Ecuador - Vocational Training Project

Document of The World Bank FOR OMCIL USE ONLY Rqit No. 5275 PROJECT CONPLETION REPORT ECUADOR VOCATIONAL TRAINING PROJECT (LOAN 1157-EC) October 2, 1984 Education Projects Division Latin America and the Caribbean Regional Office lbis Icm tr a uegdd-I,lbWlum ni ma be wd by red_pk.b emy In lb pwu of tbroUfdmI d.dss. lb csudsU iy met uihuwwh be disciuud witheu Wedi Bik aetwhubdm. I  FOR OFFICIAL USE ONLY ECUADOR VOCATIONAL TRAINING PROJECT (Loan 1157-EC) PROJECT COMPLETION REPORT TABLE OF CONTENTS Page No. X ~PREFACE ................................... BASIC DATA ..........i HIGLIGHTrS ..*.......... v T. BACKGROUND AND CONTENT OF PROJECT-C.... 1............... I Objectives 1....... 1....................... -1 Project Description ................................................1 Project Revisions ............ II. PROJECT IDPLEMENTATION .. .............. 2 Implementation Period .. 2 SECAP's Organization .................................... 3 Project Implementation Staff .................. 4 Site Selection 4.............................4 Design of Facilities ......................................... 4 Construction Procurement ......... 5 Contractor Performance ......6 Equipment and Furniture Procurement and Installation ......... 6 Mobile Units ..... ..7 Technical Assistance .... .....*..*. ........................ 7 III. OPERATIONAL OUTC(MES ...... o.... .*.**...... ........... 8 Overview ........ .........o.....8 Output and Course Development ........ . .. ........ 8 Use of Facilities 9........... ; ; SECAP's Training Program ............ 10 Apprenutce -raining.... ... ..... .10 Training of Technicians ...... .11 Tis 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.  TABLE OF CONTENTS (Continued) Page No. Training Support System ............ .......... ........**** 11 Planning ....................**..... .... .... ... ........... 11 Placement Service ................. ................ 12 Instructor Training .................... ..... 12 Curriculum and Teaching Materials ......................... 13 IV. PROJECT COSTS AND FINANCING ................................ ; 14 Cost of the Project ... ....... ............. .o ... +*14 Cost of Construction ..... .......... ....... ...o..0 .............. 14 Disbursements - ... ... ... .... ..... . . ..*. ...... ** * ** ............... 14 Recurrent Costs ... ............... ....... . ............... 15 V. CONCLUSIONS AND RECOMMENDATIONS .............................. 15 Conclusions ... ....... ........... .. .-.......... 15 Recommendations ...........O........................... 18 ANNEXES: Annex 1: Comparison of Construction Areas ........................ 21 Annex 2: Technical Assistance 1975-1983 ..... ..................... 22 Annex 3: Qualifications and Experience of Instructors 1983 ....... 23 Annex 4: Summary of Project Costs .... .. ...................00004. 24 Annex 5: Unit Operating Costs .................................... 25 Annex 6: SECAP's Budgetary Expenditures (1979-1983) .............. 26 Annex 7: Compliance with Loan Covenants . .......-....... 27 ATTACHMENTS: Attachment I: Comments from the Borrower - Ministry of Labor and Human Resources ..................2........ - 29 Attachment II: Comments from the Borrower - SECAP ........... . ..... 30  ECUADOR VOCATIONAL TRAINING PROJECT (LOAN 1157-EC) PREFACE This is the Project Completion Report for the Second Education Project, Loan 1157-EC, for which a credit amount of US$4 million was approved. The project has been completed and the loan account closed on February 10, 1984. This Project Completion Report (PCR) derives from: (a) three Bank project completion field missions for a total of five staff-weeks that reviewed Borrower's files, visited the project training centers in Quito and Guayaquil (Duran) and held discussions with the Directors of both centers; (b) a review of material in Bank files, notably project-related correspondence, supervision reports and progress reports, the appraisal report (No. 621a-EC, dated April 1, 1975), the President's Report (No. P-1569a-EC dated April 16, 1975), the Loan Agreement and project files. Despite the Bank staff's encouragement, the Borrower's involvement in the preparation of the PCR was limited. Only tables concerning final civil works areas and costs were prepared by SECAP's Project Implementation Unit (PIU). The PCR highlights project implementation issues, opera- tional outcomes, costs and financing, and it provides the conclusions and recommendations of the missions. After reviewing the PCR and noting that there is a follow- on project which could be packaged for audit at a later stage, the Operations Evaluation Department decided not to audit the present project and sent the PCR to the Government for comment in June 1984. Comments received have been taken into account in finalizing the report and are reproduced as Attachments I and II.  - ii - ECUADOR VOCATIONAL TRAINING PROJECT (LOAN 1157-EC) BASIC DATA Appraisal (1) The Loan Estimate Actual Total Project Cost (US$ million) 7.92 9.28 overrun tZ) - 17.00 Loan Amount (US$ million) 4.00 4.00 Disbursed by February 10, 1984 4.00 3.81 Cancelled February 10, 1984 0.19 Outstanding as of January 31, 1984 3.33 Date Physical Components Completed 8/31/77 1/30/84 Months Since Credit Signing 23 101 Proportion Completed by Above Date (2) 100 100 Proportion of Time Overrun (Z) - 340 Institutional Performance 1975-1979 a/ Very good Poor 1980-1983 b/ Fair (2) Chronology of Events First Mention in Files 06/04/73 Government's Application Negotiations 03/06/75 Board Approval 05/22/75 Credit Agreement Date 09/03/75 Effectiveness Date 11/20/75 Closing Date 09/30/78 06/30/83 Last Disbursement 02/10/84 Borrower Government of Ecuador Executing Agency Servicio Ecuatoriano de Capacitacion Profesional (SECAP) Fiscal Year of Borrower January 1 - December 31.. Follow-up Project Name Third Education Project (Second Vocational Training) Loan Number 2171-EC Amount (US$ million) 16.0 Board Approval 06/30/82 Loan Agreement Date 01/20/83 Effective Date 04/22/83 a/ Between 1975 and 1979, there was no Government financial support. V/ Between 1980 and 1983, 97% of the project was implemented.  - iii - ECUADOR VOCATIONAL TRAINING PROJECT (LOAN 1157-EC) (3) Mission Data Month/ No. of No. of Man- Date of Sent By Year Days Persons Weeks Report Reconnaissance Unesco 10/72 4 2-Ed,E 1.6 03/16/73 Identification Bank 02/74 4 2-A,E 2.0 02/28/74 Preparation Unesco 04/74 14 2-E,Ed 5.6 06.02.74 Appraisal Bank 04.74 12 5-3Ed,A,E 12.0 04.11.74 Total 21.2 Supervision I Bank 09/76 4 l-Ed 1.0 10/08/76 Supervision II Bank 03/77 4 2-Ed,A 1.6 04/29/77 Supervision III Bank 05/77 10 1-Ed 2.0 05/31/77 Supervisioh IV Bank 06/77 3 1-Ed 0.5 07/12/77 Supervision V Bank 08/77 6.5 2-Ed,E 2.6 09/20/77 Supervision VI Bank .10/77 3 2-Ed,A 1.2 11/18/77 Supervision VII Bank 09/78 3 1-Ed 0.5 09/27/78 Supervision VTIII Bank 11/79 5 3-Ed,E,A 3.0 11/16/79 Supervision IX Bank 06/80 5 2-Ed,A 2.0 06/23/80 Supervision X Bank 11/80 12 2-Ed,E 4.8 11/14/80 Supervision XI Bank 12/81 7 1-Ed,E 2.8 11/23/81 Supervision XII Bank 11/82 9 2-E,A 3.6 11/02/82 Total 71.5 25.6 Completion: Civil Works Bank 04/83 10 1-A 2.0 05/04/83 Educational Aspects Bank 10/83 10 1-Ed 2.0 11/18/83 Civil Works Bank 11/83 5 1-A 1.0 12/09/83 Total 25 5.0. a/ Ed - Educator A Architect E - Economist (4) Country Exchange Rate Name of Currency (abbreviation): Sucre (S) Exchange Rates: Appraisal Year US$1.00 - S25.00 1975-1981 US$1.00 - S25.00 1982 US$1.00 - S33.00 Completion Year Average US$1.00 - S42.00  - iv - ECUADOR VOCATIONAL TRAINING PROJECT (LOAN 1157-EC) (5) Allocation of Loan Proceeds Original Actual I. Civil Works 1,450,000 1,450,140.61 II. (a) Mobile Uaits and Equipment 1,549,000 2,158,007.41 11 (b) Project Administration 21,000 (c) Technial Unit (salaries and related expenditures) 0 III. Furniture 160,000 IV. Unallocated 820,000 - 4,000.000 3,813,247.99 Cancelled 186,752.01 (6) Cumulative Estimated and Actual Disbursements Cumulative Costs (USS million) FY75 FY76 FY77 FY78 FY79 FY80 FY81 FY82 FY83 FY84 (i) Estimated 0.61 1.94 3.63 4.00 - - - - - (ii) Actual - - 0.20 0.20 0.20 0.22 0.47 1.65 2.41 3.81 (iii) Actual (ii) as of(i) - - 5 5 5 5 12 41 60 95 1/ Includes Furniture category 2/ Includes Project Administration  v ECUADOR VOCATIONAL TRAINING PROJECT (LOAN 1157-EC) HIMQLIGHTS The project was identified in 1972, prepared and appraised in April 1974, the loan was approved in May 1975 for the equivalent of US$4.0 million representing about 50% of the estimated $7.9 million project cost. The original loan Closing Date of September 30, 1978 was extended four time to June 30, 1983; project implementation was extended from the originally estimated three years to eight and one-half years. The project, as originally approved, envisaged an expansion of SECAP's vocational training program to meet specific manpower requirements in priority sectors of the economy and included: (i) expansion and additional furnishing and equipping of a new vocational training center in Quito, with an increase from 390 to about 1,110 trainee places; (ii) construction, furnishing and equipping of a new vocational training center in Gaayaquil with about-1,245 trainee places; and (iii) purchase of two mobile vocational training units to provide training opportunities to about 500 trainees annually in smnll towns and rural commnmities. It is important to note that the educational aspects (e.g. curriculum, course content, teacher training, etc.) of the project were expected to be developed by SECAP under the project not with financial support from the project, but with the help of bilateral and multilateral assistance. Completion was about 5.5 years later than originally envisaged, primarily because of (i) lengthy periods of shortfall in counterpart funding until 1979; (ii) time consuming procedures preceeding the acquisition of the necessary land for the Quito Center; (iii) fragmented project design work during the early project years; (iv) frequent turnover of SECAP's top level and project management personnel until the end of 1979; (v) borrower's unfamiliarity with Bank policies and procedures; and (vi) inability of SECAP's Department of Construction, until the end of 1979, to carry out the architect/engineer functions effectively. Key factors contributing to succesful physical implementation after 1979 were: (i) the priority given by the new Government, in 1980, to vocational training; (ii) the formation of an effective PIU staff with full-time qualified personnel; (iii) the approved use of Loan proceeds to pay salary supplements of PIU key personnel; and (iv) the appointment of a full-time SECAP Executive Director for a period of four years. Overall, the project implementation can be considered as satis- factory. The buildings have been completed. All eqipment financed by the project has been delivered and installed. Training programs have been started in SECAP's original facilities, the majority of the educational objectives have been achieved and most of the covenants of the Loan Agreement have been complied with (Annex 7).  - vi - The project, as revised during implementation has rendered substantial benefits to SECAP and the vocational training system as a whole. SECAP's capacity to implement development projects has been substanitially strengthened. Extensive bilateral and multilateral technical assistance has successfully improved the planning, organization and implementation of all SECAP training activities. The training of employed workers, apprentices, and technicians has been expanded and upgraded. The organization and management of SECAP's existing facilities have been improved substantially. Instructor manuals, charts and other teaching aids now exist for all trades. Involvement of employers in training through the in-plant training scheme at the national level is being established as an important SECAP strategy. The important lessons learned from this project are: (a) A substantial trade-off between the accelerated pace of project preparation/appraisal and efficiency in project implementation (paras. 2.01 and 2.02). (b) The need to assess, at appraisal, executing agencies' overall organizational strengths, operating capabilities, staffing and staff morale, and the desirability of including, as a condition for loan negotiation, completion of site acquisition and preliminary designs and adequate arrangements for project management staff (paras. 2.08 - 2.09). (c) The design of the project emphasizing only physical aspects when technical assistance is available from other sources (para. 1.03). (d) The role of technical assistance, not financed with the loan but cofinanced under the project by other bilateral and MulEilateral aid agencies, in making a far reaching improvement in the training programs and operations of SECAP (para. 3.01). (e) The importance of making intensive and frequent supervision visits at an early stage of project implementation (para. 2.02). . (f) The flexibility and care needed in tendering equipment and evaluating bids by packages, and the percentages to be applied (para. 2.21). The major recommendations which should be taken into account, particularly for the implementation of the Third Education Project, Loan 2171-EC, are as follows: (i) SECAP should give high priority to the commis- sioning and operation of the new facilities and provide more equity in training opportunities through a wider regional distribution of training facilities and in-plant training; (ii) SECAP should arrange consultations with representatives of employers on a subsector basis to discuss apprentice training and adult accelerated training; (iii) SECAP should establish a national trade standard, testing and certification system; (iv) SECAP should provide each training center with a maintenance budget and establish a maintenance unit and (v) the Bank should facilitate training for Project Unit staff to familiarize them with Bank policies and procedures.  I. BACKGROUND AND CONTENT OF THE PROJECT Objectives 1.01 The project was intended to increase the capacity of SECAP about six-fold and to help diversify its training programs by providing SECAP with the physical facilities needed at Quito and Guayaquil. These facilities were expected to permit the organization of accelerated training for the unemployed and the expansion of apprenticeship and upgrading training for employed workers, as well as specific job-oriented training for graduates of the secondary technical schools. Training opportunities in rural areas and smaller towns were expected to be provided by two mobile units which would complqment three other units provided under bilateral and maultilateral assistance programs. The project, as initially identified and prepared, had included primary teacher training and the provision of basic education for the poorest segment of the population in urban and rural areas. These items were deleted during appraisal at the request of the Government and with the agreement of the Bank's Appraisal Mission which saw advantages in homogeneous project composition. Project Description 1.02 The project, as defined at appraisal, consisted of: (a) construction, furnishing and equipping of two vocational training centers: Location Trainee Places Annual Output of Apprentice Acceler. In-Center Centers Existing Additional Total Training Training Upgrading Total Quito (Extension) 390 720 1,110 390 375 1,980 2,745 Guayaquil (New) - 1,245 1,245 450 405 2,040 2,895 TOTAL 390 1,965 2,355 840 780 4,020 5,640 (b) two mobile training units to provide training opportunities for about 500 trainees annually in rural comianities and small townships. 1.03 The project focused mainly on the infrastructure aspects. The technical assistance required to complement the physical facilities provided under the project was expected to be supplied by the Federal Republic of Germany, Spain, the United Kingdom, Switzerland and UNDP/ILO. It consisted  -2- of 43 experts and 58 fellowships and concentrated upon strengthening the technical and administrative infrastructure of SECAP, expanding the training program in the new training centers and reinforcing in-plant training and the training advisory service as well as instructor training. Consequently, no technical assistance was financed by the Loan under this project. Project Revisions 1.04 During implementation, the loan agreement was modified once (May 11, 1978) to reallocate US$200,000 from the "Unallocated" category of the Loan to a new category "Technical Unit Salaries and Studies" in order to finance salaries and related expenditures of SECAP's Project Implementation Unit (PIU). Final allocations are shown in detail on the basic data sheet (page iv). During implementation, the Bank agreed to other revisions involving building and equipment acquisition priorities brought about by financial constraints and required modifications of the implementation schedule. II. PROJECT IMPLEMENTATION Implement&tion Period 2.01 Loan 1157-EC was signed September 3, 1975 and became effective about 2-1/2 months later on November 20, 1975, which is better than the average interval (4 months) between signing and effectiveness for education projects. Although the project was identified, prepared and appraised efficiently in one year, project implementation extended beyond the originally estimated three years to eight and one-half years. Consequently, the originally established closing date of September 30, 1978 was extended four times to Ju.._ 30, 1983. During Appraisal. civil works, furnishings and equipment were scheduled to be completed by mid-1977, which was too optimistic an estimate. Substantial completion of construction was actually delayed until December 1982, about 5-1/2 years later than envisaged. Equipment orders were also delayed to enable the delivery and installation to coincide with completion of buildings. 2.02 Delays between the originally proposed and the actual implementation schedules were caused primarily by: (a) frequent change of SECAP management and insufficient full time SECAP technical personnel, adequately qualified and fully dedicated to the Bank/SECAP project, until the end of 1979, four years after the Loan effectiveness; (b) time consuming legal procedures that SECAP had to undertake in order to obtain the necessary land for the Quito Center, and poor site conditions existing at the Guayaquil Center; (c) design of buildings being prepared in stages and not in an integrated fashion because of lengthy periods of shortfalls in counterpart funding; as a consequence, civil works also developed in an unintegrated form;  -3- (d) Borrower's lack of familiarity with Bank policies and procedures regarding procurement and withdrawal of Loan proceeds resulting from the frequent changes of SECAP staff; and (e) iuadequate supervisory assistance provided by the Bank at the initial stages of project implementation (only one supervision mission in the first two years). 2.03 Other constraints to project implementation during the first three- four years were frequent turnover of SECAP top level management, a SECAP salary structure too low to attract and retain qualified professional staff, and the inability of the SECAP Department of Construction to carry out its duties and responsibilities as envisaged. The resources and technical capability of the Department to manage the physical development portion of the project appear to have been overestimated during appraisal. Project implementation had two distinct stages: the first from 1975 to 1979, in which the project was practically stopped because of lack of counterpart funds and frequent changes in top level SECAP management, and the second, from 1979 to 1983, in which the above-mentioned constraints were overcome and the project was substantially implemented. SECAP's Organization 2.04 During project implementation, upon the Bank's suggestion, SECAP was officially reorganized under Presidential Decree 2928, issued October 19, 1978. As part of this reorganization, a PIU was formed, which proved to be a key factor in speeding up project lmplementation during 1979-1983. The reorganization consisted of: (a) decentralizing SECAP's operations to the regional level and (b) strengthening its technical support to iaprove the quality of the training programs. These changes were required in order to comply with the Government's policy of expanding training opportunities. 2.05 Even after SECAP's reorganization, project implementation continued to be slow until the beginning of 1980 because of frequent personnel changes, inadequate counterpart funding, and PIU salaries too low to attract and retain qualified personnel. Key factors contributing to successful project implementation after 1980 were: (a) appointment of capable, full time, qualified personnel whose sole responsibility was project implementation; (b) allocation of up to USS200,000 in loan funds to pay PIU salary supplements and operational costs; 1/ and (c) appointment of a full time SECAP Executive Director for a period of four years, thereby providing stable leadership. 1/ Loan ammendment dated May 11, 1978, per Borrower's request dated February 15, 1978. Supplemental salaries were authorized in order to make PIU wage-level comparable with salaries of permanent SECAP staff.  -4- Project Implementation Staff 2.06 After the 1978 reorganization of SECAP, the following personnel were assigned to the PIU: one civil engineer, one structural specialist; one mechanical specialist, and one secretary. Since the project consisted primarily of physical infrastructure development (civil works and equipment procurement), the above-mentioned types of expertise were needed for overseeing the work of the consulting firms and the contractors. In October 1979, the PIU was expanded to include the following additional personnel whose skills were required to complement project implementation needs: one architect, one accountant, one bilingual secretary, one assistant secretary. The PIU staff since then has gradually increased its technical and administrative capability. It has maintained excellent rapport with SECAP's management and with the Bank. At present, under a Project Director, the PIU handles civil works planning, construction supervision, equipment purchases, and overall monitoring of all SECAP projects throughout Ecuador.At the same time, SECAP recently created the Directorate of Projects, in charge of organizing and coordinating all activities pertaining to SECAP's institutional development, and it intends to gradually integrate the PIU into this Directorate. 2.07 Although the PIU's manpower has been increased, its responsibili- ties for administration and finances have also increased. Having gained experience in implementing a Bank financed project, the PIU, with some strengthening of its technical staff and with adequate support from stable SECAP management, has been entrusted with implementing the Second Vocational Training Project financed by the Bank (Loan 2171-EC). Although it is felt that the preparation of designs and tender documents, as well as general supervision of civil works should continue to be contracted to outside architectural/engineering firms, the PIU should assume a greater responsibility in assuring that these contracted services are performed satisfactorily, by appointing a Construction Coordinator 2/ to supervise the full time resident architect/engineers of all major civil works projects. Site Selection 2.08 The sites selected for construction during appraisal were judged to be suitable at that time. However, in Quito, the land originally thought to be easily acquired through expropriation was unavailable even two years after loan signing, delaying the preparation of final project designs and commencement of construction. 2.09 The Guayaquil site is low and poorly drained and although located only about 30 minutes outside Guayaquil, the students must be bussed. The site is adjacent to a relatively poor community, break-ins are frequent and squatters have built their homes outside of the property against the perimeter wall, providing a constant threat of invasion of privacy. Design of Facilities 2.10 The appraisal mission felt that the SECAP Construction Department had the capability to design and supervise the construction of facilities. 2/ With five to ten years' minimum professional experience in on-site supervision of construction.  During implementation, however, the Construction Department employed consul- tants to prepare designs and tender documents for both centers proposed under the project. Preliminary plans and tender documents for the first four buildings at Guayaquil, and for Quito, were prepared by private architecturallengineering (AE) firms in 1974 and 1975, prior to signing of the loan. The designs of the remaining facilities were left uncompleted up to 1979. 2.11 In 1980, a SECAP committee selected one company each to complete the design of facilities at Quito and Guayaquil following local bidding procedures. Fees paid for these AE services were reasonable and in line with recommendations of the Ecuadoran Society of Architects for work of this nature. The final designs for bui-ldings were simple and economic and followed construction practices previously used by SECAP at other locations. Construction Procurement 2.12 A local invitation to tender was made, and, in August 1975, construction was begun on the following four buildings at Guayaquil: (a) Guardhouse; (b) Classroom Building; (c) Mechanical Equipment Shop; and (d) Automotive Mechanics Shop. With the exception of these four buildings, little progress was made in project implementation during the period 1975 to mid-1979 for reasons explained in paragraph 2.03. 2.13 Seven local construction companies were first prequalified by SECAP in 1977. However, because of financial constraints, SECAP put off a decision on the selection of contractors until 1979. So much time had elapsed since the firms had been prequalified that another prequalification was in order before tendering the construction contracts. Therefore, firms already prequalified were asked to update their qualifications. 2.14 The mission agrees that the second prequalification was necessary. This was announced in local newspapers June 10-12, 1980. Prequalification was not carried out as specified in Section 4 of the Loan Agreement since copies of the announcement were not sent to representatives of member countries of the World Bank and Switzerland. The mission feels, however, that the prequalification procedures, as carried out by SECAP, were adequate and did not preclude interested foreign companies from becoming prequalified. 2.15 On March 16, 1981, separate construction contracts were signed for Quito and Guayaquil, under which nine months were allowed for completion of civil works. The mission feels that nine months was insufficient time for completion of the project and that 15 months.of construction time would have been more appropriate. 3/ 2.16 The total area actually constructed at Quito is about 10% less than that planned at appraisal. The facilities, however, are adequate and make maximum use of the limited space available within the site on which a 3/ In fact, it took 20 months to complete the Quito Center and 30 months for Guayaquil.  -6- number of buildings (workshops and administrative areas) already existed. Notwithstanding the reduction in area at Quito, the facilities provided appear somewhat generous for the current student population in the center. The total construction area at Guayaquil is about 6% larger than that determined at appraisal. These areas include the buildings (three workshops and a classroom block) constructed during the early stages of the project (1977-79). Annex 1 compares the areas by line items for both centers. Contractor Performance 2.17 Provisional reception of the Quito Center was made on November 16, 1982, and of the Guayaquil Center on December 9, 1982. The Centers took about 11 and 21 months longer to complete than specified in the respective contracts. Contractor performance appeared to have been average. Delays in time for completion of the Quito Center appears to be justifiable; penalties were not imposed. Some of the time overruns in Guayaquil, however, were not completely justifiable and penalties amounting to the equivalent of US$12,000 were imposed against the contractor for delays in completion. 2.18 Construction supervision was contracted using local competitive bidding (LCB). Fees for these services were based on a percentage of the contract price and were in line with fees recognized by the Ecuadoran Society of Architects. They were considered reasonable for the services performed. 2.19 At Guayzquil, the quality of construction was lower than average. After completion, and at the onset of the rainy season, leaks appeared in many flat concrete roofs, expansion joints, and asbestos cement collector canals. At the time of the completion mission, the contractor was completing repairs, including adjustment of ill-fitted steel windows, under the supervision of an architect assigned by PIU. Tha mission feels that, during construction, PIU should have been provided with a higher caliber of supervision by their consultants. 2.20 Article 4 of the Loan Agreement states that the Borrower should cause SECAP to keep the building adequately maintained. Some provision had been made in the 1983 budgets of both centers for conservation and maintenance of facilities, and more adequate provisions have included in the 1984 budget. Equipment and Furniture Procurement and Installation 2.21 Prior to 1980 and in the absence of Government financial support for the project, the PIU occupied itself with the preparation of tendering documents and equipment specifications. The first international competitive bidding (ICB) exercise for equipment took place in May 1981 right after the signing of the civil works contracts. The Borrower required that all interested bidders submit a proposal for at least 80% of each bid package; non-compliance would result in rejection of the bids. Many bidders were unable to fulfill this requirement, and, consequently the tenders were rejected by SECAP's tendering committee. This problem had two main causes: first, the 80% as a minimum required was rather high since experience shows  -7- that bidders are normally able to bid for a maximum of 702 of the items in a given package; and, second, the bid was grouped in only four packages of heterogeneous items. A second ICB took place in December 1981. In this case, the packages were more homogeneous and the 80% criterion was applied in a more flexible manner, as the Bank's guidelines recommended. Four proposals were accepted, and contracts were signed in February 1983, with a delay of about 15 months, partly because the Borrower insisted over the Bank's objections to award items that were not in accordance witb the specifications and partly because the cost was about twice the appraisal estimate. Finally, the Borrower agreed to delete the items which did not comply with the specifications, including the two mobile units. The suppliers maintained bid prices constant throughout the delay, and equipment started to arrive in June 1983. It was also agreed that indispensable items estimated to cost about half a million dollars should be bought by SECAP out of its own budget. Because of financial constraints, SECAP was able to procure only about 20% of this amount by December 1983; however, SECAP is planning on completing all purchases with its own resources. 2.22 A third bidding exercise for equipment valued at about US$223,000 was carried out in April 1983, and contracts were signed in June 1983. Because of the small contract amount involved, the contracting procedure was much quicker, and the equipment has been installed. The PIU performed satisfactorily during procurement considering local procedures it had to comply with. Mobile Units 2.23 The Bank, in March 1983, objected to financing two mobile units since the equipment specifications were not deemed appropriate to SECAP's requirements. The bids, which were received through ICE, were therefore rejected by the Bank. Because of time constraints, the Bank suggested that limited tenders be called and that LCB be acceptable. However, SECAP never called for new bids and, at the time of completion, its Board of Directors was considering the possibility of purchasing these two mobile units entirely with its own budget. Technical Assistance 2.24 Extensive bilateral and multilateral assistance to complement the physical facilities provided by the project was received between 1975 and 1983, comprising 95 man-years of expert services, 13 man-years of fellowships and about USS2.1 million in equipment (Annex 2). These figures exceed by about 202 the assistance that was expected at appraisal. By far, the largest contributor was the Federal Republic of Germany, with 35 man-years of experts, three man-years of fellowships and USSI.6 million in equipment, to help establish courses in metal mechanics, tool and die-making and auto mechanics. Otber programs include the establishment of courses in electricity/electronics and agro-mechanics at Ouito, with U.K. and Swiss assistance respectively, and the participation of Spain, Brazil and UNDP/ILO in promoting tool and die-making, instructor training, in-plant training,  miscellaneous trades and training planning. In spite of the delays in completing the infrastructure provided under the project (para. 2.17), technical assistance was fully utilized and effective because it was directed toward SECAP's activities operating in existing facilities. Consequently, it is possible to affirm that the assessment made by the appraisal mission was correct in the sense that technical assistance would be available from other external aid agencies and that the project could make positive impacts on SECAP's institutional capacity through a cofinancing of technical assistance. III. OPERATIONAL OUTCOMES Overview 3.01 Although project facilities have yet to be commissioned, formal training has been expanded, using SECAP's original facilities. Output targets were not achieved for apprentices and accelerated training programs, but exceeded for the upgrading program for employed workers. As a result of technical assistance provided by external aid agencies under the project, instructors have been trained, curriculum and teaching materials developed, and the planning and organization of training improved. Significant problems have emerged: the courses for apprentice training and adult accelerated training are too long and costly; the commissioning of the new facilities will strain SECAP's operational budget; and, because of the present economic crisis, the Government is reluctant to increase its contribution to SECAP's operating expenses, despite specific clauses in the Law establishing SECAP mandating such contributions. Output and Course Development 3.02 Table 1 shows output from the two training centers, using SECAP's old facilities, in 1983 compared with appraisal estimates. 3.03 The greatest demand has been for evening courses for upgrading employed workers (4,662 in 1983), exceeding the appraisal estimate (4,020) by over 600 without benefit of the Bank-financed facilities. There is a real need for this type of activity, and the centers have responded well. The courses range in duration from 30 to 240 hours (appraisal estimate 40 to 180 hours) in narrowly specialized fields such as electric welding, engine tuneup and domestic wiring, etc. For admission, a minimum age of 18, completion of primary education and evidence of working in the occupation are required.  -9- Table 1: Estimated and Actual Output from Quito and Guayaquil Training Centers Training Centers And Programs Appraisal Estimate Actual (1983) Training Programs Quito Guayaquil Total Quito Guayaquil Total Apprentices 390 450 840 593 a/ 513 1106 Accelerated Training (Adults) 375 405 780 327 191 518 Upgrading Training 1980 2040 4020 2258 2404 4662 Total 2745 2895 5640 3178 3108 6286 a/ Modular system introduced in 1982 with possibility of obtaining a certificate and leaving the training center after 1-1/2 years, 2 years and 2-1/2 years. Based on experience in the previous years, net output would be about 450 since most trainees are expected to remain for all modules, i.e. for 2-1/2 years. 3.04 Adult accelerated training, mostly for unemployed out-of-school youth, was started in 1977, and output was increased to 518 in 1983, somewhat short of the appraisal estimate (780). The courses are of one-year (1,760 hours) duration (appraisal estimate six months) for specialized occupations similar to those for the upgrading course. Admission requirements include a minimum age of 18, completion of primary education and passing of an aptitude test. One year courses for this target group, without a job commitment, are too long. Use of Facilities 3.05 None of the Bank-financed facilities at the training centers in Quito and Guayaquil have been fully put to use yet. All of the equipment has been installed, but overall space utilization averages about 65% for Quito and Guayaquil. Some workshops such as electronics, metal mechanics, and bricklaying at Quito are working on a double-shift system, with apprentice training and adult accelerated training during the day and training of  - 10 - employed workers in the evening, while other shops such as plumbing and auto mechanics are partially underutilized because of a lack of sufficient operational funds to fully operate the centers, and a lack of demand in some trades. 3.06 The commissioning of the new facilities financed by the Bank is helping SECAP to redistribute the overloaded workshops, eliminate those that are operating only provisionally and diversify the trades offered. The new output expected in full operation will exceed appraisal estimates by about 100l. (See Table 2). Table 2: Output from Quito and Guayaquil Training Centers When New Facilities Are in Full Operation Training Program Quito Guayaquil Total Apprentices 1915 704 2619 Accelerated Training 810 244 1054 Upgrading Training 3545 2716 6261 Total 6270 3664 9934 SECAP's Training Program 3.07 Although the training programs were developed using SECAP's original facilities, two important factors should be taken into account for SECAP's expected expansion as a result of the operation of the new facilities financed by the project: (a) the changes in apprentice training; and (b) the introduction of the training of technicians as a new level of the training programs offered. 3.08 Apprentice training. It was envisaged at appraisal that the courses would be of three years duration, with the first year full-time at a training center, followed by six months in industrial employment and six months full time at a training center in each of the subsequent two years. This was implemented as three-year full-time courses in the centers until 1982, with resulting low output because of difficulties in placing trainees in industrial establishments for the six months of apprenticeship training. 3.09 In 1982, a modular system was introduced with two distinct modes permitting trainees to leave at three different levels according to inclination. The first mode, termed "Enterprise Center", admits young persons aged 14-18 years who are nominated by an enterprise, have completed  - 11 - primary education, have passed an aptitude test, and have undergone a full- time six-month pre-training course at a training center. In this mode, the apprentice works four days each week in enterprises and attends the training center one day per week. He can leave the system after completing two modules of 22 weeks with the title of 'Assistant.- After a further 44 weeks, he can receive the title of Operator and after a final 22 weeks can be awarded a C.A.P. (Trade Apprentice Certificate). The second mode, termed 'Center-Enterprise' admits young persons who have completed nine years of basic education and have successfully passed a four-week full-time pre-training course at a training center. In this mode, training is full time, with more emphasis on practical work at the training center for the equivalent of two and one-half years to reach the final qualification. 3.10 Subject to evaluation of operating experience with the first mode, or Enterprise Center system, that system would seem to offer the most promise forthe future. Valuable work experience would be given alongside technical training which would produce a more competent worker; the cost of training would be low, and increased output from the training centers would be achieved with greater flexibility. Furthermore, training would be related directly to job needs. The second mode, 'Center Enterprise-, resolves none of the problems of apprentice training, i.e., low output and high cost, and would seem to perpetuate the old three-year system. 3.11 Training of Technicians. The training of technicians in tool and die-making has recently started at both training centers. At Quito, facilities are provisional in nature until full installation of project facilities is completed and operating technical assistance is provided by Spain. In Guayaquil, technical assistance provided by the Federal Government of Germany comprises experts and an extensive range of machinery. Participants in the courses are either graduates of the SECAP apprentice training course at CAP level or graduates of the secondary technical schools, both with two years minimum of work experience. The course duration is 66 weeks (18 months) full-time, and the title of tool and die technician will be given. This course represents a satisfactory upward evolution of SECAP's training activities. Training Support System 3.12 The assistance provided by international experts directly under SECAP's multilateral and bilateral arrangement was a key factor in strenthen- ing SECAP's ability in: (a) planning; (b) job placement; (c) instructor training, and (d) development of curriculum and teaching materials as explained in the following paragraphs. 3.13 Planning. Preparation of the annual training plan and budget is the responsibility of the Directorate of Planning. A subsector approach has been adopted and projections made based on the census and anticipated economic activity. Applying the occupational structure technique and allowing for output from existing programs, the training needs by broad category of worker were derived. Data were developed for both large, medium and small enterprises, and at the national, regional and provincial levels.  - 12 - 3.14 Placement Service. Job placement is the responsibility of a supervisor located in each of the two training centers. Placement has been satisfactory, with about 97% of the full-time trainees obtaining employment in occupations related to their fields of study within four months of graduation. With the expansion of the training activities, SECAP is negotiating with the Ministry of Labor with a view toward having the Placement and Employment Offices assume some of the responsibilities for placement and give preference to SECAP graduates. 3.15 A follow-up survey financed by German Technical Assistance and carried out by SECAP on 600 graduates from full-time courses in July 1983 concluded that there was general satisfaction with the training, although a desire for longer courses was expressed. SECAP has promoted the formation of associations of graduates in Quito and Guayaquil, and it is intended to obtain feedback information from workers through these associations. Up to the present, there has been no survey of the employers. However, a questionnaire is ready, and SECAP is planning to implement a survey in 1984. 3.16 Instructor Training. An instructor training unit, with a staff of nine trainers, recruits and trains new instructors and upgrades instructors in courses of about 320 hours duration. New instructors would have a minimum of 12 years of general/technical education and three years of trade experience. Selection procedures include tests to determine intellectual ability, aptitude for teaching, trade skills and knowledge and an interview. The courses given by the unit at both basic and upgrading levels focus on instructional techniques. Skill-upgrading courses of about 540 hours duration are arranged in the training centers. In addition, some staff are sent overseas on fellowships. About 300 instructors are trained annually, of whom about 20% are for institutions other than SECAP. To help organize instructor training, technical assistance has been received from Brazil, the Federal Republic of Germany, Switzerland and UNDP/ILO. In addition, the equipment suppliers have arranged short (e gbt hours) familiarization courses for instructors on the new equipment. 3.17 A total of 309 instructors were employed by SECAP in 1983; a sample profile of their qualifications and experience in given in Annex 3. For the two training centers in Quito and Guayaquil, about 200 instructors are required. A total of 128 were already in post in 1983, and a further 46 had satisfactorily completed the basic training and skill-upgrading courses, and had heen contracted to staff the new facilities as they are commissioned. A further 26 instructors will be required to fill vacancies as they occur during the build-up of activities in the new facilities. All of them have already been trained by SECAP, and most of them are being hired during 1984.  - 13 - Table 3: Staffing of Training Centers in Quito and Guayaquil Quito Guayaquil Total Instructors in post 1983 79 49 128 Instructors trained and contracted in 1983 for new facilities 20 26 46 Additional instructors required to fully staff new facilities 14 12 26 TOTAL 113 87 200 Apprentice training and accelerated training of adults are carried out by a corps of full-time instructors. For upgrading workers, part-time instructors from industry are contracted. SECAP's policy is to establish a pool of part- time instructors who can be called as the need arises. Because the average instructor's wage (S/157,800 per year) is less than that of a highly skilled worker or foreman (S/180,000 to 225,000 per year), turnover of full-time instructors exceeds 15X. Those instructors who remain with SECAP do so because of the benefits and prestige and, in many cases, because they can fit a second occupation into their work program. This situation is expected to improve as a result of SECAP's decision to grant to its instructors salary increases of 50% in 1984, which, for the time being, significantly exceed the inflation rate. 3.18 Curriculum and Teaching Materials. Curriculum is based upon occupational analysis and development of subject matter specialists in SECAP's Office of Operations. The curriculum is subsequently approved by the SECAP Board of Directors for use in the training centers. There are 11 regular training programs and a variety of short courses. However, there are no published national trade standards, accepted by both employers and trade unions, no institutional means to review and revise curricula and trade standards and no arrangements for trade testing at the national level. A battery of trade tests does exist, but the levels of the tests are adjusted to allow for perceived differences in the various regions of the country. This situation results in a lack of feedback between the labor market and SECAP which would permit the adaptation of the programs to labor market requirements, and makes it difficult to establish standardized salary levels appropriate to the skills learned by the trainees. Instructor course guides are prepared by specialists in the Office of Operations, following the approved curriculum, and then circulated to the training centers. Instruction and information sheets for trainee use are prepared by the course instructor. Use of teaching materials at this level is uneven.  - 14 - IV. PRDJECT COSTS AND FINANCING Cost of the Project 4.01 The cost of the vocational training project was about US$9.28 million at the time of completion, some 17% above the appraisal estimate of US$7.92 million. This final cost (a) includes the cost of the mobile training units which were, at the time of completion, still being considered by SECAP for financing entirely out of its own resources since the Bank did not agree to the awards; but (b) excludes the cost of acquiring the equipment, which was considered of secondary priority and not essential to the immediate placement in operation of the two centers. The expenditure for acquiring the equipment of secondary priority would amount to about US$0.5 million, thereby projecting the total cost of the project, to about US$9.8 million, or 232 more than the appraisal estimate. Actual and appraisal costs are compared in Annex 4. The principal cause of the increase is the extended implementation period. Although unit construction costs have been controlled effectively by PIU, the five-year delay more than offset the economy realized in building simple structures. Cost of Construction 4.02 During appraisal construction costs were estimated to be S/3,250 (US$130) per square meter 4/ excluding land preparation, utilities, and fees for professional services. During this same period (1976-77), economical housing in Ecuador was estimated to cost S/3,000 (US$120), 5/ about 8% less than for this project. Final project cost, with construction principally carried out during 1981-82 (five years later than anticipated), amounted to S/5,090 (US$204) per square meter in Quito and S/4,650 (US$182) in Guayaquil. The Camara de la Construccion estimates that, during this same period, actual cost -0 economical housing in the same areas wr:'d have been about S/5,500 (US$220) or about 8-18X more than the square meter costs for this project. These figures clearly reflect the conscientious effort of SECAP to design, and to construct economical buildings. The cost of professional services, on the other hand, was estimated at appraisal as 0.3Z of construction costs, because it was expected that the PIU would prepare the designs in-house. Since the services were actually performed by private firms, the amount thus provided was inadequate to cover the actual cost (6.52 of construction cost). Disbursements 4.03 The low disbursement profile, as conipared to the appraisal expectation (see Basic Data Sheet), is a reflection of the extensive implementation time overrun. Since the bulk of equipment expenditures, which comprise about 542 of the Loan proceeds, was disbursed only during the last year of implementation, a low disbursement profile resulted from 1976 through 1982. In addition, the amount of US$186,752.01 was left undisbursed in the 4/ Includes 30Z for price contingencies during construction period. 5/ Figures obtained from the Camara de la ConstruccLon in Quito.  - 15 - Loan account since the Closing Date had already passed when SECAP still had to procure supplementary equipment left unawarded after the second equipment tenders were received due to the inadequate response by the suppliers. Consequently, the Bank financed 41% of the total project cost, instead of 52Z estimated at appraisal, and the Government the balance. Recurrent Costs 4.04 Annex 5 shows unit operating costs per trainee hour by specialty and by category of trainee at the training centers in Quito and Guayaquil. The costs per trainee hour for different training programs are comparable with those of many vocational training institutions in the Latin America Region according to studies conducted by CINTEFOR. 6/ The costs per trainee hour of upgrading courses are substantially higher than those for apprentice or adult accelerated training, mainly because of the recruitment of instructors on contract from industry at higher salaries. Fees of these part-time services are reasonable and in line with fees paid in the labor market for extra time performed. At the apprentice training and adult accelerated training level, disparities are caused by overloading some facilities, underutilizing others and implementing some courses off-center. When the course duration is taken into consideration, the cost per trainee per course fur upgrading is much less than for apprentice training or adult accelerated training. 4.05 Annex 6 shows that historical evolution of SECAP's overall budgetary expenditures since 1979 and details of the expenditures of the two training centers. As a percentage of SECAP's overall operating expenditures, outlays of the two training centers varied from 34% in 1980 to 29% in 1982, as SECAP's other activities expanded. However, in 1983, the overall operating expenses were reduced by 14% because of a smaller Government contribution to SECAP, and the two training centers' share jumped to 37%, which is expected to be the same for 1984. The projected 1984 budget for s;he two training centers, including the project facilities, is S/68 million, representing60 of the 1983 overall income of SECAP. In the present economic climate, the prospect of increased Government support is remote, and other sources of income will have to be explored if the capital investment already made in the two centers is to be exploited. V. CONCLUSIONS AND RECOMMENDATIONS Conclusions 5.01 Overall, the project has been a worthwhile investment. It. has satisfactorily achieved the physical targets except for the two mobile units and exceeded the education output envisioned at appraisal, although the latter was not achieved in the physical facilities financed by the Loan. Facilities provided under the project were economical and suitable for their intended use. Most of the covenants of the Loan Agreement have been complied with (Annex 7). 6/ CINTEFOR - Centro Interamericano de Investigacion y Documentacion sobre Formacion Professional  - 16 - 5.02 Project preparation and appraisal have been efficient. From the start of preparation until Board approval it took only 12 months. But this accelerated process bas had some negative impact on the Implementation of the project. 5.03 Implementation took eight and one-half years, five and one-half years (180Z) longer than appraisal estimates, but about the same as the average implementation period for education projects of that period. Between 1975 and 1980, there was little Government financial support, because the Government did not accord the project adequate priority, and there were frequent changes of SECAP management and staff in charge of project implementation. During this period, classrooms and administrative facilities in Guayaquil amounting to only about 32 of the project were implemented. Government financial support was substantially increased in 1980, and completion of 97Z of the project was achieved in the following three and one-half years. Discounting the initial delay, subsequent performance can be rated as satisfactory, mostly because of the priority given by the Government since 1980 to manpower development and the improved and stable management of SECAP and PIU. 5.04 The principal reasons for delays in project implementation were: (a) frequent change of SECAP management and insufficient full time SECAP technical personnel, adequately qualified and fully dedicated to the Bank/SECAP project, until the end of 1979, four years after the Loan effectiveness; (b) inability of SECAP to obtain the necessary land for the Quito Center and poor site conditions existing at the Guayaquil Center; *c) design of buildings beiag prepared in stages and not in an integrated fashion because of lengtny periods of shortfalls in counterpart funding; as a consequence, civil works also developed in an unintegraced form; (d) Borrower unfamiliarity with Bank policies and procedures; and (e) inadequate supervisory assistance provided by the Bank at the initial stages of project implementation (only one supervision mission was made in the first two years). 5.05 With regard to physical aspects, SECAP has strengthened its capacity to Implement investment projects more efficiently and effectively but needs to strengthen it further by appointing a coastruction coordinator (para. 2.19). 5.06 Since the project facilities are not yet fully operational, the training and qualitative objectives were achieved using provisional iacilities of SECAP. Details are as follows: (a) Extensive technical assistance envisaged under the project but financed by Germany, Switzerland, U.K., Spain, Brazil and UMDP/ILO has improved the plaaning, organization and implementation of all SECAP training activities.  - 17 - (b) Training activities have been expanded. Upgrading tralning has expanded beyond appraisal estimates and is responding In a cost-effective way to the real needs of the productive sector. Apprentice training has been restructured, although output is still low. Adult accelerated training has been established, but the courses are too long and output has not yet reached th. appraisal targets. A higher level progra-, technician level training in tool and die-making, has recently been established for graduates of SECAP's apprenticeship program and for graduates of the secondary * technical schools. These courses are supported by the employers and are satisfactory. (c) Planning of training programs and placement services for gradutates has been successfully established. (d) The organization and management of SECAP's existing facilities are satisfactory, although the use factor is still low; equipment Is appropriate and teaching methods and records are adequate. Some improvement in academic inspection Is desirable. (e) Some 46 instructors have been trained and appointed for the new facilities. A further 26 will be required for full operation of the centers. (f) Curriculum has been developed with the assistance of internatlonal experts. Cg) Instructors" manuals, charts and other teaching aids have been developed for almost all trades, but the use of thls material is uneven among the instructors. Ch) Evaluation of training activities has received bilateral technical assistance, and feedback from ex-trainees has provided SECAP with an adequate initial basis for improving its training program. Ci) Involvement of the employers in training through the in-plant training scheme Is being established as a major strategy for SECAP. Technical assistance is being received to expand the scheme. 5.07 Key factors that contributed positively to project implementation were: (a) development of an effective Technical Unit (PIU) whose sole responsibility was project implementation; (b) authorization of salary supplements to be pald to key personnel from Loan funds up to US$200,000; and  - 18 - (c) stability in SECAP's management by appointment of a full-time SECAP Executive Director for a period of four years, and reorganization of SECAP. 5.08 The Important lessons learned from this project are: (a) A substantial trade-off between the accelerated pace of project preparation/appraisal and efficiency in project implementation (paras. 2.01 and 2.02). (b) The need to assess, at appraisal, executing agencies' overall organizational strengths, operating capabilities, staffing and staff morale, and the desirability of including, as a condition for loan negotiation, completion of site acquisition and preliminary designs and adequate arrangements for project management staff (paras. 2.08 - 2.09). (c) The design of the project emphasizing only physical aspects when technical assistance is available from other sources (para. 1.03). -d) Tne role of technical assistance, not financed with the loan but cofinanced under the project by other bilateral and multilateral aid agencies, in making a far reaching improvement in the trainiag programs and operations of SECAP (para. 3.01). (e) The importance of making intensive and frequent supervision visits at an early stage of project implementation (para. 2.02). (f) The flexibility and care needed in tendering equipment and evaluat- ing bids by packages, and the percentages to be applied (para. 2.21). Recommendations 5.09 SECAP should: (a) Give first priority to the commissioniag and operation of-the new training centers in Quito and Guayaquil and offer training opportunities at the regional level as has been envisaged in the Second Vocational Training Project (Loan 2171-EC). (b) Give second priority to the promotion of in-plaat training focussing on upgrading supervisors, foremen and training officers and apprentices. For in-plant training, additional resources should be acquired to finance training coatracts. (c) Arrange consultations with representatives of employers on a subsector basis to discuss apprentice training and adult accelerated traiaing. The focus of the discussions should be on the reduction of the full-time pre-employment training. Subsequent part-time specialized courses should be available on a modular basis after placement of trainees in industry.  - 19 - (d) Establish national trade standards, testing and certification systems. (e) Improve the technical and academic supervision of courses. (f) Hire 26 additional instructors required for full operation of the new centers, and keep salaries of instructors competitive with those of industries. (g) Produce more instructional sheets for trainee use. Ch) Obtain feedback from the employees for evaluation of tra'ning activities on a continuing basis. (i) SECAP should study the prospects for financing the current and future training programs and seek new sources of financing. 5.10 The present Technical Unit of SECAP should have its technical capabilities strengthened, particularly by appointing a construction supervisor or coordinator, and its administrative role reduced. There should be a clear division between administrative and technical duties of personnel in this Unit. 5.11 Each training center should establish a maintenance unit consisting of about four to six persons to carry out physical maintenance and uLpkeep of buildings and grounds. Funds should be made available as a line item in each center's recurrent budget to cover the cost of supporting a maintenance progrr.m. 5.12 The Bank should include the project in the second look program in order to monitor the operational outcomes once the centers are fully operational.  ANNE 1 - 21 - ECUADOR VOCATIONAL TRAINING PROJECT (LOAN 1157-EC) COMPLETION REPORT Comparison of Construction Areas The following tabulation compares the areas of construction actually built in Quito and Quayaquil with those projected at time of appraisal. a/ Area in Square Meters Name of Space As Per Appraisal Constructed QUITO Technology 455 873 Cafeteria 441 546 Automechanics 3,303 2,782 Metal Structures - 845 Construction 3,039 2,587 Metalworking 1,541 2,020 Electricity 1,541 - 10,320 9,653 GUAYAQUIL Technology b/ 1,266 829 Administration c/ 1,572 910 Automechanics 4,257 3,249 Construction 4,303 4,053 Metalworking 3,754 3,097 Electricity 2,080 2,045 Classrooms - 870 dI Basic Mechanics 1,307 Machine Tools 1 ,307 Automotive Workshop - 580 17,212 18,247 a/ Areas of hallways, toilets, offices, etc. have been prorated among the various construction line items. b/ Includes Library in planning. c/ Includes Cafeteria and Auditorium. d/ First Phase of Development (1977-79) financed entirely by SECAP.  ANNEX 2 ECUADOR VOCATIONAL TRAINING PROJECT (LOAN 1157-EC) COMPLETION REPORT Technical Assistance 1975-1983 Experts Fellowships Equipment Country/Agency M/M H/M USSOOO Development Field Brazil (SENAI) 8 56 - Instructor training; planning; in-plant - training Federal Republic of Germany 419 36 1,600.0 Metalmechanics and automechanics at Quito and Guayaquil V.T.C. Rolland 36 - - Socio-economic study of the slum areas of Guayaquil focusing on the informal industrial sector, employment and women. Spain 232 9 - Manpower planning, tool and die; miscel- laneous trades. Switzerland 168 10 3.4 Agromechanics United Kingdom 246 32 74.0 Electricity; electro- nics; in-plant training. UNDP/ILO 30 9 406.0 Organization and management of training; instructor training; teaching -. equipment. Total 1,139 152 2,083.4  ANNEK 3 - 23 - EaMM VOATOIL PQImC~E (OA,N 1157-EC) * QmlificntLczs u~~~an Eiperience of Instrutor:s - 1983 erages of SpecEality No. of Wage of intructors Years of Years of EHurs cf Years of Years of Foreun In m Tedmical Indzsrial Th&mtrial Trainirg Amnnl in SVcLlty Pst left Fx o Fxatim rrg Eqe a t Indstrial Nedxizd 52 6 6 6 50 5 5 15780 225.000 Aztauediadds 22 6 6 6 500 7 6 157.800 225.000 and Hev Fuipimen 7 1 6 6 500 6 6 157.800 180.000 Mec_y and ElectrwLcs 16 1 6 6 500 7 7 157.800 225.000 Qxc nructiaa 8 6 2 500 11 8 157J80 180.000 Carpentry 4 1 6 6 500 5 7 157.80 180.000 J~~~~~~~~~~~~~  AwE 4 - 24 - * EWADX VOC&TtIIAL ZU&INDG 3ERDJ (MON 1157-EC) SiW of PLoject Cots Cos including CIugeides In US$OOCW Ct.il Works Pumiitre FServices Mnistration Total Appralsal 1,719 172 956 5 - 2,852 Actu81 1,888 at 65c/ 1,134 141 - 3,228 Appraisal 3,395 314 1,103 9 - 4,821 Actual 3,241 b/ 118 d/ 1,384 d/ 195 f/ - 4,938 Appraial - 89 - - 89 Actual - 278e/ - - Z78 FIHW= AhKDIS3ATM Apprasal -- - - 161 161 Actual - - - - 837 837 1oAL CON AppraIsal 5,114 486 2,148 14 161 7,923 Actual 5,129 183 1,796 336 837 9,281 Z r fferen - 6Z +3m +2,400 fl +519% +17% a/ S/. 0.3 3 contracted 1977-1979 and SI. 5.83 M contracted 1980-1983. b SI. 10.97 M contracted 1977-1979 and S/. 879 contracted 198D-1983. ci CorrespIs to about 75% of total epLpaet requireat coived at appraisal. d/ Grrespmw to about 65Z of total equpmt requiremet conceived at appraisa. h t i ies coast of 2 bues acquired In 1978 for Ojaq .l e/ Bids received hbt awards and firmrrg by Borrower under fderatlx by SEW at the tim of fI he anst of profess1ocal services m apparently errceusly costed out in the appraisal report. DesigL servies wmld nornamly amnwt to 5Z of estimted constrcution costs plus anwter 2.5% to 3Z for aipervisidc. The appraisal estimte only provided 0.M of cmatnuciom co6tS for total professimxal fees.  AUK 5 - 25 - S9D EmTIN lP'n (IO&N 11 57-4) ~w r Unit OperatlDg Cost a/ Q UIT O GUAYAQUIL Adult Adult Appmtioe Acom3Ated Umding A Accelezted Undin g TrLLg Trad Come Taizg Trang Com Unit Cost perT=Um EHxw (S) 37 35 214 77 76 255 Cost xer trai per Come (S/OO3) 162.8 61.6 51.4 33&8 133.7 61.2 Ubit Cost par T3me How (S) 101 66 291 108 8i 212 Cost per t pe per cae (SAxxB) 444.4 116.2 69.8 475.2 149.7 90.9 Unit Cost per Tzslme How (S) 26 135 149 - - Cost per trime per coaue WOAxMB) 114.4 257.6 35.7 _ _ _ Unit met Fr tde botw (S) 2 - 54 Cost per tz;me per Oxe (S/COOs) 404.8 - 12.9 - - - Unit cst per tl boewhr(S) 39 11 36 _ _ _ Cost per tnde per conse (S,CM3) 171.6 19.3 8.6 - 8/ D.uatim of ApMtice Tminrzg Cozse 4,400 h DTaticn of Adult A roelemteP Tzig 1,760 hcrs Avezg Tutim of Ulbrautlg Cuase 20 hus  ANNEX 6 - 26 - ECUADOR VOCATIONAL TRAINING PROJECT (LOAN 1157-EC) COMPLETION REPORT SECAP's Budgetary Expenditure - 1979-1983 Expenditure - Millions of Sucres Type of Expenditure 1979 1980 1981 1982 1983 1984 c/ SECAP Overall Recurrent 96.3 107.6 129.8 132.4 114.0 n.a. Capital a/ 3.9 18.6 140.3 94.9 128.4 n.a. Total 100.2 126.2 270.1 227.3 242.4 n.a. Quito Training Center Recurrent 15.7 22.2 25.4 23.0 25.1 38.0 Capital b/ 0.8 1.0 1.6 2.7 1.8 3.8 Total 16.5 23.2 27.0 25.7 26.9 41.8 Guayaguil Training Center Recurrent 9.7 14.4 16.8 15.9 17.6 30.0 Capital b/ 0.5 1.2 1.7 0.7 2.5 5.1 Total 10.2 15.6 18.5 16.6 20.1 31.5 Total Recurrent Expenditure Quito and Guayaguil, Training Centers 25.4 36.6 42.2 38.9 42.7 68.0 Share of SECAP Overall Recurrent Expenditure Z 26 34 32 29 37 40 d/ a/ Includes project counterpart funds. a/ Does not include project counterpart funds. cl Percentage based on 1983 recurrent budget. dI Projected Source: SECAP Finance Administratica Directorate.  ANNEX 7 -27 Page 1 of 2 ECUADOR VOCATIONAL TRAINING PROJECT (LOAN 1157-EC) COMPLETION REPORT Compliance with Loan Covenants Article Description Remarks 4.02 The Borrower shall cause SECAP to main- During 1977, SECAP tain records adequate to reflect, in received technical accordance with consistently maintained assistance from the Bank appropriate accounting practices, the to improve the adminis- operations and financial conditions of trative and accounting SECAP. system. By 1980, a strong system as functioning. 4.05 The Borrower shall cause SECAP to submit to the Bank for review, not later than March 31, 1977 or such other date as the Bank shall agree: (i) a draft of the procedure for The selection procedure selection of apprentices to be trained apprentices is well in the centers included in Parts A and established and satis- B of the Project. factory. (ii) samples of (1) the programs for (A) The course programs for accelerated training course for (A), (B), (C) and (D) are unemployed adults and dropouts from the well established, and in education system; (B) upgrading of all cases supported by employed workers; (C) short supplemen- instructors' guides. tary courses to prepare graduates from the formal technical schools for specific middle-level technician occupations and (D) apprentice training course; (2) the standards to be met in the training for SECAP has failed to esta- recognized skilled occupations; and (3) blish a national trade the tests to measure skill levels. standard, testing and certification system. (iii) plans for the operation of a A placement service was placement service for the trainees of established and is such centers, a tracer system to follow successful. A follow up up the career development of such survey of trainees was trainees and evaluation procedures to done in 1983 and plans assess the suitability and efficiency are ready to survey of the training programs of such employers in 1984. centers.  ANNEX 7 Page 2 of 2 - 28 - Article Description Remarks (iv) a plan for the training of Implemented. instructors and supervisors to operate such centers and the mobile vocational training unit included in Part C of the Project. 4.06 The Borrower shall cause SECAP to Implemented. review, at intervals of about one year jointly with the Bank, the plans and programs for vocational training.  - 29 - COCMENTS FROM THE BORROWER ATTACEYHDU I (Translation of Spanish original) Ministry of Labor and Human Resources of Ecuador Office of the Minister Ref. No. DM-840294 J Quito, July 31, 1984 Mr. Shiv S. Kapur Director, OED World Bank Washington, D.C. Dear Sir: I acknowledge receipt of your letter of June 22, 1984 enclosing the Vocational Training Project Completion Report (Loan No. 1157 EC). It is clear from a careful reading of the text that the joint efforts of the World Bank and the Ecuadorian counterpart organization, SECAP, have been extremely positive for our country. I find this extremely gratifying, and both my office and SECAP agree with the essential substance of the Report. SECAP will be sending the Bank its comments on the Report's technical aspects. Very truly yours, /8/ Jamil Mahauad Witt Minister of Labor and Human Resources  - 30 - COEMMENT FROM THE BORROWER ATTACHMENT II (Translation of Spanish original) (p. 1 of 4) Servicio Ecuatoriano de Capacitaci6n Profesional - SECAP Office of the Executive Director Attached to the Ministry of Labor and Human Resources Letter No. 1829 Quito, August 3, 1984 Mr. Shiv S. Kapur, Director Operations Evaluation Department World Bank Washington, D.C. Dear Mr. Kapur: I refer to your letter of June 22 with its enclosed Project Completion Report for the Vocational Training Project (Loan 1157-EC), in which you asked for our comments before the preparation of the final version, which will be submitted to the Bank's Board of Executive Directors. I have studied the report very carefully and have sought comments from the National Directors and the IBRD/SECAP Project Office, which can be summarized as follows: O.lyrrsnbmI (1) On p. v, in the third paragraph, the wording of (i) and (ii) should inixupcapo. be changed to read as follows: "(i) a long period from the start of the project until 1979 when counterpart funding was inadequate; (ii) the protracted procedures SECAP had to follow before it could obtain legal title to the land for the Quito Center." (2) On p. v, fourth paragraph should be changed to read as follows: VieRfLdy1te1eL "All of the equipment has been delivered and installed." The rest #gwe mm hmP of the sentence ("and the remainder is expected to be installed by tIUt KR isarZj the end of May 1984") should be deleted. OIC Awn"d (3) On p. vi, in the first paragraph, after the sentence beginning on emtILyss line 10 which reads, "Involvement of employers in training through ipord. the in-plant planning scheme is being established as an important SECAP strategy," the following should be appended: "for which a nation-wide in-plant training program has been set up."  - 31 - ATTACHMENT II (p. 2 of 4) o 1(amesin 4) On p. 2, in para. 2.02(a), insert after "this shortage of. oost* *Mn I suitable personnel," "and frequency of SECAP management changes".* aEKdhbly. (5) On p. 2, subpara. (b) should read: "The protracted procedures SECAP ox. | had to follow to acquire the necessary land for the Quito Center and the unfavorable conditions prevailing at the site for the Guayaquil Center." O1G b-nbS (6) On p. 4, the following should be added after the last line of para. ee-saxlay as 2.06, which ends with "throughout Ecuador": "At the same time the ' zwp#I. j Project Department was established to organize and coordinate all institution strengthening activities." (7) On p. 4. para. 2.09 should read: "The Guayaquil site is located in the town of Eloy Alfaro (DurAn), 30 minutes outside Guayaquil, in an Toomxh ^etUL area that is poorly drained because the land is virtually at sea It Ishielt that level. The site is adjacent to a community which is experiencing theECRRtmm on rapid change and rising standards of living. On two occasions tids pont is squatters attempted to build their homes on land adjoining the mIn iumo property, against the perimeter wall of the SECAP Center, but tth the time- i government authorities, police and SECAP officials acted swiftly to m3 of odwr I move them on. The ownership of the Center site has now been ,v*. I resolved and squatters can no longer take up residence against the walls, as streets have been built there." MeFotvWl (8) On p. 6, in para. 2.19, the following should be added to the end of emiWna]ytbe the text: *'The steps taken by the PIU have improved the quality and sD ifr2nBItLX the buildings are now fully completed and satisfactorily meet the as that I d original standards." (9) On p. 6, para. 2.20 should read: "Article 4 of the Loan Agreement states tnat the Borrower should cause SECAP to keep the building nemellyas adequately maintained. The mission found that SECAP's 1984 budget p!oed. included specific provisions for the maintenance of the facilities in Quito (US$143,600)." V4 fW by (10) On p. 7, in para. 2.22, lines 3, 4 and 5 should be replaced with the Lth SEW thst h following: "...was much quicker. All of the equipment has been PCRis =t. I installed. The PIU performed..." OX. kend 1(11) On p. 7, in para. 2.23, the following should be added at the end: emsu-tayas "The matter has been brought before SECAP's Board of Directors for a Pnwoai final decision." Itisfeat dat (12) On p. 7, in para. 2.24. after "with U.K. and Swiss assistance tbeP ER sqBE rebpectively," the text should read: "In addition to the axur*einic- strengthening of in-plant training programs with the assistance of m3dLm ad te the U.K., Spain and Brazil, which are helping implement vocational Is m need fxw training programs tailored to the specific needs of particular axmdn3e* plants, with appropriate methodologies in programs for textiles. * Although relevant to the Spanish version, this change would be redundant in the English (Tr.)  - 32 - AITA2HNZT II (p. 3 of 4) tool and die-making, electricity, diesel engines, hotel trade, instructor training and training planning. In spite of the delays..." AMAd tde1 (13) On p. 8, in para. 3.01, the last three lines after "SECAP's frmm tie RR tbe operating expenses" should be replaced by the following: " ... and pendctia tbat it is expected that future administrations will increase their neebd Gst. owr contributions to operating expenses in accordance with the trM*_1lns mm1 provisions established to this effect in SECAP's charter." not be fttiath . (14) On p. 9, in para. 3.05, line 3 should read: "All of the equipment (i) Sw pobts (2) has been installed and the centers are fully operational." On line ad (10); Cli) It 6, "about 65Z" should be changed to "about 85%." Line 8 should s fd.t dtt theER read: "At some workshops, such as electronics, metal mechanics and ao0zblyw de bricklaying at Quito, enrollment is very high and the shops are toe of unmninatNa operating at full capacity on a double-shift system, with and(Ui)am9zW apprentice training and adult accelerated training during the day orly to AM the and the training of employed workers in the evening, while other lwqndodotbgt use shops such as plumbing and auto mechanics are not being used to andIn+eddftis capacity owing to low demand for training in those sectors." (15) On p. 10, para. 3.06 should read: "Thanks to Bank financing of the .eoidedtopDve new facilities, SECAP has been able to reassign the students of anresdonof overloaded workshops, eliminate the shops that were operating actLvlties In provisionally and diversify the trades offered." (16) On p. 12, para. 3.17 should read: "In 1983 for the country as a whole SECAP employed a total of 271 instructors on regular AWXiItD suply appointments and 38 engaged on an occasional basis. fr zmt[n abik 5,a,uctmw &Ctvg For the training centers in Quito and Guayaquil 116 instructors aU of19B3 id t were required and 75 instructors satisfactorily trained 46 others fypart of it. who will be gradually brought on board as the programned activities in the new facilities are expanded. TABLE 3: Staffing of Training Centers in Quito and Gtyvaquil Quito Guayaquil Total Instructors in post 1984 116 75 197 Instructors trained in 1983 to be taken on as required by demand at the centers 10 12 22 Instructors trained in 1983 [sic: 1984?] to be taken on as required by demand at the centers 8 16 24 134 103 237 (end quote)  - 33 - ATTACEMENT II (p. 4 of 4) (18) On p. 17, para. 5-06(b) should read: "Training activities have expanded as shown by the following table: 1980-1984 Vocational Training at the Vocational Training Centers Quito Guayaquil Type of Training Courses Trainees Hours Courses Trainees Hours TWead Training 599 10,038 79,909 474 8,989 41,942 ae 9 IesbOn Adult Training 7i 1,287 42,223 54 743 54,432 usi% Apprentice Training 171 2,875 181,293 78 1,473 66,373 TOTAL 845 14,200 303,425 606 11,205 162,747 Courses utp to June 1984 Source: Data from the Vocational Training Centers Preparation of table: Planning Department (end quote) The last five lines of para. 5.06(b) should follow the table, i.e.: "A higher level program, technician level training in tool and die-making, has recently been established for graduates of SECAP's apprenticeship program [the proposed wording deletes "and for graduates of the secondary technical schools" -- Tr.]. These courses are supported by the employers and are satisfactory." Mfs i(530sew (19) On p. 19, the following should be added to subpara. (f): "SECAP has bahYn =asr- : now raised the wages and salaries for instructors by 50I." PMetBiatde ,erdofpam. 31. Kindly take these comments into consideration for the final report. Yours truly, /S/ David Vera Alarc6n Executive Director, SECAP