introduction of indigenous staff through appropriate training; and (d) retard the growth of recurrent costs through a 15% increase in actual class size and systematic school location planning. 3.03 Quality Improvement. The proposed project would seek to reduce dropout, from the current 30% to 25%; raise pupil learning achievements from a score of 40-50% to about 60%; and improve teaching efficiency through a multifaceted attack on low quality in primary education by:  - 16 - (a) strengthening the Curriculum Development Center (CDC), by adding a textbook development unit, an examination unit and an audio-visual aids section; (b) reinforcing the examination and evaluation process by providing facilities and staff for continuous educational evaluation; (c) coordinating curricula with teacher training through relocation of the CDC to a site adjacent to the national center for in-service staff training; and (d) improving facilities and staff quality at teacher training colleges to help upgrade their teaching program and improve the performance of less qualified instructional staff. 3.04 Enrollment Expansion. The project would support the Government's efforts to extend educational opportunities to hitherto underserved areas and to expand existing schools to keep pace with continued population growth. It would do so through a financial program, called the Provincial Primary Education Fund ("the Provincial Fund"). The Provincial Fund would finance a series of small projects designed to address expansion constraints and quality issues in primary education. A feature of the Provincial Fund (which is described in more detail in Chapter 4) is that it would support both capital and recurrent costs, depending on the nature of enrollment constraints faced by a particular province. Project Components 3.05 Administration (Proposed outlay US$1.1 million, excluding contin- gencies). The project would: (a) strengthen local planning and adminis- trative capacity by financing local and overseas in-service training pro- grams for educational administrators and planners; and (b) help prepare provincial education plans. The largest training program would encompass nearly all the senior administration and planning cadre of the nation: about 40 provincial and 10 national staff including the education superintendent and the education planner from each province. The training content would include case studies and practical exercises directly related to the responsibilities of national and provincial staff. To avoid excessive depletion of staff resources, local training would consist of a 15-month program divided into multiple segments of 2 to 8 weeks duration covering the span of the project, 1981-87./1 The residential training would be conducted at the University of Papua New Guinea (UPNG) in Port Moresby, and at POMITC, which have staff capable of conducting such training. Four man years of expert assistance would be provided under this component to supplement existing training capacity. Overseas training would be provided in two ways: /1 See Working Paper for details of staff to be trained and implementation schedule of training.  - 17 - (a) Study tours of 10 weeks duration for 20 provincial superintendents and about 10 selected NDOE staff. The study groups would go to developing countries en route to more developed countries to study education administration in different settings. Six to eight wTeeks of predeparture and poststudy tour seminars would complement this training. (b) Fellowships in educational planning of 12 months duration would be arranged for 5 NDOE staff and provincial superintendents. The fellowship training would take place in 1982-84. To supplement the training, the project would finance the services of four experienced educational planners for a duration of about two years each to assist the provinces in preparing provincial medium-range educational plans. Short-term planners (one-month visits) would also be used. These planners would be required in the early years of the project (1980-82). 3.06 Curriculum, Textbooks, Examinations and Testing (Proposed outlay US$5.4 million excluding contingencies). A major objective of the proposed project is to improve primary teaching materials. The curriculum, textbooks and media, and examinations components of the proposed project would play a major role in this respect. These components would support the development, testing and production of appropriate teaching materials. The Curriculum Unit (CDC) of the Standards Division would operate these components in project-financed facilities on the site of the Port Moresby In-service Teachers College (POMITC). The proposed project would provide office space for CDC staff and editors, printshop, graphics and storage facilities for small-scale textbook production; communal facilities for CDC staff; and a small computer for statistical analysis of examination results. 3.07 The main objectives of the textbook program would be to develop institutional capacity for continuous supply of textbooks relevant to Papua New Guinea. This includes writing, production of trial editions, field testing, revision, production and printing of final editions and distribution to schools of textbooks and teachers- guides in grades 4-6 in mathematics and community life (social studies and health)./l Language differences in grades 1-3 (para. 2.09) make the development of satisfactory textbooks in subjects other than English difficult. Current emphasis in grades 1-3 is therefore on the English textbooks while the development of textbooks in other subjects will be deferred. The textbooks would be field tested in about ten representative schools to ensure readability, /1 An adequately funded textbook program in English, the medium of instruction, is ongoing. Science textbooks would not be developed because a series of adequate booklets is already available.  - ~~~- 18 - practicability, adequacy of materials and acceptability in terms of local customs and traditions. Teachers would be trained in the use of textbooks concurrently with the textbook development phase. Inspectors would be trained as trainers and their training of teachers reinforced with radio broadcasts. Pre- and post-tests would be administered to pupils on a sample basis to evaluate the effects of the text on pupil achievement. 3.08 Textbook printing within the Curriculum Unit would be limited to production of the trial edition and possibly the teachers' guides. Com- mercial printing facilities in PNG are limited and government printing facilities lack trained personnel. A five-year training program (1978-83) for the government printer in NWS is in progress and this is expected to permit the Government printer to compete effectively with foreign firms for textbook production in PNG. The number of recipients of textbooks and guides is expected to fall within the ranges shown in Table 3.1. Table 3.1: ESTIMATES OF NUMBERS OF CLASSES AND PUPILS IN GRADES 4, 5, AND 6, 1984 Estimated Estimated number number of pupils Grades of classes ('000 ) Range Range 4 2,200-2,700 55-81 5 2,120-2,400 53-72 6 1,680-2,100 42-63 Total 6,000-7,200 150-216 Appropriate storage for books would be provided in the project to prolong the life of the books. Based on experience in comparable countries, the average life of each book is estimated at three years. The number of textbooks and guides is estimated in Table 3.2.  - 19 - Table 3.2: PARAMETERS OF THE TEXTBOOK PROGRAM Subject Pages/book Color No. of copies Mathematics (7 titles) Pupils text 120 2 150,000 Teachers guide 120 2 7,500 Handbook 260 1 1,500 Community Life (12 titles) Pupils text 32 2+ 150,000 Health (9 titles) Pupils text 48 2+ 150,000 Teachers- guide 96 2 7,500 Total (28 titles) 466,500 The Supply Division of NWS would be in charge of distributing prepackaged textbooks to the provinces where suitable storage depots exist. Distribution of textbook packages to the schools would be a joint NWS/PDOE undertaking. Training workshops for provincial supply officers in respect of organizing intraprovincial distribution would be undertaken by the Supply Division of NWS. 3.09 Three nondegree fellowships of six months each would be provided to train local staff in curriculum development. Three man-months of overseas in-plant training would be provided for composers in the printshop. Unesco-s specialist services programs in textbook development and production are expected to continue and would be strengthened under the proposed project with 18 man-years of specialist services in community life, health, mathematics, book production, graphics and editorial services. 3.10 CDC would expand and improve its development of simple audio-visual aids such as wall charts and maps to complement improved textbooks. Staff would be trained to instruct teachers in the use of diversified media. Fellowships (48 man-months) would be provided in fundamentals of educational technology, especially low cost technology to support the curriculum of PNG, ways to interest teachers in the use and development of teaching media and distribution and maintenance arrangements. To complement the fellowships training, four man-years of specialist services would be provided in simple educational technology and broadcasting.  - 20 - 3.11 The objective of the examination test and measurement component is to improve the present weak examination programs, to assist in diagnosis of learning and teaching problems and to produce meaningful results for student placement. Close liaison would be established between the examination unit and curriculum materials developers to improve designs of diagnostic tests in textbooks and teachers' guides. Among the more specific outcomes expected are: (a) development of appropriate measurement devices to use in grades 4-5 to assist teachers to improve instruction, identify pupil learning difficulties, and assess adequacy of curriculum and teaching materials; (b) development of reliable and valid tests upon which decisions regarding future education would be based; and (c) introduction of annual collection and statistical analysis of test results as a means of trend analysis of educational outcomes (para. 2.04). This information will provide inputs for an overall project evaluation. Specialist services (six man-years) and four degree fellowships for local staff are envisioned. During negotiations the Government provided assurances that it would gather on a sample basis test results from grades 4-6 and submit for Bank Group review: (a) baseline data by December 31, 1982; and (b) annual evaluation data on the impact of textbooks and curricula during 1984-87. 3.12 To assist in extending the use of learning materials and improved teaching methods to schools in the provinces, the proposed project would include fellowships and specialist services for two activities related to quality improvements - school libraries and educational resource centers (ERCs). Field surveys of school libraries would be conducted and lists of suitable books for varying school sizes developed. Training courses for library staff and teachers would also be conducted. ERCs are provincial extension centers for teacher training, local curriculum development and teaching materials production and lending. Interest of the provinces in these activities is promising and the inclusion of technical assistance would support provincial initiatives to design and operate such centers. Seventy-two man-months of fellowships for librarians and 30 man-months for ERC operators would be provided. Four man-years of specialist services for libraries/ERCs would complement the fellowships training program. 3.13 Teacher Training. (Proposed outlay US$2.3 million excluding con- tingencies.) The objective of this project component is to convert, improve and expand the physical facilities of POMITC and to train teaching staff in the use of media. Special emphasis would be placed on linking teacher training with textbook development. The POMITC facilities would be provided with a well-equipped library, staff offices, workshops, audio-visual and recreational facilities for students and staff; renovations of existing communal facilities; and new hostel facilities for 80 students to make the college fully residential. The renovated POMITC facilities would complement the new, contiguous CDC facilities. 3.14 The following in-service training courses would be operated at POMITC (Table 3.3):  - 21 - Table 3.3: IN-SERVICE TRAINING COURSES AT POMITC Current number Annual Number of POMITC target of persons 1980 during courses/ in this enrollment project year category per course period 1 - Educational upgrading of teachers with less than 9 years of schooling 1 2,000 125 125 2 - Professional training for teachers with 9 or more years of schooling 2 2,000 80-90 175 3 - Serving headmasters 2 2,000 65 130 Subtotal 5 - - 430 Special short courses in inspector training, curriculum workshop and education planning 8 150 30 240 Total 13 6,150 - 670 3.15 The proposed project would assist in retarding the growth of recurrent education costs by increasing the proportion of indigenous teach- ers of all PNG's primary education teacher training colleges from the cur- rent 28% to 50% (Table 3.4). The average annual cost per staff member would be reduced by about 25% (from US$20,000 to US$15,000). At the end of the project (1987) overall annual cost of teacher trainer salaries would be re- duced from US$2.7 million to about US$2.1 million despite a 10% increase in staff numbers (Working Paper Section C). The training of teacher trainers (63 man-years) would be a combination of local/overseas and degree/nondegree training. At least half of the program would be conducted by the UPNG as two-year diploma courses. Six man-years of specialist services would be provided to coordinate this training. A detailed fellowship and staff training plan is shown in Working Papers, Section B../1 /1 The training plan would cover all training components of the project.  - 22 - Table 3.4: LOCALIZATION TARGETS FOR PRIMARY TEACHER TRAINING STAFF Present (1979) End of project (circa 1987) Eight Eight Change preservice preservice in Citizenship POMITC colleges Total POMITC colleges Total total Local 10 26 36 20 50 70 +34 Expatriate 21 70 91 20 50 70 -21 Total 31 96 127 40 100 140 +13 3.16 Provincial Primary Education Fund (Proposed size of Bank financing US$7.5 million.) The objective of the "Provincial Fund" is to assist the provinces in improving quality of and access to primary education. The Provincial Fund would help accommodate more pupils in existing schools, open new schools in hitherto underserved areas (paras. 2.11-2.13) and improve education quality. This objective is similar to that of the Government's sectoral programs in primary education (para. 2.20). Therefore, the proposed project element would finance a share of the NPEP sectoral programs in primary education during 1983-85 when provincial education plans have been substantially completed (para. 3.05). 3.17 The Provincial Fund would finance a variety of items identified as constraints to enrollment expansion or education quality in each province. The national policy, under which financing construction of new schools is a communal responsibility, would not be changed. Consequently the Provincial Fund would finance other items, geared to expand enrollment (particularly that of girls) or improve quality of primary education. These would include: (a) New teaching posts for new or enlarged schools; (b) Materials needed to erect new schools or extend existing ones; (c) Materials for erecting or improving teacher housing at an existing school where teacher posting has proven difficult, or in a community which has provided a school but lacks teachers; (d) Equipment and materials for new or expanded schools (such as blackboards, classroom furniture, books, storage areas, water tanks, etc.). (e) Experiments/studies to improve quality and access.  - 23 - Over 50% of the items to be financed by the Provincial Fund are expected to be incremental operating costs because the greatest constraint to increased access is the provision of finances for new teaching posts (para. 2.16). 3.18 A national enrollment ratio target of 68% of the primary age population has been established for the final year of the project, 1987 (para. 2.18). Taking the estimated population increase into account, reaching this target would mean a 45% increase in enrollment, from 277,000 in 1979 to 400,000 in 1987. An important activity of the proposed project would be to develop provincial education plans for the years 1983-87, including detailed strategies and means needed to achieve the enrollment targets. The contents of such plans would include: (a) numbers and locations of children who now lack access to existing schools; (b) school maps to determine proper location of new schools to serve those children; (c) assessment of the ability of communities to erect necessary new schools; (d) identification of sociocultural constraints to enrollment expan- sion and ways to overcome such constraints; (e) analysis of the need for expansion of existing schools to meet population and enrollment growth; (f) staff needs for teachers, headmasters and inspectors; and (g) development of annual priorities. The National Government is assisting the provinces in formulating their plans before the Provincial Fund becomes operational in 1983. During negotiations the Government agreed to submit for Bank review by December 31, 1982 its consolidated plan for enrollment expansion by province or groups of provinces during 1983-87. 3.19 Project Evaluation and Management (Proposed outlay US$1.8 mil- lion). The Government is in the process of establishing a unit for systematic formative and summative evaluation of the project. This unit would become the core of a permanent management information system within the NDOE. The unit would have four key staff, a coordinator, an evaluation and dissemination officer, a provincial project liaison officer, and a project staff development evaluation officer. Twenty man-years of specialist services would be provided for initial staffing of the unit and three degree fellowships (54 man-months) would complement the specialist  - 24 - services program. A national advisory committee on evaluation would be established to provide policy guidelines and set priorities in evaluation activities. Project management would also be strengthened with ten man-years of specialist services (project manager and project accountant). 3.20 Other Components. (Proposed outlay US$0.8 million excluding contingencies.) The project would include US$600,000 for twenty staff houses for project specialists. The proposed project would also include US$200,000 for preparation of future education projects including a special intensive study of quantitative and qualitative problems of lower and upper secondary education (estimated cost US$100,000). The study on secondary education would provide recommendations on necessary national and provincial policy and educational changes required to increase enrollment, reduce wastage and improve educational attainment at that level (paras. 2.04 and 2.06). During negotiations the Government agreed to complete this study by December 31, 1983. 4. MANAGEMENT AND IMPLEMENTATION 4.01 The improvement program for primary education would consist of: (a) identifiable national project items; and (b) funding assistance to a series of provincial subprojects to be determined during project execution. 4.02 Management arrangements for execution of the project would rely heavily on existing implementation organizations and include: (a) comprehensive plans for administrative responsibilities, organiza- tion and staffing; (b) well-defined implementation procedures for subprojects financed by the Provincial Fund; (c) relevant criteria for use of the Provincial Fund; and (d) a realistic implementation schedule. These arrangements are discussed in the following sections of the report. Administrative Responsibilities, Organization and Staffing 4.03 The project would be implemented by existing line agencies at national and provincial levels and coordinated by staff in the Ministry of Education (Chart 22239 on next page). At the national level, overall responsibility for coordinated project implementation would rest with a Project Management Committee (PMC), chaired by the Secretary of Education.  PAPUA NEW GUINEA PRIMARY EDUCATION PROJECT PROJECT ORGANIZATION CHART NATIONAL EXECUTIVE COUNCIL (NEC)T rv . N FTER MINISTER MINISTER PRIME OTHER RELEVANT POLITICAL FOR FOR FOR NIINISTER MINISTERS ~~~~~~~LEVEL NATIONAL PLANNING EDUCATION FINANCE WORKS MINISTER MINISTERS COMMITTEE AND BUDGET PRIORITIES COMMITTEE (p.M.) SECFIN. DIR. NPO CHAIRM. PSC: SEC NEC PROJECT MANAGEMENT COMMITTEE SECRETARY SECRETARY SECRETARY FOR FOR FOR NATIONAL EDUCATION FINANCE WORKS&SUPPLY I I I ~~~~~~~~~~~~~~~~~NATIONAL NATIONAL PLANNING DEPT. OF EDUC. DEPT. OF FIN. NAT. W & S LEVEL A.S. PLANNING FASWORKS ASST. DIRECTOR SERVICES PROJECT ARCHITECT PROJECT IMPLEM FAS PROJECT FAS (LIC) (NPEP) GES CCORD. ASST SECT. COORD. SECTORAL PROJECT FAS SUPPLY PROGRAM MANAGER PROCUREMENT L AISON OFFICER O ,FF~ICE2R |PROVINCIAL GOVERNMENT ABBREVIATIONS: A.S. - ASSISTANT SECRETARY F.A.S. - FIRST ASSISTANT SECRETARY NPEP NATIONAL PUBLIC EXPENDITURE PLAN PROVINCIAL NPO - NATIONAL PLANNING OFFICE PROVINCIAL EDUC. DIVISIONS GES GENERAL EDUCATION SERVICE LEVEL PES - PROVINCIAL EDUCATION SERVICE PM PRIME MINISTER PROVINCIAL PSC - PUBLIC SERVICE COMMISSION EDUCATION NN. W&S - NATIONAL WORKS AND SUPPLIES SUPERINTENDENTS SECFIN - SECRETARY FOR FINANCE (SECTOR PROGR AM)I LLINE OF AUTHORITY * _1 S LIAISON__ tEilIi REPORTING ---ADVISORY World Bank - 22239  - 26 - Committee members would be the Secretaries of Finance and National Department of Works and Supply (NWS) (or their nominees). A similar committee exists under the First Education Project, Credit 661-PNG. The PMC would be a policy-implementing and decision-making body, responsible to the Budget Priorities Committee. 4.04 The Assistant Secretary, Planning Services, in the National Department of Education (NDOE), assisted by a project manager, procurement officer, an accountant and a part-time senior architect from NWS, would be the executive officer of the PMC and be responsible for overall project implementation. Specifically, he would: (a) coordinate activities of executive government departments and agencies and ensure that the covenants and conditions of the Loan/Credit Agreement are complied with; (b) prepare staffing plans, including staff development plans; (c) identify needs for technical assistance and arrange for the necessary recruitment; (d) arrange for preparation of designs and supervise the approved capital works program; (e) arrange for implementation of the textbook program; (f) arrange for procurement of equipment and ensure that contracts are awarded in accordance with Bank and Government guidelines; (g) arrange for preparation of project budgets; (h) monitor and control costs in accordance with the approved budgets; (i) maintain records and accounts, prepare periodical progress reports and liaise with the Bank; (j) prepare and submit disbursement applications to the Bank; and (k) monitor and evaluate progress and conduct project studies. NDOE would also (together with NPO and the Finance Department) ensure that the Provincial Fund would be used in accordance with implementation procedures mutually agreed between the Bank and the Government. 4.05 Appropriate sketch designs for the joint POMITC and CDC campus have been prepared by the architectural division of NWS. The working drawing stage will include the assistance of engineering design consultants  - 27 - who are available in the country. Tender documents for this complex would be prepared by the Quantity Surveying Division of NWS. Supervision would be done jointly by the two divisions. The existing site of POMITC, the only identifiable project site at this stage, is adequate in size and appropriately located for the POMITC/CDC complex. 4.06 The Local Government Design Services branch of NWS would be strengthened with two man-years of specialist services. The specialist would assist in extending existing low-cost school construction technology to communities interested in making use of this technology for their primary school construction programs. Provincial Fund Implementation Procedures 4.07 The Provincial Fund is defined as the Bank financing of the Community Education Sectoral Program of the NPEP. The Provincial Fund would be limited to financing programs in provincial primary education during 1983, 1984 and 1985, the incremental cost of which has been estimated at US$16.1 million over the 1981 allocation./l The National Planning Committee (NPC) determines an overall ceiling on the NPEP sectoral budget for primary education each year, whereas a'llocation of funds to the provinces, project appraisal and supervision is the responsibility of NDOE. Responsibility for identification and implementation of provincial subprojects rests with the provinces. An agreement between provincial and national governments outlining duties and responsibilities of the two parties would be a prerequisite for disbursements of NPEP funds to provinces. 4.08 National Responsibilities. NDOE would be responsible for the following in respect of the Provincial Fund: Annually (a) propose to NPC the sectoral allocations to each province in accordance with a set of social equity indicators (population and enrollment ratios), and inform the provinces accordingly; /1 This estimate is based on the following assumptions and definitions: (a) sectoral programs in primary education would grow at an annual rate of 5% of the total education budget; (b) 65% of that amount would be allocated to provincial projects; and (c) only the increments in 1983 over the 1981 budget (starting year of the project) would be defined as project cost. For disbursements purposes, the total NPEP allocation for provincial projects during 1983 (US$30.7 million as shown in the NPEP) would be used as a basis for calculations. For further details of calculations see Working Papers, Section E.  - 28 - (b) provide technical assistance to help provinces formulate their own draft project proposals within their allocations; (c) review provincial project proposals and advise provinces on technical suitability (including staff requirements/constraints) of their proposals; (d) check if individual provincial subproject proposals meet agreed criteria and policy directives; (e) obtain cash flow and implementation schedules for each provincial NPEP primary education subproject; (f) submit for budget approval, consolidated provincial proposals for NPEP primary education projects to the Budget Priorities Committee, NPC and the National Executive Council; (g) evaluate the impact of each subproject towards stated targets, Quarterly (h) disburse, or cause to be disbursed, the estimated next three-month requirement of NPEP funds to the provinces; (i) prepare financial and physical performance reports on the provinces which would be used for processing of withdrawal requests to the Bank Group; and (j) submit quarterly reports on expenditure and physical progress through the Government-s regular quarterly review progress for the budget and the NPEP. 4.09 The National Planning Office (NPO) would monitor overall implemen- tation progress through the quarterly reports submitted by the NDOE and its own inspections of provincial physical progress in order to keep the National Planning Committee informed about progress on a quarterly basis. The Budget Priorities Committee would act as an arbiter between national and provincial education authorities in cases of disagreement over conformity of provincial project proposals with agreed criteria and policy directives. 4.10 The National Department of Works and Supply (NWS) would physically monitor all NPEP.capital works projects through their provincial offices. In addition, the NWS would be responsible for financial monitoring of capital works undertaken on behalf of the provinces by N1S' own work force.  - 29 - 4.11 Provincial Responsibilities. The PDOEs in consultation with provincial governments would be responsible for preparing the medium-range plans for increasing access to primary education (para. 3.18). Technical assistance would be provided by the National Government to assist the provinces in preparing their own plans (para. 3.05); alternatively a province could request NDOE to prepare such a plan on its behalf. Annual NPEP project proposals, prepared by the same parties would: (a) dovetail with the medium-range provincial plan; (b) be within the financial limits of the sectoral programs in each province; (c) respond to established national criteria; and (d) accord with provincial priorities. Over the span of the project there would be about 60 provincial Bank-financed subprojects (e.g., one per year by each province (20) during the 1983-85 period). Each subproject is estimated to consist of about 5 project items, i.e., there would be a total of about 300 project items to be financed by the Provincial Fund. During negotiations the Government agreed that: (i) prior to the first year of Provincial Fund operations (1983) it would send for Bank reviewe and comments a representative subproject from each Region; and (ii) in subsequent years it would submit to the Bank Group for review and comments such other subprojects as the Bank would reasonably request. Criteria for Use of the Provincial Fund 4.12 During the first year of NPEP sectoral operations (1980), primary education projects in the provinces were identified in accordance with loosely defined criteria. Improved project criteria have been prepared in cooperation with the Government (Annex 2) and would be followed during the 1983-85 budget periods when the NPEP sectoral projects would be financed with the Provincial Fund. The criteria consist of general guidelines for allocation of funds and approval criteria of provincial projects. These criteria would ensure that assistance provided under the Provincial Fund would direct provincial primary education projects towards their objectives: improved access to, and quality of, primary education. During negotiations the Government provided assurances that it would: (a) allocate sectoral program funds to the provinces in accordance with agreed distribution criteria; and (b) review Provincial Fund-assisted subprojects in conformity with agreed criteria. 4.13 Guidelines for Allocation of NPEP Funds. About two thirds of the yearly financial allocations for sectoral projects in primary education is currently earmarked for provincially administered and one third for nationally administered projects. These proportions are appropriate in view of existing national and provincial responsibilities in the sector. 4.14 All provinces would receive a portion of the provincial allocation of the NPEP for primary education, but interprovincial differentiation is steeply pitched in favor of the disadvantaged provinces (e.g., the Eastern Highlands Province received about 17 times as much NPEP Funds in 1980 as did  - 30 - East New Britain). Criteria for determining allocations to each province will be based on a recently revised (September 1980) index of provincial population and primary enrollment ratio. Preparation of a medium-term plan for increased access to primary education (para. 3.18) would be a new criterion for any increase in a provinc.e's annual allocation of NPEP funds. 4.15 Approval of Provincial Projects. The NDOE would review and approve subprojects on the basis of their relevance, feasibility and efficiency. The first criterion, relevance, would mean the degree to which the subproject encourages primary enrollment improvement. Subprojects financed by the Fund would therefore need to: (a) support a component of primary education; (b) support the provincial education plan to increase access and reduce dropout of primary school children; or (c) be designed to make a measurable contribution to increasing subject matter relevance and improving provincial education delivery methods and means. 4.16 The second criterion, feasibility, would mean the ability of the province to undertake and support a project on a continuous basis. A project proposal would need to be documented in accordance with NPO guidelines to prove its feasibility./I Topics that would be reviewed include: (a) suitability of school location; (b) availability of staff; (c) availability of school facilities and staff housing; and (d) recurrent cost implications and ability of the province to sustain these expenditures upon project completion. 4.17 The third criterion, efficiency, would include such aspects as the reasonableness of investment and recurrent costs, and attention to appropriate class and school sizes. Annex 2 provides further explanation of the criteria guiding allocations of the Provincial Fund. Implementation Schedule 4.18 The project would be implemented over a seven-year period as shown in the implementation schedule (Annex 3). Major preparatory activities are in progress and the Government has completed the 'following: /1 See "Instructions and Guidelines for New Policy Submissions for the National Public Expenditure Plan," National Planning Office, Feb. 1979.  - 31 - (a) sketch plans, equipment lists and specifications; (b) plan and schedule for textbook development and production; (c) initial recruitment of technical assistance; (d) final plans for project evaluation, tests and measurements; (e) initial provincial plans and criteria for use of the Fund; and (f) final plans for project management. Of special importance in the initial project phase is the date for prepar- ation of provincial plans for universal primary education (December 31, 1982), which links the use of the Provincial Fund in 1983-85 to specific provincial targets. Evaluation of the provincial enrollment plans would be conducted continuously throughout the project. The last project item - the fellowships training program - would be completed by June 1987. The Closing Date would be December 31, 1987. 5. COSTS AND FINANCING Costs 5.01 Project costs are defined as the sum of: (a) the costs of identi- fiable project items (US$16.9 million including contingencies); (b) the estimated incremental cost over the 1981 allocation of NPEP sectoral projects in provincial primary education during the 1983-85 period (the Provincial Fund),/1 US$16.1 million; and (c) the estimated cost of school construction financed by local communities during the 1981-83 period (US$4.7 million) as a matching contribution to the Provincial Fund. These costs are summarized in Table 5.1 below. /1 For further definition of the size of the Fund, see para. 4.07 and Working Papers, Section E.  - 32 - Table 5.1: PROJECT COSTS BY PROJECT ITEM /a Local Foreign Total Local Foreign Total ---- (K million) ---- --- (US$ million) -- Administration training 0.2 0.5 0.8 0.4 0.8 1.1 Curriculum development 0.9 2.7 3.6 1.4 4.1 5.4 Teacher training (in-service) 0.6 0.9 1.5 0.9 1.4 2.3 Provincial primary education 9.7 4.1 13.8 14.5 6.2 20.7 Staff housing 0.2 0.2 0.4 0.4 0.2 0.6 Preparation of future projects - 0.1 0.1 - 0.2 0.2 Evaluation and management 0.1 1.1 1.2 0.2 1.6 1.8 Baseline costs 11.8 9.7 21.5 17.7 14.5 32.2 Contingencies 1.2 2.4 3.6 1.8 3.5 5.4 Total project cost 13.1 12.0 25.1 19.6 18.0 37.7 /a Additions of detailed figures in Table 5.1 and 5.2 may not add to totals because of roundings.  - 33 - 5.02 Project costs by type of expenditure are shown in Table 5.2 below: Table 5.2: PROJECT COSTS BY TYPE OF EXPENDITURE Local Foreign Total Local Foreign Total (K million) ---- --- (US$ million) -- Construction Site development 0.1 - 0.1 0.2 0.1 0.2 Buildings 3.0 1.6 4.6 4.6 2.4 6.9 Professional services 0.1 - 0.1 0.1 - 0.1 Subtotal 3.2 1.6 4.8 4.8 2.4 7.3 Facilities Furniture 0.2 0.1 0.3 0.3 0.2 0.5 Equipment - 0.5 0.5 0.1 0.7 0.8 Paper/printing 0.1 0.9 1.0 0.1 1.3 1.5 Subtotal 0.3 1.5 1.8 0.5 2.2 2.8 Technical Assistance Experts 0.3 2.8 3.2 0.5 4.3 4.7 Local training 0.4 0.1 0.4 0.5 0.1 0.7 Foreign training - 0.4 0.5 0.1 0.6 0.7 Subtotal 0.7 3.3 4.1 1.1 5.0 6.1 Baseline costs 4.3 6.5 10.9 6.4 9.7 16.1 Contingencies Physical 0.3 0.4 0.7 0.4 0.7 1.1 Price 0.9 2.0 2.9 1.4 2.8 4.3 Subtotal 1.2 2.4 3.6 1.8 3.5 5.4 The Provincial Fund 7.5 3.2 10.7 11.3 4.8 16.1 Total Project Cost 13.1 12.0 25.1 19.6 18.0 37.7  - 34 - 5.03 Bases of Cost Estimates. Base costs refer to December 1980 prices. Construction costs for CDC and POMITC have been estimated on the basis of sketch plans of economical buildings. The plans were reviewed during appraisal and found acceptable. The average building unit costs for these facilities derived from recently built simple comparable structures in PNG are estimated at US$375/sq m. Although local materials (timber, sand and gravel) are used to the extent possible, unit cost is higher than in other countries in the region because of high cost of imported materials (over 60% of building materials are imported) and high cost of labor. Costs of primary schools built by the communities have been provisionally estimated at US$150/sq m. This figure represents an estimate of a wide range of unit prices - from practically zero, where schools are built with donated labor and bush materials - to over US$300/sq m where communities finance the construction of permanent structures on remote locations. The cost of specialist services, US$4,400/man-month is based on the average cost of recent contracts in PNG for comparable services. This cost includes net salaries, housing costs, education and medical benefits, moving allowances and international airfares. Overhead costs for recruitment, local travel costs and office costs are excluded from this man-month cost. Overseas training costs have been estimated at US$18,000/man-year. 5.04 Comparisons of areas per student place with other Bank-financed facilities can only be made for POMITC hostels and staff houses because other facilities are either extensions of existing facilities or nonteaching facilities (e.g. the CDC). Such a comparison shows that the area per boarding place at POMITC (10.4 m2) is the same as Bank median in FY74-77. Staff houses are about 80 m2/house, 20% less than Bank median of 100 m/ouse. 5.05 Contingency allowances in project cost estimates are as follows: (a) physical contingencies (US$1.1 million) estimated at 7% of the base cost of all project items; and (b) price contingencies (US$4.3 million) calculated on the December 1980 base cost plus physical contingencies in accordance with the following estimates of price escalation (Table 5.3):  - 35 - Table 5.3: ANNUAL COST ESCALATION Year Escalation 1981 9% 1982 8% 1983-5 7% 1986-7 6% The Provincial Fund would finance sectoral programs with built-in contingency allowances. 5.06 The foreign exchange component is estimated at about US$18.0 mil- lion or about 48% of total project costs. This foreign exchange component was derived from an analysis of labor, materials and overhead contents of civil works and furniture; estimation of the amount of imported equipment; estimation of the foreign content of technical assistance; and an approximation of the composition of the subprojects to be financed under the Fund. The resultant percentages amount to 33% for civil works and furniture; 91% for equipment; 90% for foreign technical assistance; 20% for local training and professional services; and 30% for the Fund. 5.07 Duties and Taxes. The local customs duties and taxes on civil works and locally procured furniture and equipment is estimated at about US$0.4 million or about 4% of the estimated cost of these items including contingencies. No customs duties are levied on items directly imported for project use. Project Financing 5.08 The total project cost of US$37.7 million would be financed as follows:  - 36 - Table 5.4: FINANCIAL PLAN Estimated Local Govern- World % Bank communi- ment of Bank Group Item ties PNG Group Total financing ---------- US$ million ----------- l.(a) Civil works at POMITC and CDC - 0.9 1.7 2.6 70 (b) Community-financed civil works & furniture 5.8 - - 5.8 - 2. Equipment, paper, printing and materials - 0.2 1.8 2.0 90 3. Technical assistance (a) Expert services incl. prof. services 2.0 4.6 6.6 70 (b) Training programs - 0.6 1.2 1.8 70 4. The Provincial Fund /a Cost of sectoral pro- grams incurred during calendar years: (a) 1983 _ 1.2 2.3 3.5 30 (b) 1984 - 2.6 2.7 5.3 25 (c) 1985 - 4.8 2.5 7.3 20 5. Unallocated - 1.6 1.2 2.8 Total 5.8 13.9 18.0 37.7 /a For definition, see para. 4.07 and Working Papers, Section E.  - 37 - Incremental Recurrent Costs 5.09 Aggregate recurrent costs for primary education would increase during the project period due to school-age population growth and higher enrollment ratios (paras. 2.16-2.19) as shown in Table 5.5. Analysis of the cost increases has been conducted in order to estimate the impact and Table 5.5: RECURRENT COSTS OF PRIMARY SCHOOL EXPANSION Year 1979 1987 2000 Actual --- Projected --- 1. Primary school age population ('000) 482 611 897 2. Enrollment rate (%) 58 68 100 3. Enrollment ('000) 280 427 897 4. Pupil/teacher ratio 31:1 35:1 35:1 5. Mean teacher salary p.a. (K) 3,015 3,264 4,499 6. Total primary education costs (K million) 28 43 119 7. Government expenditure (K million) 442 577 1,207 8. Gross national product 1,361 1,862 3,734 9. Total education as % of government expenditures 16.4 17.3 16.5 10. Primary as % of total education expenditures 39.0 40.0 56.0 11. Primary education/GNP (%) 2.1 2.4 3.2 12. All education/GNP (%) 5.4 5.4 5.7 Notes: 1. Bank projection. 2. Conforms to Government and Bank expectations. 3. 1 x 2. 4. 31:1 is present ratio, 35:1 is announced government policy. 5. Projected from present levels on the basis of GNP/capita. 6. Number of teachers (3/4) multiplied by salaries and adjusted about 3% upward to compensate for the fact that teacher salaries are 97% of current costs. 7. Domestic revenues projected on basis of GNP and Australian aid projected to decline in real terms at 5% p.a. 8. Bank/Government projections. 9, 10, 11 and 12 are self-explanatory.  - 38 - to suggest means to control increases in costs. Results of the analysis are as follows: - if primary class size is increased from 31 to 35 by 1987 and held at 35 until the end of this century (para. 2.18) (Line 4); and - if the rate of primary teacher salary increases during the remainder of the century are held below the growth rate of the 1970s (para. 2.18) (Line 5); and - if primary expenditure is increased as a percent of total educational expenditure from 39% to 56% (Line 10) in conformity with the Government's declared education strategy./l Education expenditures could be held near their present level of 5.4% of GNP (Line 9). Procurement 5.10 The main civil works contract(s) at POMITC/CDC (a US$3.0 million package of three contracts) would be awarded on the basis of international competitive bidding in accordance with Bank Group Guidelines. Civil works contracts estimated to cost US$300,000 or less, all furniture contracts and contracts for goods to be financed through the Provincial Fund would be awarded on the basis of government procedures acceptable to the Bank Group. These procedures include locally advertised bidding and force account. These procedures are appropriate in view of the large number of geograph- ically dispersed small contracts that would be financed in this fashion (para. 4.12). Prior Bank review of contract award would only be required in the case of civil works contract(s) awarded under ICB. 5.11 Equipment, paper and materials bid packages over US$100,000 equivalent would be awarded on the basis of international competitive bidding in accordance with Bank Group Guidelines. Domestic manufacturers would be /1 Although absolute post-primary expenditure would continue to rise, the rate of increase would be reduced by more use of local teachers, reduc- tion of boarding and other economies. See also National Education Strategy 1979 pages 134-135 for planned changes in proportions allocated to various levels of education.  - 39 - allowed a preferential margin of 15% or the existing customs duty, whichever is the lower, over the c.i.f. price of competing imports. Equipment, paper and furniture purchases which cannot be reasonably grouped to form packages in excess of US$100,000 equivalent could be made without prior Bank Group approval on the basis of: (a) contract awards following compet'tive bidding advertised locally; or (b) from existing government stores contracts, provided that the aggregate of such contracts would be less than US$1,300,000. Small-scale printing facilities (US$250,000) would be procured after negotiations with a supplier that provides maintenance in PNG. Books (total cost estimated at US$300,000) would be purchased directly from authorized distributors. Printing of textbooks subject to a maximum of US$250,000 could be done by force account through the Government Printer. In addition, miscellaneous items, not exceeding US$10,000 in each contract and aggregating less than US$250,000 could be purchased on the basis of a minimum of three price quotations. Disbursements 5.12 Disbursements under the proposed project would be made as follows: (a) 70% of local expenditures on civil works at POMITC/CDC and for staff housing; (b) 100% of foreign expenditures for directly imported equipment, furniture, paper, books and materials; 100% of ex-factory costs of locally manufactured goods; and 70% of local expenditures for goods and services procured locally; (c) 100% of the cost of technical assistance (including civil works designers), but excluding cost of their housing and recruitment; (d) the following percentages of local expenditures incurred in respect of the NPEP sectoral programs for provincial primary education during the following caledar years:/l 30% in 1983; 25% in 1984; and 20% in 1985 /2 Disbursement is expected to be completed by December 31, 1987. The estimated schedule of disbursements is shown in the following table: /1 For definition, see para. 4.07. /2 To be adjusted during project implementation. The percentages have been selected to allow the size of Bank/IDA financing to remain stable at about US$2.5 million per year.  - 40 - Table 5.6: SCHEDULE OF EXPENDITURE AND DISBURSEMENT IBRD fiscal Expenditures Disbursements year and semester Semester Cumulative Semester Cumulative