Document of The World Bank FOR OFFICIAL USE ONIY Report No 4755-TU REPUBLIC OF TURKEY INDUSTRIAL TRAINING PROJECT STAFF APPRAISAL REPORT February 28, 1984 Education and Manpower Development Division Europe, Middle East and North Africa Region 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 REPUBLIC OF TURKEY Currency Equivalents 1 US Dollar = 291.5 Turkish Lira (TL) (February 13, 1984) 100 TL = 0.34 US Dollars Fiscal Year January 1 - December 31 GLOSSARY MOE; Ministry of Education MOL: Ministry of Labor MIT; Ministry of Industry and Trade PCR: Project Completion Report PPAR; Project Performance Audit Report SEE; State Economic Enterprise SEGEM; Industrial Training and Development Center SIS; State Institute of Statistics SPO; State Planning Organization TA; Technical Assistance TISK: TUrk-Is Arastirima Uzmani TTC; Technician Training Center TTU; Technician Training Unit TEK; Turkish Electricity Authority UNDP: United Nations Development Programme UNIDO; United Nations Industrial Development Organization YoK: Council for Higher Education OECD; Organization for Economic Cooperation & Development FOR OFFICIAL USE ONLY REPUBLIC OF TURKEY INDUSTRIAL TRAINING PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. GLOSSARY BASIC DATA I. ECONOMIC DEVELOPMENT AND INDUSTRIAL TRAINING .................... 1 Economic Development ....................................... 1 Manpower Issues ............................................ 2 Industrial Training ........................................ 5 Government Industrial Training Policies and Budgetary Support. 6 The Bank's Role in Education and Training .... 8 II. THE PROJECT ........ 9 Objectives and Scope . . . 9 Description of the Project . . .. 9 A. The Council for Higher Education . . 9 Pre-Service Technician Training Centers (TTCs) ... 10 Curriculum and Staff Development . ... 10 Strengthening the TTC Management System . . .. 12 B. The Industrial Training and Development Center (SEGEM)..12 National Industrial Training System .... 13 Program Development and Expansion .... 14 Industrial Training Consultancy Facility .... 14 Future Project Development .... 15 Staffing .... 15 Cost Sharing .... 15 Monitoring and Evaluation .... 15 C. State Institute of Statistics .... 16 III. PROJECT COSTS, FINANCING, MANAGEMENT AND IMPLEMENTATION .... 17 Cost of the Project .... 17 Summary of Project Costs .... 17 Recurrent Costs .... 20 Project Financing .... 20 Management and Implementation .... 21 Project Management .... 22 Procurement .... 22 Technical Assistance .... 24 Implementation Schedule .... 24 Disbursements .... 24 Accounts and Audit .... 25 This report is based on the findings of an appraisal mission which visited Turkey in May/June 1983. The mission comprised Messrs. C. A. Sinclair (economist, mission leader), S. Sigurdsson (facility planner), J. Schweitzer (technical educator) and A. Gow (industrial training specialist, consultant). 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. Table of Contents (con't) Page No. IV. BENEFITS AND RISKS .. ......................................... 26 Benefits ........................................... 26 Risks ........................................... 27 V. AGREEMENTS REACHED AND RECOMMENDATIONS .. 28 ANNEXES Annex 1 Wage Rates in the Turkish Manufacturing Industry . ..31 Annex 2 Manpower Projections, 1985-95 .33 Annex 3 Organization, Management and Implementation Capability of YUK, SEGEM, & SIS .... 37 Annex 4 Evaluation of Benefit/Cost Ratio for Proposed Development of Eight Technician Training Centers . .43 Annex 5 Technical Assistance Program for YoK, SEGEM and SIS .. 46 Annex 6 Table 1 Projected Enrollment in Technician Training Centers by Main Subject .49 Table 2 Estimated Expansion of Industrial Technician Training Programs, Council for Higher Education (Y6K) ..50 Table 3 Requirements for Trained Instructors by Main Subject ........... 51 Annex 7 Area and Cost Per Place for the Technician Training Centers...52 Annex 8 Project Cost Estimates - Summary Account by Project Component ..53 Annex 9 Schedule I implementation Schedule .54 Schedule 2 Estimated Schedule of Disbursements .55 Annex 10 Chart 1 Council for Higher Education, Organization Chart...56 Chart 2 Proposed Organization of Management System for Technician Training Centers, Technician Training Unit, Council for Higher Education (YoK)..57 Chart 3 Organization of the Industrial Training and Development Center (SEGEM) .58 Chart 4 Organization of the State Institute of Statistics (SIS) .59 Annex 11 Comparative Education Indicators ..60 Annex 12 Related Documents and Data Available in Project File .62 Map REPUBLIC OF TURKEY INDUSTRIAL AND VOCATIONAL TRAINING PROJECT STAFF APPRAISAL REPORT Basic Data (1982) Country Data (1982) Per-Capita GNP US$1,540 Total population 46.5 million Population growth rate 2.2% p.a. Total labor force 20.3 million Literacy rate (% of adults) (1980) Men 96% Women 51% Total 73% School Enrollment and Expenditure Data (1981) Total Enrollment Female Enrollment Total as Percentage of as Percentage of Enrollments 1/ Age Group Total Enrollment ('000) Level and Age Group Primary (grades 1-5, ages 7-11) 5,860 118 46 Lower secondary (grades 6-8, ages 12-14) 1,413 47 34 Total secondary (grades 9-11, ages 15-17) 798 28 34 General 541 19 38 Vocational and technical 257 9 26 Higher education (grades 12+, ages 18+) 241 8 27 Public Expenditure on Education and Training (1981) Central government expenditures on education as percentage of total government expenditures 2/ 26.2% Central government expenditures on education as percentage of GNP 3.1% Central government capital expenditures on education as percentage of all capital expenditures. 2/ 13.7% Central government recurrent expenditures on education as percentage of all recurrent expenditures 2/ 32.1% 1/ Gross enrollment data. Includes over-age students and repeaters. 2/ Excluding expenditure on SEEs. I. ECONOMIC DEVELOPMENT AND INDUSTRIAL TRAINING Economic Development 1.01 During the 1970s successful management of the economy proved increasingly difficult and by the late 1970s Turkey faced a balance of payments crisis, a large budget deficit, and very high rates o domestic inflation. As a result, the Government began a policy of structural adjustment and economic reform in January 1980 which entails a greater reliance on market forces and incentives, the introduction of measures to achieve monetary stability, and the promotion of export industries capable of earning foreign exchange and providing employment, particularly in the private sector of the economy. The Government has been able to achieve success in several of its objectives: inflation rates have fallen from 101% in 1980 to 25% in 1982; exports grew at 61% in 1981 and 22% in 1982; in 1982 Turkey's current account deficit was less than 2% of GNP, and GNP grew in real terms at 4.6%. 1.02 The industrial sectors 1/ provided about 20% of all employment in 1980, and are estimated as expanding, in employment terms, at an annual rate of 3%. These sectors are the main source of productive employment opportunities as agricultural sector employment is more or less static. 1.03 Crucial to the attainment of the Government's economic objectives is the sustained growth of the industrial sectors, particularly manufacturing and exporting industries. Exports are expected to grow annually at about 11% in the next five years, concurrently with improved levels of industrial productivity. The manufacturing sector accounts for about 22% of GDP, 11% of total employment and 60% of total merchandise exports. Export industries are mainly in the private sector (80% of commodity exports), which has a greater involvement in light and non-process industries than the public sector. Average labor productivity was 30% higher in the private than in the public sector. By comparison with the public sector, the private sector has a greater capacity to increase export production in the short run, and offers the best prospect of increased export growth and employment creation. 1.04 While manufacturing industry has grown rapidly from 1978 to 1982, the productivity of investment has declined. Even in 1978, Turkey's gross manufacturing output per capita constituted only 1/4th, 1/6th and 1/14th of the levels in Portugal, Spain and Germany, respectively. In order to sustain the growth of the manufacturing sector and to retain competitiveness in international markets, improved levels of productivity are essential. In analyzing the causes of low productivity, the Bank's Industrialization and Trade Strategy report mentioned several issues pertaining to the productivity of labor. These included inadequate industrial training and poor management techniques in industry. 1/ Defined here to include mining and quarrying, manufacturing, utilities, construction, transportation, storage and communications. -2- Manpower Issues (Annexes 1 & 2 ) 1.05 The principal issue in the industrial sector is the low level of productivity and poor quality of output of manufacturing industry, the result of several factors including the previous economic strategy, institutional con- straints, as well as the neglect of industrial training over several decades. Two aspects of this issue are discussed here; (a) manpower scarcities; and (b) the causes of low labor productivity in industry. 1.06 Manpower Scarcities. Employers in industry report, and Bank findings confirm, a scarcity of well trained technicians, particularly in exporting industries which require high standards of quality control, modern production techniques and specialized machinery. A comparison of the number of engineers, technicians and foremen and supervisors per 1000 employees in the manufacturing sector in Turkey in 1980 with the number found in the manufacturing sector of some of its competitors in about 1971, suggests that the proportions found in Turkey are low and would be even lower by comparison if more up to date data were available (Table 1.1). Table 1.1: Comparison of Selected Occupations in the Manufacturing Sector No. Per '000 in Manufacturing Sector Foremen and Country Year Engineers Technicians Supervisors United States a/ 1970 33 24 47.0 West Germany a/ 1970 22 35 10.0 Israel a/ 1972 14 37 19.0 Greece a/ 1971 5 2 4.0 Turkey b/ 1980 7 9 0.5 Sources: a/ Zymelman, M., Occupational Structures of Industries, Education Department, The World Bank, Washington, D.C., 1980. b/ 1980 Census, State Institute of Statistics. 1.07 The scarcity of well trained technical manpower, particularly technicians, leads to, on occasion, technicians being paid very high rates of pay. Wage rate data available to the mission (Annex 1) indicates that the private sector of industry tends to pay higher wage rates than the public sector, except at the unskilled level. Technicians in the private sector earn a high 73% of the salary of engineers in the private sector, and an equally high 136% of the salary of skilled workers in the private sector (Annex 1, Table 1). -3- 1.08 Bank estimates of labor demand and supply were undertaken by the mission for selected occupational groups, including technicians, for 1985-95. The basis for these and the detailed results are shown in Annex 2. The 1980 Census was used as a basis for projecting employment, current Bank growth and productivity assumptions for the projection period, and information on the supply of labor was taken from the Ministry of Education (MOE) and the State Institute for Statistics. These estimates are summarized in Annex 2, Table 2, and show that over the projection period additional manpower demand exceeds additional supply for engineers, technicians, skilled and semi-skilled workers. The projections imply that attainment of target growth rates in the industrial sector will be compromised unless supplementary means of training technicians can be found or unless a more efficient use of existing manpower can be made. The proposed project would assist with the provision of technicians through the development of eight Technician Training Centers (TTCs) which will produce some 8,000 graduates over the projection period, and will assist with improved utilization of existing resources in industry through the proposed development of the training programs of the Industrial Training and Development Center (SEGEM). Table 1.2; Demand and Supply of Professional Scientists and Engineers, Technicians, Skilled and Semi-skilled Workers In Industry. 1985-95 (in 'OOOs) Additional Additional Demand for Supply from Supply as Estimated Labor due to Education and % of Employment Economic Growth Training Additional Occupational Category in 1985 and Attrition a/ Institutions Demand Professional Scientists & Engineers 178 175 120 69 Technicians 104 117 20 17 (of which proposed project) (8) (7) Skilled & Semi-skilled Manual Workers 3,211 2,447 1,430 b/ 58 a/ Excluding upgrading requirements. b/ Not including on-the-job training. Source: Mission estimates as described in Annex 2. 1.09 There are three main reasons for the scarcity of skilled and semi-skilled workers and technicians, namely the present orientation of industrial training, a general lack of industrial training, and an absence of technician training in particular. Orientation; the education system is heavily oriented towards formal academic education as a preparation for university education. As a result, graduates from the Ministry of Education (MOE) secondary technical schools often seek places in higher education rather than in industrial employment. Industrial Training; pre-service training of semi-skilled and skilled workers is undertaken, almost exclusively, by the MOE through the secondary technical schools, as well as trade schools and night schools and through a small apprenticeship training program. Although enrollments in MOE secondary technical schools expanded quite rapidly during the 1970s, by 1982 only about 9% of the eligible secondary school-age population were enrolled in these programs. As a proportion of total secondary enrollments, they remained static at about 32% between 1978/79 and 1981/82. With the exception of entry level and on-the-job training provided by some major industries, training opportunities for skilled workers and technicians outside the formal education system are at present very limited and receive only minor support from other concerned Government ministries and agencies. Technician Training; programs for the training of technicians in particular are quantitatively and qualitatively inadequate. As a result, there is a scarcity of well trained technicians, particularly in industry, and those technicians who are working in industry are either MOE technical school graduates who have subsequently acquired their skills on-the-job, or are university graduates or dropouts who are working at technician level. Until such time as additional resources are available for the expansion of pre-service training programs, the present informal approach to preparing technicians within industry will continue. 1.10 Problems arising from scarcities of skilled manpower have been compounded by labor emigration. Typically the more skilled members of the labor force have left and, in many cases, have not returned. Of those who have returned, many have changed their mode of work and their economic sector, leaving formal employment to work as self-employed petty traders. The post-1973 depression in Europe marked the end of Turkish migration to Western Europe, though there are still an estimated 803,000 Turkish workers there. Turkish migration began anew after 1980 to Libya and Saudi Arabia, where Turkish contracting companies have won large contracts for construction projects. Remittances in 1982 were $2.2 billion, and represented 38% of Turkey's earnings from commodity exports. In 1982 there were an estimated 1 million Turkish migrants overseas, who comprised about 5% of the workforce. 1.11 Low Labor Productivity in Industry. Low levels of labor productivity in industry are due in part to inadequate industrial training programs. Several factors have contributed to this. First, there is the lack of an appropriate institutional framework for industrial training, with the result that the coverage and quality of industrial training programs are poor. Second, there is at present little financial incentive for an employer to provide training, though tax reforms to alter this are now being considered by the Government. Third, the strict control of wages and salaries by the state resulted in a lack of instructors in industrial training programs through low -5- pay. Under the recent SEE reform decree, however, employees are to be governed by a new personnel regime which is expected to provide greater flexibility to SEE managements in determining wages and salaries. The proposed project addresses the issue of low labor productivity in industry. Industrial Training 1.12 In order to improve productivity and maintain high rates of growth of manufactured exports, an adequate supply of appropriately trained, productive and skilled manpower is a prerequisite. Turkey's emerging export industries particularly will have growing demands for skilled labor. A major effort in both pre-service and in-service industrial training is, therefore, required and is one which the Government is now undertaking. 1.13 Pre-Service Industrial Training. There is a clear need to extend and improve the MOE skill training programs, as indicated by the shortfall shown in Table 1.2 of skilled and semi-skilled workers. However, the more pressing priority is industrial technician training, of which there is little in Turkey. The Council for Higher Education (YoK) is the key Government agency to assist meeting this need and a detailed description of YoK is given in Annex 3. YoK is developing existing two-year vocational institutes for this purpose. YoK was established by a law passed by Parliament in 1981, and is responsible for all post-secondary education, including universities and the two-year post-secondary vocational institutes. It is a semi-autonomous Government agency, which reports directly to the Head of State. There are at present 53 post-secondary vocational training institutes under YoK. These institutes currently have an enrollment of about 11,000 students in two-year courses in business studies, secretarial studies and tourism as well as technical studies. However, they suffer from an over formalized approach to training, inadequate premises, out-dated curricula, have almost no equipment and are short of well-trained instructors. The Government has a program for systematically and imaginatively reforming these vocational institutes, so that they are more able to meet the needs of the manufacturing and exporting sectors of the economy. As a first step the Government is developing eight new type industrially oriented Technician Training Centers (TTCs), and the proposed project would assist in the further development of this pilot program. In view of the need for technicians, the Government is planning a rapid expansion of technican training facilities through the 1980s (Annex 3 and Annex 6, Table 2). 1.14 In-Service Industrial Training. Many of the SEEs, in coal, textiles and mining, large private corporations such as Koc Holdings and public and private sector development finance corporations, such as the State Investment Bank and the Industrial Development Bank of Turkey, have established training units which provide training for new staff, as well as upgrading courses for existing staff. In addition, the United Nations Industrial Development Organization (UNIDO) has helped to establish successful in-plant training programs in several large industries, including fertilizers, iron and steel, petrochemicals and pulp and paper processing. The main Government agency for in-service industrial training is the Industrial Training and Development Center (SEGEM), established in 1978 and described in Annex 3. SEGEM is -6- managed by a Board which includes representatives from the State Planning Organization (SPO), the Ministry of Industry and Trade (MIT) and the MOE. For budgetary purposes, it is attached to the MIT. The responsibilities of SEGEM are to provide in-service training to the public and private sectors of industry in management, technical subjects and production, mainly at the professional level, and this is now being extended to include the supervisory and technician levels. SEGEM is at an important stage in its development and has made the transition from a pilot project to a national and semi-autonomous training agency. SEGEM training programs have grown rapidly in the past few years, from 400 participants in 1979 to 2,500 in 1982. In 1982, SEGEM ran 100 training programs for staff drawn from some 1,270 public and private enterprises, using its own 45 professional staff as well as consultants from industry, universities and abroad. SEGEM also provides short-term counsultancy advice to industry, using SEGEM staff and internationally recruited experts. Three-quarters of all SEGEM courses are held outside their headquarters in Ankara, and are either put on in-plant or in facilities provided by local Chambers of Industry. Government Industrial Training Policies and Budgetary Support 1.15 Government policy for industrial training is reasonable. It has three thrusts; (a) to improve the effectiveness of existing programs; (b) to increase the provision of industrial training; and (c) to establish an appropriate institutional framework in which industrial training will prosper. 1.16 Effectiveness. Agencies engaged in industrial training have recently begun to improve their effectiveness by linking their training more directly to the needs of industry. In 1983 the MOE introduced a new program aimed at linking the secondary technical school curriculum to the needs of industry. Eight large employers in both the public and private sectors of industry have actively cooperated with secondary technical schools located in the vicinity of their plants. Some 500 final year secondary technical school students in the Istanbul region have been taken on by the firms and given periods of in-plant training and experience of up to three months. On leaving school, they are assured of employment in the parent factory. Similar close linkages with industry have been embedded into the new program of technician training run by YoK (para 2.09). 1.17 Expansion. In the past few years, a training capacity has been established in several industries and SEEs (para. 1.14). While the industrial training programs of established training agencies such as SEGEM are expanding rapidly, special attention is being given to training in new ventures. For example, the National Small Industry Organization, an agency under the MIT to assist small-scale enterprises, is proposing to develop a national system of extension services for small scale industry. At present only one site exists, at Gaziantep, which would serve as a model for the subsequent development of other centers. 1.18 Institutional Development. At present there is no overall industrial training system and a long-term component of Government policy, designed to encourage private industry to undertake more training, is the development of a national industrial training system, which will both rationalize the provision -7- of industrial training and provide financial incentives to employers to provide training. The main Ministry responsible for the development of the industrial training system is MIT, which, through SEGEM, is proposing to lay the groundwork in the next two years by undertaking preparatory studies and by consulting employers, unions, Chambers of Industry and responsible Government agencies on an appropriate design. There is a growing awareness in the private sector of industry of the need to develop in-plant training. The Turkish Chambers of Industry, which works closely with SEGEM, has set up a special commission to assist the development of industrial training and allocated about US95 million in 1983 from members' dues for this purpose. The State Planning Organization (SPO) is undertaking preliminary studies of a draft industrial training law which would establish the legal and financial basis for a training levy on all industrial employers. 1.19 Budgetary Support. In 1981, Turkey spent an amount equivalent to 3.1% of GNP on education. This is comparable with other countries at a similar stage of development. Education accounted for 26.2% of all Government expenditure in the same year; primary, secondary and higher education receiving 55%, 26% and 19% of the budget, respectively. Technical education accounted for 60% of all expenditures at the secondary level, three-quarters of which are recurrent expenditures, mainly teachers' and instructors' salaries. At the post-secondary level, only 1.5% of the 1982 higher education budget was allocated to the two year post-secondary vocational training program, and the Government is increasing this in order to further develop technician training at the expense of the further development of other branches of higher education. Education has been free at all levels until now, though the Government is now proposing to introduce fees at the university level. However, to promote technician training, the Government is not proposing to introduce fees for the technician level at this time. 1.20 Expenditures on industrial tra.ining through SEGEM have grown rapidly, and at an annual rate of 51% from 1980/81 to 1982/83. In the latter year, SEGEM's budget was TL 225 million, 1% of the MIT budget to which SEGEM is attached for budgetary purposes. SEGEM's regular budget has been derived from three sources; direct Government support for SEGEM's budget through the MIT (82%); payments made to SEGEM by participants in SEGEM's training courses to cover the costs of training materials, and occasional purchases of publications produced by SEGEM (5%); and, contributions in kind from companies working with SEGEM on in-plant training programs (estimated as amounting to 13%). Payments in kind are typically made in the form of the provision of board and lodging for SEGEM staff and course participants. In addition to these sources of local funds, SEGEM received, in 1983, project assistance from UNDP equivalent to 5% of the 1983 budget. Until now, SEGEM has not charged fees to cover the direct costs of its training programs. In recent years, SEGEM's programs have become increasingly popular, and in order to ensure that the maximum benefit is derived from each program by participants, to increase the level of service SEGEM provides, and in order to diminish the burden on the Government of SEGEM's industrial training program, SEGEM management has decided to introduce an element of cost sharing with clients which will represent about 20% of the direct cost of SEGEM's training programs. This establishes for the first time the principle of cost recovery for SEGEM's programs. - 8 - The Bank's Role in Education and Training 1.21 Previous Experience. The Bank has so far provided one loan of US$13.5 million for an Education Project (Loan 748-TUR) which was signed in 1971 and closed in 1981. The First Education Project supported secondary technical education through the provision of equipment to 32 technical secondary schools, a technical teacher training college, as well as to the Science Equipment Production Center and the Educational Film, Radio and Television Center. The project also included the construction and equipping of twelve trade schools, six adult training centers and a Management Training Institute. The Project Performance Audit Report No. 4018 (PPAR) (dated June 28, 1982) and the Project Completion Report of June 1981 stated that the educational impact of this project was considerable, particularly on secondary technical schools, with project equipment well used and maintained and enrollments in the secondary technical schools practically as anticipated at appraisal. However, there were severe delays in the construction of new buildings. These reports highlighted a number of problems such as political disruption, poor design and construction of school buildings and the lack of an effective project implementation unit. The experience gained during implementation of the Education Project has been taken into account in the design of the proposed project in two ways; (a) to ensure smoother project, implementation, YoK, SEGEM and the State Institute for Statistics (SIS) would each be responsible for implementing their own project components; and (b) the proposed project excludes financing for the construction of new physical facilities. The Bank has also supported industrial training indirectly, through loans to specific industrial sectors and to branches of industry which have included project or sector-related training. Projects with a component of this type in the last few years have included loans for the textile, sugar, steel and copper industries, as well as small-scale industries. The major emphasis of the industrial training assistance provided in these loans has been technical assistance to identify training needs. 1.22 Future Strategy. The objective of Bank lending in the education and training sector is to support the Government's policy to improve industrial productivity. This encompasses training for technology development and the development of appropriate industrial training programs and policies, including the development of measures to reduce the burden of recurrent expenditures of industrial training on Government, such as cost recovery and levies on employers. The initiatives of the Chambers of Industry to establish an industrial training fund, and the development by the State Planning Organization (SPO) of a legal and financial basis for an industrial training levy on industrial employers are important steps which the Bank will monitor carefully (para 1.18). In the proposed project the principle of cost sharing for industrial training will be established for the first time with the introduction of fees for SEGEM's training programs. 1.23 The Bank is proposing to support two key agencies involved in industrial training, SEGEM and YoK. Further project support for these agencies and other industrial training agencies is likely to be requested by the Government in the future. A research and development component is anticipated in any future industrial training projects which would, as well as maintaining the initiatives begun in the proposed project, encourage appropriate technology development for Turkey's industrial sector. -9- II. THE PROJECT Objectives and Scope 2.01 The proposed industrial training project is ConsistenL with the Government's development strategy to improve productivity and maintain high rates of growth of manufactured exports (para. 1.03). The main project objectives are as follows: (a) to strengthen the institutional capacity of YoK and SEGEM to provide industrial training programs; (b) to alleviate scarcities of technicians in industry by assisting the development of pre-service technician training programs; and (c) to improve industrial productivity by developing SEGEM's in-service, on-the-job, industrial training programs for middle level manpower and professional staff, and to establish a basis for a national industrial training system. The project would also include a small but important component to facilitate the management of the economy by improving the quality of staff with responsibility for building up economic and social statistics. 2.02 In order to assist the Government achieve these objectives, the project would include the provision of: (a) equipment, furniture, and minor refurbishing for eight pilot Technician Training Centers (TTCs) under YoK; (b) technical assistance to YoK for curriculum and staff development for the TTCs and to assist with the strengthening of the TTC management system and future project development; (c) equipment and technical assistance to SEGEM to assist with the development of a framework for a national industrial training system, program expansion, diversification and improvement, and future project development; and (d) technical assistance to the State Institute of Statistics (SIS) for an overseas fellowship training program. Description of the Project 2.03 Individual project items are described below. The proposed program of technical assistance relating to each institution is described in Annex 3 and shown in detail in Annex 5. A. The Council for Higher Education (Y-K) 2.04 The YoK component would consist of equipping, furnishing and minor refurbishing for eight pilot TTCs, as well as technical assistance for expert services to assist the development of new curricula and staff, strengthening - 10 - the management system, and for a fellowship training program for instructors. The technical assistance program is necessarily substantial, involving some 20 man years of expert services and 126 man years of fellowship training. Because of the scale of the technical assistance, special attention has been given to this aspect of the proposed project, described in para. 3.18, Annex 3 and Annex 5. 2.05 Pre-Service Technician Training Centers (TTCs). YoK (para. 1.13, and Annex 3) presently manages 53 two-year post-secondary institutes under its control, and this project would support the conversion of eight of these into pilot Technician Training Centers (TTCs). The eight pilot centers have been selected on the basis of; (a) their proximity to local industry; (b) the level of support for the program from local industry; and (c) the adequacy of the existing buildings for technician training programs. The eight sites chosen are Antalya, Cankiri, DUzce, Iskenderun, Istanbul, Izmir, Kirikkale and Konya. These centers have classroom and workshop space that need minimal refurbishing to become adequate for their purpose (para. 3.04). 2.06 The project would provide about 2,600 training places in new industrial technician training programs (Annex 6, Table 1). The projected enrollment target would be reached by 1990 (Annex 6, Table 2), and the number of technicians graduating annually would be about 1,200 from 1991 onwards. 2.07 Curriculum and Staff Development. The project would assist with the development of curricula for technician training, taking into account the particular requirements of Turkish manufacturing industry. The curriculum would cover a two-year training period, based on a 35 hour teaching week, with approximately 10 hours of theoretical and academic work, 20 hours of laboratory and workshop instruction and five hours of practical activities. There would be a core of common subjects which TTC students would take in their first year. This would include math, basic science, computer applications, technical drawing and English. Students would specialize in one of ten specialist areas which would include control and instrumentation, communications, industrial electronics, electrical engineering, mechanical engineering, air conditioning and refrigeration, foundry technology, agricultural engineering, construction technology and computer programming. The emphasis in the curriculum would be on equipping students with a range of skills within their chosen specializations to ensure that graduates are able to adapt to rapidly changing technology in industry. In this regard, computer applications would be a core subject for both years and would equip graduates to utilize modern technology fully. Project institutions have achieved a high level of cooperation with local industry, particularly in placing students for training. The TTC at Iskenderun, for instance, places second year mechanical engineering students in the nearby steel mill for 45 days of practical training. At all project sites, local industrial employers expressed strong interest in expanding training placements. Under the proposed project, students will spend up to eight weeks per school year in industrial placements and existing industry-TTC links would be institutionalized through the establishment of Advisory Boards (para. 2.09). - 11 - 2.08 Curriculum development would take place at two of the TTCs which already have some experience in the development of technician training courses and have close contacts with local industry. The Izmir TTC would be the main curriculum development center with principal responsibility for mechanical engineering and construction courses. A subsidiary center would be developed at the Istaaiul TTC for electrical and electronic engineering programs and computing. To assist with the development of suitable curricula for these new courses, the project would finance expert services for a total of 138 man-months (Annex 5). The curriculum experts would also assist the TTC Directors to achieve efficient use of classrooms and workshop space (para. 3.04). 2.09 In order to ensure the continuing relevance of the TTC program to the needs of local industry, strong links with local industry are essential. These already exist at the eight pilot TTCs proposed in this project and have developed because of the interest of local industry which have provided part-time instructors and in-plant training facilities where none presently exist. In order to enhance the continuity of such linkages through a more formal arrangement, an assurance was received during negotiations that each TTC would have an Advisory Board with representation and terms of reference satisfactory to the Bank, including, in addition to the Director of the TTC and staff from YoK, representatives of local industry. 2.10 To staff the eight project TTCs, there would be a need for approximately 172 teaching staff of whom 40 would teach core subjects and 132 would teach specialist subjects (Annex 6, Table 3). The additional staff required for the proposed eight TTCs are some 156, since approximately 16 qualified teaching staff already are employed by Y6K; some 200 part-time instructors are available from local industry. Under this project there would be a major effort in staff training, which would have two components. The first consists of an overseas fellowship training program for some 156 fellows for nine months duration. These staff would be recruited from graduates of university faculties of science and engineering. This overseas fellowship program would be conducted in three time phases with three groups each of 52 fellows. Each group would receive foreign language training in Turkey prior to overseas training, which would be undertaken through existing language training centers under the administration of Y6K. An assurance was received at negotiations that the fellowship training would be carried out in accordance with terms of reference, including a program and a timetable, satisfactory to the Bank. The timing of the overseas fellowship training program (Annex 9, Schedule 1) and enrollment growth (Annex 6, Table 2) have been phased to ensure the availability of well-qualified instructors when the new programs begin enrollment. On their return, these fellows would provide the basic core of technician instructors for the eight TTCs. 2.11 The second component of the staff training program has a longer term objective, comprising the development of an in-service staff development program at Izmir. Alongside its curriculum development activities, Izmir would develop training programs designed to upgrade new and existing staff teaching in the TTCs. The facilities at Izmir are adequate for this purpose, and existing staff, with appropriate technical assistance, have the capacity - 12 - to develop this program. The staff development program at Izmir would cater to the additional staff requirements due to possible future expansion of the eight TTCs and, in addition, the needs of the other 45 TTCs as the program develops. In order to assist with the staff development programs at Izmir, the project includes 24 man-months of expert services, and 72 man-months of overseas fellowships for about eight instructor trainers (Annex 5), who would return to Izmir following their overseas training. 2.12 Recent changes to the regulations governing Y-oK administered salaries have improved those of TTC staff by placing them on the university pay scale. The career prospects for an instructor with YbK are good, given the opportunity for training abroad and the planned expansion of the system. Under these circumstances, it is not anticipated that YbK would experience difficulty in recruiting suitable staff for fellowship training. The attrition rate amongst overseas fellows is expected to be low, as the Government has a well-defined and effective bonding system. 2.13 Strengthening the TTC Management System. Y-K already manages the 53 two year post-secondary vocational institutes, but a major objective of the proposed project is to assist Y-K strengthen its management system for the new type TTCs. In particular, it would enhance the management of student admissions, course development, academic standards, teaching methods, examinations, student placement in training and employment, staffing and staff development, equipment procurement and the establishment of appropriate physical facilities, and the development of a monitoring and evaluation system to provide feed-back into the curricula and program development. To assist with the strengthening of the management system, the project would finance 69 man-months of expert services including a technical education planner (two and one-half man-years), an equipment procurement and facilities planner (one man-year), and an examination and accreditation expert (one man-year) as well as short term assistance to cover monitoring, evaluation and education management aspects (15 man-months) (Annex 5). The project would also finance 34 man-months of short term overseas fellowships for 18 YoK managerial staff and senior management of the TTCs. The eight pilot TTCs supported in this project are an initial step in the development of pre-service technician training in Turkey, and YZK is planning to convert a further 16 of the other 45 two-year post-secondary institutions under its control into similarly industrially oriented TTCs. In order to assist YoK ensure the appropriate expansion of its technician training facilities, the project would also provide 12 man-months of expert services for feasibility and pre-investment studies. B. The Industrial Training and Development Center (SEGEM) 2.14 The project would assist the Government prepare a framework for a national industrial training system and promote in-service industrial training through the provision to SEGEM of expert services, overseas fellowship training and equipment. The technical assistance program is necessarily substantial, involving some 14 man-years of long and short term expert services and some eight man-years of overseas fellowship training. Because of the scale and complexity of the technical assistance, special attention has - 13 - been given to this aspect of the proposed project, described in para. 3.18, Annex 3 and Annex 5. Specifically, the project includes the provision of; (a) technical assistance to assist with the organization, development and planning of a national in-service industrial training system; (b) equipment and technical assistance for program development and expansion; (c) a strengthened industrial training consultancy facility; and (d) expert services for feasibility and pre-investment studies. An assurance was received at negotiations that fellowship training would be carried out in accordance with terms of reference, including a program and a timetable, satisfactory to the Bank. 2.15 SEGEM (Annex 3) is a semi-autonomous agency existing under the administrative control of the MIT. It was established with assistance from UNIDO for the purpose of enhancing Turkey's in-service industrial training capacity. The Government intends that SEGEM would continue for at least the life of the proposed project, and proposes to enact legislation to establish SEGEM as a permanent body and to strengthen its role as an industrial training agency. Pending enactment of such legislation, the Government gave assurances at negotiations that SEGEM would continue to exist during the life of the project with powers and responsibilities sufficient to enable it to carry out the project, satisfactory to the Bank. The Government also expressed its intention to seek formal legislation to regularize SEGEM's future status. 2.16 National Industrial Training System. To help coordinate and plan industrial training (para. 1.18), the project would finance about six man-years of technical assistance to SEGEM for a core team of about four specialists plus short-term specialists. The objective would be to assist SEGEM design a national industrial training system for the country, focusing initially on the professional, technician and supervisory levels. The tasks include the identification of manpower requirements in industry, the definition of occupational standards, the design of an accreditation system and a review of alternative ways and means of financing the envisaged system (Annex 5). There are existing specialist staff in SEGEM who would act as counterparts to the four core experts. They would work closely with the Director General of SEGEM, and maintain a close liaison with other government agencies, Chambers of Industry, the SEEs, private sector employers and unions (Annex 3). An essential element of this task would be the compilation of an inventory of existing agencies and programs undertaking industrial training by type, duration and level. To assist with this task, the project would finance computer equipment and associated software. The project would also finance 24 man-months of overseas fellowship training and study tours for SEGEM staff to study other countries' accreditation systems and the experience of other countries in developing, financing and managing industrial training systems. - 14 - 2.17 Program Development and Expansion. The objectives of this project component are to assist SEGEM to expand the range, scope and quality of its industrial training activities by; (a) expanding the coverage and improving the quality of the two to three week in-service training programs in management, technology and production techniques run by SEGEM, from 2,500 participants in 1982 to about 4,450 participants by 1988, and assisting SEGEM develop specialized technology training programs in key areas identified by industry; (b) extending the range of SEGEM's in-service training programs to include, from 1984, about 400 technician and supervisory level staff annually. By 1988 this program would expand to about 2,000 technicians and supervisory staff per annum; (c) assisting SEGEM to develop training programs for new and serving instructors in public and private sector industrial training centers and hence to support directly the development of industrial training capabilities in manufacturing industry; (d) improving the quality of SEGEM's intensive English language training programs for technical and managerial staff who require English competency for production or export marketing; (e) enhancing SEGEM's capacity to undertake extension work in industry and improve the capacity of in-house training programs through the development of a training materials and audio-visual aids production center. 2.18 To assist SEGEM achieve these objectives, the project would provide; (a) equipment for a training materials and audio-visual aids production center at SEGEM headquarters in Ankara; (b) five man-years of expert services in the fields of general management, production management, training of trainers, English for special purposes, and training materials production, plus overseas fellowship training for counterpart staff totalling some six man-years (Annex 5). There are existing specialist staff in SEGEM who would act as counterparts to the four core experts. The experts would report to the heads of the concerned specialized departments within SEGEM. 2.19 Industrial Training Consultancy Facility. The project would provide 20 man-months of expert services to strengthen SEGEM's on-going industrial training programs (para. 1.14 and Annex 3), and to assist SEGEM to meet the requests it regularly receives from industry for spot consultancies and training in advanced production and manufacturing techniques. This program would focus on manufacturing export industries where new technologies are being introduced to increase productivity. Subject areas to be covered would - 15 - include specialized welding techniques, corrosion control, heat treatment, chemical processes, numerical control, materials management and stock control. The proposed facility would give SEGEM flexibility to respond quickly to requests received from industry. 2.20 Future Project Development. To assist the Government identify further industrial training measures to improve productivity, the project would finance expert services for 12 man-months for pre-investment and feasibility studies for a possible follow-up project. 2.21 Staffing. SEGEM's proposed program expansion will require that by 1988 the professional staff complement would double from around 50 in 1983 to around 100, and therefore would require the additional recruitment of some 50 professional staff. The additional staff would be recruited from the sources that SEGEM has used in the past, namely industry and commerce, universities, and new graduates entering the labor market. As a consequence of SEGEM's semi-autonomous status, it is able to pay salaries that are attractive compared with those paid in Government and to provide a range of additional benefits. The strong support for SEGEM of the parent entity, the MIT, ensures that adequate budgetary provision will be made available for the anticipated growth in expenditures (para. 3.07). 2.22 Cost Sharing. In order to establish the principle of cost sharing, SEGEM is proposing that participants in SEGEM's programs contribute towards the cost of these (para. 1.20). This policy is regarded as an important step in the development of SEGEM, and SEGEM's terms of reference contain provisions to enable it to accept fees. It is proposed that participants contribute 20% of direct training costs at this stage. This proportion represents a reasonable maximum for employers to bear, without diminishing the impact of SEGEM's training programs. SEGEM plans to increase this proportion over time, with the ultimate goal of full cost recovery. An assurance was received at negotiations that SEGEM would initiate a cost recovery system acceptable to the Bank so that the percentage of direct costs of SEGEM's programs recovered by SEGEM would: (a) by December 31, 1986 be not less than 20%; and (b) for each year thereafter be increased by a reasonable percentage in consultation with the Bank. 2.23 Monitoring and Evaluation. SEGEM has a monitoring and evaluation system in place. This comprises the administration of a questionnaire to each participant on any SEGEM-run course. The questionnaire is used to evaluate the perceived effectiveness of programs. Follow-up visits by SEGEM staff to industry monitor the subsequent on-the-job performance of participants, and this provides a longer and more comprehensive time frame of evaluation of the effectiveness of SEGEM programs. In addition, SEGEM recently surveyed some 1,200 industrial enterprises in order to determine industry's training needs. The results of this extensive survey have assisted SEGEM to formulate program objectives for the future. An assurance was received at the time of negotiations that this monitoring and evaluation program would be maintained. - 16 - C. State Institute of Statistics (SIS) 2.24 The State Institute of Statistics (SIS) (Annex 3) is responsible for the compilation of all statistical information in Turkey. Information produced by the SIS is used by line agencies to fulfill Government policy, as well as by the SPO for analysis and prescription of policy. To assist the SIS improve the quality of its economic data gathering, compilation and presentation, the project would finance 217 man-months of overseas fellowship training for some 55 SIS staff engaged in the computation, analysis and development of economic data. The fellowship program would cover the methodology, computation, analysis and application of agricultural, mining, manufacturing, construction, foreign trade, national accounts and price indices data in the economic statistics and research departments of the SIS. It would also include state-of-the-art reviews and upgrading in data processing, census geography and special training for systems analysts and programmers in the technical operations department. The program would aim to upgrade more senior SIS staff who would, on completion of training, act as trainers of other SIS staff in Turkey. There would be a practical emphasis on the fellowship program which would be conducted, as far as possible, in working environments. This is a large and complex fellowship program and, in order to ensure a timely implementation of the program, the SIS would select one of the internationally qualified firms experienced in providing this type of service (Annex 3). A program and timetable acceptable to the Bank has been developed which outlines the fields in which overseas fellowship training would occur, the duration of study and the timing of fellowships (Annex 5). An assurance was received at negotiations that the fellowship program would be carried out in accordance with terms of reference, including a timetable and a program, satisfactory to the Bank. -17 - III. PROJECT COSTS, FINANCING, MANAGEMENT AND IMPLEMENTATION Cost of the Project 3.01 Summary of Project Costs. Project costs are estimated at TL 12.9 billion or US$44.3 million equivalent and include the refurbishment of existing buildings, provision of equipment, specialist services and fellowships for the project items shown in Table 3.1 and further detailed in Annex 8. Table 3.1 Summary of Costs by Project Item % of Total (TL Million) (US$ Million) Base Local Foreign Total Local Foreign Total Cost Council for Higher Education (Y-K) Technician Training Centers (8) 659 4,963 5,622 2.26 17.02 19.28 60.8 Curriculum and Staff Development Program 146 1,570 1,716 0.50 5.39 5.89 18.6 TTC Management System 38 222 260 0.13 0.76 0.89 2.8 Future Project Developmpent 6 33 39 0.03 0.11 0.14 0.4 Incremental Rec. Costs 71 - 71 0.24 - 0.24 0.8 Sub-total 920 6,788 7,708 3.16 23.28 26.44 83.4 Industrial Training and Development Center (SEGEM) National Ind. Trng. System 38 435 473 0.13 1.49 1.62 5.1 Program Development 33 218 251 0.11 0.75 0.86 2.7 Industrial Training Consultancy Facility 11 55 66 0.04 0.19 0.23 0.7 Future Project Development 6 33 39 0.02 0.11 0.13 0.4 Incremental Rec. Costs 557 - 557 1.91 - 1.91 6.0 Sub-total 645 741 1,386 2.21 2.54 4.75 14.9 State Institute of Statistics 6 150 156 0.02 0.52 0.54 1.7 Total Base Costs 1,571 7,679 9,250 5.39 26.34 31.73 100.0 Phys. Contingencies 157 768 925 0.54 2.63 3.17 10.0 Price Contingencies 497 2,250 2,747 1.70 7.73 9.43 29.7 Total Project Costs 2,225 10,697 12,922 7.63 36.70 44.33 139.7 Front End Fee on Bank Loan - 27 27 - 0.09 0.09 - Total Financing Required 2,225 10,724 12,949 7.63 36.79 44.42 - - 18 - A surmnary of project costs by type of expenditure is given in Table 3.2 Table 3.2 Project Cost by Category of Expenditure % of Total Category of (TL Million) (US* Million) Base Expenditure Local Foreign Total Local Foreign Total Cost Renovation and furniture for existing facilities 85 37 122 0.29 0.13 0.42 1.3 Equipment 575 5,151 5,726 1.97 17.67 19.64 61.9 Technical Assistance Fellowships 49 1,248 1,297 0.17 4.28 4.45 14.0 Specialists 234 1,243 1,477 0.81 4.26 5.07 16.0 Sub-total 283 2,491 2,774 0.98 8.54 9.52 30.0 Incremental Recurrent Costs 628 - 628 2.15 - 2.15 6.8 Total Base Costs 1,571 7,679 9,250 5.39 26.34 31.73 100.0 Phys. Contingencies 157 768 925 0.54 2.63 3.17 10.0 Price Contingencies 497 2,250 2,747 1.70 7.73 9.43 29.7 Total Project Costs 2,225 10,697 12,922 7.63 36.70 44.33 139.7 Front End Fee on Bank Loan - 27 27 - 0.09 0.09 - Total Financing Required 2,225 10,724 12,949 7.63 36.79 44.42 - - 19 - 3.02 Basis of Cost Estimates. Costs of refurbishing existing facilities (including provision of furniture) are based on mission estimates of the work required to bring structures to acceptable standards and average US$200 per student place. These costs would be borne by the Government. Equipment costs have been estimated on the basis of costs per student place in comparable Bank-wide f nanced facilities (Annex 7). Technical assistance costs (about 30% of project total) are estimated at an average of US$11,900 per man-month of specialist services and US$2,500 per man-month of fellowship training. The man-month cost of specialists includes housing, relocation costs, salaries, travel costs, subsistence, office services, fees, overhead and recruitment costs. Base cost estimates reflect prices at the time of negotiations. 3.03 Customs Duties and Taxes. Equipment and goods imported for use by Government ministries are exempt from duties. 3.04 Costs, Areas per Training Place and Use Factors. Equipment costs per training place in the TTCs are estimated at an average of US$6,500 which are comparable with those of Bank-wide financed facilities for technician training programs of this type (Annex 7). Existing building facilities at project institutions are adequate in size and layout to house the proposed training program supported by the project. Minor refurbishment is required at almost all sites, and is part of the project. Use factors in TTCs would be about 85% for classrooms and just under 70% for workshops. Assurances were obtained from YoK during negotiations that it would; (a) provide appropriately refurbished buildings at project institutions prior to the scheduled arrival of equipment; and (b) that to permit a minimum adequate space provision, the net floor area of classrooms, workshops and laboratories available to project assisted programs would equal or exceed 5.0 m2 per project assisted training place. 3.05 Contingency Allowances. Project costs include a contingency allowance for unforeseen physical additions, equal to 10% of the estimated cost of all project items. Price contingencies between negotiations (February 1984) and the end of project implementation are estimated at US$9.4 million equivalent, or 27% of base cost plus physical contingencies. Annual rates of price increases have been applied to both local and foreign costs and for all categories in US$ terms at the following annual rates; 8% in 1983, 7.5% in 1984, 7.0% in 1985 and 6% thereafter. By expressing both foreign and local price contingencies in US$ equivalencies, it has been assumed that the present policy of adjusting the lira exchange rate to reflect the inflation differential between Turkey and its major trading partners will continue. The lira has devalued in accordance with this pattern since 1980 and is now adjusted daily on a crawling-peg system. Total contingencies represent 40% of the base cost. 3.06 Foreign Exchange Component. The foreign exchange component was estimated as follows; (a) refurbishment of existing facilities, 25%; (b) equipment, 90%; (c) specialist services, 80%, and (d) fellowships, 95%. These percentages have been determined by; (a) estimating the indirect - 20 - foreign exchange of construction; (b) assuming that all equipment would be imported; and (c) the anticipated composition of the technical assistance programs. Including contingencies, the foreign exchange component is estimated at US$36.7 million, or about 83% of total costs. 3.07 Recurrent Costs. In order to ensure the attainment of project objectives, adequate budgetary provision is essential. The project therefore includes the estimated annual incremental recurrent costs (including additional salaries, expendable materials and maintenance costs) over the project period. When fully operational in 1989, the annual incremental recurrent costs absorbed by the proposed eight YoK administered Technician Training Centers and the in-service staff development program would represent about 1% of the estimated 1989 annual budget for the overall post-secondary vocational and technician program, and a negligible proportion (less than 0.1%) of the estimated total 1989 post-secondary education and training budget. These incremental recurrent costs will be offset in part by limited amounts of productive work undertaken by students in workshops and during periods of in-industry training. When fully operational in 1988, the annual incremental recurrent costs due to the proposed project with SEGEM would absorb additionally about 1% of the estimated 1988 budget of the MIT. The burden on the Government of these incremental recurrent costs will be diminished by about 12% because of SEGEM's proposed cost recovery of 20% of direct training program costs. The anticipated incremental recurrent costs absorbed by the proposed project with SIS are negligible. The incremental recurrent costs absorbed by the project are within the capacity of YoK and the Government to finance. 3.08 Return to Investment in TTCs. There are quantifiable costs and benefits to the proposed development of technician training in the eight Technician Training Centers. The costs of the investment comprise; refurbishing, equipping, furnishing, expert services for curricula development, expert services for the development of a management system in YoK, a fellowship program for instructor training, additional incremental recurrent costs deriving from higher salaries paid to more highly qualified instructors and expendable materials and maintenance. The benefits of the investment are the improved quality of industrial manpower, and hence increased industrial productivity. As a proxy for these benefits, the incremental salaries earned by more highly qualified technician graduates of the eight TTCs as compared with the salaries of previous graduates are taken. On that basis, the ratio of the present value of the estimated benefits to the proposed development of the eight TTCs to estimated costs is a factor of 2.5, which implies a high return to resources devoted to this component of the project (Annex 4). Project Financing 3.09 The proposed Bank loan of US$36.8 million would finance the foreign exchange component of the project (including the front-end fee of US$0.1 million). The Government would finance the balance of project costs. Project financing would be in accordance with Table 3.3. In order to expedite pre-investment work, retroactive financing of up to US$0.2 million is - 21 - recommended for YoK to cover the cost of office equipment and specialist services necessary for timely project start up. It would be limited to expenditure incurred prior to loan signing but after June 30, 1983. Table 3.3 Financial Plan Estimated share Implementing Agency and Government Bank Total of Bank Category of Expenditure ------- US$ million -------- financing (%) A. Council for Higher Education (YbK) Refurbishment of existing buildings 0.6 - 0.6 0 Equipment 2.7 24.0 26.7 90 Technical Assistance 0.9 8.2 9.1 90 Future Project Development - 0.2 0.2 85 Incremental Recurrent Costs 0.4 - 0.4 0 Sub-total 4.6 32.4 37.0 88 B. Industrial Training and Development Center (SEGEM) Equipment 0.1 1.0 1.1 90 Technical Assistance 0.3 2.4 2.7 89 Future Project Development - 0.2 0.2 85 Incremental Recurrent Costs 2.6 - 2.6 0 Sub-total 3.0 3.6 6.6 55 C. State Institute of Statistics Technical Assistance - 0.7 0.7 95 D. Front End Fee - 0.1 0.1 100 Total Financing Required 7.6 36.8 44.4 83 Management and Implementation 3.10 The proposed project would be implemented by the three Government agencies involved; the Council for Higher Education (Y'oK), the Industrial Training and Development Center (SEGEM), and the State Institute for Statistics (SIS). The organization, management and implementation capacity of Y6K, SEGEM and SIS are described in detail in Annex 3. - 22 - 3.11 YbK Project Management. The proposed project would be administered through the Project Implementation Unit in the Technician Training Unit (TTU) of YoK (Annex 3 and Annex 10, Chart 2) headed by the Director General of the TTU, also the Director of the PIU. During appraisal, the organization and management system of the TTU, the composition of the PIU, and links with industry and the universities were reviewed by the Bank and are satisfactory. The Director General/Director of the PIU, Procurement Specialist and Project Accountant/Finance and Administration Officer have been appointed. By September 30, 1984, a facilities planner (to plan the upgrading, renewal and expansion of the TTC facilities), a teacher recruitment and placement officer and an Industry and University Relations Officer would be appointed. These officers and staff would be based in Ankara. There would also be a curriculum and teacher training development unit established at the Izmir TTC and a subsidiary curriculum development unit and English Language and Curriculum Development Unit established at the Istanbul TTC by September 30, 1984. Assurances were received from YoK during negotiations that the three remaining members of YoK's TTC management staff would be recruited prior to September 30, 1984. 3.12 SEGEM Project Management. SEGEM's management structure has developed with assistance from UNIDO since 1978 and this has enabled it to develop sound technical resources and administrative procedures (Annex 3). Through its cooperation with UNIDO, SEGEM has in place a team experienced in the administration of technical assistance, which has managed a short-term technical assistance program comparable in design to that of the proposed project. The existing management team in SEGEM is capable of implementing the SEGEM component of the proposed project with existing staff (Annex 10, Chart 3). The Director General of SEGEM would be responsible for the implementation of the project, assisted by a Project Coordinator (Annex 10, Chart 3). 3.13 SIS Project Management. The SIS was established in 1962 and is responsible for the compilation and presentation of all statistical data in Turkey (Annex 3). The President of the SIS would be responsible for project implementation, assisted by the Directors of the Directorates of Economic and Social Analysis and Data Processing Center (Annex 10, Chart 4). The fellowship program comprises training in these two Directorates. These SIS staff have previous experience of administering overseas fellowship training. 3.14 Building designs. YMK's Director General of the TTU would hire local architects to carry out minor design and supervision work associated with alterations and refurbishment of existing facilities. 3.15 Site Acquisition. There are no site acquisition problems because all project institutions will be housed in existing facilities. 3.16 Procurement. Invitations to bid for individual project items would be grouped to the maximum extent possible and contracts awarded on the basis of Table 3.4. - 23 - Table 3.4: Procurement Arrangement /a -----------USS Million--------- Project Procurement Method Element ICB LCB Other Total Cost Renovation and furniture 0.3 0.3 0.6 for existing facilities - (0.0) (0.0) (0-0) Equipment 21.3 4.0 2.5 27.8 (19.4) (3.6) (2.0) (25.0) Technical Assistance - - 12.9 12.9 and Pre-investment Studies (11.7) (11.7) Total 21.3 4.3 15.7 41.3 (19.4) (3.6) (13.7) (36.7) La Figures in parentheses are the respective amounts financed by the Barn_ Loan. The exceptions to ICB procurement would be as follows; (a) Refurbishment of existing buildings (including furniture), totalling about US$0.6 million, would be carried out by local contracts and by force account. These items would be financed by the Government; (b) Contracts for equipment estimated to cost less than US$50,000 equivalent each, which in the aggregate would not exceed US$4.0 million and which would not be expected to interest foreign suppliers because of the variety of the contents of each contract, would be awarded on the basis of competitive bidding advertised locally in accordance with local procedures to be acceptable to the Bank; (c) Sundry items not exceeding US$25,000 in each contract and aggregating a maximum of US$2.0 million equivalent would be purchased on the basis of a minimum of three quotations, in accordance with local procedures to be acceptable to the Bank; and (d) Books and training materials (such as films, slides and charts) not to exceed in aggregate US$450,000 would be purchased in accordance with local procedures to be acceptable to the Bank. - 24 - 3.17 In respect of equipment, bid packaging would also be reviewed by the Bank prior to bid invitation. In comparison of bids for equipment to be procured through international competitive bidding (ICB), domestic manufacturers would be allowed a preferential margin of 15%, or the existing customs duty, whichever is lower, over the c.i.f. prices of competing imports. Under ICB procedures, invitations to bid and proposed awards of contracts would be reviewed by the Bank prior to final award decisions. It is estimated that this review would cover about 77% of the value of all equipment contracts (US$21.3 million equivalent). The remaining 23% of equipment contracts would be subject to selective post-award reviews. 3.18 Technical Assistance. To simplify management of technical assistance, the three implementing agencies would obtain specialist services and fellowships as comprehensive TA contracts. At least three firms would participate in each bidding on the YbK and SEGEM components, following a short-listing of consulting agencies acceptable to the Bank (Annex 3). The Government and YdK gave assurances at negotiations that they would employ consultants whose qualifications, experience and terms and conditions of employment would be satisfactory to the Bank. These consultants would be selected in accordance with principles and procedures satisfactory to the Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank and Executing Agency." 3.19 Implementation Schedule. The project would be completed in about five and a half years (1984-90) in accordance with the Implementation Schedule in Annex 9, Schedule 1. The project is in a state of preparation that would permit quick disbursement of funds because; (a) construction of buildings (a source of delay in the past) would be limited to minor refurbishment of existing buildings and would not be financed by the Bank; (b) equipment lists and specifications have been drawn up with external assistance and submitted for Bank review; and (c) the technical assistance package has been well defined, draft terms of reference are prepared, and proposals are expected by Loan Signing (May 1984). Project completion would be December 31, 1989 and the Closing Date would be June 30, 1990. 3.20 Disbursements. The proposed project would be disbursed over a period of six years (Annex 9, Schedule 2). Disbursements would be made against; (a) 100% of the foreign exchange cost of directly imported equipment and educational materials; (b) 100% of the ex-factory price of locally manufactured items (excluding furniture); (c) 65% of the cost of locally procured items of equipment; and (d) 100% of the foreign cost of foreign consultant services and overseas fellowships or 80% of the total cost of locally hired consultants. Disbursements are expected to be completed by June 30, 1990. - 25 - 3.21 Accounts and Audit. YoK, SEGEM and SIS would each maintain separate accounts for the project. Staff of the three agencies involved would prepare, at the end of each quarter, a detailed statement of project expenditures during the period (in an agreed format) and submit such statements to the Bank within 45 days after the end of each quarter. Such statements would, inter alia, be used as a basis for supervising the progress of procurement. An annual audit would be carried out by the Auditor General's Office and submitted to the Bank within six months of the end of each fiscal year. Financial reporting and auditing would be in accordance with the World Bank 1981 Guidelines Report. Assurances to this effect were obtained during negotiations. - 26 - IV. BENEFITS AND RISKS Benefits 4.01 Under the proposed project, the potential of Turkey's industrial sector, particularly manufacturing and exporting industries, would be enhanced through the extension and improvement of the national capacity to provide industrial training. Institutional development would occur in two key industrial training agencies, YoK and SEGEM. Industrial productivity would be improved through the improvement and expansion of pre-service and in-service technician training programs and of industrial training programs at management, technician and supervisory levels provided by SEGEM and Y-K. The provision of increased and improved economic and social data would assist the management of the economy. 4.02 The eight TTCs for which financing is proposed in this project are pilot centers which would produce about 940 graduates in 1989, building to some 1,230 graduates annually from 1992, which would represent about 10% of annual demand at that time. Additional TTCs planned by the Government would build on the foundation provided by the pilot eight and would supply an estimated further 20% of demand. The impact of residual scarcities of technicians will be minimized through the development of SEGEM's activities which will assist with a more efficient utilization of resources in industry. 4.03 The project would facilitate the improvement of technician training through the development of suitable curricula and training materials, and through the establishment of an in-service staff development program as well as further strengthening the management of the new TTCs within YoK. Through the project, some 164 fellows would be trained to instructor or technician instructor level, and these would provide both a sufficient number of staff for the TTCs and also a core group upon whom to build in subsequent phases of development of the TTCs. 4.04 Using the higher salaries of graduates of project institutions as a proxy measure for enhanced industrial productivity, the benefit/cost ratio to resources applied to the development of the eight pilot TTCs under the proposed project is approximately two and one-half times as high as on resources devoted to existing training programs. Unquantifiable, though significant, are the additional benefits likely to accrue to the Government by way of increased output and foreign exchange earnings as a result of the enhanced productivity of labor in the industrial and exporting sectors following the provision of, and in-plant in-service upgrading of, technician-level manpower through the proposed program of Y-K and SEGEM. 4.05 Through the project the groundwork for the development of a national industrial training system would be laid which will assist the long term development of industrial training. SEGEM's role as an industrial training agency will be enhanced both quantitatively and qualitatively. Through the provision of an industrial training consultancy facility, SEGEM would have considerable flexibility in meeting the immediate needs of industry for specialist training advice. In addition, the proposed project would provide a sound basis for further development of technician and in-service training to industry under a possible second phase of the development of YoK and SEGEM. - 27 - 4.06 Under the project, the principle of cost sharing for industrial training programs would be introduced for the first time. This would lead to a diminution of the burden of recurrent expenditures deriving from SEGEM's training programs. The introduction oF the principle of cost sharing provides the opportunity to raise the proportion of the total cost of shared expenditures -a the eventual point of full cost recovery. Risks 4.07 The proposed project would involve three agencies new to the Bank including one, YdK, which is newly created (Annex 3). As a result of the unfamiliarity of the agencies involved in the proposed project with Bank procedures, there is a risk that project implementation would not be timely. Early supervision missions would ensure that Bank procedures are fully understood, and that special short-term training programs have been arranged for project implementation staff. A greater than normal supervision effort is anticipated in the first 18 months of the proposed project and considerable attention would be given to the timing and composition of these missions. 4.08 In all three agencies, an important objective of the proposed project is institution building. To assist the Government achieve this objective, a substantial technical assistance program has been included in the project. There is a risk that the technical assistance would not be implemented as planned, and thereby attainment of project objectives delayed. In order to minimize this risk, the technical assistance packages have been designed to minimize the administrative burden on implementing agencies by ensuring that, as far as possible, the consultant firms/institutions would assume responsibility for the burden of their detailed administration. Moreover, the management systems of the line agencies were reviewed by the mission and, where necessary, appropriate institutional steps have been taken to assist in the smooth implementation of the project. 4.09 The proposed technician training program and the proposed in-service staff development program at Izmir would require the recruitment of some 164 staff. There is a risk that it would not be possible to recruit an adequate number of instructors for training. To reduce this risk, the Government is paying attractive salaries to TTC staff at university rates. There are a considerable number of university science and engineering graduates available for recruitment and there are good career prospects for staff with YUK in a new and expanding branch of training. 4.10 Each TTC is attached, for administrative purposes, to a university and there is a risk perhaps that the development of practical job-oriented programs would be compromised by this arrangement in favor of the academic. Though real, this risk is diminished by the strong conmitment of the management of YoK to the proposed technician level programs. Moreover, courses and curricula are determined by YoK, instructors have a different academic background from university staff, students in the TTCs are oriented to employment within local industry and are academically quite different from university undergraduates, and the TTCs are limited by law to a two-year training program. - 28 - V. AGREEMENTS REACHED AND RECOMMENDATIONS 5.01 During negotiations the Government provided assurances that; (a) SEGEM would continue during at least the life of the project with powers and responsibilities sufficient to enable it to carry out the project satisfactory to the Bank (para. 2.15); (b) SEGEM would initiate a cost recovery system acceptable to the Bank so that the percentage of direct costs of SEGEM's programs recovered by SEGEM would; (a) by December 31, 1986 be not less than 20%; and (b) for each year thereafter be increased by a reasonable percentage in consultation with the Bank (para. 2.22); (c) SEGEM's existing monitoring and evaluation structure would be maintained (para 2.23); (d) SEGEM and SIS would carry out their fellowship training in accordance with terms of reference including a timetable and program acceptable to the Bank (paras. 2.14 and 2.24); (e) SEGEM and SIS would employ consultants whose qualifications, experience and terms and conditions of employment would be satisfactory to the Bank, such consultants to be selected in accordance with principles and procedures satisfactory to the Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank and Executing Agency" (para. 3.18); and (f) SEGEM and SIS would undertake an annual audit to be carried out by the Auditor General's Office in accordance with the World Bank 1981 Guidelines Report and submit the same to the Bank within six months of the end of each year (para. 3.21). 5.02 During negotiations, YoK provided assurances that; (a) an Advisory Board would be appointed to each TTC with representation and terms of reference acceptable to the Bank (para. 2.09); (b) at the eight locations at which technician training is proposed; (i) appropriately refurbished buildings would be provided prior to the scheduled arrival of equipment, and (ii) that the net floor area of classrooms, workshops and laboratories available to project assisted programs would equal or exceed 5.0 m2 per project assisted training place (para. 3.04); (c) terms of reference, including a timetable and a program, for the fellowship program would be acceptable to the Bank (para. 2.10); 2 29 9 (d) YoK would employ consultants whose qualifications, experience and terms and conditions of employment would be satisfactory to the Bank, such consultants to be selected in accordance with principles and procedures satisfactory to the Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank and Executing Agency" (para. 3.18); (e) It would, not later than September 30, 1984, fully staff its management unit for the TTCs with suitably qualified personnel (para. 3.11); and (f) YoK would undertake an annual audit to be carried out by the Auditor General's Office in accordance with the World Bank 1981 Guidelines Report and submit the same to the Bank within six months of the end of each year (para. 3.21). 5.03 Subject to the above conditions, the project would provide a suitable basis for a Bank loan of US$36.8 million equivalent to Turkey for a term of 17 years, including a grace period of four years. -31- Annex 1 REPUBLIC OF TUhKEY STAFF APERAISAL REPORT INDUSTRIAL TRAININC EROJECT Hlge Rates in the Turkish Manufacturing Industry 1. Systematic and comparative wage rate data are generally not available in Turkey. Wages are recorded in the Qiarterly Manufacturing Industry Establis1-met Survey, (State Institute of Statistics) on a quarterly basis at four-digit International Standard Industrial Classification specificity for the manufacturing sector, but only in aggregate for all occupational levels. The official and largest union, TUrk-Is Arastirima lzmani (TISK), maintains records of wage agreenits reached in subsectors of the manufacturing sector by broad level of occupations. The appraisal mission obtained wage rate data of this kind from TISK for the wood, railway, textile, sugar, ship repairing, tobacco and energy sectors and these data are summarized in Annex 1, Table 1. The limitation of these data is that they describe wage agreenats only in larger establishments in the public sector, though wage agreements reached through the offices of TISK are often used as guidelines and as a point of reference for other euployers also. Wage data obtained fron TISK showed considerable variance between sectors, reflecting the different conditions in each industry. 2. Private sector wage rate information for 1982 was obtained from Chanbers of Commerce and Industry in Ankara, Istanbul and Izmir as well as fron major employers and are also summarized in Annex 1, Table 1. Data obtained from this source showed little variance between sectors and even between regions of Thrkey. It is clear that the private sector is a more competitive employer compared with the public sector in that the former appears to pay better rates, except at the unskilled worker level. Mbreover, the private sector appears to reward higher skill levels more highly; a technician in the "public" sector is paid 1.15 tines the pay of a semi-skilled worker, While, in the private sector, the differential is 1.82 times. 3. The eight TTCs for which support is proposed in this project would be training graduates at the technician level. The location of the eight TTCs, the type of training given, and the institutional links proposed in the project are designed to assist the TTCs to neet the denad for technicians in manufacturing and exporting industries. Thus, it is anticipated that graduates in the eight TTCs supported under this project will seek and obtain employment in private manufacturing industry and will, therefore, have salaries at the level indicated in Anex 1, Table 1 for technicians in the private sector. Anex 1 -32 Table 1 REUELIC CF TURKEY INDUSMRIAL TRAINING PROJECT SIAFF APPRAISAL REPORT Daily Wage Rates in the Manwfacturing Sector (1982) (in TL) Skill Level Public Sector* Private Sector** Ergineer 1,912 3,750 Technician 1,650 2,750 Forenmn/Supervisor/Skilled Worker 1,530 2,020 Semi-Skilled.Worker 1,440 1,510 Unskilled Worker 1,060 995 Note: *Covers maaifacturirg sector in which wage agreenents have been reached by TISK. **rovers agreenents reached anorgst nembers of the Chanbers of Camierce and Industry. Source: Public sector: Conpiled frcm data provided by TISK. Private sector: Chanbers of Commerce and Industry. -33- Arnex 2 Page 1 of 2 REPUBLIC CF TURIKY IND)USAL TRAi PROJECT STAF APPPAISAL REPOlR manpower Projections, 1985-95 1. In order to ascertain the magnitude of the training requirement for manpower of different skill levels, particularly that of technicians, a formal projection of manpower demand and supply was undertaken for the period 1985-95. The 1980 Census was available for 82 occupations and 9 economic sectors. This permitted the compilation of a sector occupation matrix conprising 9 sectors and 10 groups of occupations with similar education and training backgrounds. The ten occupational groups used are defined in Table 1, Annex 2. Bank estimates of output and productivity growth for 1980-85 and 1985-95 were applied to estimates of employnment by sector in 1980 to obtain enployment derand by sector in 1985 and 1995. In order to translate the growth in demnmd for labor by economnic sector into a growth in demand for particular occupational groups, sectoral denad in 1985 was distributed between occupational groups in accordance with the 1980 sector occupation matrix. The sector occupation matrix for 1995 was estimated by adjusting the 1980 sector occupation matrix proportions, particularly in the B-1 "Technician Occupations" category, to proportions nornally associated with estimated levels of productivity in 1995, using standard indices. The estimated 1995 sector occupation matrix was applied to the 1995 totals of sectoral labor demnd to obtain the distribution of demand within each sector by occupational level. Fran a canparison of the derand for labor in 1985 and 1995 by sector and occupational group, the demAnd for labor due- to economic growth was estimnated. To these totals was added the demand for labor deriving fran death and retirement of the labor force. Attrition rates were generally 2% per year. The projection was made with 1985 as the base year, and 1995 as the final year. Annex 2, Table 1, shows estimated manpower requiremants due to econanic growth and attrition by occupational category for 1985-95. Supply Projections 2. Data for supply projections were obtained frcn information provided by the State Institute of Statistics and the Ministry of Education on enrollment and graduates for nonformal education, secondary vocational and technical education and higher education. 3. Professional Scientists and Engineers. The number of science/ ergineering graduates for 1985/86 was calculated fron the ratio of science/ ergineering enrollments to total enrollments ir. 1981/82. This probably over- estirates the unubers of science/engineering graduates as sane programa are longer than four years in duration and no allowance is made for dropouts. Governwent policy is to increase science/engineering enrollrents. Taking the foregoing into account, an approximate 5% increase in graduates is asstuned for each year after 1986, and these data are sumnarized in Anex 2, Table 2. -34- Annex 2 Page 2 of 2 4. Technician Training. Pre-service industrial technician training is virtually no-existent. There are no post-secondary technician training institutes at present, and technicians working in industry at present are either university science/engineering graduates who have accepted employment as technicians, or are HE technical school graduates who have subsequently acquired their skills orr-the-job. In order to rectify this situation, the Goverrmaent is proposing, through YoK, to convert, in the first instance, eight of 53 existing post-secondary vocational institutes to Technician Training Centers (TTCs). The proposed project would assist the Government with their developxnent. The Goverrment is anticipating the development of a further 16 subsequent to the initial eight, and the detail of the proposed expansion, imncluding the output of the present project, is shown in Annex 6, Table 2, and summarized here in Annex 2, Table 2. 5. Semi-Skilled and Skilled Manual Workers. Data on 1980/81 graduates from the HE secondary vocational and technical schools and fron the network of practical trade schools, adult training centers and night schools were used to calculate supply. Since graduate nmbers actually declined slightly over the 1976/77-1980/81 period, and goverwrent actions to increase enrollment are unclear, no expansion of graduates was assumed over the period and output over the period 1985-95 was assumed to be ten tires the 1980 nuiber, e.g., 1,460,000. This figure must be adjusted downward to take into account those technical school graduates (about 30,000) who will continue on to technician training. Therefore, the total output available between 1985-95 is about 1,430,000. In the absence of data concerning orr-the-job training, no attempt has been made to calculate additional supply from industry-based training prograns (at present limited to major private-sector employers and public enterprises) which will provide an additional supply of semi-skilled and skilled workers. Hwever, the ME vocational secondary schools and the nonformal education system provide training for many nonskilled and semi-skilled manual occupations such as clerical work, service industries, health, etc. Therefore, the supply projections reasonably estimate the additional supply actually available to industry. Mancer Projection Ranary 6. Anex 2, Table 2 sumnarizes the manpawer projection for engineers, technicians and skilled and semi-skilled occupations. Anex 2, Table 2 shows that over the projection period additional manpwer demand exceeds additional nanpower supply for ergineers, technicians, and skilled and semi-skilled workers. In relative terms, the projected relative shortage of technicians is the most sigaificant, representing 48% of total demand. The projections imply that attainnent of target growth rates in the industrial sector will be conprcnised unless alternative neans of training mnpcwer in these categories can be found or unless a more efficient use of existing marnpaer is made. The proposed project would assist with the provision of technicians through the developnent of eight TTCs which will provide sane 8,000 graduates over the period 1985-95 and would assist with improved utilization of existing resources in industry through the developnent of SEfB7M's programs. Doc. ID No. 1613V -35- Anmex 2 Table 1 REPU1LC OF TURKEY INWUSTIAL TRAINING PROJECr SAEFF APPRAISAL REPORT Labor Denand by Occupational Category (1985-95) Occupa- Labor Denrnd due to Labor Denrrd due Total Labor tional Ecornic Growth, to Attrition, Denand, Category 1985-95 1985-95 1985-95 A-1 142,600 32,500 175,100 A-2 90,400 45,200 135,600 B-1 98,100 19,000 117,100 B-2 287,100 177,200 464,300 C-1 276,500 175,400 451,900 C-2 881,100 238,600 1,119,700 D-1 80,300 52,200 132,500 D-2 723,200 604,700 1,327,900 E 650,200 3,147,800 3,798,000 F 287,500 308,700 596,200 TUIAL 3,517,000 4,801,300 8,318_300 NDTE. Occupational Categories pertainirg to the proposed project are indicated in Armx 2, Table 2. A-1: Professional Occupations Usually Requiring a Scierce/Math-Based University Degree. A-2; Professional Occupations Usually Requiring an Arts-Based Degree. B-1: Technician Occupations Usually Requiring Post-Secondary Science/Math-Based Education and Training. B-2: Technician Occupations Usually Requiring Post-Secondary Non-Math-Based Education and Trainirg. C-1i Skilled Office Occupations Usually Requirirg Secondary School Campletion Plus Job Training. C-2: Skilled Manual Occupations Usually Requirirg Secondary School Ccmpletion and Job-Related Instruction and Training. D-1. Semi-Skilled Office Occupations Usually Requirirg Intermediate School Conpletion Plus Job Trainirg. D-2: Semi-Skilled Manual Occupations Usually Requiring Internediate School Coxrpletion Plus Prevocational Instruction. E: Sem:i-Skilled Occupations Usually Requiring Literacy. F: Unskilled Occupations Requiring No Special Education or Training. Doc. ID No. 1613V REPUELIC CF TURKEY INDUSMRAL TRAINIG PROJECr SrAFF APPRAISAL REPORT Mnpower Projection Summary Table, 1985-95 Additional Denmaxd Additional Supply Deficit (-) or Due to Ecornmis from Eduration Balarce Total Surplus (+) as Occupational Euployment Growth and Attri- and Training Shortage (-) Demand % of Total De- Category in 1985 tion of Labor Force Institutions or Surplus (+) in 1995 maind for Labor Engineers (A-1) 177,800 175,100 120,000 -55,100 320,400 -1 7% Technicians (B-1) 103,600 117,100 20,000 -97,100 201,700 -48% (of wbich proposed project) (8,000) Skilled and Semi-Skilled Workers (C-2 and D-2) 3,211,000 2,447,600 1,430,000 -1,017,600 4,816,100 -21 Doc. No. 1613V IHI (-DX -37- Anrn 3 Page 1 of 6 REPUBIC CF TUKEY DUSTRIAL IRAIN POJECT STAFF APPRAISAL lREPOR Organization, Mmiagement and Inplemntation Capability (Ircluding Tedinical Assistanre Program) Y-, SEsE and SIS Introduction 1. The two main imlplanlenting agencies in the proposed project, YdiK and SGEM, are relatively new to the field of industrial training. In addition, Y&bK, SEGEM and SIS are also new to Bank lending. The mission therefore carried out an in-depth analysis of the organization, management and implanentation capability of YoK, SBG1 and SIS. Also, because institution building is a key objective of the proposed project, tie mission provided assistance to and reached agreenent with all three agencies on terms of reference, as wll as the mxdalities of selection of consultants and the managenent and implementation of the TA. The Council for Higher Education (YWK) 2. YdK is a semi-autonanous Government agency, in effect a mini-ministry, which was established by a law passed by Parliament in 1981 and entered into the constitution. Its functions are to plan, organize, administer and supervise education provided by institutions of higher education including the 25 universities, the specialist academies, and the 53 two-year post-secondary tedhnician and other training institutions. YiK's responsibilities include the training of teaching staff and the appointment of the senior staff and umnagement of the universities and institutes. The President and sane eight members of the 25-member governing council of YbK are appointed directly by the President of the Republic of Turkey and the YoK President reports to him. Other members of the council are appointed by the Cabinet, Ministry of Education, and the Inter-University Council. The chief adninistrative officer of YoK is the Secretary General, who administers YoiK through a number of Assistant Secretaries General who in turn administer Directorates, which include Education and Training, Planning, Research, Budgets and Investments, Library and Documentation, Data Processing, Coordination, Administration, and Construction (Annex 10, Chart 1). A Student Selection and Placement Unit is responsible for the country-wide selection and placenent of the nation's approximately 241,000 students in higher education and also mmnitors University exaninations. A Tedcnician Training Unit is responsible for the development of technician training. Both these directorates report directly to the President of YoK. 3. Government funds for higher education amounted to TL 97 billion in 1982, 19% of total educational expenditure. YdK administers this budget, and provides a budget for each institution under its control and ensures proper use of financial resources. YaK now has a professional and aiministrative staff of about 150, which are mainly housed in new accamodation in Ankara. -38- Annex 3 Page 2 of 6 4. The Lechnician Training Unit was established fonmally in 1983 and is responsible for the developnent of technician training, including the transformation of eight existing post-secondary vocational training institutions into Technician Training Centers for uhich project assistance is included in the proposed project. YdK is planning to transform 16 other existing post-secondary vocational training institutions into Technician Training Centers subsequent to the initial eight, for whkich the Ibchnician Training Unit is also responsible. 5 Within the Technician Training Unit is the Project Implenentation Unit (PIU) for the proposed project. At appraisal, the organization and managem-nt systEn of the Technician Training Unit, the camposition of the PIU, and institutional links with the universities and industry were reviewed and are acceptable to the Bank. Annex 10, aart 2 shows the present organization and rrageurrnt systaen for the administration of the Technician Training Cc3uxeri . lair Director General anld Director of the PIU, Procurement Sh2c:iAli
Groupe de la Banque mondiale · Staff Appraisal Report
Turkey - Industrial Training Project
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