Guinea - Health and Nutrition Sector Project

Document of The World Bank FOR OFFICIAt, USE ONLY Report No. 11684-GUI STAFF APPRAISAL REPORT REPUBLIC OF GUINEA HEALTH AND NUTRITION SECTOR PROJECT DECEMBER 22, 1993 Population and Human Resources Division Occidental and Central Africa Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EOUIVALENTS Currency Unit = Guinean Franc (GF) US$I = GF953 GFI = US$0.00l GFIOOC = US$1.05 MEASURES I m = 1.09 yd I ml = 10.76 sq ft I km1 = 0.38 sq mi ABBREVIATIONS AND ACRONYMS AfDB African Development Bank AGBEF Guinean Association for Family Well-Being AGETIP Agency for the Execution of Works in the Public Interest AIDS Acquired Immune Deficiency Syndrome BEPR Studies, Planning and Research Division (MSPAS) BPFR Training, Planning and Research Division (MSPAS) CLSAG African Institute for Management Training CNSS National Social Security Fund CSP l'roject Review Committee C`'IC Technical Coordinating Committee (MSPAS) DAAF Division for Administrative and Financial Management (MSPAS) DIEM Infrastructure, Equipment and Maintenance Division (MSPAS) DH Hospital Division (MSPAS) DNES National Directorate for Health Facilities DNPL National Directorate for Pharmacy and Laboratory DP'F Division for the Promotion of Women (MSPAS) DPSAS Prefectorat Directorate for Health and Social Affairs EEC European Economic Comniunity EPI Expanded Program of Immunization l:P Family Planning GDP Gross Domestic Product GF Guinean Franc GNP Gross National Product GTZ German Technical Cooperation IDA International Development Association ICB International Competitive Bidding IEC Information, E,ducation and Communications IGS General Hcalth Inspcctorate IRSAS Regional Inspectorate for Health and Social Affairs ABBREVtATIONS AND ACRONYMS (Continued) KAP Knowledge, Attitude and Practice KfW Kreditanstalt fuer Wiederaufbau: German Development Bank LCB Local Conipetitive Bidding MRAFPT Ministry of Administrative Reform, Civil Service and Labor MCH Maternal and Child Health MIS Ministry of the Interior and Security MPF Ministry of Plan and 1-inance MSPAS Ministry of Public Hlealth and Social Affairs MUV Unit Value Index of Manufacturers Exports NGO Non-Governmental Organization I'CR Project Completion Report I'HC Primary Health Care PIUIUGP Project Implementation Unit PNDS National Health Development Plan PPF Project Preparation Facility SAL Structural Adjustment Loan SIAC Community-Based Nutrition Information System SNAPE Rural Water Supply Service STD Sexually Transmitted Diseases TA Technical Assistance UNDP United Nations Development Program UNFPA United Nations Fund for Population Activities UNICEF United Nations Children's Fund UNIPAC UNICEF Procurement Agency WHO World Health Organization FSCALYEAR January I - December 31  FOR OFFICIAL USE ONLY REPUBLIC OF GUINEA HEALTH AND NUTRITION SECTOR PROJECT TABLE OF CONTENTS Page No. DOCUMENTS AVAILABLE IN THE PROJECT FILE . ........... i CREDIT AND PROJECT SUMMARY .......... .. .............. iii I. INTRODUCTION A. Country Economic Framework.1 B. Human Resources Development in the Broader Economic Context .......................................... 2 II. THE POPULATION. HEALTH AND NUTRITION SECTOR A. Sector Overview.. 3 1. Introduction .3 2. Population and Family Planning .3 3. Nutrition .4 4. Health. 4 B. Past Performance and Key Issues .. 5 1. Limited Access and Low Service Quality. 5 2. Weak Sector Organization and Institutional Capacity. 7 3. Financial Constraints and Inefficient Use of Resources .............. 8 C. Donor Support to the Sector ......................... 10 This report is based on the findings of the Bank appraisal mission which visited Guinea in June, 1992. This mission comprised Mrs. Ethna Johnson (Public Health Specialist and Mission Leader), and Messrs./Mmes. Alain Papineau (Implementation Specialist), Carin Lenngren (Health Facilities Planner), Malonga Miatudila (Public Health Specialist), Tonia Marek (Nutrition Specialist), Marc Reveillon (Health Economist) and Seydou Ly (Resident Mission). The findings from the mission by Ms. Michele Lioy (Information Education and Communications Specialist) to Guinea in January 1993 have also been incorporated. Ms. Ishrat Husain is Lead Adviser. Peer reviewers include Dr. Robert Castadot (rechnical Components), and Messrs. Robert Crown and Johan De Leede (Financial and Management Aspects). Ms. Marilou Bradley (Operations Assistant) prepared the COSTAB for the proposed project. Mmes. Griest, Hamon and Vaselopulos provided support in the preparation of the report. This report was reviewed by Mr. Ok Pannenborg, Division Chief, Population and Human Resources Division, and Mr. Olivier Lafourcade, Director, Occidental and Central Africa Department. 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 (continued) D. Government's Sector Policy and Program .. 10 1. Sector Objectives and Policy .................... 10 2. Sector Strategy and Plan .................... 11 E. The Bank Group's Role and Assistance Strategy for Health ....... ... 14 1. The First IDA-financed Health Project .................. 14 2. Lessons Learned ............................... 15 3. Proposed Modifications ........................... 15 4. Assistance Strategy .............................. 17 III. THE PROJECT A. Project Objectives ................................... 17 B. Summary Description ...... ....... .................... 17 1. Expansion of Service Coverage and Improvement of Service Quality .................... . 18 2. Strengthening of Sector Organization and Management ..... . . 18 C. Detailed Features .. 19 1. Expansion of Service Coverage and Improvement of Service Quality .................................... 19 2. Strengthening of Sector Organization and Management ..... . . 23 D. Project Cost and Financing ............................. 28 E. Project Impact ................. .................... 28 1. Impact on Women .............................. 28 2. Environmental Impact ............................ 29 F. Project Implementation ...... ...... .................... 29 1 Preparation Status ............................... 29 2. Management .................................. 30 3. Implementation Schedule .......................... 32 4. Procurement .................................. 32 5. Disbursement ................................. 38 6. Accounting, Reporting and Auditing ................... 39 7. Supervision, Monitoring and Evaluation ................. 40 IV. PROJECT BENEFITS AND RISKS A. Benefits ......................................... 41 B. Risks ........................................... 42 V. AGREEMENTS REACHED AND RECOMMENDATIONS ..... ........ 42  TABLE OF CONTENTS (continued) VI. AN XES Annex I Basic Data and Demographic, Health and Nutrition Indicators Annex II Ten Leading Causes of Child Morbidity and General Morbidity Annex III Ministry of Public Health Budget (1980-1991) Annex IV Health Personnel by Region/Population Ratios Annex V Government's Statement of Health Sector Policy Annex VI Institutional Reforms, MSPAS Organization and Improved Management of the Sector Annex VII Decentralization of Management Functions Annex VIII Community Participation in Health Development Annex IX Priority Programs Annex X Action Plan Annex XI Training Program and Calendar Annex XII Technical Assistance Annex XIII Studies and Research Annex XIV Implementation Schedule Annex XV Project Summary Costs and Financing (COSTAB) Annex XVI Disbursement Schedule Annex XVII Bank Supervision Input into Key Activities Annex XVIII Status of Bank Group Operations in Guinea Annex XIX Implementation Manual (Table of contents) Map: IBRD 25378   i REPUBLIC OF GUINEA HEALTH AND NUTRITION SECTOR PROJECT DOCUMENTS AVAILABLE IN THE PROJECT FILE Ref. No. Document Title 1. MSPAS: Projet Sante et Nutrition: Requee de Financement (Jan. 1993) 2. Decret No. 92/121/PRG/SGG portant Attributions et Organisation du Ministere de la Sante Publique et des Affaires Sociales (26 Mai 1992) 3. Projet d'Arrete MSPAS portant Attributions et Organisation de la DNSP 4. Projet d'Arrete MSPAS portant Attributions et Organisation de la DNES 5. Projet d'Arrete MSPAS portant Attributions et Organisation de la DNPL 6. Projet d'Arret6 MSPAS portant Attributions et Organisation du BPFR 7. Projet d'Arret6 MSPAS portant Attributions, Organisation et Fonctionnement de l'IGS 8. Cadre Organique de l'Inspection Regionale de la Sante et des Affaires Sociales (IRSAS) et Projet d'Arrete portant Attributions, Organisation et Fonctionnement de 1'IRSAS 9. Projet de D6cret portant Creation, Composition et Attributions des Comites Regionaux de Sante 10. Projet de D6cret portant Creation, Composition et Attribution des Comit6s de Sante de Prefecture 11. Cadre Organique Revise de la DPSAS et Projet d'Arrete MSPAS portant Attributions, Organisation et Fonctionnement de la DPSAS  Ref. No. Document Title 12. Projet d'Arr8te Conjoint MSPAS/MIS portant Attributions et Fonctionnement des Comites de Gestion des Centres de Sante 13. Projet d'Arrete Conjoint MSPAS/MIS/MPF fixant les Modalites d'Utilisation des Fonds de Reserve des Centres de Sante 14. Projet d'Arr&t6 Conjoint MPSAS/MIS/MPF fixant les Modalites d'Assistance aux Centres de Sante Deficitaires 15. Projet de D6cret fixant Regime General des H6pitaux en R6publique de Guin6e 16. S6minaire-Atelier National sur l'Alimentation et la Nutrition: Note de presentation sur les conclusions du seminaire et la mise en oeuvre de la politique nutritionnelle 17. MSPAS: Renforcement des Activit6s de Nutrition dans les Centres de Sante 18. GTZ: Etude Socio-Economique et Budgetaire dans le cadre du Projet Sante Rurale Kissidougou/Gueckedou (Juin 1991) 19. Republic of Guinea: Children at the Heart of Development: National Plan of Action for a Decade for Children (Dakar, November 1992) 20. L'Initiative de Bamako en Guin6e (1991-1995), UNICEF, Conakry  iii REPUBLIC OF GUINEA HEALTH AND NUTRITION SECTOR PROJECT CREDIT AND PROJECT SUMMARY Borrower: Government of Guinea Amount: SDR 17.4 million (US$24.6 million equivalent) Term: Standard IDA, with 40 years maturity Project The overall objective of the project is to expand coverage of low cost health Objectives: services in order to improve the health status of the communities reached and, in particular, the most vulnerable groups of the population. The project would support measures and activities to: (a) expand coverage and improve quality of the health, nutrition and family planning delivery system; and (b) improve sector organization, management and resource mobilization in order to build a sustainable program consistent with the Government's letter of sector development policy and strategy. Project As part of the Government's health program (1992-2000), the project would Description: focus on: (a) improving service coverage and quality through: (i) a phased rehabilitation and maintenance program for health facilities involving community participation, in three prefectures in Middle Guinea and four prefectures in Lower Guinea, directly benefiting over one million people or almost 20 percent of the country's population; (ii) supply of essential drugs, vaccines and iodized capsules to health facilities in these seven prefectures, and limited support to the five prefectures covered under the first IDA project; and (iii) strengthening key technical programs to improve diagnostic and treatment capabilities, staff performance, and information and education to communities. The key technical programs to be supported are maternal and child health and family planning (MCH/FP), nutrition, certain infectious and parasitic diseases including malaria, tuberculosis, leprosy, respiratory, diarrheal and sexually transmitted diseases (STD), including AIDS, and health and nutrition education. These priority programs would be supported by an integrated training program for staff and would focus primarily on the needs of women and children. (b) strengthening sector organization and management through: (i) adoption of a revised MSPAS structure, light rehabilitation of the central services building, phased rehabilitation, equipment,  iv maintenance of facilities and operation of prefectoral and regional administrative health facilities and teams in eighteen prefectures in Middle Guinea and Lower Guinea, to allow greater decentralization of the management system and sector coordination; (ii) improved systems for financial, material and human resource management; and (iii) generation of new resources through user fees and support for adequate budgetary allocations. Project Benefits: By the end of the project period, both the quality and coverage of health care will have increased, thereby helping to improve the health status of the population and particularly of the vulnerable groups in the project area. The project will expand health care coverage to three additional prefectures of the ten prefectures in Middle Guinea (of which five are already covered by the ongoing project), and to four prefectures in Lower Guinea, directly benefiting over one million people or almost 20 percent of the country's population. In addition, the health care coverage for particular target groups will increase, with 70 percent of children under one year of age fully immunized, ante-natal care coverage for 60 percent of pregnant women (a minimum of three ante- natal visits and full immunization with tetanus toxoid) and 50 percent coverage by a trained birth attendant. By supporting the development of decentralized management structures, sector financing and management and Government's capacity to plan future investments and coordinate donor activities, the project will help establish the basis for a sustainable program and build people's confidence in the public health system. Project Risks: The main risks are: (a) weak political will in following through on policy measures already begun under the preceding project, such as decentralization and personnel deployment; (b) financial constraints disrupting operational performance; and (c) weak management skills affecting implementation of the project. A weakening of political will would be minimized by: (i) including up-front measures on key issues (e.g. decentralization) and by linking progress on these measures to conditions of disbursement for specific project components; (ii) regular monitoring of program implementation by authorities; and (iii) an increased involvement of communities in local management and decision-making. The risk of diminishing sector resources will be addressed by expanding the cost recovery system, reducing inefficiencies in the sector and including review of sector budgetary allocations in annual discussions of project and sector performance. The MSPAS weak institutional capacity would be addressed by strengthening strategic planning and management and project management through training and short-term specialist services.  V REPUBLIC OF GUINEA HEALTH AND NUTRIlTION SECTOR PROJECT Project Cost Summary, Financing Plan and Estimated IDA Disbursements (net of taxes and duties, in US$ million) PROJECT COST SUMMARY Local Forelan Total A. IMPROVING SERVICE COVERAGE AND QUALITY 1. Health Facility Rehabliltation and Maintenance 1.2 8.1 9.3 2. Supply of Pharmaceuticals and Vaccines 0.1 2.8 2.7 3. Strengthening of Key Technical Programs 1.2 0.4 1.6 B. STRENGTHENING SECTOR ORGANIZATION AND MANAGEMENT 2.7 5.0 7.7 C. PPF REFINANCING 0.0 0.7 0.7 Total Base Costs: 5.2 16.8 22.0 Physical Contingencies 0.5 2.2 2.7 Price Contingencies 1.6 1.0 2.6 Total Contingencies: 2.1 3.2 5.3 TOTAL: 7.3 20.0 27.3 FINANCING PLAN Local Foreion Total IDA 5.4 19.2 24.6 Govemment 1.9 0.0 1.9 Beneficiaries 0.0 0.8 0.8 TOTAL: 7.3 20.0 27.3 ESTIMATED IDA DISBURSEMENTS IDA Fiscal Year FY94 FY95 FY96 FY97 FY98 FY99 FY2000 FY2001 Annual 0.0 1.4 3.9 3.4 4.4 4.2 5.0 2.3 Cumulative 0.0 1.4 5.3 8.7 13.1 17.3 22.3 24.6 Rate of Retunm: Not Applicable   Guinea S.A.R. - Health and Nutrition Sector Project REPUBLIC OF GUINEA HEALTH AND NUTRITION SECTOR PROJECT I. ITRODUCTION 1.1 The Government of Guinea has requested IDA assistance to finance a project to support the execution of the Government's health development program and strategy covering the period 1992-2000. The health policy framework and strategy adopted by Government has evolved since 1986 and is designed to address issues of quality and coverage as well as the sustainability of the health care system. This would be the second IDA- financed investment project in Guinea, designed to expand coverage and improve the quality and efficiency of the health system, including overall sector management, resource availability and allocations in the sector. The project will finance health service activities and rehabilitation in three prefectures in Middle Guinea and four prefectures in Lower Guinea covering a population of over one million, or almost 20 percent of the country's population. In addition, limited financial support for the five prefectures covered by the ongoing project will be provided for technical programs such as training, vaccinations and iodine capsule distribution. Furthermore, decentralization will be supported through the rehabilitation of about 18 prefectoral health directorates (in the previously mentioned 12 prefectures and six others), as well as of Lower Guinea's regional health inspectorate; modest rehabilitation of the central services building of the MSPAS is also included. The project will strengthen sector organization and efficiency, and generate more resources. Total project costs are estimated at US$27.3 million equivalent, with a foreign exchange component of US$20.0 million. Project financing would include US$24.6 million from IDA, a Govemment contribution of US$1.9 million and a beneficiary contribution of US$0.8 million through cost recovery. 1.2 Project preparation was undertaken in the framework of the Govemment's technical and institutional programs and activities are fully consistent with sector strategies. The investments and supporting measures to be financed through this project were developed by a national preparation team including representatives from the Ministry of Plan and Finance and the Ministry of Decentralization. In addition, there was regular donor consultation and involvement in preparation work. Technical preparation work, including studies and short-term consultancies, has been financed under two Project Preparation Facility (PPF) advances. A. Country Economic Framework 1.3 Since the beginning of 1986, the Government of Guinea has been implementing an ambitious program of economic and financial reform. This was aimed at improving the incentive framework for private sector development including in the health sector, phasing out State involvement in commercial enterprises, better management of the administration including a reduction in the size of the civil service and the development of a  Guinea S.A.R. - Health and Nutrition Sector Project 2 strong human resource base. These objectives and associated measures were supported by the First Structural Adjustment Credit (SAL I), through the first phase of the reform program from 1986-1988, followed by SAL II which was initiated in 1988. The reform program has resulted in a full transition from a command to a market economy, increases in non-mining revenues, the privatization or liquidation of a large number of public enterprises, and a comprehensive reform of and reduction in the size of the public administration. 1.4 While progress in the first phase of the adjustment program was encouraging, some of the more difficult institution building and politically sensitive reforms have not been implemented at the rhythm anticipated. Consequently, this has slowed down the reform process, with some key measures still to be taken. The SAL H second tranche was released in November 1992 and a Country Assistance Strategy prepared in November 1993. After doubling the basic wages in 1991, government finances were faced with a severe liquidity crisis intensified by a sharp drop in revenues from mining and an unexpected shortfall in non-mining revenues. This financial problem has exacerbated in 1991 and 1992 the problems on availability of counterpart financing for foreign projects, which were also due to tinwieldy payment procedures. In the last year, discussions with the Guinean authorities pointed out the contradiction between their desire for increased funding on the part of IDA and the poor performance of the existing portfolio. As a result, the Government has taken actions in a number of areas to ensure sufficient and timely provision of counterpart funds to IDA-financed projects and the performance of the overall portfolio improved in FY93. In addition, in view of the projected fiscal tightness created by the drop in mining revenues, a Country Portfolio Performance Review, scheduled for March 1994, will study ways to restructure projects to ensure satisfactory performance towards development objectives. B. Human Resources Development in the Broader Economic Context 1.5 One of the main constraints to economic growth in Guinea is the limited human resource base, reflected in the low health status and the poor skill level of the population. The health system under Guinea's First Republic can be characterized as extremely inefficient with poor management, inadequate operating means and poor quality and coverage, particularly in the rural areas. Guinea's Second Republic, declared in 1984, inherited a health care system that had almost totally collapsed with health indicators among the worst in Africa. 1.6 Recognizing the critical role that health plays in the economic and social development objectives of the country, the Government declared its commitment to human resource development in the context of a comprehensive socio-economic reform program developed in 1986. A health policy was formulated which had, as its key objectives, to improve the coverage and quality of primary care services particularly focused on women and children. Since then, a number of policy measures have been taken to support the strategy of primary health care, aimed at revitalizing the peripheral health network and putting critical services such as a vaccination and a basic drug program in place. In addition, the Government has tried to strengthen the management capacity of the system and to liberalize and involve the private sector in order to reach health objectives.  Guinea S.A.R. - Health and Nutnition Sector Project 3 1.7 While recognizing that advancements have been made in the sector even in this short period, and that the policy objectives remain valid, a number of systemic constraints discussed later in the report continue to affect the coverage, quality and efficiency of the system. H. THE POPULATION, HEALTH AND NlTRITION SECTOR A. Sector Overvewx 1. Introduction 2.1 In 1984, when the Second Republic was declared, the health care system had almost totally collapsed, with a heavy dependence on traditional healers and birth attendants. In 1987, the bed occupancy rate was only 13 percent, primary care consultations covered only 7 percent of the population and immunization coverage was only 5 percent. In 1991, service coverage had increased to 40 percent and complete vaccination protection for under-5 year old children reached 60 percent in some areas of the country. Overall, Guinea has made considerable progress in a short time frame to develop a basic health care system. However, many areas of the country do not have a fuUy functioning health network (approximately 200 of the 346 health centers have regular drug supplies and operating means) and, even in areas with upgraded centers, the quality of care is not uniform. Although the problems are more acute in the more isolated rural areas, the urban centers and particularly Conakry are also affected. Migration to the capital and population growth have put increasing pressure on the already weak system. 2. Population and Famill Planning 2.2 Guinea's population of over 6 million (1991) has a life expectancy of 44 years, a population growth rate of 2.8 percent per annum and 47 percent of the population below 15 years of age. With the current growth rate, Guinea's population is expected to exceed 8 million by the turn of the century. Crude birth rate is 49 per 1000 population and the total fertility rate of 6.5 is similar to other low income countries in the region. Although the population is mainly rural (74 percent), Conakry's population now exceeds 1 million and is growing at an annual rate of 5 percent, putting increasing pressure on the system. In the context of high infant and maternal mortality levels in Guinea, there is broad agreement on the need for birth spacing. However, family planning services are limited to the capital and to some regional sites and contraceptive prevalence rates remain low (1 percent). The Government recently developed a Population Policy which supports the development of a multi-sectoral approach to dealing with the issue of demographic growth. In order to reduce fertility levels, the Govemment proposes to increase contraceptive use to 25 percent by the year 2010, and the public health system is expected to play a central role in the promotion and delivery of family planning services, along with the private sector, to reach this objective. However, starting from such a low base, considerable effort will be required both to create a demand for family planning services and at the same time to put the necessary  Guinea S.A.R. - Health and Nutrition Sector Project 4 services in place to effectively reach couples ready to adopt family planning. Annex I contains basic demographic, health and nutrition data. 3. Nutrition 2.3 Although comprehensive national data on nutritional levels are not currently available, regional studies show widespread serious malnutrition among children, especially pre-schoolers and pregnant women and lactating mothers. A study conducted in Middle Guinea in 1990, financed by the first IDA project, shows that 27 percent of pre-schoolers are chronically malnourished. Another study done in Conakry in the same period shows levels of 18 percent in this group, and among the poorest households two out of every three households did not receive calorie requirements 1/. Iodine deficiency is another serious nutritional problem in Guinea which leads to mentally retarded newborns and decreased labor productivity; in Middle Guinea a study showed that 20 percent of the children already had visible goiter. Levels of iron deficiency anemia, based on a 1980 study, show that 60 percent of pregnant women and lactating mothers are affected. Low birth weight is a proxy for maternal malnutrition and it is estimated that 18 percent of newborns had a birth weight below 2500 grams. This compares unfavorably with a level of 15 percent based on the median for a large number of African countries. The determinants of malnutrition are multiple and inter-related: inadequate breast-feeding practices (in Conakry 20 percent of children received other food or drink than breastmilk before three months of age although this is unnecessary and increases the risk of diarrhea) but another 30 percent of mothers gave only breastmilk to their children until they were more than ten months old; socio-economic status; seasonal food shortages; and finally morbidity. The correlation between diarrhea and malnutrition among children in the study population seems well established. The combination of illness and poor nutrition increases the seriousness of the condition and also has negative implications for physical and mental growth, school performance and ultimately, labor force productivity. Based on the preceding analysis work, the Government recently conducted a Food and Agriculture Organization-sponsored workshop to develop a food and nutrition strategy and has prepared a broad strategy to address malnutrition including: a national information, education and communications program for food security and nutrition; an evaluation mechanism for the follow-up of nutritional problems and their causes based on, among others, a community-based nutrition information system (SIAC); the integration of nutritional concerns into the agricultural development policy; improvements in the control and quality of food; management of high risk groups; and, as a broader goal, an increase in family incomes. 4. Health 2.4 Guinea's health profile is characterized by high rates of infant and under five mortality, 136 and 237 per 1000 respectively, compared with an overall infant and under five mortality rate of 109 and 160 for Sub-Saharan Africa. In other words, an estimated 25 1/ 'Enquete de consommation aupres des menages a Conakry", Ministry of Plan, 1990.  Guinea S.A.R. - Health and Nutrition Sector Project 5 percent of children die before they reach five years. About 65 percent of illnesses among this age group is caused by malaria, diarrheal disease and respiratory infections. Other prevalent and easily-preventable diseases include measles, tuberculosis, whooping cough, poliomyelitis and tetanus. Limited access to potable water and poor sanitation cause a high prevalence of parasitic and infectious diseases, especially among children under the age of five. In 1991, 42 percent and 1 percent of the rural population had access to potable water and sanitation respectively. Annex II gives the leading causes of morbidity among children of 0-5 years in Guinea in 1990 and the ten leading causes of general morbidity. The high rate of maternal mortality (8 per 1000) is caused primarily by attempted illegal abortion, hemorrhage and toxemia in pregnancy. For this reason, the Government is committed to expanding family planning services through the public health system in order to provide birth spacing services to couples, to address both high infant and child mortality and high fertility. Since the first case of AIDS was diagnosed in Guinea in April 1986, a total of 455 cases have been reported, with the majority of cases in men (69 percent). Although the HIV prevalence rate is low compared to other countries, there is the potential for a serious health problem since gynecological infections are among the ten leading causes of morbidity. B. Past Performance and Key Issues 1. Limited Access and Low Service Ouality 2.5 Two of the most serious sector problems are limited service coverage and poor quality of care particularly in rural areas. Existing health infrastructure follows the administrative organization of the country, but is sometimes poorly located relative to population density and has not met the targets of reasonable physical access. Some health facilities are over-sized, under-utilized, dilapidated and understaffed but the development of new infrastructure has not kept pace with population growth. In order to address this issue, the Government is undertaking a systematic analysis of infrastructure needs through a national inventory, with the objective of improving infrastructure planning and obtaining donor support to follow the plan (para. 2.26). The country has 205 medical village posts, 370 sub-prefectoral health centers, 29 prefectoral hospitals, 4 regional hospitals located in regional capitals and two referral/teaching hospitals in Conakry as well as a small network of maternal and child health facilities in Conakry. Some of the major communicable disease problems, for example, tuberculosis, are handled through vertical programs but their integration into the delivery system at clinics and hospitals is already underway. In addition, three hospitals are operating under the auspices of mining companies (Kamsar, Fria and Ghenko) and about 200 private medical, dental and obstetrical clinics have opened, with 80 percent of these in Conakry. Traditional healers and traditional birth attendants practice in most parts of the country. In addition, a number of local and international non-governmental organizations are operating in the health sector (para. 2.21). 2.6 Apart from those hospitals and health centers supported by donors through the national primary care program, most other hospitals and health centers lack drugs and operating means, good management and trained staff, leaving patients with unacceptable or no health care. Staff are often forced to refer patients to the private sector or write prescriptions which have to be filled at the local expensive private pharmacy. When drugs  Guinea S.A.R. - Health and Nutrition Sector Project 6 are in short supply at the health center, hospitals are often used as the entry point for basic health services. Although there is outreach into the communities with some essential preventive programs, this is only in an embryonic stage. Maintenance programs are limited in scope and the non-adherence in the past to realistic construction norms in some cases has resulted in high recurrent cost needs that cannot be supported through the combined cost recovery program and existing state support. Although health centers and hospitals have health committees, some have been more successful than others in playing an active role in management and decision-making and in correcting problems related to drug shortages and staffing issues. 2.7 A number of factors influence utilization rates, many of which are related to quality of care or misconceptions about the health services due to lack of information. Current data from the MSPAS indicate that there is less than one contact per inhabitant per year in the public health system. However, recent UNICEF evaluation results show that utilization rates are low but rising and effective coverage with ante-natal services (3 visits) has risen from 20 percent in 1986 to 50 percent in 1990. This figure has only been achieved through considerable effort and mobilization of external resources. Patients' ability to pay is not considered to be a widespread issue, although limited individual problems of affordability have occurred. These were resolved by obtaining approval from health committees to treat these cases at no cost or by obtaining support from the local mosque. However, over- prescription and overcharging would appear to be more serious than the overall ability to pay. The proposed project would develop a regular drug supply, better prescription practices and improved monitoring, supervision and community management. 2.8 The public sector enterprise, Pharmaguinee, responsible for pharmaceutical supply and distribution has had serious mismanagement problems and is almost completely inoperable since 1987. In addition, Government's budgetary allocation for drugs has been declining since 1988. The international donor and NGO community provides a disproportionate share of drugs and medical supplies. In recent years the private sector has expanded to approximately 130 pharmaceutical outlets and six wholesalers. However, at the wholesale level, Laborex has a quasi-monopoly on drug supply (90 percent of the market). Despite evidence of a flourishing informal drug market, neither the public nor private sector has been able to respond to the need for a low cost and accessible drug supply. The profit margin of Pharmaguinee was also considered to be relatively high when compared to other recent experiences with drug procurement in the country. Currently undergoing restructuring with African Development Bank financing, Pharmaguinee is expected to be fully functioning by early 1994. Based on the new Public Enterprise law adopted in April 1992, and in the context of the Public Enterprise Reform Program, financed by IDA, Pharmaguinee's legal status has been changed to that of a commercial public enterprise with statutes made to conform to the Public Enterprise Law. Further reforms of Pharmaguinee will be proposed under that project. With respect to the proposed health project, IDA has obtained agreement from Government, as contained in the Action Plan (attached), to allow facilities the choice in selecting drug suppliers that offer the best price. This requirement is consistent with the Bank's overall approach to public enterprise reform and efforts to eliminate public sector monopolies.  Guinea S.A.R. - Health and Nutrition Sector Project 7 2. Weak Sector Organization and Institutional Capacity 2.9 The centralization of management functions, weak capacity and poor definition of roles and responsibilities is a major obstacle to health program development in Guinea and will need to be tackled if the program is to expand. The MSPAS was partially restructured in 1988 in the context of the civil service reform program. In the February 1992 Ministerial reorganization, the Secretariat of State for Social Affairs was reintegrated into the Ministry. Apart from the difficulties of defining the mechanisms for integration and cooperation between health and social affairs, there are a number of weaknesses in MSPAS' organization. The central MSPAS's strategic planning, resource management, and regulatory capacity is still weak and functions are over-centralized. For example, a large part of technical program field supervision and training is done by central-level staff. In addition, the Ministry has limited or inadequately trained staff and operating means to function effectively. This is particularly the case of the Studies, Planning and Research Division (BEPR), the Division for Administrative and Financial Management (DAAF), and the Infrastructure, Equipment and Maintenance Division (DIEM). The regulatory functions are weak and ineffective and there is inadequate coordination of sector activities caused by the proliferation of project units to manage individual donor-supported projects; poor definition of individual task responsibilities leading to delays in decision-making; little or no accountability; and limited delegation of responsibilities. 2.10 Overcentralization of decision-making has left the regional and prefectoral- level authorities with little autonomy. Regional and prefectoral management is based on the administrative structure, with a Regional Inspectorate responsible for 8-10 prefectures. The prefecture is comprised of 6-12 sub-prefectures, varying in area and population density. The region has a coordinating and audit function. Each prefecture is responsible for planning, management and supervision of the health facilities in that area but this varies based on the number and size of the zone. However, the prefectoral line managers are directly responsible to central authorities, which undermines the position of the region vis-a-vis the prefecture particularly when the region lacks adequate resources to coordinate and supervise field activities. 2.11 Stemming in part from inadequacies in the organizational structure, but also from the Ministry's limited human resource capacity and weak monitoring system, the sector's management capacity in physical and financial planning and resource management remains weak, particularly at the regional and local level. Audit reports show there is lack of basic book-keeping skills, and systematic supervision of staff, both exacerbated by regular staff turnover and poor staff motivation. To address these issues, the project will support the decentralization process by reinforcing skills at the central and local level, by building systems for financial and human resource management in the sector and by ensuring that adequate resources are available and controlled by the decentralized units to supervise effectively.  Guinea S.A.R. - Health and Nutrition Sector Project 8 3. Financial Constraints and Inefficient Use of Resources a) Sector Financing and Expenditure Patterns 2.12 Public financing for the health sector has steadily declined. Total public recurrent spending for health fell from 5.2 percent in the late 1970's to 2 percent in 1991 (Annex III). This represents 0.4 percent of GDP. The sector non-salary budget also fell in real terms since 1989 and is well below most countries in Africa. For example, the health sector budget for 1993 shows a slight increase as a share of the total budget (up to 3 percent) but a decline in real terms in the non-salary recurrent budget. The per capita expenditure of US$3 is low by African standards and inadequate to allow the sector to provide even basic minimum services for the population even if resources were rationally allocated and the budget was fully executed. While private sector expenditures are not known with any great accuracy, a 1988 WHO study on pharmaceuticals estimated that GF 5,500 million (US$12 million in 1988 prices) was spent on drugs. 2.13 Donor support to the sector investment and recurrent budget is substantial, representing 90 percent of the investments and large recurrent cost requirements for drugs, medical supplies, logistical support and staff salaries (para. 2. 21). National resources come through the regular budget channel as well as through local municipalities although the latter are usually limited to support of contractual staff. 2.14 Cost recovery based on a differential tariff structure for standard diagnoses has been implemented in 200 health centers and in some prefectoral and regional hospitals. A Government/UNICEF study and an IDA evaluation show that some urban health centers can reach full cost recovery (excluding salaries) once provided with the initial stock of drugs, materials, and other operating needs. When utilization rates are not adequate, in some cases due to poor management, centers were not able to recover all non-salary operating costs. However, most hospital expenditures beyond drugs and basic materials for clinical services cannot be absorbed by the cost recovery system and will continue to depend on adequate budgetary support from the public sector and donors. Although the initial experience is very encouraging, several issues need to be resolved, including varying quality among centers, the need to develop a solidarity fund for those centers not reaching required cost recovery levels and assurances of a regular drug supply as well as rational prescription practices. The project will support regular drug supply to health facilities and institute proper prescription practices at both hospitals and health centers. In addition, the Government's proposed prefectoral solidarity funds will be developed in the project areas based on experience from the cost recovery system. 2.15 The pattern of investment and recurrent expenditures in Guinea is distorted both in terms of type and by level of expenditure. This has had a direct negative impact on the quality and efficiency of the system and the equitable distribution of services in the sector. However, the share of the investment budget allocated to tertiary-level services in Conakry is declining in line with the strategy of focusing support on the primary and secondary levels, with donor support concentrated on the development of health centers and provincial hospitals.  Guinea S.A.R. - Health and Nutrition Sector Project 9 2.16 Salaries accounted for 72 percent and 80 percent of the recurrent budget in 1990 and 1991 respectively, due to a doubling of Government staff salaries in 1991. In sharp contrast, the allocations for drugs, already at a low level, declined from 9.6 percent in 1990 to 7.6 percent in 1991. As a result, Guiniea's capacity to finance the sector is gradually being eroded at the same time that service coverage is inadequate, utilization levels are extremely low, and the quality of care is poor. IDA has obtained Government agreement on annual non-salary budgetary levels for the first three project-years (para. 5.1). 2.17 The National Social Security Fund (CNSS), autonomous since 1984 provides, among other payments, health insurance to private sector employees and family members totalling 130,000 insured. Reimbursement for medical care is based on contributions by the employer and employee. Although contributions are large, the reimbursement for medical care appears to be very small; as a result, membership has declined and private enterprises are dissatisfied with the management of the system. The MSPAS would like to expand the system of medical insurance, however, the current system will need to be reviewed to determine the framework and capacity for broader coverage. The financing study to be finalized as a condition of credit effectiveness is analyzing the current system and alternatives to provide broader coverage. (b) Human Resource Management and Productivity 2.18 Although automatic recruitment of qualified personnel into the civil service was abolished in 1988, the Government recruited a large number of personnel in 1990 and 1991 for reasons of political expediency, at a time when the consolidation of personnel skills, staff deployment and career development were critical. The overall ratio of health staff to population is quite good, but large skill-mix and regional disparities exist, particularly in the case of midwives and to a lesser extent for physicians (Annex IV). Currently, 34 percent of sector personnel are based in Conakry, to cover 14 percent of the population; however, this is not excessive if compared to other countries in the region. A Staffing and Redeployment Plan, financed by the first IDA project, would, if fully implemented, redress the wide disparities by region and level of services. The operational plan for this redeployment has been prepared and some redeployment has already taken place. In Middle Guinea, for example, the redeployment of staff out of the regional hospital in Labe has already taken place and some prefectures have already initiated redeployment within the prefecture. However, a comprehensive approach is needed to deal with skill-mix and staff shortages, and continued implementation of staff redeployment, in accordance with the timetable of the Plan, will be a condition of credit effectiveness (para. 3.23). 2.19 Low salary levels, no incentive structure and limited career development and training opportunities as well as limited infrastructure, particularly in rural areas, have left staff lacking motivation, productivity is low and transfer to more desirable areas is highly politicized. In order to attract staff to rural areas, the project will provide some built-in incentives, such as housing, and training will be a high priority. The proposed PAGEN project, scheduled for Board presentation in FY94, will assist Government to improve implementation of current regulations concerning personnel management in the Ministry of Plan and Finance and to define priorities and policy options with a view to expansion to all civil service personnel.  Guinea S.A.R. - Health and Nutrition Sector Project 10 2.20 Formal health education is the responsibility of the Ministry of Education, and is provided through one medical school in Conakry and 4 paramedical schools, one school that trains nurses, midwives and technicians in Kindia, and three schools which train health assistants, one each in Labe, Kankan and N'z6rekor6. Serious inadequacies in the Guinean basic health training programs are due to inadequate pedagogical materials, outdated pedagogical skills and a concentration on hospital-based patient care instead of on public health and primary care. Lack of a comprehensive in-service training plan also contributes to the poor quality of patient care. Pre-service curriculum development is included for the paramedical schools under this project along with supply of pedagogical materials and staff training. In addition, the project will implement training programs consistent with the National Health Training Plan, developed under the first IDA Project. C. Donor Support to the Sector 2.21 As indicated earlier (para. 2.13) over three-quarters of the investment budget is financed through donor support. Bi-lateral and multi-lateral support is focused on improving the delivery system in defined geographic areas. Some donors, including IDA, have also focused efforts on the development of population, health and nutrition policies and strategic and management concerns in the sector. Apart from IDA, the most important among these are the African Development Bank, the European Community, UNICEF, the World Health Organization, UNFPA, UNDP, the French Ministry of Cooperation, KfW, GTZ and the Saudi Fund. The non-governmental community is active in service delivery and includes the French and Belgian "Medecins sans Fronti&res", the Guinean Association for Family Well-being (AGBEF), Medicus Mundi and other NGOs. 2.22 Apart from investment support to renovate and equip facilities, donors are financing essential drugs, operating needs and hospital, health center and district management and training. Albeit starting from a very low base, service coverage and sector management capacity have improved considerably, due to donors' involvement in the sector. It is anticipated that donors will continue to play a major role in the health sector in Guinea for some time to come in the face of severe overall resource constraints and the unmet demand for services. In addition, with the development of a more comprehensive health policy and program, there is an overall commitment by donors to lend support to Government initiatives that try to address systemic issues in the sector. This is manifested by donor consultations in the recently-prepared hospital policy, their involvement in defining mechanisms for supporting health centers with limited cost recovery and interest expressed to follow a standardized plan for health facility construction. Finally, in addition to donor commitment to standardized approaches on facility construction, essential drugs policy and cost recovery for example, good donor collaboration and coordination also exist at project implementation levels. D. Government's Sector Policy and Program 1. Sector Objectives and Policy 2.23 Government has declared its commitment to improve physical access, and service quality, focusing in particular on women and children. Based on the principles of primary health care agreed at international fora such as in Alma Ata in 1978 and based on  Guinea S.A.R. - Health and Nutrition Sector Project 1l the Bamako Initiative of 1987, the MSPAS is implementing, with donor support, a primary care system focusing on basic preventive and curative care and promotional efforts. Government intends to strengthen the quality of care and double primary care coverage to 80 percent by the year 2000. 2.24 Recognizing that the institutional, structural and operational issues discussed above have slowed progress in achieving operational targets and sector goals for mortality and morbidity reduction, the Government has over the past two years examined the constraints and bottlenecks to effective execution of the sector program. Through a series of ongoing workshops and project analyses, policy measures have been defined and sector operational targets have been set up to the end of the century. The policy framework set out in a revised statement of Health Sector Policy states the Government's commitment to, among others, increased decentralization, a new hospital policy, continued support for and expansion of cost recovery and the role of the community in managing the health system. The statement, included as Annex V, was prepared by an interministerial team (Health, Finance, Plan and Decentralization) and submitted for review to other departments of the Government. It states Government's position on the policy and program measures proposed for the sector. It is complemented by timebound programs and plans and legislative instruments. 2. Sector Strategy and Plan 2.25 The development of operational program targets up to the year 2000 for the key sector programs constitutes an important milestone and is the first major attempt by Government to set specific targets and an action program. The program builds on the Government's three-year rolling investment plan, developed by the first IDA-financed project (para 2.33) and includes operational targets and action plans combined with a number of policy measures to address sector bottlenecks. The three-year investment program and operational plan (1992-2000) have a number of priority clinical and institutional programs which will be the basis for IDA support. In addition to the priority programs set by Government (maternal and child health, malaria, acute respiratory infections, diarrheal disease and parasitic diseases), the Ministry proposes to intensify efforts to fully integrate other programs into the regular services offered at facilities, including family planning, nutrition, tuberculosis, onchocerciasis, leprosy, sexually transmitted diseases/AIDS and water supply and sanitation. Each of these programs has operational targets and an implementation plan. Prefectoral, regional and national level consultations took place in the preparation of the program and the budgetary needs are now being assessed for investment and recurrent cost requirements. 2.26 Concerning physical coverage, MSPAS has undertaken a large program of infrastructural improvement to which the first project contributed in Middle Guinea. Government intends to continue requesting donor assistance in this area. The national health inventory, financed through the PPFs, will provide the basis for infrastructural and coverage norms for construction and rehabilitation planning (para 2.5). The siting of infrastructure under the proposed project is being planned based on the national inventory (para. 3.5).  Guinca S.A.R. - Health and Nutrition Sector Project 12 2.27 The MSPAS has set a number of medium-term operational targets shown in Table 1 below which, given progress achieved since 1987, are ambitious but not unmanageable. Targets set for the IDA-financed project are consistent with objectives set under the national program. Table 1 HEALTH INDICATORS - TABLE 1 I STATUS | TARGET 2000 ______________________________________ 1990 f Infant Mortality Rate Reduction 145/1000 80/1000 Maternal Mortality Rate Reduction 8/1000 3/1000 Overall coverage (physical access) 40% 80% Program Coverage of women: l Pre-natal Care, urban 30% 90% Pre-natal Care, rural 20% 80% Assisted Births, urban 25% 100% Assisted Births, rural 10% 70% Contraceptive Prevalence 1% 25%* Program Coverage of Children: Vaccination during first year 25% 80% Growth surveillance (0 - 3yrs) 3% 60% Antibiotics after 1 infectious episode __ 60% _Curative Coverage 20% 60% Soum:WHO1 Repn J8774GUI - Target set for the year 2010 (a) Ministry Reorganization 2.28 Recognizing that technical responses alone are not sufficient to address the health needs of the population, the MSPAS has prepared a number of complementary programs and measures to ensure smooth implementation and continuing support for its primary health care strategy. 2.29 A program for the restructuring of the MSPAS has been approved covering the functions of Ministry units along with legislative instruments for the proposed decentralized management structures (Annex YI). An improved coordination mechanism has been adopted in the form of an inter-ministerial committee ("Comite de Suivi des Projets"), which will provide intersectoral and donor coordination and evaluate the MSPAS program and its coherence with sector policy. This committee would also participate in the annual review of the Action Plan and of the project's mid-term review (para.3.70). The existing Ministerial technical committee ("Comit6 Technique de Coordination") would continue to meet on a quarterly basis to review donor projects to ensure that norms and standards are respected and  Guinea S.A.R. - Health and Nutrition Sector Project 13 that action programs are executed as agreed. In the context of the proposed project, the CTC would review the annual Action Plan and budget, review quarterly reports, audit and evaluation studies and make recommendations to improve project management and implementation (para. 3.39). The CTC meetings will include regional and local representation as required, in particular when operational issues are reviewed and at the time of phase and mid-term reviews. (b) Decentralization 2.30 The decentralization of management decisions and the strengthening of the health management teams at regional and prefectoral level are described in Annexes VI and VII. This will give greater local autonomy to the region and the prefecture on decisions related to staffing of facilities, management of resources and budget preparation. The prefectoral administrative team (Prefectoral Directorate for Health and Social Affairs) will be strengthened in terms of staffing and resources to carry out more effectively their management and supervision responsibilities within the prefecture. Similarly, at regional level, the management team (Regional Inspectorate) will be strengthened to coordinate and monitor program development in the entire region, including drug supply and training. In addition, a regional and prefectoral technical committee is proposed to coordinate the activities of the region and prefecture and the regular monitoring and supervision of activities. Analysis of the hospital system in Guinea indicates that the hospital management committee needs to be strengthened and better management controls introduced. The recently approved hospital policy contains a number of measures to give hospital management a stronger role in the decision-making process, to retain funds from cost recovery, to define its own budget and resource use within a given framework and to give the hospital committee, which includes community representation, fuller powers to manage staffing and resource use. These measures will improve hospital efficiency as well as promote stronger community participation in the decision-making process. At the health center level, considerable progress has already been achieved, but the role and composition of the health committees have been reviewed and will be reinforced through further training of health committees and membership changes. As a condition for negotiations, the draft legislative instruments, including proposed staffing levels, related to the role and functions of the decentralized management structure and health committees were prepared. They have been put in effect as a condition of Board presentation. (c) Community Participation 2.31 A serious attempt by the MSPAS since 1987 to put a primary health system in place has resulted in the development of integrated services (Expanded program of immunization, primary health care and essential drugs), linked to community management and financing through user fees. With Government commitment to the Bamako Initiative supported by UNICEF, the EEC, IDA and other donors, health committees comprise representatives of the local community and health facility staff. Overall, health center committees have been able to function more satisfactorily than hospital committees. However, three weaknesses have been identified: the heavy emphasis on ensuring financial independence; inadequate representation of the population; and the low representation of  Guinea S.A.R. - Health and Nutrition Sector Project 14 women on committees. These issues are expected to be corrected and health committees will be strengthened based on the new guidelines set by Government, which include the introduction of some incentives, such as travel costs, for committee members. In addition, hospital committee management functions will be strengthened substantially following the issuance of the new hospital policy (para. 2.30). Annex VIII summarizes the role and responsibilities of the community in management, financing, renovation and sensitization as well as the measures proposed to strengthen these committees. (d) Resource Mobilization and Management 2.32 Improved management of sector resources, specifically in the areas of personnel, finance and budgeting, was an objective of the first project. Service norms have been established and a plan for redeployment has been adopted by Government and the timetable for its implementation agreed at negotiations. The preparation of a comprehensive plan for retraining personnel was financed under the first project and will be implemented as part of the second project. Limited progress has been made on accounting and budgeting practices but MSPAS has initiated a series of studies and seminars (with WHO and IDA assistance) to define budgetary requirements at the hospital and health center level and a sector financing strategy based on cost sharing by Government, beneficiaries, and donors. The cost recovery program will be strengthened since health committees will participate more fully in the management of funds and the new tariff structure for hospitals has been approved. Strong Government commitment will be needed particularly for the more politically and institutionally difficult measures, such as redeployment of personnel and allocation of adequate budgetary resources to priority programs. IDA will address the financing of the health sector in the next two years in three different ways. First, as part of our macroeconomic dialogue, we expect that a Public Expenditure Review would lead to agreements to raise the share of the national budget for health. Second, to justify this increase in priority, Government is completing an analysis of budgetary needs derived from its policy, using technically acceptable norms for investment, personnel and non-personnel inputs and other operating costs (para. 3.26). Finally, over the life of the proposed project, Government and IDA will monitor the conformity of the proposed annual budgets and their execution with the policy and budget framework (para. 5. 1). E. The Bank Group's Role and Assistance Strategy for Health 1. The First IDA-Financed Health Project 2.33 IDA's involvement in the health sector began in 1987, with the approval of a specific investment loan (the Health Services Development Project - Credit 1837-GUI), with IDA financing of US$19.7 million and a Government and beneficiary contribution of US$2.0 million and US$0.8 million respectively. It supports policy and program development efforts to improve the quality, coverage and efficiency of basic health care services. This objective is addressed through (a) strengthening the MSPAS strategic management and planning capacity, and (b) improving basic health services in Middle Guinea. This regional support covers five of the ten prefectures in Middle Guinea (19 percent of the population), and finances infrastructure development, drug supply and cost recovery, staff training and simple management systems. Project closing date is being postponed by 18 months to June 30, 1995.  Guinea S.A.R. - Health and Nutrition Sector Project 15 2.34 Operationally, the project has been successful in testing out approaches to service delivery, community involvement and cost recovery and has raised utilization rates in the project zone. For example, in some facilities, health care coverage has reached 50 percent, pre-natal and vaccination coverage have increased from less than 10 percent in 1987 to over 60 percent more recently and, at some of the hospitals, bed occupancy rates have reached 50 percent. Renovation of facilities has mostly been completed and a further increase in utilization rates is expected, particularly at the hospital level. At the institutional level, the project has built up the MSPAS technical, planning and management capacity, it developed a computerized personnel file system, prepared a staffing and redeployment plan, strengthened investment programming capacity and is preparing a national health training plan. 2. Lessons Learned 2.35 A number of factors have slowed down implementation and effective execution of the project. First, the management arrangements for the project resulted in poor coordination between the Project Implementation Unit (which was weak managerially, housed separately from the Ministry and was comparatively privileged in terms of resources), and the technical departments of the Ministry, resulting in poor internalization of project responsibilities, delays on procurement and slippage on field activities. Secondly, the severe shortage of counterpart funds in the third and fourth year of the project due to liquidity problems has slowed down implementation considerably, resulting in delays in local training and weak local project management and supervision. For example, local training is about one year behind schedule in part due to lack of funds to finance travel and per diems of participants. Third, at the decentralized level, supervision has been weak, in some cases due to resource constraints (counterpart budget), lack of adequate and properly trained staff at the prefectoral level to supervise an expanding primary care system, and lack of clear responsibilities and decentralization of authority and, in some cases, lack of staff motivation. For example, budgeting and financial and stock management remain weak (para. 2. 11). Fourth, while community participation in the management of services and resource use has been relatively successful at the health center level, it remains weak at the hospital level due to limited autonomy of the hospital, lack of a clear mandate of the hospital committee and the overriding problem of limited controls and transparent management procedures. Success in efforts to involve communities in some simpler rehabilitation work has varied from community to community and can be linked to the absence of clear up-front arrangements in contract documents and unwillingness of contractors to involve the communities. Fifth, beneficiaries have not been consulted on a regular basis on how responsive the system is in addressing their needs, resulting in a top-down approach to project planning and management. Finally, quality of care has been inadequate at some facilities due in some cases to lack of adequate training and motivation, to poor supervision, delays in resupply of drugs or drug requests and poor prescription practices. 3. Proposed Modifications 2.36 Although the project disbursement lag is less than 10 percent, implementation was slower than anticipated and a number of new approaches (drawn also from the  Guinea S.A.R. - Health and Nutrition Sector Project 16 implementation experience from other projects) will be incorporated into the proposed operation: (a) the project management structure will be refined to ensure direct responsibility by technical units for the management and implementation of project components, with support provided through a Project Coordinator based in the General Secretariat of the MSPAS (para. 3.39). This new structure will replace the current project implementation unit; (b) counterpart financing will include beneficiary and Govemment contributions phased in over the course of the project (para. 3.30). In addition, the Govemment will be expected to finance the incremental recurrent costs associated with service delivery in the five prefectures financed under the first project, through adequate budgetary resource allocations, as agreed with Government (para. 3.26); (c) the Ministry's key strategic planning and technical units will be strengthened, roles more clearly defined and legislative instruments issued defining the roles and responsibilities of the decentralized management teams (Regional Inspectorates and Prefectoral Directorates). In addition, financial and resource management procedures will be strengthened at all levels (paras. 3.22 and 3.62); (d) health committees will receive further training. Health center committees will be expanded and must include a female representative; management responsibilities of hospital committees will be strengthened through the new hospital policy (para. 2.30); (e) community participation in the rehabilitation of health centers will be required based on the criteria set out in Annex VIII; (f) beneficiary assessments, to be conducted before effectiveness and the project's third phase, will determine if project inputs and services are addressing community needs (para. 3.15); (g) IDA will support new management procedures at hospital level, and strengthen supervision, prescription practices and mechanisms for referral of high-risk maternity and other cases through better diagnostic methods and inter-facility communication. (h) drugs will be financed by IDA for the first two years of the project and individual accounts will be maintained for each health facility. Thereafter facilities will purchase drug requirements from cost recovery proceeds and, based on agreements to be reached prior to disbursement for second phase, will have full autonomy to purchase drugs from sources that provide the best available price (para. 3.8); and  Guinea S.A.R. - Health and Nutrition Sector Project 17 (i) new infrastructure will be based on population and access criteria instead of on purely administrative criteria, and on agreed construction norms and the "Carte Sanitaire" (para. 2.26). 4. Assistance Strategy 2.37 Guinea's socioeconomic indicators place it as the lowest-ranking country in the world based on the United Nations assessment of standards of living. This is clear justification for giving high priority to human resources development. Moreover, recognizing the central role that human resources play in the economic development of the country, both the Country Economic Memorandum of 1990 and the Country Assistance Strategy of November 1993 emphasize the need for a strong commitment to human resource development and, in particular, support to the education and health sectors. Therefore, the main focus of IDA's assistance strategy for health will be to consolidate achievements in the sector, build on the operational experience gained and help Government to implement certain institutional measures and management practices that address sector organization, management and financing issues and program sustainability. At the management level, the project will ensure strong project leadership and greater involvement by technical divisions, give particular attention to field supervision especially in the areas of quality control, cost recovery, renovation and community involvement and, more broadly, make necessary revisions based on a formal annual and phase review, and link execution to implementation progress. HII. THE PROJECT A. Project Objectives 3.1 The overall objective of the project is to expand coverage of low cost health services in order to improve the health status of the communities reached and, in particular, the most vulnerable groups of the population. This is fully consistent with the Government's policy framework and sector strategy. It is aimed at (a) expanding coverage and improving quality of health, nutrition and family planning services with specific coverage indicators for each program (Annex IX); and (b) improving sector organization, management and resource mobilization. B. Summary Description 3.2 The project will finance health service activities and rehabilitation in three prefectures in Middle Guinea (Mali, Koubia and Mamou) and four prefectures in Lower Guinea (Telimele, Dubreka, Coyah and Kindia) covering a population of over one million, or almost 20 percent of the country's population. In addition, limited financial support for the five prefectures covered by the ongoing project will be provided for technical programs such as training, vaccinations and iodine capsule distribution. Furthermore, decentralization will be supported through the rehabilitation of about 18 prefectoral health directorates (in the previously mentioned 12 prefectures and six others: Koundara, Gaoual, Boke, Boffa, Fria and Forecariah), as well as of Lower Guinea's regional health inspectorate (in Kindia);  Guinea S.A.R. - Health and Nutrition Sector Project 18 modest rehabilitation of the central services building of the MSPAS is also included. The project will help strengthen sector organization and efficiency, and generate new resources. The attached map shows the prefectures covered by the ongoing project and the geographic coverage under the proposed project. Together the two projects will cover more than 40 percent of Guinea's population. The project will finance infrastructure development, hospital and health center management, cost recovery, essential drugs, training and the integration of health, family planning and nutrition services at clinical facilities, as well as develop better supervision and resource management systems at the central and decentralized levels. The project will also finance community participation in project management by supporting the organization and training of community health committees. The project will be executed in three two-year phases (para. 3.46) and will include two major components consisting of six sub-components, drawn from the six programs presented in the Government's request: 1. Expansion of Service Coverage and Improvement of Service Oualitv: (a) rehabilitation, construction, and maintenance of health centers and prefectoral hospitals; (b) supply of essential drugs, vaccines and iodized capsules; and (c) strengthening of key technical programs through the provision of goods, training, services and operating costs to improve diagnostic, treatment and management capabilities and outreach into the communities. The programs to be supported include maternal and child health and family planning, nutrition interventions, infections and parasitic disease control programs against diarrheal and respiratory diseases, malaria, tuberculosis, leprosy and sexually transmitted diseases (STD) including AIDS, and health information, education and communications. 2. Strengthening of Sector Organization and Management: (a) rehabilitation works and provision of goods, training, services and operating costs for strengthening and further decentralization of the management system and sector coordination, following the adoption of the revised MSPAS structure; (b) training, goods and services to improve current systems for financial, material and human resource management; and (c) provision of goods and services for the generation of new resources through user fees and support for adequate budgetary allocations.  Guinea S.A.R. - Health and Nutrition Sector Project 19 C. Detailed Features 1. Expansion of Service Coverage and Inmrovement of Service Qualitv 3.3 To overcome problems of access to health care and improve the quality of services (para 2.5), this component will support the following: (a) Health Facility Rehabilitation and Maintenance (US$11.5m) (Part of Government's Program 5)2/ 3.4 The project will finance rehabilitation, construction and maintenance (works, equipment, furniture and spare parts) of twenty health centers, two improved health centers and four prefectoral hospitals in the prefectures of Mali, Koubia and Mamou in Middle Guinea, and the prefectures of Telimele, Dubreka, Coyah and Kindia in Lower Guinea. 3.5 Rehabilitation will be undertaken in three phases (paras 3.46/3.47). Site selection will be based on the results of the national health inventory and will include criteria of population density, the most neglected facilities and agreement reached with the community to participate in the work. Communities will participate in health center rehabilitation as agreed with Government by completing site cleaning and preparation, site enclosure, latrines and shelters. The architectural, technical and control consultants for the first phase were short-listed before negotiations. The rehabilitation program for the first phase has been finalized before Board presentation. Signature of the corresponding contracts will be a condition of effectiveness. The first phase will be implemented at credit effectiveness, contingent upon a number of other measures to be taken by Government (para. 5.3). Disbursement of funds for the implementation of the second and third phases of rehabilitation of facilities will be contingent upon satisfactory completion of the previous phase, and completion of necessary measures on staffing, financing and management arrangements (Para. 5.4). 3.6 In addition to guiding Government on the selection and phasing of rehabilitation work, the national health inventory (para. 2.26) will provide the basis for setting norms based on population density and improve programming of infrastructure and equipment, which will also be supported through 28 person-months of specialist services and staff training (para. 3.25). 2/ Refers to Government's overall health program of which IDA is financing certain activities and as expressed in the Government's project request document.  Guinea S.A.R. - Health and Nutrition Sector Project 20 (b) Drug Supplv for Basic Health Services (US$3.3m) (Part of Program 5) 3.7 The project will finance the basic package of essential drugs, vaccines and iodized capsules for goiter problems, training in drug management and improved prescription practices, vehicles for drug distribution and necessary facilities, furniture and equipment for storage of drugs in the newly rehabilitated facilities. An initial two-year stock of essential drugs (1 drug kit for a population of 1250) will be financed and procured by the project, to allow new facilities time to establish cost recovery mechanisms and generate receipts for replenishment of drugs and materials. Facilities will receive an initial six-month drug supply based on population size, with replenishment based on consumption levels and projected needs for the next six months. Restocking of facilities will be coordinated through the regional administrative units (para. 2.30). Iodized capsules for the nutrition component of the project and vaccines for the maternal and child health component discussed below, will be financed, for the first two years in the case of iodized capsules and throughout the project in the case of vaccines, to cover needs in Middle Guinea and in the prefectures financed in Lower Guinea. 3.8 A number of drug management procedures will be strengthened, including stock control and replenishment procedures, as well as training of staff in improved hospital prescription practices (para 2.7). Signature of the contracts for supply of drugs adequate to meet the requirements of the project for the first year of its implementation will be a condition of credit effectiveness (para 5.3). In line with the agreed Action Plan (Annex X), Government will submit proposals acceptable to IDA, before the project's second phase, allowing health facilities in the project zone to purchase drugs and vaccines from sources offering the best prices (para. 5.4). (c) Strengthening of Key Technical Programs (US$2.2m) (Programs 1-4) 3.9 The project will finance goods (including vehicles), 64 person-months of specialist services, training and operating costs to strengthen services at the health center and hospital level and integrate some vertical programs into the normal delivery system. In particular, it will improve staff diagnostic and treatment capabilities, adequate follow-up of patients through the outreach program and rapid referral of high risk cases. This will be complemented by a comprehensive information and education component for preventive and promotional work and data collection and analysis. An in-service training program for clinical staff will also be supported through the project. Annex XI lists training (locally and abroad). In-service training will be conducted at the regional and prefectoral level primarily, using existing training facilities. It will focus in the first phase on the development of a team of trainers and priority training to execute the primary care program, as well as on pedagogical methods, curriculum development or adaptation and development of appropriate educational materials. As training is among the highest of Government priorities, training will be provided directly to a large number of clinical staff in the health facilities to be financed, and second generation training by those trained will be completed within individual health facilities. In addition, management training will be conducted for management teams  Guinea S.A.R. - Health and Nutrition Sector Project 21 in all 12 prefectures as well as for community health committees in the facilities to be financed. The training activities are described in the individual sections of the report and are designed to develop and reinforce standards of care and norms for delivery of the technical programs described below. Disbursement of funds for training in phase 2 and 3 will be conditional upon satisfactory completion of local training in the preceding phase. (i) Maternal and Child Health and Family Planning (MCH/FP) (Program 1) 3.10 Project financing for the maternal and child health and family planning (MCH/FP) program, the sector's highest priority, will include basic health and family planning (FP) equipment, vaccines, contraceptive supplies, staff training and operating costs for pre and post-natal care, deliveries, referral of high risk pregnancies, family planning, child nutrition and communicable disease control. Nurses and midwives will be trained in essential obstetrical care and management and referral of obstetrical complications requiring medical support. Since a large number of women still deliver in their home, the project will support outreach to communities (providing traditional birth attendants -TBAs- with training and necessary materials for safe deliveries and health education) and determine with communities the best method for organizing referral of high risk pregnancies in order to create a strong link and referral system between the TBA and medical staff. Health facilities will be equipped with radio communication for the management and referral of high risk cases. In addition, health centers and prefectoral hospitals will be equipped to provide basic curative services for the catchment population. A national strategy and service delivery norms have been adopted by Government for integrating family planning education and contraceptive services into public health facilities through a phased program. Contraceptives are also part of the essential drugs list. The project will finance the delivery of these services as well as two knowledge, attitude and practice studies (KAP) in the area of family planning practice. In addition to support for these services in the public system, and based on the fully adequate experience in the first project with the International Planned Parenthood Federation affiliate, the Guinean Association for Family Well-being (AGBEF), the project will support this non-governmental organization to work on the expansion of family planning education and service delivery, based on agreed annual work plans through a sub-contract with the MSPAS. By addressing the demand for family planning, as evidenced by recourse to abortion, the Government may be able to reduce the lead time between mortality and fertility decline. (ii) Nutrition (Program 2) 3.11 Based on recent nutrition studies conducted in Conakry and Middle Guinea, the Government has developed a nutrition strategy to deal with specific nutrition problems (para. 2.3). Following this, the project will contribute to Government's policy to provide micronutrient supplementation to high risk groups, monitor nutritional problems through the clinical services and through the SIAC system and educate communities. The project will finance micronutrient distribution, specialist services, training, growth monitoring equipment, educational materials and nutrition and KAP studies to reduce iodine deficiency and improve breastfeeding and weaning practices. Short-term specialist services and training will be  Guinea S.A.R. - Health and Nutrition Sector Project 22 financed for MSPAS' Nutrition Division to enhance nutrition planning, management and evaluation. 3.12 The project will integrate nutrition monitoring and management of nutritional problems into the health center activities. Currently nutrition monitoring is done for 0-11 month-old infants but the MSPAS proposes to extent this system up to 36 month-old children. The project will provide iron, iodine and vitamin A supplementation through the clinical sites of the project area. All ante-natal patients will be monitored and receive micronutrient supplementation with the objective of reducing anemia by one-third and eliminating iodine deficiency in pregnant women. The serious goiter problem will be addressed through a systematic capsule distribution program for all women in the reproductive age group (15-45 years) and all children up to 15 years of age in Middle Guinea and in selected areas of Lower Guinea. The MSPAS is already testing the distribution system in two prefectures with assistance from UNICEF, with the objective of expanding distribution to all affected areas. The long-term operational strategy to deal with iodine deficiency is being analyzed based on the consultants' study on the feasibility of iodizing salt financed under the first PPF (para. 3.33). Growth monitoring will be strengthened to identify children at risk and as an educational tool for mothers. In collaboration with the Education Division, nutrition education will be reinforced, focusing on promotion of breastfeeding and proper weaning practices since a large number of problems stem from inadequate knowledge about the most appropriate types of infant foods and timing for weaning. A group of villages has been chosen to test out the community-based nutrition information system, with children weighed regularly and communities sensitized about nutritional problems. Based on results, this system will be expanded under the project. (iii) Communicable Disease Control (Program 3) 3.13 To fully integrate and expand services to control communicable diseases (para.2.25), the project will finance local training and short-term specialist services, equipment, drugs, materials, and operating means to control malaria, STD/AIDS, tuberculosis, leprosy, diarrheal (including parasites) and respiratory diseases. Initial diagnostic work for malaria and tuberculosis will be done at the health center and more complicated tests or confirmatory tests done at the hospital level. In addition, the project will finance the testing of impregnated mosquito nets in communities to control malaria. Based on the established norms for health facilities, the project will equip and provide necessary laboratory materials for diagnostic work, as well as train staff in patient management. 3.14 The disease profile for Guinea shows that about 40 percent of health conditions are water-related or due to poor environmental hygiene and sanitation. IDA initiated discussions with MSPAS, KfW and GTZ during project preparation to agree on the expansion of their water-supply program in four prefectures (Mali, Koubia, Telim&e and Dubreka) covered by this project. Government and KfW have reached a preliminary agreement to proceed and KfW and IDA will work closely together to support educational efforts and promote demand among communities for better water supply.  Guinea S.A.R. - Health and Nutrition Sector Project 23 (iv) Health and Community Education ( Program 4) 3.15 The project will finance production of education materials, specialist services, workshops, training and knowledge, attitude and practice (KAP) studies to determine family planning, breast feeding and other health behavior (paras. 3.10 and 3. 11), and operating means to implement the health and nutrition information, education and communications (IEC) component. The basis for an educational program is already in place, but needs to be strengthened and new health messages need to be developed and disseminated into the proposed project zone. Therefore, the project will finance two KAP studies and beneficiary assessments, the development and dissemination of key messages to communities focusing on nutrition, family planning, maternal and child health problems, sexually transmitted diseases and AIDS prevention, and other communicable disease messages. It will also finance the in-service training of technical staff in interpersonal skills and community representatives in social mobilization; and the dissemination of mass-media messages through 'Radio Rurale', a regional radio network of the Ministry of Communications which was supported through the first project. In addition, specialized programs, discussed above, will include IEC components in their specialized training. The beneficiary assessment already conducted and one to be conducted during the project, and again at project completion, will assess the communities' perception about the health delivery system and modifications needed. A first beneficiary assessment in the project area has been completed as a condition of Board presentation, and completion of a second one, with the adoption of necessary corrective measures, will be a condition for launching the project's third phase (paras. 5.2, 5.4). 3.16 The educational program will finance training of health committees and sensitize communities on their role and management responsibilities (paras. 2.6 and 2.31). This will include their involvement in the financing and management of health services, their interest and expected participation in health facility rehabilitation and, finally, sensitization about community-based projects to support water and sanitation efforts in the community, linked to the KfW-financed operation. 2. Strengthening of Sector Organization and Management (US$9.7m) (Program 6) 3.17 The project will strengthen the organization of the MSPAS (para. 2.9), systems development and management and the generation of new resources through cost recovery and support for adequate and rational budget allocations (para. 2.32). Financing will be provided for the rehabilitation of the decentralized administrative units of the MSPAS, 28 person-months of specialist services, in-service and training abroad, vehicles, furniture, equipment and operating costs.  Guinea S.A.R. - Health and Nutrition Sector Project 24 (a) MSPAS Organization and Sector Coordination (i) Central Organization and Coordination 3.18 The MSPAS, with specialist support, has already prepared a program to restructure the Ministry (para.2.29), and divisional mandates, the description of individual posts and assignment of staff to key positions have been undertaken; the specialist's contract was drafted as a condition of negotiations. This will be followed by job descriptions for all staff in the MSPAS. This exercise will also permit the Ministry to review training needs and career development streams. In the second project year, financing will cover the preparation of a procedural manual and the new structures will be evaluated. In addition, departmental managers will be trained in management, selected staff will receive overseas training and the project will finance equipment, furniture, vehicles, materials and operating costs to allow the MSPAS to operate more efficiently and institute improved management systems. The new structures will also be strengthened through other project activities described later, particularly those involving the consolidation or development of better financial and personnel management systems, the national training plan, and regular supervision. Modest rehabilitation of the central services building of MSPAS will also be financed. Before Board presentation, the legal texts on MSPAS' organizational structure had been in effect, and division head positions filled on the basis of job descriptions satisfactory to IDA (para.5.2). Satisfactory functioning of the new administrative structures will be a condition of disbursement for the subsequent phases, as outlined in the Essential Actions of the Action Plan (Annex X) agreed during negotiations. 3.19 To strengthen sector coordination, the project will cofinance (with Government, WHO, and UNICEF) a workshop for top policy-makers and donors in the first year of the project to present the health sector program and the objectives set for the sector as well as the key issues still to be addressed. The draft legal texts were prepared prior to negotiations and, before Board presentation, the legal texts have been in effect, on the composition, mandate and functions of the sectoral and inter-sectoral committees (para. 5.2). (ii) Decentralization 3.20 To strengthen management structures at the regional and prefectoral level, the project will finance the rehabilitation of eighteen prefectoral health offices (Labe, Tougue, [elouma, Pita, Dalaba, Koubia, Mali, Telimele, Dubr6ka, Kindia, Koundara, Gaoual, Boke, Boffa, Coyah, Fria, Forecariah and Mamou), and one regional inspectorate (Kindia); vehicles, office equipment including radio communication, materials, training and operating costs. In addition, short-term specialist services will be required for the development of the prefectoral teams to ensure that the new management system becomes fully operational and to anticipate bottlenecks in the system. The training of staff in management, budgeting, accounting and supervision will be financed under the project (para. 3.22). Evaluation of the new organizational structures will be completed in the third project year. 3.21 Finally, the project will finance the training of the health committee of each hospital and health center to fulfill their functions concerning facility management and  Guinea S.A.R. - Health and Nutrition Sector Project 25 budgeting procedures, community participation in infrastructure development and the sensitization of communities about health issues and new policies introduced in the system. As the hospital policy (para. 2.30) is implemented, this will require selection and more intensive training of committee members. Before negotiations, the Government prepared the legal texts related to the role and mandate of the regional inspectorate and prefectoral directorates, including staffing levels and hospital and health center committees, and these legal texts have been in effect before Board presentation (paras. 5.1, 5.2). Satisfactory functioning of decentralized entities will be a condition of disbursement for the subsequent phase, as outlined in the Essential Actions of the Action Plan (Annex X) agreed during negotiations. (b) Inprovement of Financial, Material and Human Resources Management Systems (i) Accounting, Financial and Stock Management 3.22 Based on the analyses conducted in the context of the annual audit and of previous technical assistance provided under the first project, financial management, accounting and stock control measures will need to be intensified (para. 2.11). At the health facilities, the project will support the development of administrative and operational instruments and standardized procedures for the management of resources. This will also include management of cost recovery proceeds, consistent with criteria set by Government for the management of funds. At the regional inspectorate and prefectoral directorate levels, administrative procedures will also be developed and the new administrative structure proposed will include a financial and administrative unit at both levels. This is expected to strengthen considerably the management of budgetary resources, stock management such as drugs and spare parts but also the supervision of staff at health facilities. Finally, the project will also support better accounting and financial management procedures at the central level by providing support to the DAAF unit in the MSPAS to monitor and supervise the implementation of the new system in health facilities. The project will finance short-term specialist services, overseas and local training, equipment and materials, and operating costs to set up and monitor the system in the prefectures covered. An annual review and programming workshop will be financed as well as quarterly and semi-annual monitoring of the new hospital management system and health centers respectively at which time the system will be evaluated. A plan for financial and stock management at health facilities financed by the project and at the regional and prefectoral levels, and for the establishment of cost recovery at the health facilities has been prepared before Board presentation (para.5.2). Satisfactory implementation of the plan and cost recovery in the project area will be a condition for launching the second phase of the project, as outlined in the Essential Actions of the Action Plan (Annex ) agreed during negotiations. Finally, a mid-term review of the project will, among others, examine how this system is functioning and make recommendations for changes as required (para. 3.70).  Guinea S.A.R. - Health and Nutrition Sector Project 26 (ii) Human Resource Development and Deployment 3.23 Under the first project, staffing norms were established, a redeployment plan was prepared and a National Health Training Plan is under preparation (paras. 2.18, 2.34). The proposed project will finance short-term services of a training specialist, local and overseas training for regional training teams, pedagogical materials and equipment and operational support to institute the in-service training plan. In addition, curriculum development, pedagogical materials and improved teaching methods will be financed at the two paramedical schools at Labe and Kindia. Training will combine clinic-based and classroom courses and will focus on refresher training to improve patient management, including capacity in patient assessment, health and nutrition education, and management of services. Since maternal and child health are Government priorities, the training of staff, particularly nurses and midwives, in obstetrical care and child health will be emphasized. During negotiations, Government presented to IDA a work program and timetable for implementation of the staffing and redeployment plan (para. 5.1). Continued implementation of the plan based on the agreed timetable and redeployment of a minimum of 150 staff to the health centers in the prefectures as well as submission to IDA of the updated staff redeployment numbers will be a condition of credit effectiveness. Continued implementation of the staffing and redeployment plan will be a condition for launching the subsequent phases of the project (paras 5.3, 5.4) as outlined in the Action Plan (Annex X) agreed during negotiations. 3.24 A computerized personnel management system was installed in the MSPAS through technical assistance financed by the first project (para. 2.34). The proposed project will expand the information base of this system and update annually the information in the redeployment plan, coordinating closely at all times, as was the case in the first project, with the Ministry of Administrative Reform, Civil Service and Labor (MRAFPT). The project will finance short-term specialist services, further training of the staff member responsible for up-date of the system, regional workshops and a new computer, materials and operating costs. 3.25 In addition to the capacity building efforts in financial and human resource management already discussed (paras. 3.22-3.24), the project will finance overseas and local training of staff and some short-term specialist services to review the management information system. Annex XII contains the complete program and timetable for all specialist services in the project. This will focus on support to key units of the MSPAS, including the Planning Division (BEPR), the Infrastructure, Equipment and Maintenance Division (DIEM), the Division for Administrative and Financial Management (DAAF) the Division for the Promotion of Women (DPF) as well as technical assistance to the decentralized management units of the MSPAS. This will be complemented by training of staff in central and decentralized units in procurement, project planning and management and clinical management. Where appropriate, the National Management Training Center in Conakry will be used as a training site or consultant resources from the Center will be used for regional and prefectoral staff training. Finally, the DIEM will be supported through specialist services to develop norms based on the national health inventory results and to improve design and programming of infrastructure (para 3.6).  Guinea S.A.R. - Health and Nutition Sector Project 27 (c) Mobilization of Additional Financial Resources 3.26 The establishment of a budget framework for the sector will provide a strong basis for the efficient allocation of resources and justification for an increase in budgetary support to the sector, both of which are objectives of the proposed project. This budget framework, prepared under PPF financing, is based on norms for the delivery of a minimum package of services in different health facilities and is linked to resource availability, including cost recovery proceeds, donor and Government financing. It is expected that the non-salary share of the recurrent budget will progressively increase relative to salaries. Consultant contracts for the financing study were signed before negotiations (para. 5.1). Study completion and adoption of the financing plan and agreement on budgetary allocations for fiscal year 1994 will be a condition of credit effectiveness. The budgetary allocation for fiscal year 1994 for non-salary health expenditures should be no less than GF 2.3 billion (para. 5.3). Responsibilities for the preparation of annual budgets will be clearly defined and local and regional teams will undertake this exercise annually in collaboration with the DAAF as well as the monitoring of expenditures to ensure that allocation criteria are respected and that financial management systems are fully operational to ensure transparency in the management of resources. The DAAF will monitor and coordinate this effort, prepare a consolidated budget and expenditures for the sector and make corrections as required. The project will finance local and overseas training in budgeting and program resource management, specialist services, materials and operating costs to prepare the annual budgets for the sector and review and evaluate financing needs and cost recovery levels. As a follow-up to the financing study, an internalization workshop will be conducted, aided by a consultant. The project will finance preparation of the three-year investment plan for the sector including an analysis of the recurrent cost requirements for these investments. The plan will include, in addition to bi-lateral and multi-lateral support, non-governmental investments since these constitute large investments in the sector. During negotiations, IDA obtained assurances from Government for a joint annual review no later than September 30 each year, of the previous year's expenditures and agreement on the recurrent budget for the following fiscal year, which will not be less than GF 3.4 billion in fiscal year 1995 and GF4.5 billion in fiscal year 1996 for non-salary recurrent health expenditures. Disbursement for the second and third phases of rehabilitation work will be conditional upon satisfactory conclusion of the previously mentioned review and agreement. In addition, the Government will review with IDA no later than September 30 each year, its 3-year rolling investment plan in the framework of overall resource availability for the sector, and agree on the investment program for health including its coherence with the health budget. Any additional annual investments that exceed a cumulative amount equivalent to US$1 million will be subject to IDA's prior approval. 3.27 As with the first project, the cost recovery system will be introduced into the new IDA-supported hospitals and health centers (para. 2.34). The project will finance two year's of drug requirements in each facility, training, equipment and materials and operating costs to establish and monitor cost recovery and service utilization. The recently revised fee structure for health centers and the new hospital fee structure will be applied in the project zone. Based on the experience of cost recovery efforts in health facilities to-date, it is expected that overall the cost recovery system could finance 50 percent of operating costs in  Guinea S.A.R. - Health and Nutrition Sector Project 28 health centers when fully operational. In the case of hospital facilities with a bed occupancy rate of 40 percent, it is expected that 30 percent of operating costs will be financed by cost recovery. A plan for establishing cost recovery in health facilities has been prepared before Board presentation. A study of the cost recovery system will be conducted by MSPAS and corrective measures implemented prior to the second phase, and the mid-term review will include an in-depth analysis of the system; this analysis and full implementation of cost recovery in the project area will be a condition for launching the third phase, as outlined in the Essential Actions of the Action Plan (Arneg.X) agreed during negotiations. 3.28 A study of the social security system is also part of the financing study, including the regulatory framework and the functioning and coverage of the existing system. IDA will review with Government specific actions to be taken in the context of the project or otherwise to refine or expand the system. D. Project Cost and Financing 3.29 The total cost of the project, including contingencies, is estimated at US$27.3 million, net of taxes and duties, with a foreign exchange component of US$20 million or 73.6 percent of total project costs. Project cost estimates are summarized in Annex XV. 3.30 IDA's credit will be US$24.6 million equivalent, representing 90 percent of total project costs. Government counterpart financing will be US$1.9 and the balance of project costs, US$0.8 million, will be financed by beneficiaries. Combined Government and beneficiary contributions represent 10 percent of overall project costs. The project will finance 60 person-months of internationally and 60 person-months of locally-recruited consultants to assist the Government to implement particular aspects of the work. The IDA credit will finance incremental recurrent costs. Base costs are in average 1992 values. Physical contingencies of 15 percent have been included for rehabilitation works and 10% for goods. Price contingencies for foreign exchange costs have been calculated at 1.3%, 1.2%, 2.4%, 3.2%, 3.4% and 3.2% annually from 1993 onwards. Price contingencies for local currency are estimated at 12% and 8% for 1993 and 1994, respectively, and 6% thereafter. Cost estimates for rehabilitation works (estimated at US$300/m2) are based on actual costs from the first IDA health project, after international competitive bidding. Cost estimates for other expenditures are based on recent experience from the first project and other projects, as well as on quotations from suppliers. E. Project hnpa 1. Impact on Women 3.31 Improved quality and coverage of health services will benefit women in a number of ways. The package of integrated health and nutrition services financed by the project will focus in particular on the needs of pregnant women and lactating mothers including a program of family planning which will protect the mother and the young children of the family (paras. 3.10 and 3.11). In addition, the local health referral system will be improved by upgrading facilities, and providing equipment and materials designed to manage  Guinea S.A.R. - Health and Nutrition Sector Project 29 high risk pregnancies and complications of pregnancy, the major cause of maternal mortality in Guinea. Communicable disease control and health education will directly address the needs of women who are also responsible for family welfare. The nutrition component wiU focus on the nutritional problems of Guinean women and especially those of pregnant women. Finally, in order to develop a better understanding of women's issues in the Guinea context and promote women's concerns and their integration into development activities, the project will provide institutional support to the Division for the Promotion of Women to develop the capacity in program planning and management. 2. Environmental Impact 3.32 The project will have a positive environmental impact through its information, education and communications component. It will be linked to the water supply and sanitation component to be financed by KfW through community mobilization and education on the value of safe water and sanitation. In addition, general community hygiene will be promoted. At the clinical level procedures for the safe handling of waste and hazardous materials (needles, blood products) will be instituted at all health facilities and staff trained in the disposal of these products. F. Project Implementation 1. Preparation Status 3.33 Under a first PPF advance of US$450,000 (approved on December 18, 1991), and a second of US$250,000 (approved on July 20, 1993), the following studies have been undertaken: (a) a study on sector budgeting and financing; (b) a national health inventory of infrastructure and equipment, and a plan for developing norms, facilities and equipment; (c) the design of a new hospital management system; (d) a feasibility study against iodine deficiency; (e) a beneficiary assessment in the project zones; (f) the preparation of the job descriptions for key MSPAS posts; (g) the preparation of a project Implementation Manual; and (h) preliminary architectural studies for the first year of project implementation. 3.34 The Implementing Organization described hereafter in section 2 and agreed upon with the Government, is being put in place and staffed. Texts for the decentralized management structures were prepared before negotiations; they have been in effect, along with the MSPAS organization and key staffing, before Board presentation.  Guinea S.A.R. - Health and Nutrition Sector Project 30 3.35 Project Design and Cost Estimates prepared during Appraisal have been revised first at the Government's request during a Pre-Negotiations Technical Mission of Guinean officials from the Ministry of Public Health and Social Affairs and the Ministry of Plan and Finance to Washington (November 4-13, 1992); then after a newly revised Request was received from the Government on January 29, 1993; then, finally, during negotiations (May 1993). Cost estimates are based on average 1992 values, and contingencies relate to the annexed Implementation Schedule. Architectural and technical design work for the first phase should be completed at the latest six months after effectiveness. 3.36 Specialist and Training Services have been identified (Annexes XI-XIII), and terms of reference for assignments needed in the first phase have been finalized before Board presentation. The architectural, technical and control consultants for the first phase were short-listed before negotiations, and signature of corresponding contracts is a condition of effectiveness. 3.37 Procurement planning and methods have been agreed with the Government as shown in the procurement table below (Table 2) and in the annexed Implementation Schedule. Advertising will begin in early 1994. Bidding documents will be adjusted from the ones approved by IDA under the first project, including for local procurement. No land acquisition problem is expected in this mostly rehabilitation operation. 3.38 Negotiations took place in May 1993, and Board presentation has been delayed pending satisfaction of conditionalities (para. 5.2), as well as preparation of a Country Assistance Strategy. Project start-up is scheduled in July 1994, the first year being anticipated to be an adjustment period owing to the reorganization of the sectoral management system (paras. 2.28-2.31 and section 2 below). 2. Management 3.39 The Ministry of Public Health and Social Affairs (MSPAS) is responsible for overall project management. The Ministry units in charge of the programs included in the project, as well as the sectoral decentralized entities (regional, prefectoral and sub- prefectoral), will be responsible for implementing these programs, as summarized below. Drawing from the first project's experience (paras. 2.35 and 2.36), and as detailed in Annex VI, decentralized entities will be strengthened, procedures will be improved, and project management will be fully integrated within MSPAS; the coordination and administrative functions and personnel of the Project Management Unit (UGP) established under the first project are being redistributed within the Ministry, as reflected in the reorganization underway: (a) a Project Coordinator will be located within the General Secretariat (the GS being responsible for overall project coordination, intersectoral dialogue, and liaison with IDA); (b) two Accountants previously responsible for the first project's accounts will report to the DAAF; and  Guinea S.A.R. - Health and Nutrition Sector Project 31 (c) the procurement function has already been transferred to the DIEM, where three competent staff are in place, with experience from IDA's first and other donors' projects. 3.40 To further draw from the first project's lessons and improve central management, complementary measures have been agreed upon, including mainly: (a) MSPAS's technical units are being more fully involved in project management; (b) the accounting, auditing and financial management system has been brought up to standard, with assistance from a financial management consultant; (c) the accounts will be checked quarterly by a private accounting firm, notwithstanding the usual annual independent audits and future half-yearly controls by the internal audit service that MSPAS is establishing within its General Inspectorate; (d) DIEM's procurement capability is being strengthened through training, locally and abroad; (e) DIEM's procurement capacity will be increased through complete subcontracting of bidding document preparation and site supervision to private firms, in packages proportionate to their ability (this has been preferred to an "AGETIP" scheme since: (i) DIEM already has competent staff involved in the first project and IDA-approved bidding documents from the first project, (ii) the size and remote location of most procurement will not be within AGETIP's range of comparative advantage --later on, however, another sector's eventual "AGETIP" might handle some of it--, and (iii) six local and six foreign, locally present firms have been evaluated and short-listed by DIEM); (f) the Ministry of Works will be more involved in architectural design and construction supervision than in the first project (where full support from its decentralized units was not secured); and (g) quality control of works and goods will be contracted to experienced "Bureaux de contr6le", as a technical and legal back-up to DIEM and the Ministry of Works. 3.41 Responsibilities, liaisons and procedures at the regional, prefectoral and sub- prefectoral levels have also been reviewed in light of the first project's experience (paras. 2.35 and 2.36), and are detailed in Annex VI. The strengthening of decentralized entities, as summarized below, is planned within the sectoral reorganization underway and will begin by project effectiveness with staff redeployment: (a) "Cellule r6gionale de coordination": the existing Regional Inspector will be assisted by three services (Regional Program Coordination; Planning, Training and Research; and Administration and Finance), the Regional Hospital  Guinea S.A.R. - Health and Nutrition Sector Project 32 Director, the Regional Maintenance Director, and the future Regional Director of "Pharmacie Centrale de Guin6e; (b) "Cellule pr6fectorale de gestion du projet": the existing Prefectoral Director for Health and Social Affairs will be assisted by five services (Primary Health; Planning, Training and Research; Pharmacy and Laboratory; Social Affairs; and Administration and Finance), the Prefectoral Hospital Director, and the Prefectoral Director of Works; and (c) At the sub-prefectoral level, responsibility for project implementation will be shared, as in the first project, between the Health Center Chief and the elected "Comite de gestion", but more attention will be paid to staff qualification and training, as well as to supervision and organizational guidance. 3.42 Implementation of such reorganization will be progressive, as reflected in the annexed Action Plan and Implementation Schedule. Prior to negotiations (para. 5.1), essential legal texts were drafted by the Government and the timetable for implementation of the staff redeployment plan was presented to IDA. Before Board presentation, essential legal texts have been issued; key job descriptions have been finalized; staff redeployment is satisfactorily underway and key positions have been filled; and an Implementation Manual detailing project procedures has been prepared (Table of contents in Annex XIX!. 3. Implementation Schedule 3.43 Given the lessons learned from the first project (paras. 2.35 and 2.36) as well as the expected delays stemming from the sectoral reorganization underway, the implementation period has been planned in three phases of two years each. With a likely completion lag of twelve months, plus six months for the closing of the accounts, the expected seven-and-a-half-year period conforms to the disbursement profile for all sectors in Guinea (para. 3.58 and Annex XVI). 3.44 Project activities and execution of project components will be phased as detailed in the Action Plan and Implementation Schedule (Annexes X and XIV). The Action Plan was agreed upon during negotiations and emphasizes certain actions (underlined in Annex X) as "Essential Actions". Satisfactory implementation of these Essential Actions will be a condition for disbursement of funds for all works and health facility equipment for the second and third phases. In addition, training in subsequent phases will be conditional on satisfactory completion of local training in the previous phase (para. 5.4). 4. Procurement 3.45 Table 2 below summarizes the project elements and their estimated costs and proposed methods of procurement. Procurement phasing and procedures are explained in paras. 3.46-3.51; procurement management arrangements (including past performance and proposed improvement) in paras. 3.52 and 3.53; and IDA review procedures in para. 3.56. All procurement within the project for works, goods, pharmaceuticals and vaccines, and services will adopt the Bank's Sample/Standard Bidding Documents.  Guinea S.A.R. - Health and Nutrition Sedor Projec 33 Table 2: Summary of Proposed Procurement Arrangements (US$m. net of taxes & duties) Procurement Method Total Project Element ICB LCB Other N.I.F. Cost 1. Works 20 Health Centers (HCs) 2.9 2.9 (2.9) (2.9) 2 Improved Health Centers 0.8 0.8 (0.8) (0.8) 4 Hospitals 3.5 3.5 (3.5) (3.5) 18 Prefectoral Directorates 1.3 1.3 (1.3) (1.3) 1 Regional Inspectorate 0.1 0.1 (0.1) (0.1) Health Ministry Rehab. 1.1 1.1 (1.1) (1.1) 2. Goods Vehicles 2.4 2.4 (2.4) (2.4) Medical & Other Im- 1.4 1.4 -ported Equipment (1.4) (1.4) Materials & Supplies 0.6 0.6 (0.6) (0.6) Furniture 0.5 0.5 (0.5) (0.5) 3. Pharmac. & Vaccines Drugs & Vaccines for HCs 2.Oa 2.0 (1.8) (1.8) Drugs for Hospitals 0.8 0.8 (0.3) (0.3) Iodized Capsules 0.4 0.4 (0.4) (0.4) 4. Services (T.A.) Policy Support 0.1 b 0.1 (0.1) (0.1) Proj. Prep. & Impl. Sup. 1.6 b 1.6 (1.6) (1.6) Institutional Dev. 1.2 b 1.2 (1.2) (1.2) 5. Miscellaneous Local Training/Seminars 1.4 c 1.4 (1.4) (1.4) Operation/Maintenance 4.5 c 4.5 (2.5) (2.5) PPF Refinancing 0.7 0.7 (0.7) (0.7) 10.4 5.4 11.5 27.3 Total (9.9) (5.4) (9.3) (24.6) Note: Figures in parentheses are the respective amounts financed by IDA. N.I.F.: Not IDA-Financed. a. UNIPAC (UNICEF Procurement Agency) b. In accordance with World Bank Guidelinest Use of Consultants by World Bank Borrowers and by the World Bank as Zxecuting Agency (August 1981). c. In accordance with Government procedures (Implem. Manual, Annex XIX).  Guinea S.A.R. - Health and Nutrition Sector Project 34 Procurement Phasing 3.46 As shown in the Implementation Schedule (Annex XIY), this program will be implemented in 3 phases of 2 years each, with distribution aimed at overcoming the first project's delays and flaws (paras. 2.35 and 3.52). Satisfactory completion of all activities in the previous phase (para. 3.5), and completion of all necessary new procurement preparation (TORs, draft bidding documents and timetable) for the subsequent phase (para. 3.55) will be a condition of disbursement for the subsequent phase (para. 5.4), as per the Action Plan (Annex X) agreed during negotiations. Project Procedures 3.47 Works: The US$9.7 million equivalent civil works program includes the rehabilitation and extension or construction of 20 health centers, 2 improved health centers, 4 hospitals, 18 prefectoral directorates, one regional inspectorate and MSPAS' rehabilitation, phased as follows, for more progressive start-up, more even distribution of activities over time, and more opportunities for involving local architectural, technical and construction resources, while covering simultaneously and progressively the new prefectures not touched in the first project (of which some are remote and of more difficult access): PHASE 1 PHASE 2 PHASE 3 10 Health Centers, CS 10 CS 2 improved CS, CSA (LCB, US$1.4m) (LCB, USS1.5m) (ICB, US$O.8m) 2 Hospitals 2 Hospitals (ICB, US$1.7m) (ICB, US$1.8m) 10 Pref. Direct., DPSAS 8 DPSAS (LCB, USSO.7m) (LCB, US$0.6m) 1 Regional Inap., IRS (LCB, US$O.lm) Health Ministry, MSPAS (ICB, US$1.lm) IC: Contracts for the 2 Improved Health Centers (US$0.8 m), 4 Hospitals (US$3.5 m) and MSPAS (US$1.1 m), split in about ten packages to allow medium size contractors' participation, will be awarded according to Section II of the IDA Procurement Guidelines (Fourth Edition, Revised and Expanded, 1992). Domestic contractors will receive a 7.5 percent preference in bid evaluation. It is expected that these contracts will be equivalent to US$200,000 or more each. LEa: Works for the 20 Health Centers (US$2.9 m), 18 Prefectoral Directorates (US$1.3m), and the Regional Inspectorate (US$0.1 m), split by the unit to allow small size contractors' participation, and too small and dispersed to attract bidders from abroad, will be bid by LCB procedures acceptable to IDA, which will at the minimum include local advertising, public bid opening, clarity in evaluation criteria, award to the lowest bidder, non-exclusion of foreign bidders, and no preference in bid evaluation for domestic contractors. It is expected that these contracts will be less than the equivalent of US$200,000 each.  Guinea S.A.R. - Health and Nutrition Sector Project 35 Local communities will initially provide preliminary/complementary works like site preparation and planting, fencing, latrines, shelters for visiting families, etc.. Expressed interest in, mobilization for, and significant progress of such participation will be major criteria for the selection of the health centers to be rehabilitated and extended. 3.48 Goods: ICB: Vehicles, medical, office and other imported equipment (US$3.8 m) will be procured through ICB procedures according to Section II of the IDA Procurement Guidelines, with about 20 contracts exceeding US$50,000 equivalent each; eligible domestic manufacturers will receive a preference in bid evaluation of 15 percent (or the amount of customs duties and other import taxes if lower). Goods procured through ICB shall be exempted from price preshipment inspection by a third party inspection firm. LCB: Locally procured furniture, materials and supplies (US$1.1 m) will be procured through about 30 smaller contracts in which foreign firms will not be interested. Such contracts, not exceeding US$50,000 equivalent each, will be bid by LCB procedures acceptable to IDA as for works above. 3.49 Pharmaceuticals and Vaccines: ICB: Drugs for Hospitals (US$0.8 m), and Iodized Capsules (US$0.4m) will be procured through ICB procedures as above, since UNIPAC, the Procurement Agency of UNICEF, has so far been interested in supplying to Health Centers only. The specific procedure will be agreed upon prior to second phase; its application will be a condition of disbursement for the second and third phase (para. 3.8). Other procedures: Pharmaceuticals and vaccines for Health Centers (US$2.0 m) will continue to be procured through UNIPAC. 3.50 Services: Management, architectural, procurement, auditing and various sectoral (including training) services, totalling US$2.9 million equivalent will be procured in accordance with principles and procedures satisfactory to IDA on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. Technical Assistance and Training Programs and Calendars are in Annexes XI and XII. Terms of reference for specialist and training services for the first phase have been prepared before Board presentation. 3.51 Miscellaneous: Consumables, incremental staff, indemnities, mission and local training allowances, etc. will be acquired and paid for following regular Government procedures which have been found acceptable to IDA and which are detailed in the Implementation Manual prepared before Board presentation.  Guines S.A.R. - Health and Nutrition Sector Project 36 Procurement Management 3.52 Past Performance: Preparation of bidding documents has improved during the first project owing to the building of experience and to the progressive and now systematic use of the Bank's sample bidding documents, but local expertise is insufficient in such specialized areas as drugs and medical equipment procurement. Evaluation of bids has also improved, but remains too long and sometimes includes criteria which are valid but not displayed in bidding documents (a continuation of local practice), as well as unclear or incomplete reporting (stemming mainly from insufficient expertise). Finalization of contracts has often been long, owing to the need for frequent revisions of erroneous or incomplete information on key dates, price/payment data, price revision procedures when applicable, and clear distinction between revised versions. Supervision of execution has been inadequate, owing to the numerical and technical weakness of both local and foreign specialists, and the inability and/or unwillingness of MSPAS to reinforce or replace them. 3.53 Proposed Improvement: Measures agreed upon to strengthen MSPAS' procurement management capacity are detailed in para. 3.40, some of which have already started: (a) procurement responsibility has been transferred to DIEM, and three DIEM Procurement Specialists (including DIEM's Chief) have been upgraded in procurement management through Bank-endorsed training at CESAG, Dakar; (b) to complement MSPAS' insufficient staffing, local private specialists services have been evaluated to prepare architectural designs, equipment specifications and other bidding documents, as well as to supervise the execution of works and the supply of goods; and (c) the quality of the private specialists' performance will be controlled by locally established 'Bureaux de controle' (such as "SOCOTEC" or 'VERITAS"), from which MSPAS has begun receiving assistance to improve the first project's completion, as per IDA's advice. Local Procedures 3.54 A Country Procurement Assessment Report has not yet been completed. However, the Borrower's procurement regulations and procedures have been reviewed throughout the preparation of the new Procurement Code (cf. Mr. Westring's Memo of April 28, 1989, L), and more recently during the preparation of a road sector project (cf. Mr. Raoul's Note of December 9, 1992, transmitted to the Government by Mr. Lafourcade on the same date, recommending some amendments to the Procurement Code). Pending further discussions with the Government concerning these amendments, IDA Sample Bidding Documents will continue to be systematically used (as is now satisfactorily the case under the first project); necessary adjustments to local procedures will be agreed upon during the above-mentioned discussions. Should these discussions not conclude soon enough, procedural adjustments specific to the project will be agreed upon separately.  Guinea S.A.R. - Health and Nutrition Sector Project 37 Procurement Schedule 3.55 The scheduling of major procurement activities is indicated in the annexed Implementation Schedule and reflected in the annexed Disbursement Schedule. The following preliminary steps are implied: (a) the architectural, technical and control consultants were short-listed prior to negotiations; (b) the signing of architectural, technical and control services contracts for the first phase will be a condition of effectiveness; and (c) satisfactory completion of a phase, including all necessary new procurement preparation (TORs, draft bidding documents and timetable), will be a condition for launching the subsequent phase. Review 3.56 During project execution, IDA-financed works and goods contracts above a threshold of US$150,000 will be subject to IDA's prior review procedures. The review process will cover about 80 percent of the total contract value procured by ICB and LCB (100 percent, ICB; about 50 percent, LCB). Selective post review of awarded contracts below the threshold levels will be carried out on about 1 in 5 works contracts and in 1 in 7 goods contracts. All consultant contracts will be subject to IDA's prior review procedures. However, prior review or approval of budgets, short-lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts will not be required for each contract below a threshold of US$50,000 equivalent for which post-review procedures will apply. Nevertheless, prior review would continue to be required for all terms of reference, the employment of individuals, single source selection of firms or assignments determined by IDA to be of a critical nature or to amendments of contracts raising the contract value to US$100,000 equivalent or above. 3.57 Procurement Information During negotiations, agreement was reached on: (a) prompt reporting of contract award information by the Borrower; (b) comprehensive semi-annual reports to IDA by the Borrower, indicating: (i) revised timing of procurement actions, including advertising, bidding, contract award, and completion time for individual contracts; (ii) revised cost estimates for individual contracts and the total project, including best estimates of allowances for physical and price contingency; and  Guinea S.A.R. - Health and Nutrition Sector PojoJt 38 (iii) compliance with aggregate limits on specified methods of procurement. (c) a completion report by the Borrower within three months of the credit's closing date (para. 3.71). 5. Disbursement 3.58 Under the first project, disbursement has lagged owing mainly to procurement and counterpart funding delays. Despite the safeguards introduced in the implementation schedule and arrangements for the present project (including the phasing and a new management structure), and despite improvements expected from the experience gained during the first project, the counterpart funding problem may continue. To address this issue, the Credit will finance 100 percent of all project costs the first year, and the agreed Action Plan (Annex X) requires that the Government's first annual share of financing (for the second year of the first phase) be deposited in the Project Account at the latest 12 months after Effectiveness, and at the beginning of each subsequent project year. The disbursement schedule proposed in Annex XVI reflects the seven-and-a-half year disbursement profile for all sectors in Guinea. The Credit will be disbursed as follows (conditions of disbursement for each phase are specified in paras. 5.3 and 5.4). Tab_le 3: Withdrawal of the Proceeds of the IDA Credit Amount of the Credit Allocated % of Expenditures Cateaory (Expressed in USS million Eauivalentl to be Financed (1) Works 8.5 100% (net of taxes & duties) (2) Equipment & furniture for health facilities 1.5 100 (3) Other equipment & furniture, materials and vehicles 3.0 100% (4) Drugs, iodized capsules and vaccines 2.0 100% (5) Specialist services 3.0 100% (6) Training 1.5 100% (7) Operating costs* 2.0 100% " for the 12 months following the Effective Date; 50% thereafter (8) Refunding of PPF 0.7 100% (9) Unallocated 2.4 TOTAL 24.6 * Operating Costs: incremental project-related expenditures incurred by MSPAS and Health Facilities for supplies, operation and maintenance of equipment and vehicles, maintenance of buildings, per diem for mission and local training, and domestic travel of staff of MSPAS and Health Facilities.  Guinea S.A.R. - Health and Nutrition Sector Project 39 Disbursement Documentation 3.59 Disbursements from the IDA Credit will be fully documented, except for payments under contracts of less than US$20,000 equivalent, training, and operating costs, which will be reimbursed against certified statements of expenditures, for which documentation will be retained by MSPAS' DAAF for review by IDA supervision missions and project auditors. Project Accounts 3.60 Given the first project's satisfactory experience with this financing facility, the Government will establish, maintain and operate, in a commercial Bank, on terms and conditions satisfactory to IDA, a Special Account to which IDA will make an initial deposit of about US$500,000 (estimate for about three months of expenditures). This Special Account will be replenished by IDA monthly according to disbursement regulations and will include a certification by the bank holding the account showing (i) account activity since the last replenishment application, (ii) the account balance, and (iii) a reconciliation statement. Should any disbursement made be disallowed by IDA, the Government will redeposit the corresponding amount into the Special Account. Given the availability of the Special Account, applications for direct payment will normally be for US$ 50,000 (or 10% of the initial deposit) equivalent minimum. The Government will, prior to the second year of the first phase, establish a separate Project Account in local currency and will deposit an initial amount in Guinean Francs equivalent to US$258,000, representing the Government's counterpart financing contribution for the second year of the project. At the beginning of each subsequent project year, the Government will deposit funds to cover Government counterpart financing requirements for that year, as per the Action Plan (Annex ) agreed during negotiations. The Project Account may be replenished through the Special Account for incurred expenditures for eligible operating costs. 6. Accounting. Reporting and Auditing 3.61 Past Performance: The first project's computerized accounting and financial management system has been set up and improved with the assistance of a financial consultant and of the external auditors. The two accountants have been trained in its utilization. Owing to a first unsuccessful computerization attempt by another consulting firm and the lengthy development of the new system, audit reporting has sometimes been late. Furthermore, insufficient counterpart financing has delayed the training of regional entities in improving their accounting procedures. However, conditions for satisfactory financial management are now in place. 3.62 For the proposed project, and on the basis of the now improved system, experience gained, and planned procedures (Annexes VI and XIX), MSPAS will progressively establish and maintain separate project-related accounts at the central and decentralized offices responsible for project execution. Such accounts shall be maintained in accordance with sound and internationally recognized accounting principles and practices satisfactory to IDA. MSPAS will provide interim and annual financial statements to reflect  Guinea S.A.R. - Health and Nutrition Sector Project 40 the financial performance and position of the project. An auditor's opinion and reports satisfactory to IDA on such statements, including for the Special Account, the Project Account and the Statement of Expenditures, will be provided within six months of the close of the fiscal year. The auditor's report will include a statement on the adequacy or otherwise of the accounting system and internal controls, as well as on the compliance with financial covenants, and a separate opinion on the reliability of statement of expenditures as a basis for credit disbursements. 3.63 The foregoing project accounting, financial reporting, and auditing arrangements should provide adequate and timely information to IDA for supervision. As a condition of effectiveness, the first project's computerized accounting and financial system, including all improvement measures recommended by the auditor, will be transferred to MSPAS' DAAF from PIU, and the system will be fully operational and adequate staff assigned and trained; and (ii) the above-mentioned financial statements will be included in the semi-annual progress reports to be transmitted to IDA by the Project Coordinator at the latest three months after the end of each semester. 7. Supervision, Monitoring and Evaluation 3.64 IDA's Supervision Plan (Annex XVII) and MSPAS' Monitoring System (paras. 3.65-3.67) will be closely coordinated to ensure the most efficient use of scarce resources in a context of remote and dispersed project activities. Implementation problems experienced during the first project, which covers five more accessible prefectures in the same region, have led to Government increasing and diversifying supervision resources (Annex Vl). Government's Monitoring System 3.65 As detailed in Annex VI, Project monitoring will be the responsibility of the Project Coordinator in MSPAS' General Secretariat. Review meetings with the participation of the various project entities (including local representatives of all involved development agencies, NGOs, and private consultants) and chaired by MSPAS' Secretary General will be held at the end of each quarter. 3.66 Progress reports will be prepared at the end of each semester by MSPAS' General Secretariat, with inputs from the various project entities and under the Project Coordinator's responsibility. To make this procedure as light and effective as possible, MSPAS and IDA will, during the project launch workshop, agree on a format and coverage limited to the essential indicators. 3.67 MSPAS' General Secretariat will be responsible for coordinating arrangements for IDA supervision missions, and for providing all required information. Missions will normally be accompanied by the Project Coordinator, and, as necessary, by specialist staff from the project entities and other Ministries. Mission briefings, on arrival, and wrap-up meetings will normally be chaired by MSPAS' Secretary General, with the participation of the various project entities.  Guinea S.A.R. - Health and Nutrition Sector Project 41 Joint Evaluation 3.68 IDA and the Government will conduct three types of periodic joint assessment of the relevance, performance, efficiency, and impact (both expected and unexpected) of the project in relation to stated objectives: at the end of each phase, at mid-term, and at the end of the project. Phase Review 3.69 During negotiations, the Government and IDA agreed on the annexed Action Plan, which will be examined jointly at agreed intervals to assess progress in the implementation of the policy measures and activities. Conditions of disbursement for each phase are specified in the annexed Action Plan (Annex X). Mid-term Review 3.70 The Government and IDA will, at the beginning of the fourth project year (i.e. the middle of the second phase), conduct a mid-term project implementation review to evaluate progress in carrying out the project and meeting its objectives. Without limitation upon the generality of the foregoing, such review will include an evaluation of: (i) MSPAS' functioning; (ii) progress of cost recovery measures and their impact on health services' quality and utilization; (iii) progress of training activities and the performance of trained staff; (iv) progress of the priority programs; and (v) project management. Project Completion Report 3.71 Sufficiently ahead of the scheduled final supervision/completion mission, the Government will prepare an independent evaluation of project implementation and outcome, to be submitted no later than three months after the completion mission. During the completion mission, IDA will ensure that IDA/Government views are well understood by both parties, before being recorded in an agreed aide-memoire. Within six months after the Credit Closing Date, a Project Completion Report will be finalized by IDA, in which differences of views will be identified. IV. PROJECT BENEFITS AND RISKS A. Benefits 4.1 By the end of the project period, both the quality and coverage of health care will have increased, thereby helping to improve the health status of the population and particularly of the vulnerable groups in the project area. The project will expand health care coverage to three additional prefectures of the ten prefectures in Middle Guinea (of which five are already covered by the ongoing project), and to four prefectures in Lower Guinea, directly benefiting over one million people or almost 20 percent of the country's population. In addition, the health care coverage for particular target groups will increase, with 70  Guinea S.A.R. - Health and Nutrition Sector Project 42 percent of children under one year of age fully immunized, ante-natal care coverage for 60 percent of pregnant women (a minimum of three ante-natal visits and full immunization with tetanus toxoid) and 50 percent coverage by a trained birth attendant. By supporting the development of decentralized management structures, sector financing and management and Government's capacity to plan future investments and coordinate donor activities, the project will help establish the basis for a sustainable program and build people's confidence in the public health system. B. RiMsk 4.2 The main risks are: (a) weak political will in following through on policy measures already begun under the preceding project, such as decentralization and personnel deployment; (b) financial constraints disrupting operational performance; and (c) weak management skills affecting implementation of the project. A weakening of political will would be minimized by: (i) including up-front measures on key issues (e.g. decentralization) and by linking progress on these measures to conditions of disbursement for specific project components; (ii) regular monitoring of program implementation by authorities; and (iii) an increased involvement of communities in local management and decision-making. The risk of diminishing sector resources will be addressed by expanding the cost recovery system, reducing inefficiencies in the sector and including review of sector budgetary allocations in annual discussions of project and sector performance. The MSPAS weak institutional capacity would be addressed by strengthening strategic planning and management and project management through training and short-term specialist services. V. AGREEMENTS REACHED AND RECOMMENDATIONS 5.1 Prior to negotiations, the following documents were submitted by the Guinean Government to IDA: (a) short-listing of architectural, technical and control consultants (para. 3.5); (b) draft consultant's contract for preparing job descriptions (para. 3.18); (c) draft legal texts, related to the role and mandate of the regional inspectorate, prefectoral directorates, and hospital and health center committees and giving autonomy to peripheral and intermediate health facilities (para.3.21); (d) work program and timetable for implementation of the staffing and redeployment plan (para. 3.23); and (e) signed consultant contracts for the financing study (para. 3.26);  Guinea S.A.R. - Health and Nutrition Sector Project 43 In addition, during negotiations, Government and IDA reached agreement on: (f) the letter of sector development policy prepared by Government (Annex V) and the Action Plan to be reviewed annually (Annex X); (g) a joint annual review no later than September 30 each year, of the previous year's expenditures and agreement on the recurrent budget for the following fiscal year which for non-salary recurrent expenditures will be no less than GF 2.3 billion in FY94, GF 3.4 billion in FY95, and GF 4.5 billion in FY96 (para. 3.26); (h) a joint-annual review and agreement no later than September 30 each year on the Government's three-year rolling investment plan for the health sector in the context of overall resources available for the sector, as well as approval by IDA of any additional annual investments that exceed a cumulative amount equivalent to US$1 million (para. 3.26); (i) project management and implementation arrangements (para. 3.39); and (j) the establishment by Government of a Project Account and deposit of Guinean Francs equivalent to US$258,000 prior to commencement of year 2 of Phase 1. Thereafter, an annual deposit of the Government's counterpart contribution for the next 12 months will be deposited in the Project Account (para. 3.60). 5.2 As Conditions of Board Presentation, the Government has: (a) prepared the rehabilitation program for the first phase of rehabilitation (para. 3.5); (b) carried out the first beneficiary assessment in project areas (para. 3.15); (c) put in effect the legal texts on MSPAS' organizational structure and filled division head positions on the basis of job descriptions satisfactory to IDA (para. 3.18); (d) put in effect the legal texts on composition, mandate and functions of the sectoral and intersectoral committees (para. 3.19); (e) put in effect the legal texts on the role of the regional inspectorate, prefectoral directorates and hospital and health center committees (para. 3.21); (f) prepared and submitted to IDA for review a plan for financial and stock management at health facilities financed by project and at the regional  Guinea S.A.R. - Healh and Nutition Secor Poject 44 and prefectoral levels, and for establishing cost recovery in financed health facilities (paras. 3.22, 3.27); (g) submitted to IDA terms of reference for specialist and training services for the project's first phase (para. 3.36); (h) undertaken all PPF-financed studies (paras. 3.33, 3.38); and (i) prepared an Implementation Manual satisfactory to IDA, detailing project procedures (para. 3.42 and Annex XIX). 5.3 Conditions of Credit Effectiveness: (a) selection of about 20 health centers, two improved health centers and four prefectoral hospitals for rehabilitation, construction and maintenance in the prefectures of Mali, Koubia and Mamou in Middle Guinea, and T&im&e, Dubreka, Coyah and Kindia in Lower Guinea, to IDA's satisfaction; and determination of which of those facilities to be supplied with essential drugs (paras. 3.5 and 3.7); (b) signature of contracts for architectural, technical and control services for the first phase (paras. 3.5, 3.36, 3.55); (c) signature of contract for first year's drug supply financed by IDA (para. 3.8); (d) continued implementation of the staffing and redeployment plan in accordance with timetable agreed between IDA and Government at negotiations, redeployment of a minimum of 150 staff to the health centers in the prefectures and submission to IDA of the updated staff redeployment numbers (para. 3.23); (e) completion of the financing study for the health sector; and adoption of the Financing Plan, and Government budgetary allocations, acceptable to IDA, for FY94, which for non-salary health expenditures will be no less than GF 2.3 billion (para. 3.26); and (f) installation of project computerized accounting and financial management system at MSPAS' DAAF unit; full operation of system; and assignment and training of adequate staff (para. 3.63). 5.4 Conditions of Disbursement Against the 2nd and 3rd Phases: Disbursement of funds for all works, and health facility equipment, for the second and third phases will be conditional on satisfactory implementation of Essential Actions in the previous phase as underlined  Guinea S.A.R. - Health and Nutrition Sector Project 45 in the Action Plan (Annex X) agreed upon during negotiations. In addition, training in subsequent phases will be conditional on satisfactory completion of local training in the previous phase as detailed in the calendar of training (Annex XI). 5.5 Event of Suspension: Any substantial changes in (i) legislation on the central or decentralized organization and the staffing and redeployment plan that adversely affects implementation of the Project; (ii) proposals as outlined in the Letter of Sector Development Policy; and (iii) execution of the Government's recurrent budget for health during project implementation, as agreed between the Government and IDA, would constitute an event of suspension. Reconunendation 5.6 Subject to the above terms and conditions, the proposed project would be suitable for an IDA credit of SDR 17.4 million (US$24.6 million equivalent) to the Republic of Guinea on standard IDA terms, with 40 years maturity.   ANNEX I REPUBLIC OF GUINEA Page l of 1 BASIC DATA AND DEMOGRAPHIC, HEALTH AND NUTRITION INDICATORS D '7 ', ;':,,ATA " '' " Y SOURCE' A. GENERAL COUNTRY DATA 1. Total Population (Million)(Estimated): 6.0 1991 WDR 2. Population Projection (Million) 8.0 2000 WDR 3. Urban PopulaUon as % of Total: 26.0 1991 WDR 4. Area (1,000 Km2): 246.0 1991 WDR 5. GNP Per Capita (USS): 460.0 1991 WOR B. POPULATION DATA: 1. Crude Birth Rate (Per 1,000 Population): 49.0 1991 WDR 2. Crude Death Rate (Per 1,000 Populaton): 21.0 1991 WDR 3. Avg. Annual Growth of Population (%): 2.8 1991 WDR 4. Total Fertilty Rate: 6.5 1991 WDR 5. Population Age Structure (% of Total): 0-14 Years 46.7 1991 WDR 15-64 Years 50.7 1991 WDR C. HEALTH DATA: 1. Population Per Physician: 6,570 1990 SID 2. Population Per Nurse: 5,164 1989 SID 3. Infant Mortality Rate (Per 1,000 Live Births): 136 1991 WDR 4 Under 5 Mortality Rate (Per 1,000 Live Births): 237 1991 NPAG 5. Matemal Mortality (Per 100,000 Live Births) 880 1990 MSPAS 6. Life Expectancy at Birth (Years) 44 1991 WDR 7. Access to Safe Water (% of Population) Urban 72 1990 NPAG Rural 42 1990 NPAG D. NUTRITIONAL DATA: 1. Daily Calorie Supply (Per Person): 2,042 1989 SID 2. Daily Protein Supply (Grams Per Person): 45 1989 SID E. EDUCATIONAL DATA: 1. Gross Enrollment Rates (% of School-Age Group): Primary: Total 37 1990 WDR Female: 24 1990 WDR Secondary: Total 10 1990 WDR Female: 5 1990 WDR 2. Pupil-Teacher Ratio: Primary: 40 1990 WDR Secondary: 21 1989 SID 3. Adult Illiteracy (%): Total 76 1991 WDR Female: 87 1991 WDR Health Budget as % of Total Gov't. Budget 2 1992 MFP SOURCES WoddD.Dvlopmeat Repon (WDR). 1993; Social lIdimlotn ot Development (SM), 1990; Nadonl Plao d Acdoo fore aDeccde for Chfldres (NPAG). Rep of Guoea.M192; AnOmI Statsto. IM,