China - Disease Prevention Project

Document of The World Bank Report No. 14912-CHA STAFF APPRAISAL REPORT CHINA DISEASE PREVENTION PROJECT NOVEMBER 8, 1995 Rural and Social Development Operations Division China and Mongolia Department East Asia and Pacific Regional Office  CURRENCY EQUIVALENTS (As of July 1995) Currency Name = Renminbi (RMB) Currency Unit = Yuan (Y) Y 1.00 = US$0.12 US$1 = Y 8.4 WEIGHTS AND MEASURES Metric System FISCAL YEAR January 1 to December 31 ABBREVIATIONS AND ACRONYMS AIDS - Acquired Immunodeficiency Syndrome BCG - Baccille Calmette-Guerin BRFSS - Behavioral Risk Factor Surveillance System CAPM - Chinese Academy for Preventive Medicine CDC - US Centers for Disease Control and Prevention DALY - Disability Adjusted Life Year DCD - Disease Control Department DPT - Diphtheria, Pertussis and Tetanus EPI - Expanded Program on Immunization EPS - Epidemic Prevention Station FLO - Foreign Loan Office HIV - Human Immunodeficiency Virus ICB - International Competitive Bidding IDA - International Development Association IEC - Information, Education and Communication IMR - Infant Mortality Rate MCH - Maternal and Child Health MIS - Management Information System MMR - Maternal Mortality Rate MOF - Ministry of Finance MOH - Ministry of Health NCB - National Competitive Bidding NCD - Non-Communicable Disease NIHE - National Institute for Health Education PCG - Project Coordination Group PIA - Project Implementation Agreement PIP - Project Implementation Plan PPP - Project Preparation Plan SDR - Special Drawing Right SOE - Statement of Expense SPC - State Planning Commission STD - Sexually Transmitted Disease TFR - Total Fertility Rate UNICEF - United Nations Children's Fund WDR - World Development Report WHO - World Health Organization  CHINA DISEASE PREVENTION PROJECT CREDIT AND PROJECT SUMMARY Borrower: The People's Republic of China Beneficiaries: Provinces and Autonomous Regions of Gansu, Guangxi, Guizhou, Hebei, Henan, Hubei, Shaanxi, Shanxi, Xinjiang, and Yunnan; Cities of Beijing, Chengdu, Liuzhou, Luoyang, Shanghai, Tianjin, and Weihai; and the Ministry of Health and the Chinese Academy of Preventive Medicine. Poverty: Program of Targeted Interventions Amount: SDR 67 million ($100 million equivalent) Terms: Standard, with 35 years' maturity Commitment Fee: 0.50 percent on undisbursed balances, beginning 60 days after signing Financing Plan: See Table 3.2 Economic Rate of Return: Not applicable Project ID Number: CN-PA-3589   - .1 - CONTENTS 1. Disease Prevention in China .......................... 1 A. Population, Health and Nutrition Status. 1 B. Vaccine-Preventable Diseases. 2 C. Non-Communicable Diseases, Sexually Transmitted Diseases and HIV .3 D. Bank Group Assistance Strategy and Project Rationale. 5 E. Bank Group Experience and Lessons Learned. 5 2. Project Background. 8 A. Project Development. 8 B. Project Areas. 9 3. The Project ................................................ 1 A. Project Objectives .11 B. Project Description .11 C. Project Costs and Financing .14 4. Project Organization and Implementation ..16 A. Organization and Management .16 B. Implementation Plan .18 C. Procurement .19 D. Disbursements .21 E. Accounts and Audits .23 F. Project Monitoring and Evaluation .23 G. Impact on Environment .25 5. Benefits, Risks, and Project Sustainability .26 A. Benefits .26 B. Risks .27 C. Sustainability .28 6. Agreements Reached and Recommendation ..29 This report is based on the findings of an appraisal mission that visited China in June/July 1995, comprising Messrs./Mmes. Jagadish Upadhyay (Task Manager), Janet Hohnen, Darren Dorkin, and Shaikh Hossain (EA2RS); Mary Young (HDD); Zhao Hongwen (RMC); Mauno Erkkila and Alan Schnur (WHO); John Quinley, Vivian Lin and Karen Webb (Consultants); and Karen Hill (AusAID). Messrs./Mme. Eugene Boostrom (AFTHR), Salim Habayeb (SA2PH), Caby Verzosa (HDD), and Richard Bumgarner (WHO) were the peer reviewers. Mr. Joseph Goldberg is the Division Chief and Mr. Nicholas C. Hope is the Department Director.  - iii - TABLES IN TEXT 1.1: Immunization Coverage . ......................................... 3 2.1: Basic Indicators of Immunization Component Project Areas .................. 10 3.1: Summary of Cost Estimates ...................................... 14 3.2: Financing Plan . ............................................. 15 4.1: Procurement Arrangements . ....................................... 20 4.2: Project Outcome Indicators ....................................... 24 ANNEXES 1. Immunization Component ........................................ 32 2. Health Promotion Component ..................................... 38 3. National-Level Component ....................................... 50 4. Replacement and Long-Term Sustainability of the Cold Chain ................. 59 5. Project Implementation Provisions .................................. 65 6. Summary of Project Costs . ....................................... 68 7. Estimated Credit Disbursement Schedule .............................. 70 8. Project Implementation Schedule ................................... 71 9. Project Performance Monitoring ................................... 72 10. Project and Economic Analysis .................................... 75 11. Proposed Project Supervision Plan .................................. 82 12. Questionnaire Concerning Review of OED Reports ........................ 83 13. Documents Available in the Project File ............................... 87 MAP IBRD No. 27285  1. DISEASE PREVENTION IN CIUNA A. Population, Health and Nutrition Status 1.1 Population Status. China's population is estimated to have reached 1.2 billion in February 1995. Family planning efforts, starting from the early 1970s, have resulted in a decline in the total fertility rate to about 2.0 per woman in the early 1990s. In 1990, China's crude birth rate was estimated at 1.8 percent and death rate at 0.6 percent, resulting in an annual rate of natural increase of 1.2 percent. The current population has a high proportion of younger adults. Rapid economic growth during the 1980s has benefitted most of the population. Yet, nearly 100 million people (8.6 percent) were in absolute poverty in 1990, and the Government has instituted special programs for their benefit. 1.2 Health Status. Since 1949, China's achievements in health have been remarkable, and by the 1980s it had reached mortality levels comparable to middle-income countries. The 1995 World Development Report (WDR) indicates that, in 1993, China's average life expectancy at birth was 69 years, compared to 62 years for low-income countries, and the infant mortality rate (IMR) was 30 per 1,000 live births compared to 64 for low-income countries. A young and healthy adult population gives China an overall burden of disease that is less than that found anywhere outside the established market economies and the former socialist economies of Europe. 1.3 China's successes in disease prevention are based on successes in improving educational standards, in lifting most of the population out of absolute poverty and in creating a comprehensive "three-levels" network of health services covering all counties. The network consists of a general hospital, an epidemic prevention station (EPS) and a maternal and child health (MCH) station at the county level, a small hospital (average 15 beds) at the township level, and rural (formerly, "barefoot") doctors and other health workers at the village level responsible for basic curative and preventive services. By the 1970s, the three level system covered most of China, making at least limited health care accessible to nearly everyone. 1.4 Specific health education and disease prevention programs were able to build on the political and health systems established in China. Epidemic and endemic diseases, such as plague, cholera, malaria, smallpox and schistosomiasis, which were uncontrolled in the first half of this century, were reduced to very low levels or even eradicated. Other infectious diseases, such as common childhood respiratory and diarrheal illnesses and adult tuberculosis, while still important public health problems, have been greatly reduced. 1.5 Nutritional Status. Average food consumption in China compares well with other developing countries. The National Nutrition Survey of 1982 indicated that the average energy intake per capita was 2,085 calories (102 percent of recommended daily allowance or RDA) including 67 grams of protein (92 percent of RDA). Since then, rural reforms and enormous increases in agricultural production have markedly improved food intake on a broad scale. Significant micronutrient problems of China have included iodine, vitamin A and iron deficiencies. Considering that about one third of the population lives in iodine deficient areas, the Government has embarked on universal iodization of salt, which will be significantly helped by the Iodine Deficiency Disorders Control Project approved in June 1995 (Cr. 2756-CHA; Ln. 3914-CHA). Vitamin A deficiency is a relatively less prevalent problem with seasonal deficiency in some areas and control measures are in  - 2 - an experimental stage. Iron deficiency anemia remains widespread in children and women, and many experimental as well as large scale efforts have been launched to address this problem. B. Vaccine-Preventable Diseases 1.6 Strengths. Emphasis on preventive care, particularly immunizations against childhood diseases, has been a key factor in China's success in the health care of its population. In 1981, China joined the World Health Organization (WHO)-coordinated Expanded Program on Immunization (EPI) against tuberculosis, diphtheria, pertussis, tetanus, polio and measles. The Government provided political and financial support for immunization services at every leve] and started major efforts to expand coverage. During the 1980s, the Government as well as international organizations also made large investments in the transport and refrigeration facilities with the objective of establishing a "cold chain" for vaccines, allowing for at least six vaccination sessions per year even in poor rural areas. Consequently, coverage of the four basic vaccines1' reached 80 percent in each province by 1988, and it reached 80 percent in nearly all counties by 1990 (with an average county level of 95 percent). These achievements resulted in dramnatic reduction in the incidence of major diseases; for example, between 1978 and 1993, for every 100,000 population, pertussis decreased from 126 to 1, diphtheria from 2 to 0.01 and measles from 250 to 10. As a result of special campaigns, polio cases have been reduced by two-thirds in the period 1992-1994. The Government has now added new vaccines to the immunization program and set the targets to: (a) eradicate polio and to reduce neonatal tetanus to one per 1,000 live births by 1995; and (b) immunize 80 percent of infants against hepatitis B in urban areas, and expand coverage in rural areas. 1.7 Weaknesses. In spite of the past remarkable achievements, China's disease prevention programs, especially the immunization program, now face several stubborn problems and challenges. First, the immunization program has been an unintentional victim of China's recent economic reforms with declines in resources available for preventive care since the mid-1980s. While the overall economy and the total expenditures on health have been growing rapidly, the real per capita Government expenditures on health have stagnated and even declined, from 4.9 RMB per capita in 1982 and 6.6 RMB in 1986 to 5.9 RMB in 1993. As a result, the condition of immunization infrastructure, especially the vital cold chain, remains poor and most systems are in need of replacement. Similarly, operating budgets for the program are inadequate, causing serious shortages of syringes, needles and sterilization equipment, particularly in poorer provinces. Second, there is a wide discrepancy in coverage and quality of inmmunization programs between the poorer and richer provinces and between urban and rural areas, as shown in Table 1.1 below. In many poor areas, major system breakdowns occurred in 1993 and 1994, as many counties could not meet the minimum number of yearly immunization rounds, resulting in inadequate protection for many children. 1' Includes: BCG (baccille Calmette-Guerin, against tuberculosis), DPT (against diphtheria, pertussis and tetanus), polio and measles.  - 3 - Table 1.1: IMMUNIZATION COVERAGE (%) BCG Polio DPT Measles National 90 88 86 85 Urban 95 94 93 85 Rural 85 86 84 73 Shanxi 65 66 62 49 Guizhou 72 74 67 53 Source: Preliminary results of National Child Survey, State Statistical Bureau, 1994. 1.8 Third, the dismantling of rural cooperatives has created a vacuum in the rural health insurance system. The payments to health workers based on work-points are now abolished, so that they have to rely on curative services for much of their income; this has reduced incentives to provide preventive care. In some areas the immunization services are paid for by the provinces or local communities, but most areas charge user fees either for each immunization or through a local contract system. There is an urgent need to establish a viable and affordable system to finance immunization. In particular, there is a need to establish a system to finance expensive new vaccines like hepatitis B, particularly important for China because about 10 percent of the population are carriers. Fourth, the immunization workers lack sufficient technical and management skills. Training has become even more important because of the departure of a large number of experienced health workers to pursue private practice or leave the profession altogether. Fifth, immunization coverage data are not reliable, and the system needs improvement so that better quality data can be obtained for management decisions. Finally, there is a lack of health education for families to increase their demand for essential immunization. C. Non-Communicable Diseases, Sexually Transmitted Diseases and HIV 1.9 Health Transition. With increasing life expectancy, a declining overall rate of death and of illness caused by infectious diseases, and a rapidly growing economy, China is experiencing a dramatic health transition. The proportion of older persons has been increasing fast and steadily: 12 percent of the population will reach age 60 or over by 2010 and 20 percent by 2030. In Shanghai, over 35 percent of the population is already over 40 years old and 14 percent over 60 years; in Beijing and Tianjin, the proportions are 30 percent and 10 percent, respectively. Consequently, disease patterns have also undergone dramatic changes, and non-communicable diseases (NCDs) already account for over three-quarters of all deaths in China. The World Bank's last health sector report!' indicated that the annual probability of death from infectious disease for adult men and women in China (ages 15 to 60) was just over one percent. In contrast, the death rate from chronic 2' China: Long-Tenn Issues and Options in the Health Transition (No. 7965-CHA), 1990.  - 4 - disease, injury and suicide was almost 15 times greater for men and 10 times greater for women (when compared with infectious disease). 1.10 Changing Risk Factors. Smoking, hypertension, poor diet, overweight and obesity and pollution are now the most important health risk factors in modern China. Over 70 percent of men and 7 percent of women smoke, making China the world's largest consumer of cigarettes. The consumption of cigarettes is growing, especially among women. The prevalence of hypertension is also increasing: from 5.11 percent (or 30 million people) in 1959, to 7.73 percent (60 million) in 1979 and to 11.88 percent (90 million) in 1991. The rate is over 20 percent in some urban areas. Over 10 percent of the Chinese population carry the hepatitis B virus, which is a major cause of liver failure and cancer. China's environmental pollution is very high, contributing to a chronic obstructive lung disease rate that is among the highest in the world. Industrial pollution, accidents and work-related injuries are also high and rising. Finally, China's increased economic and social openness have contributed to a very dramatic rise in sexually transmitted diseases (STDs) with associated risk of transmission of human immunodeficiency virus (HIV). 1.11 Non-Communicable Diseases. According to recent reports (1990, 1991 and 1992) of the National Disease Surveillance Points (DSPs), NCDs accounted for 79.8 percent of deaths, and in one urban area for 89.4 percent. The most important causes were heart diseases, stroke, lung diseases, and cancer. The death rate from stroke and hypertension (mainly heart diseases) was 150/100,000 and rates of increase were 5 percent and 8.7 percent, respectively. The cancer death rate was 83.74/100,000, mainly of stomach, liver and lung. The death rate of lung cancer increased by 4.5 percent per year. The incidence of these diseases is expected to continue to increase dramatically in the absence of effective prevention measures. 1.12 Sexually Transmitted Diseases and HlV/AIDS. The population's increased mobility, economic freedoms and changing behavior have been accompanied by a resurgence in a variety of STDs and in increased HIV. Though still relatively very low in prevalence, the numbers of STDs/HIV cases have been increasing fast each year, with a real potential for explosive growth. While there is a lack of reliable data on STDs, the STD cases are believed to have risen from 2 reported cases in 1979 to a cumulative total of over 1.13 million in 1994. The main STDs are gonorrhea, syphilis and pointed wart; the adjusted rate for gonorrhea is estimated at 41 per 100,000 population. The first HIV positive case in China was reported in 1985 and, as of June 1994, over 1,600 HIV cases have been reported, including nearly 40 cases of Acquired Immunodeficiency Syndrome (AIDS). 1.13 Government Policies and Programs on NCDs, STDs and lIV. The Government is fully alert to the challenges and potential threats posed by NCDs, STDs and HIV. On NCDs, the Government has prepared a National Outline of NCD Control outlining its strategies based on multi- sectoral involvement and primary prevention. The main approaches are to include community-based prevention, training of general practitioners and improvements in primary health care. Concerning STDs and HIV, the Government emphasizes preventive measures with four main strategies: (a) information and education to promote safe sex and other healthy behavior and to discourage intravenous drug abuse; (b) effective STD case management regimes to control the spread of STDs/HIV; (c) screening of blood donations; and (d) promotion of condom use. A large number of small experiments and pilot programs have been taken up by the Government itself and with external cooperation. Many of these programs are directed toward high-risk groups and areas.  D. Bank Group Assistance Strategy and Project Rationale 1.14 The Bank Group's Country and Sector Strategies. The project proposed by the Government is in line with China's "8-7 Plan", which aims to eliminate extreme poverty by the year 2000 and to narrow the widening health gap between the poorer rural and richer urban areas of China (see para. 2.7 for the selection of project areas). The project is also in line with the Bank Group's country and sector strategy. The Bank Group's Country Assistance Strategy for China (Report No. 14454, May 1995) is to help China meet its two major challenges: (a) achieving macroeconomic stability while maintaining rapid (and more efficient) growth; and (b) sustaining this growth by shifting resources toward priority areas, including poverty reduction, human resource development, infrastructure, and environmental protection, that are currently under-funded. For the health sector, Bank assistance will focus on helping the Government: (a) to meet the basic health needs among the rural population, particularly those living in absolute poverty; and (b) to reinvigorate initiatives in disease prevention, by retaining the gains made against infectious and endemic diseases and by implementing innovative programs against non-communicable and chronic disease. The proposed project seeks to prevent vaccine-preventable diseases in ten of the poorest provinces of China and to lay a base for effective, sustainable and replicable programs against non-communicable and chronic diseases. 1.15 Rationale for IDA Involvement in the Project. IDA support for the proposed project is justified by the project's close alignment with the Bank Group strategies for its country and health sector assistance. In addition, as a result of our involvement, provincial resource allocations for immunization will improve substantially, reversing the recent declining trend in financing disease prevention. Finally, the Association's involvement will enable China to benefit from the best international experience, technical knowledge and practices. This is particularly relevant in the case of health promotion to control chronic and non-communicable diseases, STDs and HIV, in which China's experience is limited. E. Bank Group Experience and Lessons Learned 1.16 Lessons learned from previous Bank Group projects in China and elsewhere have benefited the design of this project. In addition, non-Bank experience in the fields of imnmunization, communication, health promotion and management of chronic diseases, HIV and AIDS has been considered. Close attention has likewise been given to experience of the Government and other agencies in relevant fields in China. Lessons learned from Bank Group financed health projects implemented worldwide and summarized in OED reports are detailed in ANNEX 12. 1.17 Lessons from Bank Group Experience in China. The Bank Group has supported seven health projects in China since the early 1980s. The first two projects -- the Rural Health and Medical Education Project (Cr. 1472-CHA) and the Rural Health and Preventive Medicine Project (Cr. 1713-CHA/Ln. 2723-CHA) -- have been completed except for the vaccine production component of the second project. Four health projects are currently being implemented. The Integrated Regional Health Development Project (Cr. 2009-CHA) focuses on improved planning of health services, and includes a disease prevention component. The Infectious and Endemic Disease Control Project (Cr. 2317-CHA) supports national programs for control of tuberculosis and schistosomiasis. The Rural Health Workers Development Project (Cr. 2539-CHA) focuses on improved planning and training of the rural health work-force. The Comprehensive Maternal and Child Health (MCH)  - 6 - Project (Cr. 2655-CHA) will improve basic MCH services, training and management in eight of the poorest provinces of China. Finally, the Iodine Deficiency Disorders Control Project (Cr. 2756- CHA; Ln. 3914-CHA), approved in June 1995, would help the Government's goal to eliminate iodine deficiency disorders in China by the year 2000. Two additional projects, the Medium-sized Cities Development Project (Cr. 2201-CHA; Ln. 3286-CHA) and the Second Rural Water Supply Project (Cr. 2336-CHA), also include health components. Financing preventive health care, including childhood immunization, is a main issue being addressed under the ongoing Health Care Finance Study. 1.18 The main lessons from earlier health projects in China include the need to ensure: well- organized and adequately staffed project management offices at all levels; advance planning to ensure adequate counterpart financing; and flexible project design that can respond to changing circumstances, which is especially important in China's rapidly transforming economy. The project design has fully taken these lessons into account. Almost all provinces and cities have already established project management offices and have designated key staff. The central Ministry of Finance (MOF) has already obtained full commitment from all project provinces and cities for budgetary provisions for necessary counterpart funding. Written commitments to these and other critical steps have been required as conditions of participation by the provinces and cities in the proposed project. 1.19 Lessons from Experience in Disease Prevention. There is a large storehouse of experience, both inside and outside China, on the design and implementation of immunization programs. The major lessons considered in this project include: that strong national commitment and target-setting can result in a high level of achievement, but there may be a risk of over-reporting; that coverage of certain sections of the population (especially the poorest) can be inadequate in the absence of special targeting; and that it is important to include an effective communication strategy. 1.20 The proposed project would not only strengthen China's immunization surveillance system, but it would also include three special cluster surveys -- at the start, at the middle and at the end of the project. Special steps would be made to ensure that the poorest and the migrating ("floating") families would be adequately covered (para. 5.7). To respond to the need for improved communications for the immunization program, the project would include a separate information, education and communication (IEC) sub-component that would build on the experiences of similar projects in the Philippines, Bangladesh and Ecuador. This project component's communication strategy, aimed at increasing immunization coverage and child survival, would include: (a) identifying the target audience; (b) understanding the factors in low compliance; (c) choosing desired and appropriate media mix; and (d) selecting the means to change behavior. 1.21 As China's experience in health promotion for the prevention of chronic diseases, STDs and HIV is limited, the project draws heavily from the Bank's and other international agencies' worldwide experience. On chronic diseases, the project design has benefited from the international findings of the US Centers for Disease Control and Prevention (CDC), and the successful Finnish and Australian experience. The behavioral risk factor assessment, the IEC programs and on-site intervention programs will all benefit from such experience. In HIV/AIDS prevention, Bank experience in Brazil, Burkina Faso, India, Uganda, Zaire and Zimbabwe has particularly guided the development of the following project components: (a) surveillance and evaluation; (b) institutional development for inter-sectoral coordination and improved program management and laboratories' staff  - 7 - skills; and (c) improved management of STDs. Finally, based on the lessons learned, attempts were made to keep the project design simple and flexible.  - 8 - 2. PROJECT BACKGROUND A. Project Development Project Design 2.1 The proposed project was designed to meet two distinct disease prevention objectives: (a) to improve immunization coverage to reduce vaccine-preventable infectious diseases in poor areas of China, making a significant contribution toward achieving the Government's goal of alleviating the impact of poverty; and (b) to enhance China's capacity to plan and implement programs to control the rising prevalence of NCDs, STDs/HIV and injury. The first objective would be addressed through the Immunization Component, which would improve the access, coverage and quality of immunization throughout ten of China's poorest provinces. The program would be based on well- established domestic and world-wide experience and practices. This component involves about 85 percent of the project cost. The second objective would be addressed through an innovative Health Promotion Component, which would be implemented in seven cities and, to a more limited extent, in Yunnan Province. These areas' diverse characteristics are expected to lead to wider replication of this component elsewhere. Because of its innovative nature, the design of this component has benefitted from a considerable amount of international technical assistance, which is expected to continue well into the implementation phase. Some of the interventions under the Health Promotion Component would be designed and developed only after the start of project implementation and in light of findings of the behavioral risk factor surveys (para. 4.31) and the initial experience under the project. This component accounts for less than 15 percent of the project cost. Finally, a National- level Component would be included, with an allocation of about two percent of the project cost, to coordinate the implementation of both components, to provide policy guidance and technical assistance to the cities and the provinces, and to eventually disseminate the lessons learned under the project. Project Preparation Process 2.2 The preparation of this project was entirely managed and implemented by Chinese officials at various levels. During the Identification Mission, the Ministry of Health (MOH) officials and Bank Group staff identified a long list of activities which might fit the project objectives. MOH also identified two provinces (for the Immunization Component) and two cities (for the Health Promotion Component) to start the project preparation process. Following field visits and detailed discussions between Bank Group staff and Chinese officials, a detailed project preparation plan (PPP) was agreed upon, specifying the roles and responsibilities of various parties, technical assistance requirements and schedule. 2.3 During the Preparation Assistance Mission, project proposals prepared by two sample provinces, four counties and two cities were reviewed, further joint field visits were made, and the PPP was revised. During the Pre-appraisal Mission, project proposals from all ten candidate provinces and seven candidate cities were reviewed, plans and progress of special studies and surveys were reexamined, and additional field visits were made. The PPP was further revised and converted into an outline of the project implementation plan (PIP). The MOH completed a comprehensive PIP for the appraisal, based upon the project proposals prepared by each of the project provinces and  cities. After necessary revisions, the PIP became the most comprehensive of the project documents and a basis for project implementation. Stakeholder Participation 2.4 Stakeholder involvement in the preparation process has been very high. First, each of the ten candidate provinces prepared proposals for the Immunization Component, based upon county proposals and other inputs from the lower levels. Similarly, each of the seven cities and Yunnan Province prepared its plans under the Health Promotion Component. Most of the provinces and cities were visited by joint teams from MOH and the Bank for discussions. Finally, three comprehensive project preparation and review workshops were carried out for each of the two main components (immunization and health promotion). These workshops provided productive forums and opportunities for: (a) thorough examination of the findings and recommendations of the joint MOH- IDA missions; (b) exchange of views among the local officials and between the Chinese and international experts; and (c) provision of feedback to the MOH-IDA teams to improve the project design. In addition to the workshops held in connection with the IDA mission, MOH also held a number of workshops with domestic experts and a few with external specialists. Exposure to International Experience 2.5 A major highlight of the preparation process was the interaction between the Chinese experts and top-level international experts in the relevant fields. For the preparation of the Immunization Component, technical assistance was provided by experts from WHO, CDC and others. The design of the Health Promotion Component benefitted from technical collaboration of experts from prominent sources, including WHO, CDC, the Finnish National Public Health Institute and Australian health agencies. Considerable technical assistance is also anticipated for this component during project implementation. B. Project Areas Selection Criteria 2.6 Poverty alleviation by improving the health status of the poorest population of China was the main criteria of selecting the project provinces under the Immunization Component, which involves about 85 percent of the project costs. To select the provinces under this component, all Chinese provinces were ranked on the basis of a set of indicators including per-capita income, percentage of population under the poverty line and disease incidence, and a list of the 15 most disadvantaged provinces was determined. The list was further reduced by excluding those with very small population size, a low level of interest, and recent experience with other Bank-assisted health projects in China. Finally, the ten provinces ranked as the most disadvantaged under these criteria were selected for the project. For the selection of Health Promotion Component cities, the main emphasis was on: (a) diversity (in size and location) to allow wider replication; (b) health risk factors; and (c) capacity and commitment to implement the project.  - 10- Project Areas 2.7 For the Immunization Component, the ten provinces selected are: Gansu, Guangxi, Guizhou, Hebei, Henan, Hubei, Shaanxi, Shanxi, Xinjiang and Yunnan. Together, they represent a total population of 430 million. They also cover two-thirds of the nationally designated poverty counties: 392 out of 592 counties, and a total poor population of 53 million out of 80 million. Comparison of the provincial basic indicators are presented in Table 2.1. For the Health Promotion Component, seven cities were selected: Beijing, Chengdu, Liuzhou, Luoyang, Shanghai, Tianjin and Weihai. Beijing, Shanghai and Tianjin are directly administered municipalities (province-level cities), Shanghai has the highest level of technical and institutional preparedness and experience, and Tianjin has experience with a Bank-supported chronic disease control experiment. Chengdu is the provincial capital of China's most populous province, and Liuzhou and Luoyang represent medium-sized cities from poorer inland provinces, and Weihai is a medium-sized coastal city. In addition to the seven cities, Yunnan Province, which has the highest concentration of HIV/AIDS in China, would participate in the Health Promotion Component only with respect to the prevention and control of STDs/HIV, with policy reform, training and interventions to promote inter-sectoral collaboration, increase community awareness, promote condom use and improve case management of STD. Table 2.1: BASIC INDICATORS OF IMMUNIZATION COMPONENT PROJECT AREAS Income Rural Immunization Coverage Infant Province Population Per Income Per (1/100) Mortality Rate (million) Capita Capita DPT Me Pol BCG (1/1,000 live (RMB) (RMB) PT Mals oio CG birts) Gansu 23.19 1,158 551 82.30 69.86 88.52 89.47 54.20 Guangxi 44.39 1,115 892 80.15 72.52 86.26 90.84 53.51 Guizhou 34.09 823 580 67.31 53.21 73.72 72.44 68.71 Hebei 63.34 1,515 803 96.46 84.96 96.46 94.69 30.10 Henan 89.04 1,154 695 88.89 81.48 94.44 94.44 29.63 Hubei 55.90 1,502 783 88.81 81.82 86.21 90.21 39.65 Shaanxi 34.43 1,179 653 72.14 61.19 82.59 85.08 23.60 Shanxi 30.13 1,362 718 62.35 49.41 65.88 64.74 35.85 Xinjiang 16.05 1,878 778 85.16 77.42 87.42 88.39 60.00 Yunnan 38.85 1,168 675 82.82 68.10 92.03 89.57 53.29 Source: MOH, 1995.  - 11 - 3. THE PROJECT A. Project Objectives 3.1 The project has two objectives: (a) Prevent and control vaccine-preventable diseases to reduce morbidity, disability and mortality, especially in the poorest provinces of China. This would be carried out by improving the immunization services and by introducing policy measures to improve vaccine quality and to ensure access of all population groups, and to add new vaccines to the Expanded Program on Immunization; and (b) Improve the capacity of the health sector to design and implement health promotion programs to prevent and control the rising prevalence of NCDs, STDs/HIV and injury. This would be accomplished through policy and institutional improvements and by implementing pilot programs, including surveillance, staff training, health education and other health promotion interventions, at selected locations. B. Project Description 3.2 The project comprises three main components: (a) immunization; (b) health promotion; and (c) the national-level programs. Detailed descriptions of these components can be found in ANNEXES 1. 2 and 3. A summary description is given below. Immunization 3.3 The Immunization Component would be implemented in ten of the poorest provinces of the country - Gansu, Guangxi, Guizhou, Hebei, Henan, Hubei, Shaanxi, Shanxi, Xinjiang and Yunnan. The component consists of four sub-components: (a) cold chain improvement; (b) health workers' training; (c) management and surveillance; and (d) information, education and communication. 3.4 A majority of cold chain equipment for storage and transport of vaccines at all levels is now either damaged or approaching the end of its expected service life. Any breakdown in the cold chain can seriously damage vaccine potency. To ensure the sustainability of the immunization program, a 20-year needs assessment has been prepared for new installation and regular replacement of equipment. The proposed project would finance the first five years' requirements, including urgently needed replacements of aging equipment, new installations in deficient areas, and spare parts and maintenance. The cold chain replacement program is described in ANNEX 4. The project would improve technical and managerial skills of all staff involved in the immunization program, at all levels of the epidemic prevention network, by establishing a system of regular in-service trainiing. The project's short-term (one week) and long-term (3 to 6 months) training would cover village and township EPS workers as well as middle and senior level managers. The management improvement  - 12 - activities would include training, development of guidelines and manuals, improvements in program supervision, monitoring, reporting and verification of vaccine coverage, and surveillance of measles and neonatal tetanus. Finally, the IEC sub-component would identify behavioral factors and attitudes that contribute to lower immunization coverage and implement a suitable program to counteract them and to increase community awareness and participation. 3.5 A number of complementary policy reform measures will be essential if the project objectives are to be attained to the fullest extent. For example, as stated above, it will be necessary for each participating province to have a definite plan for regular replacement of the cold chain if the project is to yield a lasting benefit. Similarly, the project would not benefit the poorest families unless satisfactory plans are prepared to ensure the affordability of immunization to these groups. Some of the policy measures will be identical in all provinces, and others will have to be tailored to the specific needs of the provinces. Assurances were obtained at negotiations that the participating provinces would take key policy measures (para. 3.10). The details of these policy measures are specified in the Project Implementation Arrangements (PIAs) included in ANNEX 5. They include that each province would: (a) continue to make free provision throughout the project period of sufficient EPI vaccines to cover the whole population; (b) prepare a long-term strategy for cold chain replacement, in accordance with the terms of reference acceptable to the Association, with a view to its adoption upon completion of the project; (c) implement measures to increase immunization access for the poorest families, and carry out six rounds of vaccination sessions each year; (d) ensure that all children, regardless of their registration status, have suitable access to its immunization programs; and (e) procure only reusable syringes and needles, rather than disposable ones, except in those urban areas which follow safe utilization and disposal practices, consistent with the recommended policy of WHO, and ensure that all syringes and needles are sterilized and disposed of in a manner consistent with this policy. Health Promotion 3.6 The Health Promotion Component would be implemented in seven cities spread throughout the country, including Beijing, Shanghai, Tianjin, Chengdu (Sichuan Province), Liuzhou (Guangxi Province), Luoyang (Henan Province), and Weihai (Shandong Province). The STD and HIV control part of this component would be implemented in Yunnan Province. The project would be the first phase of a long-term plan to develop capacity and gain experience in implementing effective health promotion strategies and interventions to control NCDs, STDs/HIV and injury, as part of a comprehensive health policy. This component will consist of the following sub-components: (a) institutional development and policy reform; (b) human resources development; (c) surveillance, especially behavioral risk factor surveillance; and (d) community-based interventions. 3.7 The institutional development and policy reform sub-component will improve institutional and coordination arrangements, help mobilize multi-sectoral participation, and establish a policy environment for the behavior changes necessary for reducing NCDs, STDs/HIV and injury. Major risk factors to be addressed include: smoking, hypertension (salt intake), unsafe sexual practices, and use of a safety belt. The human resources development sub-component would help improve knowledge and skills in health promotion for health workers and for relevant personnel in non-health sectors and the community. Support would also be given to improve the capacity of local institutions for ongoing training in health promotion skills. The project would also help each city to establish a sustainable system for surveillance of behavioral and environmental risk factors for the target population, and to improve monitoring and analysis of health trends. Finally, the community-  - 11 - 3. THE PROJECT A. Project Objectives 3.1 The project has two objectives: (a) Prevent and control vaccine-preventable diseases to reduce morbidity, disability and mortality, especially in the poorest provinces of China. This would be carried out by improving the immunization services and by introducing policy measures to improve vaccine quality and to ensure access of all population groups, and to add new vaccines to the Expanded Program on Immunization; and (b) Improve the capacity of the health sector to design and implement health promotion programs to prevent and control the rising prevalence of NCDs, STDs/HIV and injury. This would be accomplished through policy and institutional improvements and by implementing pilot programs, including surveillance, staff training, health education and other health promotion interventions, at selected locations. B. Project Description 3.2 The project comprises three main components: (a) immunization; (b) health promotion; and (c) the national-level programs. Detailed descriptions of these components can be found in ANNEXES 1. 2 and 3. A summary description is given below. Immunization 3.3 The Immunization Component would be implemented in ten of the poorest provinces of the country -- Gansu, Guangxi, Guizhou, Hebei, Henan, Hubei, Shaanxi, Shanxi, Xinjiang and Yunnan. The component consists of four sub-components: (a) cold chain improvement; (b) health workers' training; (c) management and surveillance; and (d) information, education and communication. 3.4 A majority of cold chain equipment for storage and transport of vaccines at all levels is now either damaged or approaching the end of its expected service life. Any breakdown in the cold chain can seriously damage vaccine potency. To ensure the sustainability of the immunization program, a 20-year needs assessment has been prepared for new installation and regular replacement of equipment. The proposed project would finance the first five years' requirements, including urgently needed replacements of aging equipment, new installations in deficient areas, and spare parts and maintenance. The cold chain replacement program is described in ANNEX 4. The project would improve technical and managerial skills of all staff involved in the immunization program, at all levels of the epidemic prevention network, by establishing a system of regular in-service training. The project's short-term (one week) and long-term (3 to 6 months) training would cover village and township EPS workers as well as middle and senior level managers. The management improvement  - 12 - activities would include training, development of guidelines and manuals, improvements in program supervision, monitoring, reporting and verification of vaccine coverage, and surveillance of measles and neonatal tetanus. Finally, the IEC sub-component would identify behavioral factors and attitudes that contribute to lower immunization coverage and implement a suitable program to counteract them and to increase community awareness and participation. 3.5 A number of complementary policy reform measures will be essential if the project objectives are to be attained to the fullest extent. For example, as stated above, it will be necessary for each participating province to have a definite plan for regular replacement of the cold chain if the project is to yield a lasting benefit. Similarly, the project would not benefit the poorest families unless satisfactory plans are prepared to ensure the affordability of immunization to these groups. Some of the policy measures will be identical in all provinces, and others will have to be tailored to the specific needs of the provinces. Assurances were obtained at negotiations that the participating provinces would take key policy measures (para. 3.10). The details of these policy measures are specified in the Project Implementation Arrangements (PIAs) included in ANNEX 5. They include that each province would: (a) continue to make free provision throughout the project period of sufficient EPI vaccines to cover the whole population; (b) prepare a long-term strategy for cold chain replacement, in accordance with the terms of reference acceptable to the Association, with a view to its adoption upon completion of the project; (c) implement measures to increase immunization access for the poorest families, and carry out six rounds of vaccination sessions each year; (d) ensure that all children, regardless of their registration status, have suitable access to its immunization programs; and (e) procure only reusable syringes and needles, rather than disposable ones, except in those urban areas which follow safe utilization and disposal practices, consistent with the recommended policy of WHO, and ensure that all syringes and needles are sterilized and disposed of in a manner consistent with this policy. Health Promotion 3.6 The Health Promotion Component would be implemented in seven cities spread throughout the country, including Beijing, Shanghai, Tianjin, Chengdu (Sichuan Province), Liuzhou (Guangxi Province), Luoyang (Henan Province), and Weihai (Shandong Province). The STD and HIV control part of this component would be implemented in Yunnan Province. The project would be the first phase of a long-term plan to develop capacity and gain experience in implementing effective health promotion strategies and interventions to control NCDs, STDs/HIV and injury, as part of a comprehensive health policy. This component will consist of the following sub-components: (a) institutional development and policy reform; (b) human resources development; (c) surveillance, especially behavioral risk factor surveillance; and (d) community-based interventions. 3.7 The institutional development and policy reform sub-component will improve institutional and coordination arrangements, help mobilize multi-sectoral participation, and establish a policy environment for the behavior changes necessary for reducing NCDs, STDs/HIV and injury. Major risk factors to be addressed include: smoking, hypertension (salt intake), unsafe sexual practices, and use of a safety belt. The human resources development sub-component would help improve knowledge and skills in health promotion for health workers and for relevant personnel in non-health sectors and the community. Support would also be given to improve the capacity of local institutions for ongoing training in health promotion skills. The project would also help each city to establish a sustainable system for surveillance of behavioral and environmental risk factors for the target population, and to improve monitoring and analysis of health trends. Finally, the community-  - 13 - based intervention program would design, implement and evaluate a number of pilot measures to control NCDs, STDs/HIV and injury in different settings such as schools, work-places and neighborhoods as well as city wide. Many of these interventions would have to be designed and finalized only after analyzing the results of the behavior risk factor surveillance and the experience gained during project implementation. Assurances were obtained at negotiations that: (a) each participating local entity would submit to MOH its annual plan of the health promotion interventions to MOH by October 31 of each year; and (b) MOH would furnish to the Association the summnaries of such plans by November 30 of each year for review before those interventions are implemented. 3.8 Complementary policy reform measures will be critical to the success of the health promotion programs against NCDs, STDs/HIV and injury. Some of these reforms will be the same for all project areas and others will vary according to local conditions and priorities. Assurances were obtained at negotiations that the participating iurisdictions would take key policy measures (para. 3.10). These measures, which are stated in detail in ANNEX 5, are a part of the PIAs and include annual plans to control and reduce smoking, to ensure a policy of anonymity in the treatments of sexually transmitted disease and HIV patients, and provide training to private practitioners treating STDs and HIV patients. National-Level Program 3.9 The national-level program, which would be implemented by MOH (para. 4.1), would provide necessary coordination among the many provinces and cities and their health agencies involved in this project, and it would supervise and monitor the progress of various components of the project. It would also be responsible to provide technical assistance to project entities, to carry out activities of common interest, and to disseminate the lessons learned from the project to other areas of the country. National-level policy guidance and leadership would be particularly important in developing new surveillance systems and health promotion human resources. For the Health Promotion Component, a network of participating areas and the center would also be formed to share development tasks and ensure that all benefit from the experience and capacity in each location. Project Implementation Arrangements 3.10 As described in paragraph 2.7, the project areas selected for the Immunization Component are the provinces of Gansu, Guangxi, Guizhou, Hebei, Henan, Hubei, Shaanxi, Shanxi, Xinjiang and Yunnan; and the project areas for the Health Promotion Component are the cities of Beijing, Chengdu, Liuzhou, Luoyang, Shanghai, Tianjin and Weihai. In addition, the STD and HIV control programs of the Health Promotion Component would be implemented in Yunnan Province. The programs included in the project preparation documents were appraised and found satisfactory for inclusion in the proposed project. Assurances were obtained at negotiations that the Borrower would make credit proceeds available to each of these entities under Proiect Implementation Arrangements between the Borrower and the entities, which would include the undertakings described in ANNEX 5. Making PIAs between the Borrower and at least seven local entities carrying out the Immunization Component and at least five entities carrying out the Health Promotion Component would be a condition of credit effectiveness. Making PIAs with the remaining entities would be a condition of disbursement for that entity's respective part of the project.  - 14 - C. Project Costs and Financing 3.11 Project Costs. The total cost is estimated at $162.62 million, including taxes and duties of about $8.28 million. Detailed cost estimates are in ANNEX 6. A summary is given below in Table 3.1. Table 3.1: SUMMARY OF COST ESTIMATES Y million $ million % Foreign % Exchange Total Local Foreign Total Local Foreign Total Base Costs A. Immunization Component 1. Cold Chain 235.18 237.54 472.72 28.00 28.28 56.28 50 42 2. Training 104.85 5.87 110.73 12.48 0.70 13.18 5 10 3. IEC 55.97 1.46 57.42 6.66 0.17 6.84 3 5 4. EPI Management 275.17 38.73 313.90 32.76 4.61 37.37 12 28 Subtotal Immunization 671.18 283.60 954.78 79.90 33.76 113.66 30 85 Component B. Health Promotion Component 1. Institutional Development & 10.98 3.17 14.15 1.31 0.38 1.68 22 1 Policy Reform 2. Human Resources 7.46 2.74 10.21 0.89 0.33 1.22 27 1 Development 3. Surveillance 32.14 5.08 37.23 3.83 0.61 4.43 14 3 4. Interventions 79.29 7.86 87.15 9.44 0.94 10.38 9 8 Subtotal Health Promotion 129.88 18.86 148.73 15.46 2.24 17.71 13 13 Component C. Central Component 1. Immunization 5.15 3.05 8.20 0.61 0.36 0.98 37 1 2. Health Promotion 4.99 3.85 8.84 0.59 0.46 1.05 44 1 Subtotal Central Component 10.14 6.90 17.04 1.21 0.82 2.03 40 2 Total Baseline Costs 811.19 309.36 1,120.55 96.57 36.83 133.40 28 100 Physical Contingencies 40.56 15.47 56.03 4.83 1.84 6.67 28 5 Price Contingencies 173.61 15.87 189.47 20.67 1.89 22.56 8 17 TOTAL PROJECT COSTS 1.025.36 340.69 1,366.05 122.06 40.56 162.62 25 122 Note: Columns may not add up due to rounding. 3.12 The project costs are based on July 1995 prices. Physical contingencies of 5 percent have been applied to the base costs for all components. To provide for inflation during project implementation, the following annual escalation rates have been applied: for local expenditures, 10.5 percent for 1996, 8.5 percent for 1997, 7.0 percent for 1998, 6.5 percent for 1999, and 6.2 percent for 2000; for foreign expenditures, 2.5 percent for 1995 through 2000. 3.13 Project Financing. The proposed IDA credit of $100 million equivalent will finance about 62 percent of the total project costs, including all foreign exchange. The project's financing plan is shown in Table 3.2 below.  - 15 - Table 3.2: FINANCING PLAN 3/ ($ million) Local Foreign Total Percent Government of China, Provinces and Counties 62.62 0.00 62.62 38% IDA 59.44 40.56 100.00 62% TOTAL 122.06 40.56 162.62 100% 3.14 The Government would: (a) allocate $2.24 million equivalent to the National-level Component; (b) make available $86.87 million equivalent to the provinces participating in the Immunization Component at not more than 1.1 percent per annum for 20 years, including a 5 years' grace period; and (c) make available $10.89 million to the jurisdictions participating in the Health Promotion Component at not more than 2.5 percent per annum for 20 years, including a 5 years' grace period. The provinces would allocate part of their proceeds to the counties under similar terms. Assurances were obtained at negotiations that the Borrower would make available the credit proceeds to the: (a) provinces participating in the Immunization Component at not more than 1.1 percent per annum for 20 years, including a grace period of 5 years, and each province would make the proceeds available to its counties on a grant basis or on terms at least as favorable to the counties as the terms on which it receives funds from the Borrower, and the provinces would bear the foreign exchange risks: and (b) jurisdictions participating in the Health Promotion Component at no more than 2.5 percent per annum for at least 20 years. including a grace period of 5 years, and each of these iurisdictions would make the p2roceeds available to their counties on the same terms as they receive the funds from the Borrower, and the jurisdictions would bear the foreign exchange risks. 3/ The Government has been exploring the possibility of obtaining a small grant ($700,000 equivalent) from AusAID to finance a part of the technical assistance under the National-level Component. At this time, no formal commitments have been made, but if they materialize, the funds would be reallocated to other project activities.  - 16 - 4. PROJECT ORGANIZATION AND IMPLEMENTATION A. Organization and Management National-Level 4.1 Management and Coordination. The MOH would be responsible for the overall direction, coordination and oversight of project implementation. To carry out these responsibilities, the Government has established a Project Leading Group, under the Chairmanship of the Minister of Health and including the Directors of the MOH Disease Control Department (DCD), the Foreign Loan Office (FLO), and the Departments of Planning and Finance, Science and Technology and Education. DCD will be responsible for all aspects of the project, especially for all technical matters. FLO will act as the secretariat of the Leading Group and will carry out operational aspects of the project. FLO has long experience in implementing Bank-assisted health projects in China and is well- equipped to coordinate and oversee the implementation of the proposed project. Since the project would require coordination among different sectors, a Project Coordination Group (PCG) has been established under the Leading Group, jointly chaired by the Directors of DCD and FLO and comprising senior officials of DCD, FLO, the Chinese Academy of Preventive Medicine (CAPM) and the National Institute for Health Education (NIHE). CAPM and NIHE are autonomous specialized agencies working directly under and closely with MOH, which draws on their technical expertise whenever necessary. CAPM has a large staff with high-level domestic and overseas training, and is responsible for providing technical guidance in the field of disease prevention and control. NIHE is responsible for guidance in the field of health education, and the design and implementation of policies and programs in related fields. 4.2 The Expanded Program on Immunization Division and Non-Communicable Diseases Division of DCD are the principal participants in the proposed project at the central level, as most of the project activities will fall under DCD's responsibility. Two Project Offices have been established with full-time experts under these two DCD Divisions -- the Immunization Project Office and the Health Promotion Project Office. These Offices will oversee implementation of program activities under the National-level Component. Finally, a Technical Unit has been established with full-time staff and attached to the Health Promotion Project Office to provide technical guidance to the participating areas in planning and implementing of community-based interventions. Assurances were obtained at negotiations that the Borrower would maintain the Project Leading Group. the Project Coordination Group, the Project Offices and the Technical Unit throughout the project period, with memberships, terms of reference. staffing and resources acceptable to the Association. Provincial and Prefectural Level (Immunization Component) 4.3 The provincial organizations mirror those of the Center. Each province has established a Leading Group under the Vice Governor, comprising senior representatives of the provincial finance and planning bureaus and the heads of the departments or bureaus dealing with Public Health, Education, the Women Federation, and the Economic and Trade Committee. Each province has also established a Provincial Project Office, headed by a project director responsible to the director of the provincial health bureau, to be responsible for project implementation and project management. Officials at the prefecture level would also participate in project coordination and supervision.  - 17 - Assurances were obtained at negotiations that each participating province would maintain the provincial Leading Group and the Project Loan Office, with membership, terms of reference and resources acceptable to the Association, throughout the project period. County Level (Immunization Component) 4.4 Present Preventive Care Responsibilities. At the county level, immunization services are provided by the Epidemic Prevention Station under the County Health Bureau. The EPS is responsible for the overall planning and supervision of immunization activities in the county; training of township and village level EPS workers; health education; handling of vaccines; and disease morbidity and mortality reporting related to communicable and endemic diseases. The EPS is also responsible to operate the cold chain within the county, and most immunizations take place at the village level except for limited cases carried out at the townships. 4.5 Project Coordination and Implementation. The major part of proposed project implementation is expected to take place at the county level and below. Each county would maintain a Project Leading Group of senior officials, including planning, finance and health officials, under the chairmanship of the head or deputy head of the county government. Each county would also maintain a Project Office, located in the County EPS, headed by the director of the Station, and staffed by a section chief and members of the EPI section. Assurances were obtained at negotiations that each participating province would maintain at the county level the Project Leading Group and a county Proiect Office, with membership, terms of reference and resources acceptable to the Association, throughout the project period. City Level (Health Promotion Component) 4.6 Each city has established an Inter-sectoral Policy Guidance Committee under the vice mayor responsible for the social sector to develop leadership capability in planning, implementing and evaluating health promotion activities. Committee members include senior officials from bureaus for health, finance, planning, education, culture and sports, environment protection, industry, commerce, security and related agencies. 4.7 Within each city health bureau, a Project Leading Group has been established under the direction of a deputy director to ensure coordination from relevant areas of the health sector. Members would include staff from divisions of disease prevention, health education, medical administration, science technology and education, planning and finance, personnel and foreign affairs. 4.8 Each city health bureau has also established a Project Office to coordinate all aspects of project implementation, including accounting, local procurement, reporting on progress and other day- to-day administration of the project. The Project Office would report to the Project Leading Group. Assurances were obtained at negotiations that the municipal health bureau of each participating city would maintain throughout the proiect period: (a) an Inter-sectoral Policy Guidance Committee; (b) a Project Leading Group: and (c) a Project Office. 4.9 The responsibility for implementing specific activities would mainly rest with the NCD office of EPS, the health education institute, and the STD Prevention Center. In most cities the EPS would take the lead role in the surveillance sub-component, the health education institute would lead  - 18 - the interventions sub-component, and the STD Center would be involved in all aspects of STD work. Minor variations are expected among the cities. B. Implementation Plan 4.10 Project Implementation Plan (PIP). MOH has prepared a PIP describing the Project Implementation Arrangements in considerable detail. The PIP was the main basis of the project appraisal and will become an important reference document for project implementation and monitoring. The main PIAs are summarized in the following paragraphs. 4.11 Immunuization Component. The responsibility to implement all sub-components under this component would lie with the participating provinces, prefectures and counties, with technical guidance and coordination from the national-level organizations. The improvement of the cold chain and the immunization program is mainly the responsibility of the health bureaus at provincial, prefecture and county levels, while the procurement of equipment would be overseen by FLO. The overall responsibility for planning and improving the health workers' training, including the review and finalization of training materials, would rest with DCD at the center, but the implementation of the training program would be carried out by each province. The management improvement program involves additional training to be carried out together with the rest of the health workers' training program, and the incremental provision of equipment, materials and program support expenditures included in the project. The surveillance improvement would be carried out in two ways: (a) through the adoption of improved reporting and better management and monitoring of the ongoing regular surveillance system; and (b) by implementing three cluster surveys to be carried out under the supervision of PCG at MOH. Finally, the IEC program would be designed under the guidance of PCG and implemented by individual provinces. 4.12 Health Promotion Component. Implementation responsibility for all four sub- components would rest on the health bureau of the concerned jurisdiction, coordinated by the respective Inter-sectoral Policy Guidance Committees and the Project Office (paras. 4.6 to 4.9). The program contents as well as their implementation arrangements are expected to vary among the participating project areas under this component. Because of its innovative nature, the role of the national level is expected to be very significant, in arranging and providing technical assistance, in facilitating exchanges among the project areas and in coordinating various activities under the component. The project would also provide technical assistance to enable project areas to benefit from international best practices in health promotion. Part of the international technical assistance is expected to be arranged through a qualified consulting firm or institution. Assurances were obtained at negotiations that the Borrower would employ, as a condition of disbursement for the Health Promotion Component, a consulting institution, with terms of reference. gualifications and experience satisfactory to the Association. 4.13 National-Level Component. Implementation responsibility for the National-level Component rests on DCD and FLO under the Project Coordination Group and assisted by the two Project Offices and the Health Promotion Technical Unit (paras. 4.1 and 4.2). To carry out their technical assistance functions, these central organizations would draw heavily upon outside expertise, both domestic and external. The main domestic technical assistance sources would be CAPM, NIHE and other institutions; a part of the external technical assistance for the health promotion component  - 19 - would be provided and coordinated by a qualified international institution, and the remainder through direct recruitment (para. 4.12). C. Procurement 4.14 FLO would be responsible to oversee the procurement under this project including the responsibility to ensure that the Bank Guidelines are followed. Items to be procured and financed partly or wholly with credit proceeds include equipment, vehicles, materials development, vaccines, training, technical assistance, and program support. Civil works are not financed under the project. 4.15 Equipment, Vehicles, Vaccines and Materials Development ($83.03 million) would largely consist of cold chain equipment for the immunization program, other medical equipment, health education and training related items, and hepatitis B and tetanus toxoid vaccines. Most individual equipment and other goods to be procured for the provinces will be consolidated centrally to permit bulk procurement of at least $300,000 or equivalent. Contracts estimated to cost $300,000 or more will be awarded on the basis of international competitive bidding (ICB) procedures, in accordance with the Bank Group's Guidelines for Procurement under IBRD Loans and IDA Credits, January 1995. Contracts estimated to cost between $50,000 and $300,000 equivalent, in aggregate not exceeding $9.19 million, may be procured through national competitive bidding (NCB) procedures acceptable to the Association. International suppliers may compete in these procedures. Goods estimated to cost less than $50,000 per contract, and in aggregate not exceeding $6.11 million, may be procured through shopping procedures under contracts awarded on the basis of comparison of price quotations obtained from at least three eligible foreign or local suppliers. Contracts for proprietary items and items required for the purpose of standardization, subject to the approval of the Association on a case-by-case basis, may be awarded after direct negotiations with suppliers, in accordance with procedures acceptable to the Association (estimated to cost less than $25,000 up to an aggregate of $5.22 million). Under ICB, local manufacturers would be eligible for a margin of preference in bid evaluation of 15 percent or the prevailing rate of custom duty, whichever is lower. 4.16 Most of the cold chain equipment and vehicles will be procured in three batches, and spread over the first four years of the project. Equipment will be grouped, to the extent possible, to form packages in excess of $300,000 for each contract. Proposals from the provinces and cities will be forwarded to FLO for bulk purchases by eligible tendering agencies, which have experience with ICB procedures using Bank Group Procurement Guidelines. FLO will coordinate procurement under NCB procedures acceptable to IDA and use other procurement procedures including national shopping. IDA's standard bidding documents for ICB procurement of goods with the agreed China Special Conditions will be used. 4.17 The list of the cold chain equipment was prepared by the provinces and reviewed by MOH and IDA. The standardized equipment lists, with details for each level, have been included in ANNEX 4.  - 20 - TABLE 4.1: PROCUREMENT ARRANGEMENTS ($ million) Project Element Procurement Method TOTAL ICB NCB Others Consulting NIF Services A. Equipment, Vehicles, 61.34 9.19 11.33 - 1.17 83.03 Vaccines & Materials (46.45) (6.95) (5.72) (59.12) Development B. Training 1. Local Short-Term - - 17.13 - - 17.13 (8.61) (8.61) 2. Local Long-Term - - 0.03 - - 0.03 (0.01) (0.01) 3. Foreign Long-Term - - 1.35 - - 1.35 (1.35) (1.35) 4. Study Tour - - 1.18 - - 1.18 (1.18) (1.18) C. Technical Assistance 1. Local Specialists - - - 0.60 - 0.60 (0.60) (0.60) 2. Foreign Specialists - - - 0.67 - 0.67 (0.67) (0.67) D. Program Support - - 53.67 - - 53.67 (28.46) (28.46) E. Operation & Mainten. - - - - 4.96 4.96 TOTAL 61.34 9.19 84.69 1.27 6.13 162.62 of which IDA (46.45) (6.95) 45.33) (1.27) (100.00) Notes: (1) Figures in parentheses are the amounts financed by IDA. (2) Others: includes shopping and direct contracting. (3) NIF: Not IDA financed. 4.18 Training ($17.16 million local and $2.53 million overseas). Local training activities will be carried out by existing institutions on the basis of the training program as described in ANNEXES 1 and 2. Approximately 50.0 percent of the local training costs will be financed by IDA and the remaining will come from counterpart financing. 4.19 Technical Assistance ($1.27 million). Technical assistance under this project is likely to involve individual as well as institutional contracts, both local and international. To the extent possible, employment of local experts will be encouraged. Consultants will be hired in accordance with principles and procedures satisfactory to the Association on the basis of the Bank Group's Guidelines for the Use of Consultants, August 1981. 4.20 Progran Support ($53.67 million). The program support expenditures under the Immunization, Health Promotion, and National-level Components will be financed by IDA subject to  - 21 - standard Association reimbursement requirements. Program support includes costs of surveillance and monitoring services, logistical support, medical and other supplies, transportation, acconmmodations, meals and allowances for health staff. This program support is critical to reverse recent declines in the availability of funds for the management and maintenance of preventive health care programs. In addition, by demonstrating the benefits of adequate program support, the project would increase internal support for such expenditures in the Government. 4.21 Prior IDA review of bidding documents, bid evaluation reports, and "no objection" would be required before contracts could be awarded and signed for equipment, vehicles, materials development, and vaccine contracts of more than $300,000 equivalent, estimated to cover about 80 percent of the total value of all such contracts. ICB procurement is expected to take place through several tendering exercises each year, with most equipment and vehicles included in a single tender exercise. Vaccine tenders would provide for phased delivery to protect against spoilage. Because of the small size and highly diversified nature and location of the technical assistance services for different research and monitoring activities for this project, contracts with firms of $100,000 equivalent or more and contracts with individuals of $50,000 equivalent or more will require IDA prior review and approval of budgets, short-lists, selection procedures, letters of invitation, proposals, evaluation reports, and contracts. IDA would have the right to review smaller contracts on an ex-post basis during supervision. Sample post-reviews of other bidding documents, bid evaluation reports, contracts and of direct purchases would be carried out during regular supervision missions. D. Disbursements 4.22 The proposed Credit of SDR 67 million ($100 equivalent) would be disbursed over a period of five years. Disbursements would be made against the following categories of expenditures: (a) For the Immunization Component in participating provinces: (i) equipment, materials, vehicles, and tetanus toxoid and hepatitis vaccines: 100 percent of foreign expenditures, 100 percent of local expenditures (ex-factory cost), and 65 percent of local expenditures for other items procured locally; (ii) overseas and local training: 100 percent and 50 percent of expenditures, respectively; (iii) consulting services: 100 percent of expenditures; and (iv) program support: 55 percent of expenditures. (b) For the Health Promotion Component in participating cities and Yunnan Province: (i) equipment, materials and vehicles: 100 percent of foreign expenditures, 100 percent of local expenditures (ex-factory cost), and 40 percent of local expenditures for other items procured locally;  - 22 - (ii) overseas and local training: 100 percent and 50 percent of expenditures, respectively; (iii) consulting services: 100 percent of expenditures; and (iv) program support: 40 percent of expenditures. (c) For the centrally implemented component of the project: (i) equipment, materials and vehicles: 100 percent of foreign expenditures, 100 percent of local expenditures (ex-factory cost), and 80 percent of local expenditures for other items procured locally; (iv) overseas and local training: 100 percent and 90 percent of expenditures, respectively; (v) consulting services: 100 percent of expenditures; and (vi) program support: 80 percent of expenditures. 4.23 Statements of expenditure (SOEs) would be used for: expenditures of less than $300,000 equivalent against contracts for equipment and materials, expenditures of less than $100,000 equivalent and $50,000 equivalent against consultants' contracts for firms and individuals, respectively, and all expenditures for training and program support. This limit is justified based upon previous experience, and the nature and complexity of the project. Documentation supporting SOEs would be retained by FLO in MOH and the Project Offices in the provinces and cities and made available for review by IDA supervision missions. 4.24 The project implementation period is shorter than the disbursement profile for human resource projects in China. First, the proposed project finances the first five year time slice of the 20-year needs for cold chain replacement and related activities, which comprises the majority (85 percent) of total project base cost. Second, MOH is now very experienced with Bank Group practices for project implementation, which will greatly facilitate execution of project activities and disbursement. The disbursement profile is shown in ANNEX 7. 4.25 Special Account. A Special Account with an authorized allocation of $6 million, based on four months' average expenditures, would be established in a bank satisfactory to the Association. Applications for replenishment of the Special Account would be submitted monthly or whenever the Account has been drawn down by about 50 percent of the initial deposit, whichever occurs first. 4.26 Retroactive Financing. To ensure timely start of the project, retroactive financing of up to SDR 4.7 million ($7 million) would be available for payments made for eligible expenditures incurred after July 1, 1995.  - 23 - E. Accounts and Audits 4.27 Separate accounts showing expenditure for project activities would be maintained by each province under the Immunization Component and each jurisdiction under the Health Promotion Component. Assisted by MOF, a total project account would be maintained by FLO in two books, one for project provinces and cities and the other for category of expenditures for the whole project. MOF would maintain a separate account showing amounts expended under SOEs for each fiscal year and would maintain the Special Account. Project accounts would be audited by the State Audit Administration and/or its local offices in accordance with standard practices in China, which have been found acceptable to IDA. Assurances were obtained at negotiations that the Borrower would submit to the Association, within six months after the end of each fiscal year. an annual audit report, by independent auditors acceptable to the Association, including an audit of the Special Account and a separate opinion on the SOEs. Each local entity would also have its project accounts audited by acceptable independent auditors and consolidated in the Borrower's report to the Association. F. Project Monitoring and Evaluation 4.28 Implementation Schedule. The proposed project would be implemented over a five year period. The project is expected to be completed in December 2000 and closed on December 31, 2001. A project completion report would be submitted by FLO to IDA within six months of the closing date. A chart of the implementation schedule is shown in ANNEX 8. 4.29 Performance Monitoring. Effective monitoring of performance is particularly important for this type of health project. Therefore, considerable attention has been paid to the design of a comprehensive, meaningful and practical performance monitoring system with full participation of the Borrower, the project provinces and the cities, and with assistance from a number of international experts. The system would have three parts: special surveys; regular monitoring of a set of performance indicators; and special studies and mid-term evaluation. It would measure performance during different stages and cover all important aspects. 4.30 Special surveys for the Immunization Component would include a population based assessment of vaccine coverage (modified WHO cluster survey) to validate the routine reporting system, which would be carried out in all project provinces at the beginning of the project to establish the baseline, and repeated again at the middle and the end of the project. For the Health Promotion Component, performance monitoring arrangements would be based on the behavioral risk factor surveillance system (BRFSS). A major, augmented BRFSS survey in the first 8 months of the project would provide baseline data for the project. The BRFSS would provide for continuous monitoring of behavior change. It would be supplemented by point-in-time surveys of additional variables at the mid-term and conclusion of the project. 4.31 To monitor the progress of the project and conduct evaluations, four sets of performance indicators have been discussed and prepared with MOH during project preparation. These are: (a) input indicators, which track planned investment in terms of time (e.g., staff-weeks and staff-months); (b) process indicators, which assess desirable improvement in management and quality of programs (e.g., increase in immunization coverage); (c) output indicators, which track items to quantify completion rates by a given date during the project cycle (e.g., number of training modules and number of mass media programs); and (d) outcome indicators, which monitor progress toward  - 24 - meeting development objectives (e.g., health status and risk factors). Project provinces and cities as well as FLO would ensure that data for the input, output and process indicators are collected and analyzed semi-annually. Outcome indicators, summarized below in Table 4.2, would be analyzed periodically. For the Immunization Component, the coverage data will come from the three cluster surveys (para. 4.30) since existing information is not adequately reliable. The health promotion information will be obtained from the BRFSS (para. 4.30) and other sources such as health service data and surveys. Finally, special studies and surveys would be conducted for specific purposes and for the mid-term evaluation (para. 4.32). A detailed description of project performance monitoring, including a set of regular monitoring indicators, is given in ANNEX 9. The project supervision plan is detailed in ANNEX 11. Assurances were obtained at negotiations that the Borrower would prepare and furnish to the Association semi-annual progress reports, including the national level as well as province and city levels, in accordance with the performance monitoring indicators acceptable to the Association. Table 4.2: PROJECT OUTCOME INDICATORS By Project Component Immunization Component Immunization Coverage of the Following Vaccines: BCG DPT Polio Measles Hepatitis B Tetanus Toxoid Disease Incidence of: Polio Measles Neonatal Tetanus Health Promotion Component - Smoking rates in different age groups - % Health staff that are non-smokers # Doctors trained with standard STD management % Schools, work sites and hospitals with non-smoking signs and implementing a non- smoking policy Note: The above indicators will be reviewed and decided after the finalization of the cluster surveys and the BRFSS. 4.32 Mid-Term Evaluation. Comprehensive evaluation of the project objectives and their implementation is particularly important in this project, because of the large size of the Immunization Component and the innovative nature of the Health Promotion Component. Therefore, in addition to  - 25 - the regular project and progress evaluation activities, a special mid-term evaluation would be carried out after completion of two years of project implementation. The mid-term evaluation, which would be planned and carried out jointly by the Government and IDA, would review the relevance and progress of all parts of the project to meet the basic project objectives. Assurances were obtained at negotiations that, not later than December 31. 1998. the Borrower would carry out a mid-term evaluation of the project and provide a report to the Association indicating progress and continued relevance of each activity under the project. and consolidating mid-term reports from each local entity. G. Impact on Environment 4.33 The environmental category assigned to this project is "C". The project would have no adverse environmental impact, although the immunization program would add to the total amount of needles and syringes that would have to be collected and disposed. Participating project provinces will collect and dispose of needles and syringes separately from general household wastes using special procedures in accordance with WHO's recommended policy. Training in disinfection and destruction of needles and syringes to be discarded is included in the project as well. The Health Promotion Component is expected to contribute to significantly better urban environments because of the health education programs, particularly those involving smoking bans and cessation campaigns.  - 26 - 5. BENEFITS, RISKS AND PROJECT SUSTAINABILITY A. Benefits 5.1 Through the Immunization Component (85 percent of the total project base cost), the project would most directly benefit about six million infants born each year in ten of China's poorest provinces by more effectively protecting them against mortality and morbidity caused by measles, polio, pertussis, diphtheria and tuberculosis. The project will also make tetanus toxoid and hepatitis B vaccines more accessible to families, reduce the risk of death due to neonatal tetanus, and protect the population from the long-term consequences of hepatitis B infection. The project will support 36 percent of nationally identified tetanus toxoid counties in its National Plan of Action for Elimination of Neonatal Tetanus. The main beneficiaries would be those who currently have the least access to satisfactory quality immunization services. The project will not only help China narrow the health gaps between the poor and rich and between urban and rural populations, it will also help significantly to reverse the declines in resource allocations to preventive health care that have resulted in reduced coverage and quality of immunization in China. Furthermore, by reversing the declining trend in resource allocation for preventive health, it will build a strong foundation for the preventive health care system. 5.2 The project also includes specific interventions designed to improve planning and management capacity of the national, provincial, and county governments to prepare and implement immunization programs, hence reducing unnecessary wastage of vaccines. Furthermore, the project addresses the need for periodic in-service training, operational costs of preventive programs and program management and, at least in part, alleviation of the problem of inability to pay for essential disease prevention services, all of which are expected to demonstrate to the government the value of maintaining such recurrent costs. 5.3 Economic Benefits. The project will reduce the burden of communicable diseases by about 60 percent. The benefits of the project are quantified as disability adjusted life years saved (DALY) or healthy years of life gained from the immunization program. Based on epidemiological data, vaccine efficiency, and the target population, the results indicate that immunization would save about 4.8 million DALY annually in the ten project provinces, and approximately $622 million in lost income and treatment costs; reflecting a significant return on the investment. See ANNEX 10 for details. 5.4 Cost-Effectiveness. The cost-effectiveness of the immunization program is calculated against program alternatives. Comparing estimates of DALY saved per RMB from vaccines with alternative programs of outpatient care demonstrate clearly that immunization programs are much more cost-effective. For instance, for a fixed amount of resources, vaccination against measles and DPT would save 13 and 7 times more healthy life years, respectively, than would outpatient treatment. Thus, immunization services that have few acceptable private alternatives would have a particularly large payoff to the public (ANNEX 10).  - 27 - Health Promotion Component 5.5 The Health Promotion Component of the project (13 percent of the total project base cost) will spearhead a program to improve China's capacity to develop and implement effective measures to control and prevent NCDs, STDs, HIV/AIDS and injury. While impossible to quantify with precision, it would benefit the entire population of seven major cities and, to a more limited extent, in Yunnan Province, through exposure to health promotion policies and programs. Eventual benefits would accrue to residents of other cities as the project experience spreads. The project's benefits will be greatest for those at risk for chronic diseases, STDs, HIV/AIDS, injury and those in work-places or other locations with specific intervention trials. 5.6 The component would help combat STDs, which is one of the most effective strategies for inhibiting the spread of HIV. Similarly, the project is expected to help control rising trends in mnortality and morbidity from a number of chronic diseases over the long-term following the implementation of a strategy to decrease smoking, alcohol consumption and unhealthy diets. Added gains in efficiency and more effective care will result from the improved professional training and health services management techniques through the project. These measures will contribute to control China's health expenditures in the long run. B. Risks 5.7 Several measures have been built into the project design to minimize the effects of possible risks foreseen at this stage. First, there is a risk that some provinces or cities will not provide adequate counterpart financing for the project. The central MOF is fully aware of this risk and, therefore, has taken the initiative to thoroughly discuss the funding requirements with each province and city participating in the project to ensure that provision of counterpart funding does not become an impediment to project implementation. The project provinces and cities are highly motivated to reverse the recent decline in disease prevention activities by taking advantage of the technical and financial resources that would be obtained from the proposed project. Therefore, this risk is not considered excessive. Second, there is a risk that coordination and implementation of the project activities would be inadequate. To minimize this risk inherent in a project with multiple components, all key institutional arrangements have been put in place and key staff have been recruited. Third, there is a risk that the jurisdictions participating in the Health Promotion Component will not have adequate technical guidance for capacity building and program implementation. To minimize this risk, a strong National-level Component has been included in the project, MOH has established a separate Health Promotion Division in its Disease Control Department, and arrangements have been made to contract a team of international consultants to advise DCD as well as the project jurisdictions on a regular basis. Fourth, the project is quite sensitive to changes in coverage of vaccinations for BCG and hepatitis B and it is not a cost-effective option if the coverage falls short of the target by 20 percent (ANNEX 10). It is highly unlikely that the coverage will fall by that degree considering the longstanding record of immunization programs in China complemented by a high level of political commitment. Finally, there is a risk that the poorest and migrating ("floating") families may not be able to benefit fully from the improved immunization program. Although special care has been taken to ensure that the provinces incorporate specific measures to prevent this risk, the situation will be continuously monitored through regular reporting and special studies.  - 28 - C. Sustainability 5.8 The project's sustainability has been examined in detail, and the following factors received particular attention: (a) the amount of recurrent expenditures that each province and city government will need to allocate; (b) the financial burden on the governments to maintain the project supported activities after the project investment is completed; and (c) the concerned governments' willingness and ability to sustain these costs. 5.9 The amount of post-project recurrent expenditures requirements created by the new investments has been estimated and then examined in relation to projected recurrent expenditure constraints in health budgets. For the operating cost in the sixth year and thereafter, the project jurisdictions would need a total of $4.93 million annually (RMB 40.9 million at a 1995 exchange rate). Thus, the financial burden on the jurisdictions will be quite negligible because this figure represents only about one percent of the projected total recurrent government health budget of RMB 4.5 billion in 2000 in the project jurisdictions. The governments' willingness and ability to sustain these costs are already demonstrated by increased contributions to preventive care in their health budgets. Other measures including community risk sharing and user fees have been introduced in all provinces, confirming that the incremental recurrent cost will be well within sustainable limits. 5.10 Immunization Component. The Immunization Component will involve substantially increased investments to replace the old cold chain equipment, improve management and surveillance, and train health workers. Since the programs are similar among provinces, the size of the incremental costs will vary mainly by the size of the population and the geographical conditions. Cold chain equipment is the single most expensive item in this component, because the proposed project would finance the costs of cold chain replacement and maintenance during the first five years of the 20-year needs estimate, when the cost will be the highest due to the present poor condition of the cold chain. The annual operating cost from the sixth year and thereafter for the Immunization Component is $3.1 million (RMB 25.7 million at a 1995 exchange rate), representing only 0.5 percent of projected government recurrent budgets for the ten project provinces. 5.11 Health Promotion Component. At the end of the project, the operating cost to maintain the Health Promotion Component would require only $0.56 million annually (RMB 4.6 million at a 1995 exchange rate). Thus, the operating cost of the Health Promotion Component will place no significant financial burden on the governments. It is worth pointing out that most of the activities under this component will be carried out by more affluent local governments, such as Shanghai, Beijing and Tianjin. Of the total investment in this component, community-based interventions account for nearly two thirds, and the rest is accounted for by institutional development. Since the activities under this sub-component will be implemented by financially independent enterprises and affluent urban communities, no problem in meeting funding requirements is foreseen. 5.12 National-Level Component. The remaining $1.27 million in recurrent expenditures would cover incremental operating costs associated with central government supervision and management of immunization and health promotion activities.  - 29 - 6. AGREEMENTS REACHED AND RECOMMENDATION 6.1 At negotiations, assurances were obtained that the Borrower would: (a) make available the credit proceeds to the: (a) provinces participating in the Immunization Component at not more than 1.1 percent per annum for 20 years, including a grace period of 5 years, and each province would make the proceeds available to its counties on a grant basis or on terms at least as favorable to the counties as the terms on which it receives funds from the Borrower, and the provinces would bear the foreign exchange risks; and (b) jurisdictions participating in the Health Promotion Component at no more than 2.5 percent per annum for at least 20 years, including a grace period of 5 years, and each of these jurisdictions would make the proceeds available to their counties on the same terms as they receive the funds from the Borrower, and the jurisdictions will bear the foreign exchange risks (para. 3.14); (b) maintain the Project Leading Group, the Project Coordination Group, the Project Offices and the Technical Unit throughout the project period, with memberships, terms of reference, staffing and resources acceptable to the Association (para. 4.2); (c) submit to the Association, within six months after the end of each fiscal year, an annual audit report, by independent auditors acceptable to the Association, including an audit of the Special Account and a separate opinion on the SOEs. Each local entity would also have its project accounts audited by acceptable independent auditors and consolidated in the Borrower's report to the Association (para. 4.27); (d) prepare and furnish to the Association semi-annual progress reports, including the national level as well as province and city levels, in accordance with the performance monitoring indicators acceptable to the Association (para. 4.31); and (e) not later than December 31, 1998, carry out a mid-term evaluation of the project and provide a report to the Association indicating progress and continued relevance of each activity under the project, and consolidating mid- term reports from each local entity (para. 4.32). 6.2 At negotiations, assurances were obtained from the Borrower that it would make Project Implementation Arrangements with each province participating in the Immunization Component whereby the province would undertake to: (a) continue to make free provision throughout the project period of sufficient EPI vaccines to cover the whole population (para. 3.5);  - 30 - (b) prepare a long-term strategy for cold chain replacement, in accordance with the terms of reference acceptable to the Association, with a view to its adoption upon completion of the project (para. 3.5); (c) implement measures to increase immunization access for the poorest families, and carry out six rounds of vaccination sessions per year; (para 3.5) (d) ensure that all children, regardless of their registration status, have suitable access to its immunization programs (para. 3.5); (e) maintain the provincial Leading Group and Project Loan Office, with membership, terms of reference and resources acceptable to the Association, throughout the project period (para. 4.3); and (f) maintain at the county level the Project Leading Group and a county Project Office, with membership, terms of reference and resources acceptable to the Association, throughout the project period (para. 4.5). 6.3 At negotiations, assurances were obtained from the Borrower that it would make Project Implementation Arrangements with each entity participating in the Health Promotion Component whereby the entity would undertake to: (a) submit, by October 31 of each year, its annual plans and proposals for implementation of the health promotion interventions to the Borrower for review and approval. The Borrower would submit a summary of the plans to the Association by November 30 of each year, before those interventions are implemented (para. 3.7); (b) include in its annual plan a plan designed to control and reduce smoking of tobacco products (para. 3.8); (c) ensure that the treatment of patients with STDs and HIV shall be based on a policy of anonymity (para. 3.8); (d) provide training to private practitioners treating STDs and HIV patients (para. 3.8); and (e) maintain at each municipal health bureau an Inter-sectoral Policy Guidance Committee, a Project Leading Group, and a Project Office, throughout the project period (para. 4.8). 6.4 The following provision would be an additional condition of Credit Effectiveness: (a) making Project Implementation Arrangements with at least seven out of ten provinces carrying out the Immunization Component and at least five out of eight entities carrying out the Health Promotion Component (para 3.10).  - 31 - 6.5 The following provisions would be additional conditions of Credit Disbursement: (a) making Project Implementation Arrangements with each entity would be a condition of disbursement for that entity's respective part of the project (para 3. 10); and (b) employment of a consulting institution, with terms of reference, qualifications and experience satisfactory to the Association, would be a condition of disbursement for the Health Promotion Component (para 4.12). 6.6 Subject to the above agreements, the proposed project is suitable for an IDA credit of SDR 67 million ($100 million equivalent) to the People's Republic of China on standard IDA terms and with 35 years' maturity.  - 32 - ANNEX 1 IMMUNIZATION COMPONENT 1. The objective of the Immunization Component is to prevent and control vaccine-preventable diseases to reduce morbidity, disability and mortality, especially in the poorest provinces of China. This objective would be attained by improving the quality of and access to immunization services through improvement of the cold chain, the upgrading of technical and managerial skills of preventive care health workers, the strengthening of the management of immunization services, and improving information, education and communication (IEC) about immunization. In addition, a number of complementary policy reform measures would also be implemented. 2. The Immunization Component comprises four sub-components: (a) cold chain improvement; (b) health workers' training; (c) management and surveillance; and (d) IEC. Cold Chain Improvement 3. The objectives of this sub-component are to: (a) ensure the quality of vaccines during storage and transportation; and (b) establish a system of regular replacement of the cold chain which is sustainable beyond the project period. The main activities supported by the project are described below. Additional information on the cold chain sub-component are in ANNEX 4. 4. Cold Chain Replacement. It is estimated that within the remaining years of this decade, the funding needs for replacement and, to a certain extent, expansion of the cold chain would amount to two thirds of the total value of the existing cold chain equipment. A breakdown in the cold chain can seriously damage vaccine potency, hence diminishing the effectiveness of the immunization program (and, in the worst case, destroy the whole program). A majority of cold chain equipment for storage and transport of vaccines at all levels in each province was installed in the late 1980s. Much of this equipment is now either damaged or approaching the end of their expected service life. Although the local governments as well as some donor agencies have provided replacement equipment, a shortage of funds has hindered the timely replacement of equipment. Thus to ensure the continuation of the program, a 20-year needs assessment was prepared during the preparation of this project, based on a review of the current status of equipment in each project province. The proposed project will support replacement requirements for each level of the EPS network, from village to provincial level during the first five years that fall within the project period. 5. Cold Chain Replacement System. As stated above, a 20-year assessment for cold chain equipment replacement was prepared and agreed with the provinces during this project's development which would sustain supply after the project. At negotiations, it was agreed that each province would prepare a long-term strategy for cold chain replacement with a view to adopt it after project completion. MOH is expected to cause the provinces to carry this out, if necessary by providing the required technical assistance. 6. Improvement in Cold Chain Quality. To improve the quality of the cold chain, simple modifications will be introduced that would enhance the performance of vaccine storage equipment. The project will also establish a system to routinely monitor the quality of cold chain by using  - 33 - ANNEX I chemical indicators developed for this particular purpose. 7. Maintenance. The project will help strengthen selected provincial cold chain equipment repair centers. In counties which are not covered by the provincial centers, a budget will be allocated to cover the cost of repair services obtained from local markets. 8. Sterilization of Needles and Syringes. To ensure proper sterilization of needles and syringes, steam sterilizers will be provided to village and township level health workers engaged in vaccination activities. In addition, a supply of needles and syringes will be provided to village and township staff to implement the one sterile needle and one sterile syringe per injection policy under the project. 9. Implementation Unit. Overall responsibility for this sub-component will be with the provincial Health Bureau of each province. The Procurement division of the FLO will work in close collaboration with the provincial Health Bureaus to prepare the equipment procurement documents and activities. Health Workers' Training 10. The objective of this sub-component is to improve the technical and managerial skills of all staff involved in the immunization program at all levels of the epidemic prevention network by establishing a system of regular in-service training. The project activities are described in the following paragraphs. 11. Primary Workers. The project would provide short-term training on basic technical and managerial skills to primary level preventive care workers (one village doctor from each village and two staff from each township health center). 12. Mid-Level Workers. It would provide short-term training to mid-level managers of preventive services (five staff from each county and prefectural epidemic prevention stations) on planning, management of cold chain, surveillance, disease reporting, evaluation of vaccine coverage and supervision skills. In addition, prefectural level staff will receive training for data entry and analysis in order to establish a computerized management information system (MIS) on the immunization program. 13. Senior Managers. The project would provide short-term training to senior managers (ten persons from each provincial EPS) on topics including planning, management, and repair of cold chain, surveillance, supervision, and monitoring and evaluation of vaccine coverage. Domestic long- term courses will be provided to senior managers (six persons from provincial EPS) on such technical topics as epidemiology, management, and health statistics. Courses are available at selected universities and institutes, the Beijing Medical University, Huaxi University, CAPM and Guangxi Cold Chain Repair Training Center. 14. Study Tours. The project would organize six overseas study tours, coordinated at the central level, for the benefit of provincial level staff. Topics include surveillance of measles, polio, and neonatal tetanus control, IEC, and management of immunization programs including routine reporting of immunization coverage, coverage of floating populations and MIS.  - 34 - ANNEX 1 15. Materials Development. In support of the training activities, arrangements will be made to revise existing training materials and design and prepare new materials, covering topics not yet included in existing materials. Content of short-term training modules are grouped in the following categories: EPI management, cold chain management and logistics, supervision, IEC, surveillance, and technical issues related to vaccines and vaccine-preventable diseases. 16. A set of existing training modules will be used for the primary and mid-level workers. These modules cover basic EPI management and service delivery, cold chain and logistics, injection and sterilization procedures, and vaccine coverage and disease reporting. Revision of the existing modules and development of additional modules will be done by experts from the EPI Expert Advisory Committee comprising members from CAPM, DCD, provincial experts and representatives from the US Centers for Disease Control and Prevention, WHO, JICA, and UNICEF under the supervision of DCD. As appropriate, each module revision or development will follow a sequence of activities: review, edit, pretest, revise, retest, revise and finalize. The materials will then be made available to the provinces for mass printing and dissemination. 17. A list of new and supplementary materials for primary, mid-level and senior level EPI staff has also been identified and will be designed and produced during the project. Materials will be compiled into six modules, two for primary level health workers, two for mid-level managers and two for senior level managers. New topics related to the additional vaccines (hepatitis B and tetanus toxoid) in the inununization services such as the knowledge and technical training of hepatitis B and tetanus toxoid vaccines, and measles surveillance strategy and methodology, use of steam sterilizers, disease reporting, monitoring and supervision will be prepared. 18. Training of Trainers. Based on a cascade style of training level by level, central level staff will train the provincial "trainers," and the provincial staff will train the prefectural and county level staff. The county level staff will be responsible to train township and village staff. An effort will be made to maintain effectiveness and quality of training by preparing and issuing a manual containing training guidelines to the trainers for each module used, and providing short refresher "Training of Trainers" courses for the provincial level trainers. 19. The project will finance development, improvement, production, and dissemination of training materials, guidelines for trainers on use of training materials and visual aids, training equipment (overhead projectors), and the cost of operating the training courses. 20. Implementation Responsibility. Overall responsibility for this sub-component rests with DCD in MOH. Implementation of this sub-component will be carried out by the province's Health Bureau, Epidemic Prevention Station at provincial, prefectural, county and township levels and village health stations. The DCD will map out an overall training implementation plan, organize the revision of existing training modules and design new modules. DCD has designated a full time staff from CAPM to coordinate the training preparation activities. The project office in each provincial Health Bureau will be responsible to produce the materials and to implement their training plan. The provincial EPS staff will be responsible to supervise and evaluate the training activities. Management and Surveillance 21. The objective of this sub-component is to improve the management and implementation of the  -35 - ANNEX 1 immunization program at all levels, particularly in the areas of cold chain and logistics, service delivery, collection and utilization of immunization coverage and disease data, and supervisory support between levels. The activities supported by the project are follows: (a) Increase and sustain immunization coverage (i) devise and implement effective methods to increase affordability and access of immunization services to the poorest families in the project provinces; (ii) monitor frequency of immunization sessions at each level (counties, township and villages) and maintain at least six sessions per year (as a condition to participate in the project); (iii) monitor vaccine coverage at each level; county EPS collect data by vaccine doses, by age, population of counties, townships and village; (iv) improve access to immunization services by combining fixed immunization posts and outreach delivery strategies to increase opportunities for immnunization for hard to reach population groups at all levels; and (v) implement universal child immunization recording and certificate system especially for special groups (unregistered children). Increasing the effective demand for immunization services will be addressed through the IEC sub- component. The provinces will reaffirm MOH instruction for universal immunization regardless of registration status. (b) Improve quality of immunization services (i) ensure safe injections by following national policy of one sterile needle and one sterile syringe per injection. The project will provide steam sterilizers and a set of needles and syringes for all village clinics and will establish a system for monitoring the quantity and status of injection equipment at all levels; (ii) improve cold chain management by introducing standardized reporting on cold chain equipment inventory, and individual equipment records. The guidelines will be prepared and disseminated by the national level; and (iii) improve handling of vaccines by implementing temperature surveillance of the cold chain system, using vaccine cold chain monitors to routinely monitor temperature during transport and storage. (c) expand EPI services to include hepatitis B and tetanus toxoid vaccines through provision of subsidies to poor counties. The project will support incorporation of hepatitis B vaccine to reach 85 percent coverage of urban and 50 percent of rural infants in each province. The project will finance part of the cost of hepatitis B vaccines to enable the provinces to provide subsidies on a sliding scale reaching an  - 36 - ANNEX 1 equivalent of a 50 percent subsidy for the poorest 25 percent of the provincial populations. Each province will prepare a fmancing plan to assist the poorest counties. In support of the National Plan of Action for Elimination of Neonatal Tetanus, the project will provide two doses of tetanus toxoid for women of child- bearing age, in 196 designated high risk counties at a subsidy of 0.2 yuan per capita. Subsequent to the initial mass campaign, the high risk counties will introduce routine tetanus toxoid vaccination to new cohorts entering child-bearing age and pregnant women. This would complement the Comprehensive Maternal and Child Health (MCH) Project (Cr. 2655-CHA), which has initiated similar activities on elimination of neonatal tetanus. (d) Improve reporting, monitoring, and supervision (i) implement the use of revised reporting forms, giving information by antigen, dose, and age at each level. MOH will review its reporting guidelines with a view to meeting the requirements; (ii) develop guidelines and checklists for supervision for each level; (iii) set up a computerized registry of immunization coverage by county data to be compiled and computerized at prefectural and provincial levels; (iv) introduce in all counties measles surveillance to include routine collection of age and vaccination status of each reported measles case; (v) develop surveillance of neonatal tetanus by improving the reporting of neonatal tetanus cases and investigating the reported cases; (vi) improve system of monitoring side effects following immunization as a means to monitor correct sterilization and injection techniques; and (vii) in order to evaluate the performance of the immunization program, a baseline coverage cluster survey will be carried out to estimate the situation in the ten provinces at the beginning of the project, a second cluster survey will be carried out at project mid-term, and a third survey will be carried out at project completion. Technical guidance will be provided by CAPM to assist the provinces to carry out the three surveys. 22. The project would finance: (a) program costs, including subsidy to hepatitis B and tetanus toxoid vaccines; (b) supervision vehicles, management related equipment, including computers and printers, and software; (c) operating costs of increased supervision and evaluation activities; and (d) local and foreign technical assistance. 23. Implementation Responsibility. Overall responsibility for this sub-component rests with DCD in MOH and project offices in each province. Implementation of this sub-component will be carried out by the National EPI Center of CAPM, and provincial EPSs in ten project provinces. The EPI department of provincial EPSs will be responsible to implement the surveillance activities.  - 37 - ANNEX 1 Information, Education and Communication (IEC) 24. The objectives of this sub-component are to: (a) promote public awareness and knowledge on EPI vaccine-preventable diseases; and (b) generate demand for immunization services and knowledge on EPI vaccine-preventable diseases through implementation of a communication strategy. The activities included in this sub-component are follows: (a) research on attitude and perception to EPI acceptabilty and identify factors that contribute to low coverage; (b) prepare a communication strategy based on the above research which indicates behavior change required, potential obstacles and methods to overcome problems; (c) each province's detailed plan based on needs of the minority and target groups; (d) design message and materials through coordination and technical inputs from the central level and adaption of message to local cultural needs by each province; (e) produce IEC materials at central and provincial levels; (f) conduct training on the use of materials, messages, and material options for each target group identified; (g) conduct commnunity IEC activities in settings such as market-fair day for minorities, exhibits, classes, religious meetings, designed for specific groups and conduct one-to- one education during routine immunization sessions. Various channels will be used: TV, radio, and newspaper, to increase general public awareness. IEC activities will also be scheduled before and during special events such as National Immunization Days and EPI Publicity Day. Each province is expected to negotiate with local TV stations a subsidized or free prime time to screen EPI messages; and (h) evaluate the IEC program at project mid-term and completion. Program managers will evaluate the pre- and post-campaign results of knowledge, attitudes, and practices to assess access to the messages, attitudes about the EPI diseases and the vaccines, and behavior changes after the communication program was initiated. 25. Implementation Responsibility. DCD in MOH will be responsible to prepare a communications plan, coordinate design and development of mass media materials, and organize evaluation of IEC. DCD will be supported by the national expert technical working group. The Epidemic Prevention Division in the provincial Health Bureau will prepare a detailed provincial communication plan to address particular communication needs (including approaches to reach specific groups of people) and to develop specifically targeted messages and materials. Production of these materials will be done either at the national or provincial level depending on efficiency and economies of scale. 26. The project will finance the design and production of mass media materials, training and program cost for the initial research, and post-program evaluation.  - 38 - ANNEX 2 HEALTH PROMOTION COMPONENT 1. The objective of the health promotion component is to improve the capacity of the health sector to design and implement health promotion programs to control the rising prevalence of NCDs, STDs, HIV and injury. These objectives will be attained by improving the capacity of local governments to prevent NCDs, STDs/HIV and injury, by providing experience in design, implementation and evaluation of community based interventions to control NCDs, STDs/HIV and injury, and by disseminating the project experience to other parts of China. The project will be implemented in the cities of Beijing, Chengdu, Liuzhou, Luoyang, Shanghai, Tianjin and Weihai; in addition, Yunnan Province would participate in the project's STDs/HIV activities. 2. The Health Promotion Component comprises four sub-components: (a) institutional development and policy reform; (b) human resources development (HRD); (c) surveillance; and (d) interventions. Coordination, technical support and dissemination of experience will be managed through the project's National-level Component. Institutional Development and Policy Reform 3. The aim of this sub-component is to develop government policies and an institutional environment required for successful health promotion programs. The objectives are to: (a) develop a strategic plan for health promotion; (b) define, strengthen, coordinate arrangements to carry out health promotion activities; (c) mobilize inter-sectoral and community participation in health promotion; and (d) institute policy measures which support prevention work and healthy behavior change. 4. The activities supported by the project under this sub-component are as follows: (a) prepare a strategic plan for health promotion, through a process which would involve and commit both health and non-health sector agencies to specific policies and actions. The plan will be publicized and discussed in the media in two stages: (i) at the start of the project, the plan for the project period will be publicized, including objectives and activities for STDs/HIV which follow the National Strategy; and (ii) toward the end of the project, by year four, a comprehensive five year health promotion plan will be finalized defining strategies and directions after the project's completion, and covering: (1) key health problems, risk factors and knowledge and attitude about risk factors; (2) recommended solutions and strategies for various population groups; (3) assessment of current gaps and resource availability; and (4) priorities for action and strategies for implementation (including further institutional development, policy reform, health service measures, city-wide public information and interventions in particular settings). Technical assistance and study tours will be arranged for policy makers to obtain first hand experience on health promotion policy planning and development. The responsible implementation unit is the Health Bureau of each city and the Yunnan provincial government.  - 39 - ANNEX 2 (b) develop leadership capability in planning, implementing and evaluating health promotion activities. An Inter-sectoral Policy Guidance Committee will be established at the city level, chaired by the vice mayor responsible for social sector. Within each city's Health Bureau, a Project Leading Group will be established to coordinate inputs from within the health sector (i.e., epidemic prevention, health education, medical administration, science technology and education, policy and law, finance). Each city will also establish technical groups to provide guidance in: community health, epidemiology, health education, nutrition, NCDs, STDs/HIV, health economics, social and behavioral sciences, and communication and public relations. The health promotion activities will be implemented through expanding the roles of existing organizations, and enhancement of capacity and improved coordination among existing institutions. The three key health units are: the NCD Control Office in the EPS; the City Health Education Institute (HEI); and the STD Control Office. Responsibilities of each unit are described in the PIP (ANNEX 7). The HEIs will expand their functions beyond the current focus on production of education material, to closer coordination with mass media and community organizations and to provide guidance, training and quality control for district and county level workers on health promotion interventions. A group of health promoters will be recruited and trained (5-10 staff) to assist in designing, implementing, and evaluating community based interventions. Specific content areas would include: STD prevention, community nutrition, tobacco control, school health, workplace health promotion, and social marketing. The project will support the expansion of functions and responsibilities for the EPS and HEI by providing training for staff, necessary equipment including transportation, and program support cost. (c) Policy Reform. Each city will select priority policies for development and enactment during the project period. The topics include smoking control (bans on advertising, smoking in public places and sales to youth; labelling), STDs/HIV control (increased availability of condoms; improved clinical services for STDs with anonymous treatment, training and licensing of private doctors; and sex education in schools), health education (curriculum for primary and secondary schools), physical fitness (exercise breaks at schools and workplace), and injury control (traffic restrictions, seat belt and helmet regulations). The project will support incremental expenses for meetings, workshops and other events and dissemination of policy documents. Responsible implementation unit: Health Bureaus. 5. Monitoring Indicators. Specific environmnental indicators will be used to monitor the impact of the policy reforms and implementation. Changes such as number of non-smoking places and signs, percent of workplaces with no smoking policies, the availability and sales of condoms, minutes of health content during prime time TV, frequency and accuracy of health columns in newspapers, and prevalence of health messages in public areas of hospitals will be used. The behavioral risk factor surveillance system, planned as part of the project, will provide the baseline and monitoring information throughout the project period. Responsible: EPS (Project office), NCD Center, STD Control Offices, HEI.  - 40 - ANNEX 2 Surveillance 6. The objectives of this subcomponent are to: (a) establish a system for surveillance of the behavioral risk factors for NCDs, STDs/HIV and injury; (b) establish a system of monitoring environment factors which support a healthy lifestyle; (c) upgrade mortality reporting; and (d) improve the interpretation and use of this data to monitor health trends and to plan and evaluate health promotion activities. 7. The activities supported by the project under this sub-component are as follows: (a) establish a city based behavioral risk factor surveillance system (BRFSS) for continuous and standardized collection, analysis and dissemination of information on behavioral and environmental risk factors and related attitudes and knowledge. The BRFSS will collect a common core of data on knowledge, attitudes and practice or behavior (KAP) from a sample of the general population in each participating city. Questions related to STDs and HIV will be included. Within 8 months from the start of the project, an expanded survey will collect data to serve as project baseline. BRFSS data will be used for the design and monitoring of health promotion interventions. CAPM will be responsible to develop, manage and supervise the implementation of the system in the cities and for collation and feedback of results. The EPS in each city will implement the BRFSS. The project will support the recruitment of incremental staff, training for a team of interviewers in BRFSS administration, data management (data analysis and processing), programmers, and supervisors, necessary equipment (tape recorder, motorcycle or transportation cost and computer and statistical software), and cost of meetings, publication and dissemination of the results. Implementing agency: HEI (Beijing, Shanghai), EPS (Tianjin, Chengdu, Luoyang), and NCD Center (Liuzhou). (b) establish in each city an environmental monitoring mechanism to capture key elements in the environment which influence individual behavior and which relate to proposed policy reforms (para. 5). The system will be implemented at beginning, middle and end of the project. The results will be used to focus targets for policy interventions and for public education as well as for assessment of policy effectiveness. The project will support the development and implementation of the system, including training, data collection, and analysis and dissemination of results. Implementing agency: HEI (Beijing, Shanghai), EPS (Tianjin, Chengdu, Luoyang, Weihai), and NCD Center (Liuzhou), and Yunnan Province. (c) improve current death reporting systems in five cities and introduce the new system in the other two cities (Liuzhou and Weihai). The mortality surveillance system will be standardized and refined through: addition of "place of death", case data entry, and improved coding of cause of death, using the international classification of disease (ICD-9). The project will provide in-service training for doctors and registration offices on the use of ICD-9 in each city. Implementing agency: EPS at the city level, EPS and related hospitals at county and township levels and vital statistics registration offices.  - 41- ANNEX 2 (d) evaluate the quality, cost, and application of the current morbidity surveillance systems in Tianjin and Chengdu. CAPM will assist the EPS in the two cities to conduct the evaluation. The project will support foreign and local technical assistance (4 weeks) to assist with the evaluation and dissemination of findings. 8. Monitoring and Performance Indicators. CAPM will monitor activities and problems in the implementation of the surveillance systems on an ongoing basis. Human Resources Development 9. The objectives of this subcomponent are to: (a) improve and maintain the competence of those people who carry out health promotion and related activities, both inside and outside the health sector; (b) ensure that sufficient competent people are available to manage and conduct all project activities; (c) improve and maintain skills in project management, supervision and evaluation; and (d) increase the capacity of local institutions to provide training in health promotion subjects on a long- term basis. 10. The project would support the following activities under this sub-component: (a) prepare, during the first two years of the project, short- and long-term plans for training in health promotion. (b) conduct the in-service training required for implementing each project sub-component and for project management; including training of health and other personnel in skills for leadership and institutional development, policy reform, surveillance and health promotion interventions in a community settings, through workshops and short in- service courses to update knowledge of NCDs, STDs/HIV and injury, and provide relevant health promotion skills as well as capability for project supervision and management. Trainers for specific topics will be from the health bureau, clinical facilities or other relevant institutions. Training materials and guidelines will be developed or adapted. Trainees will be health staff and managers from city, district and neighborhood levels as well as staff of other government sectors and members of the community. Specific training, associated with licensing agreements, will be provided to improve services provided by STD clinics. Training of trainers will focus on participatory methods for teaching practical skills relevant to the health promotion work or tasks of the trainees. (c) assisting training institutions to upgrade or introduce training in topics relevant to health promotion, based on a comprehensive assessment of HRD needs and resources in the cities to be conducted in the second year of the project. The project will improve the capacity of selected local training institutions to conduct training in the core skills of health promotion in the long term, particularly after the project is completed. Staff of these training facilities will be trained in relevant subject areas and in modern participatory methods for teaching and learning. Improvements of curricula and teaching methods will be made in consultation with the concerned authorities.  - 42 - ANNEX 2 (d) arrange for training of up to three months at appropriate institutions in other parts of China, and a limited amount of short term overseas training and study tours. Foreign and local technical assistance will be arranged through the central level to ensure appropriate content and quality of training, especially for training of trainers, HRD needs assessment, and training management and evaluation. 11. The project will finance: development of training curricula, new materials and visual aids; revision of existing training materials; production of training materials; operational costs of training courses and events; regional and overseas study tours to see IRD for health promotion; technical assistance (domestic and foreign) to improve planning, implementation and evaluation of training initiatives and capacity building; and training equipment. 12. Implementation Arrangements. In each project city, the project office or another suitable division or institution is responsible for overall organization, coordination and monitoring of HRD activities. A full time qualified training coordinator will work closely with managers of other sub- components to ensure that the training program meets the needs of the other project areas. District and county level health bureaus will also assign one staff member to manage local training and liaise with the city level. For each major technical area, a core team of trainers will be formed from both the technical divisions and training institutions. 13. National level guidance and supervision will be provided by the HRD coordinator of the project's technical unit in CAPM. This unit will coordinate a HRD network of all participating cities with the following functions: (a) to share tasks in training preparation such as curriculum improvement, training of trainers and materials development, including drafting, testing, revision, final design and production; and (b) to share experiences and technical expertise, including external and national experts. For training in subject areas not yet well established in China, appropriate curricula from other countries will be adapted to meet the need. 14. The National-level Component will also: coordinate local and foreign technical assistance, study tours and foreign training; provide quality assurance for materials and training prograrn development; provide training of trainers; and include progress monitoring and feedback. 15. Each city and the national level will develop an HRD plan for the project period and annual workplans, in coordination with the managers of other sub-components and approved by the city's Project Leading Group. In the second year of the project, a needs assessment of HRD in health promotion will be carried out, and used to adjust the remaining three years of the plan, with increased emphasis on capacity building in health promotion training. 16. Monitoring Indicators. The HRD activities and progress will be monitored through brief reports of all training events which will be collated by the training coordinator. Summary progress reports will be prepared twice a year and forwarded to the national level technical unit for collation. Interventions 17. The objectives of this sub-component are to: (a) provide experience in the design, implementation, and evaluation of a range of community-based health promotion interventions; and (b) reduce risk factors and prevent or control NCDs, STDs/HIV and injury in selected settings.  -43- ANNEX 2 18. Activities. Under this sub-component, cities will plan and implement a wide range of activities aimed at reducing critical behavioral and environmental risk factors for NCDs, STDs/HIV and injury. In the first two years, all cities will address smoking, STDs/HIV, diet, and physical activity, while some cities will also deal with injury, hypertension and cancer during that period. By year three, all cities will have started interventions dealing with each of these risk factors/conditions. The priority dietary risk factors to be addressed will be further defined by the Food, Hygiene and Nutrition Institute and CAPM, to ensure that the work of cities on nutrition is directed to important diet-related aspects of NCD prevention in China. 19. The interventions will be carried out city-wide and in four types of community settings: (a) schools; (b) work units; (c) hospitals; and (d) neighborhoods. The activities themselves fall into one of three categories: (a) local policy and environmental change; (b) public information; and (c) enhancement of individual and family skills for behavior change. Improvement of health services for STDs/HIV and hypertension control will also be carried out. Community development activities will be undertaken, particularly in neighborhoods and with some special groups. 20. During the first two years, each city will conduct a core of activities in each of the four settings and city-wide, but with flexibility in the methods and emphasis. Core activities are those with high potential to reach a substantial proportion of target groups, and to have a greater impact on risk factors. The city-wide core activities will be directed to local policy and environmental change and public information, such as smoking bans, increased distribution of condoms, and targeted messages to special groups about risk factors. In schools, core activities include policies and incentives related to non-smoking, physical activity and healthy foods, along with improved school curricula and teacher training in health education. 21. Cities will also undertake optional activities from a menu to be agreed upon by the Government and the Association. Two-year rolling plans for intervention activities will be developed by each city and reviewed and approved annually by MOH. 22. Implementation Arrangements. At the city level, either the HEI or the EPS will be responsible for the implementation of this sub-component. Intervention managers and training coordinators will be appointed in each city to develop operational plans, implement and supervise the activities, supported by the city's project office and leading group. The Central-level Project Office will develop guidelines for interventions, and assist with design of messages and materials. Public information materials that support the interventions will be developed by the HEIs in each city. District level intervention coordinators will be designated to coordinate the implementation of interventions in each of the four settings in each city. 23. For most cities, the implementation will be phased, beginning with a small number of intervention sites in each setting, pilot testing and refining the interventions in the first two years, and subsequently expanding to more sites. 24. Training will be arranged for intervention managers, training coordinators, district-level intervention coordinators, and key people in the intervention sites such as local leaders, teachers, food service personnel, and peer educators (lay leaders). Intervention managers and training coordinators from each city will participate in study tours and national workshops on health promotion strategies for particular risk factors, policy, practice and models, planning and evaluation, settings-based health  - 44 - ANNEX 2 promotion, and adult education principles and practice. 25. The project will rmance: training; technical assistance; development and operational costs; materials; and equipment related to health promotion interventions. 26. Monitoring and Evaluation. The interventions sub-component will be evaluated, using the BRFSS and environmental indicators to monitor changes in randomly selected intervention sites and target groups compared with similar measures in the general population of cities. In this type of project, a quasi-experimental design is neither feasible nor desirable. Time series measures of behavioral risk factor prevalence will identify secular trends in risk factors in a city population sample, and may be compared to similar measures before and after intervention in more intensive intervention sites. Changes in environmental indicators, such as number of no smoking signs posted in selected types of public places, or the availability of low-fat dairy products in food shops will be measured at least three times over the study period (i.e., baseline, middle and end of project). The central project office will assist the cities in the design of the evaluation and of special additions to the BRFSS to provide this information.  - 45 - ANNEX 2 Attachment 1 STD/HIV PROGRAM APPROACH 1. This Attachment summarizes the project's approach to the prevention and control of sexually transmitted disease (STD) and human immunodeficiency virus (HIV). which together constitute one topic area (along with non-communicable disease and injury) of the Health Promotion Component. In each of the participating cities, initiatives related to STDs/HIV will be an integral part of each of the four sub-components, as described below. In addition, the project will support efforts by Yunnan Province to improve STDs/HIV prevention and control within Kunming city and on a province-wide basis. 2. Project initiatives for this topic area have been selected from the National Strategy for Prevention of STD/HIV to the year 2000, through dialogue with experts from MOH and related institutions, and in coordination with other activities being supported by the government and other international organizations. The project will make use of information, guidelines and training materials prepared through the National program, and the progress and experience of the project areas will be reported to and disseminated through the National organization. 3. The specific objectives of project initiatives in STDs/HIV are to: (a) increase awareness of STDs/HIV in the general population and in special groups; (b) control the rising prevalence of STDs/HIV through actions to reduce transmission; and (c) obtain experience in STDs/HIV prevention at the city level and in Yunnan Province for dissemination to other parts of China. 4. The main strategies that will be used are: (a) provision of information, education and communication (IEC), to support healthy and preventive behavior; (b) promotion of condom use; and (c) improved access and quality of diagnosis and case management of STD for both men and women. 5. The above-mentioned objectives and strategies for the control of STDs/HIV will be implemented through the programs incorporated in the four sub-components of the Health Promotion Component of the project. These four sub-components are elaborated earlier in ANNEX 2. While a number of activities under the STDs/HIV control program will be developed and finalized during the project period, the program is expected to include the activities which are described below. I. INSTITUTIONAL DEVELOPMENT AND POLICY REFORM (a) The project's Inter-sectoral Policy Guidance Committee will be responsible for overall direction and progress review for STDs/HIV as for other topic areas. (b) Each city will nominate a suitable health facility or unit to give technical leadership and coordination as needed, e.g., the STD control center of EPS or a clinical facility for STD control and training (IEC activities would be managed as for the other topic areas in each city). (c) Each city will prepare an action plan for STDs/HIV control.  - 46 - ANNEX 2 Attachment 1 (d) The following policy reforms will be implemented during the project: (i) anonymity of people coming for STD treatment. Records will not need to include the names of patients; (ii) affordability of STD advice and treatment. Cities will be asked to provide a plan of how to make STD clinic services affordable; (iii) wider distribution of condoms, including availability of condoms at all STD treatment points used by men and women, such as specific STD clinics, general clinics and MCH and gynecology clinics; (iv) improved management of public and private clinics, including the training (see III (d) below) and licensing of private practitioners; (v) screening of blood donors for HIV; and (vi) sex education in schools. II. SURVEILLANCE (a) Questions related to STDs/HIV will be incorporated into the baseline questionnaire of the Behavioral Risk Factor Surveillance System (BRFSS), and in surveys aimed at specific groups in the community, e.g., the youth behavior survey. III. HUMAN RESOURCE DEVELOPMENT (a) Training and briefings for leadership development for project leading and coordination groups and administrators at all levels, to improve inter-sectoral awareness among opinion leaders and gain high level support. (b) Training of managers of the STDs/HIV prevention program. (c) Training and workshops in development of the IEC strategy and plan for STDs/HIV. (d) Training in diagnosis and management of STDs, including interpersonal communication, and reporting requirements for doctors in government and private practice and other health workers. Cities will be asked to prepare a plan for training of private doctors. IV. COMMUNITY-BASED INTERVENTIONS (a) Health education in three broad target categories: (i) for the general public -- to improve knowledge of STDs/HIV and prevention measures in the whole city, through mass media, propaganda days, competitions, community and workplace consultations, hot lines, etc.; (ii) for schools -- including high schools, training colleges, vocational schools and universities, including relevant topics in the health education curriculum; and (iii) for special groups -- young people, the migrating ("floating") population, people detained in prison or reeducation centers, hotel workers, commercial sex workers, drivers, businessmen, male and female STD patients. In Yunnan Province, intravenous drug users (IDUs) will also be specifically targeted. Methods will include holding workshops, videotape watching, interpersonal communication, peer education, print materials, etc.  -47- ANNEX 2 Attachment 1 (b) Improved effectiveness, quality and patient satisfaction with STD diagnosis and case management, to achieve higher attendance and higher one-time cure rates for STD, through: (i) introduction of standard case management protocols, based on the national guidelines or official city versions, e.g., Shanghai; (ii) introduction of the syndromic approach to STD case management at the neighborhood level and by private practitioners, after the national pilot is completed (by July 1996); (iii) training of doctors and other health workers (see III (d) above); (iv) certification of competence to provide STD treatment and advice; (v) improved clinical supervision of STD services, both public and private; (vi) provision of a patient-friendly environment by improving clinic location and hours, privacy and confidentiality, having condoms and medicines available at treatment point, and controlling fees and charges; and (vii) the National STD Reference Group, with feedback from participating cities, will develop a composite set of criteria for assessment of the quality of STD clinics, covering skills, services, privacy, IEC, charges, etc. The project will aim to increase progressively the number and proportion of clinics and treatment points in each city which meet these criteria. (c) Increased condom availability and affordability. National and city level coordination groups will decide ways to achieve this and include them in the STD/HIV action plan. One important principle agreed on is that condoms should be available and offered to men and women at the time they receive STD treatment and advice on prevention of spread and recurrence. Pricing arrangements will be tested to increase condom use. For example the cost of the condoms can be included in the consultation fee so that they do not appear as an extra cost for the patient at that time. 6. Financing by the Project. The project would finance: preparation of the city's STD/HIV action plan and annual progress review workshops; technical assistance; training; additional materials development if needed (taking into account other national initiatives); management and specified additional inputs to health education campaigns and events; selected equipment; and the costs of distribution of condoms (social marketing). The recommended equipment for diagnosis of STDs at each level has been based on advice from the National Center for STD Control, MOH and WHO. These costs for each of the inputs mentioned have been included in the cost estimates for each project sub-component. 7. Implementation Arrangements. At the central level a small STD/HIV advisory group, comprising representatives of DCD, CAPM, and the National STD Center at Nanjing will provide advice as needed to the project's central leading and coordination groups, and links to the National STD/HIV program. At the city level, implementation of STDs/HIV activities will be managed under the four sub-components. Appropriate technical support and coordination for each activity will be specified in the action plan (see I (c) above) and annual workplans for the component. 8. Monitoring and Evaluation. Arrangements for monitoring progress in achieving the objectives for STD/HIV control under the project will be finalized by the National STD/HIV advisory group, with feedback from the participating cities, within the overall project monitoring framework. The list of indicators is presented here, including some milestones of planning, management and policy reform, and some quantitative indicators of output and outcome. For each quantitative  - 48 - ANNEX 2 Attachment 1 indicator, the definition, method and frequency of collection, reporting mechanism, and responsibility will be decided by the project launch and the first supervision of the project. The first collection of data, which will form the baseline for the project interventions, will be conducted within the first project year. It is proposed that the information will be compiled at the city level at least at six month intervals, and the results publicized and discussed within the city to generate public awareness, understanding and support, and obtain feedback to assist with planning improvements. 9. INDICATORS for STD/EIiV Process Indicators (a) 5 year and annual plans prepared. (b) Progress reports prepared every six months, with report on media dissemination. (c) Policy reforms prepared and announced or implemented. (d) Number of meetings conducted with policy makers, training completed compared with target. (e) Develop a set of criteria for assessment of the quality of STD clinics (see IV (b) above). Output Indicators (f) Number (%) of STD treatment centers meeting "standard management" criteria. (g) Condom distribution points compared with target. (h) Number of "anonymous cases reported" using one-time cure management protocols. (i) Number of practitioners trained. Outcome Indicator (j) Trends in Incidence of STDs. Yunnan Province 10. In addition to the seven cities that include STDs/HIV prevention in the Health Promotion Component, Yunnan Province will also conduct a special sub-component on STDs/HIV. Yunnan has been included because of its particular place in the HIV epidemic in China. It is a large, mountainous, poor province in southwest China with a population of 38 million and shares a long international border with Burma, Laos and Vietnam. It was the first Chinese province to record HIV infection and AIDS, and in 1993 accounted for 85 percent of all HIV positive cases in China, predominantly among IDUs in a few border counties. HIV is spread among IDUs by practices such as needle sharing, and from this group to the general community through sexual transmission. Therefore IDUs and the communities in which they live represent a special target group for health education and other interventions to reduce risky behavior. 11. Kunmning, the capital of Yunnan, is seen as an important focus for the project because it is the commercial and demographic center of the province, to which and through which many people travel, including those moving from the border areas to other parts of China. Kunming is estimated to have  -49- ANNEX 2 Attachment 1 10,000 drug users and a thriving "entertainment" industry, including commercial sex, concentrated in one or two wealthy urban districts. The city also has a wide representation of minorities, including designated minority districts. 12. Several projects to reduce HIV transmission are under implementation in Yunnan's border areas, with assistance from international agencies, including a four country project along the Mekong river, coordinated by UNDP. Yunnan has established a provincial office for AIDS control and prevention, and a network of screening laboratories and surveillance points. The province has prepared a plan for HIV control up to the year 2000, giving priority to inter-sectoral cooperation, public education, improved organizational arrangements, and increased international cooperation. 13. Under the project, Yunnan Province will adopt the same objectives, strategies and activities as described above for the participating cities with broader geographic scope. Many of the activities in Yunnan will be designed and finalized during project implementation.  - 50 - ANNEX 3 NATIONAL-LEVEL COMPONENT I. Introduction 1. The efficient management of the project and ultimately the need to disseminate the experiences gained through the project to other provinces and cities in China call for investment in a National-level Component. 2. The need for a National-level Component is reinforced by the complexity of the project (i.e., two distinct components), the number of participating entities (10 provinces and 7 cities), new policy developments in immunization (e.g., tetanus toxoid and hepatitis B), and the newness of health promotion as a field of public health practice in China. 3. Therefore, the National-level Component is the driving force for the entire project. The technical assistance (TA) requirements for health promotion are unparalleled in previous projects. This TA is crucial both for the initial stages of project development and implementation and for evaluation at the conclusion of the project. Insofar as the experience gained in the seven project cities will inform future policy and practice in the control of NCD, STDs/HIV, and injury in China, the National-level Component is critical to meeting project objectives. 4. For provinces involved in the Immunization Component, there is central development of a national EPI management information system, national policy and implementation strategy for tetanus and hepatitis B immunization, and support for institutional capacity building in IEC. 5. For cities involved in the Health Promotion Component, there is a need for central development of the behavioral risk factor surveillance system (BRFSS), coordinated development of training materials and of curriculum for education of health promotion specialist, and coordination of policy developments, leadership training, and TA. As health promotion is a new area of public health practice for China, there is the need for capacity building and institutional development at the national level to ensure that project cities receive appropriate guidance and evaluation and that the experiences are disseminated to other parts of China. 6. The objectives of the National-level Component are to: (a) provide national policy guidance; (b) provide national leadership in surveillance system and human resources development; (c) coordinate activities across provinces and cities and across several national institutions as needed and to disseminate project experience; (d) provide or coordinate provision of TA; and (e) ensure efficient and effective project implementation.  - 51- ANNEX 3 II. Functions of National-Level Component 7. The major functions to be performed centrally are: (a) Project management, supervision, implementation assistance, reporting, evaluation and dissemination. It is necessary to ensure that the project objectives are met and implementation is consistent across the large number of provinces and cities. The FLO disbursement and audit requirements and other procedures as detailed in the implementation plan. Liaison will be necessary with WHO, the State Planning Commission, the Ministry of Finance as well as the World Bank. The Disease Control Department (DCD) will provide implementation assistance (particularly for cities in the Health Promotion Component and counties in the Immunization Component), monitor progress in cities and provinces against performance indicators, undertake evaluation of project and disseminate project results. The Chinese Academy of Preventive Medicine (CAPM) and the National Institute for Health Education (NIHE) will be providing and coordinating technical guidance. (b) Policy development, coordination and dissemination. A coordinated approach to policy development and implementation is necessary to ensure a consistent framework across different levels of government. DCD will coordinate the development and dissemination of national policies and guidelines and support provinces and cities in policy reforms at the local level. For the Immunization Component, this will be focussed on introduction of tetanus toxoid (in high-risk areas) into the regular immunization program, and expansion of hepatitis B vaccines, on covering the migrating ("floating") population and unregistered children, and to improve access for the poorest families. Appropriate forms, guidelines and operational manuals will be developed. In addition, mechanisms for EPI financing and replacement of cold chain equipment will need to be established. For health promotion, this will involve guidance on implementing the national strategy on HIV/AIDS and the standard protocols for diagnosis and treatment of STD, the development of national NCD strategy, and promotion of national policies on tobacco control, nutrition, and financing of prevention. In addition, protocols for developing, conducting and evaluating interventions will be centrally provided. The need to develop and coordinate operations research will also arise. (c) Training, materials development, and IEC coordination. There is a need to improve IEC skills of immunization personnel and to improve knowledge and skills of those working in health promotion and control of NCD, STDs/HIV, and injury. To ensure appropriate training and IEC materials development, research will be needed on effective channels for health communication and on attitude, perception and practices that influence acceptability of immunization. Protocols for IEC will be centrally developed. Assistance will be required for provinces and cities to refine training plans. Existing training materials need to be reviewed and, where necessary, revisions made and new ones developed. Training to the provincial and city-level trainers will be needed. Because of the newness of health promotion, curriculum for education of health promotion specialists would need to be reviewed to ensure that the courses meet contemporary international standards. Coordination of curriculum and  - 52 - ANNEX 3 teaching materials development will also be needed to incorporate knowledge and skills on health education and control of NCD and STDs/HIV into health worker education. A national human resources development working group for health promotion will work on a network basis to draw on locally available expertise and ensure responsiveness to meeting local needs. The national-level training program is expected to be developed during the first two years of the project. (d) Surveillance system development and coordination. The project will initiate the development of two national surveillance systems. Both systems are fundamental to the monitoring of the project and will require national approaches to their development and implementation, including establishment, system administration, training of provincial/city staff, and data analysis. For the Immunization Component, the EPI management information system will provide information on immunization coverage, cold chain operation, and morbidity and mortality of vaccine-preventable diseases. The central level will also coordinate the implementation of three cluster surveys. For the Health Promotion Component, the BRFSS, along with Environmental Indicators Surveillance, will provide information on knowledge, attitudes, practices, behaviors and environmental factors related to NCDs and STDs/HIV. City and provincial level staff will require support for form and questionnaire development, data collection and entry, analysis, and reporting and feedback procedures. In addition to establishing these new systems, the central level will provide assistance on standardization and refinement of death reporting (including implementation of the system in Weihai and Liuzhou) and to evaluate the cost, design and usefulness of morbidity reporting systems in Chengdu and Tianjin. (e) Technical Assistance (TA). For the EPI component, the central level will provide TA or act as a reference point for local TA. The Health Promotion Component will require substantial foreign TA for designing and implementing various aspects of the project and the most cost-efficient approach is for a coordinated approach. The project would support needed input for health promotion, e.g., overseas short-term training, study tours and foreign TA, on a nationally coordinated basis. Some TA will also be provided by the national technical units and expert committees for the Health Promotion Component. (f) Institutional Development and Capacity Development. For the Immunization Component, the development of high-level planning and management expertise at the national and provincial levels is needed, within the Health Bureau generally and for EPS and Health Education Institutes specifically. Mid-level staff will benefit particularly from short-term overseas training and practical placements in related agencies overseas. For the Health Promotion Component, the appropriate organizational framework will be established at the national level to provide guidance to the cities and to other areas beyond the project period. There is a need to ensure development of the full range of expertise required for effective control of NCD, STDs/HIV and injury, particularly the development of social science, communications, and program evaluation expertise. Furthermore, there is a need to ensure that leaders at national and provincial levels fully appreciate the nature, complexity, and importance of control of NCD, STDs/HIV, and injury. Training and  - 53 - ANNEX 3 development of leaders as well as senior health professionals can be effected through seminars and study tours. 8. Links with other donors and international organizations will be important throughout the life of the project. In particular, WHO has had ongoing involvement as well as current projects in immunization, health promotion and HIV/AIDS. Coordination will avoid unnecessary duplication of developmental efforts and maximize training and TA opportunities. In addition, project participants should share information and exchange experiences with an expanded network of provinces and cities. Ill. Organization of National-Level Component 9. Overall direction of the project will be provided by a Leading Group, chaired by the Minister of Health and comprising directors of concerned departments/units, namely DCD, FLO, Planning and Finance, Science Technology and Education, and the Patriotic Health Campaign Committee. The secretariat will be provided by FLO. 10. Under the Leading Group, a Project Coordination Group is responsible for overall planning and implementation of the central component activities. The Group is co-chaired by the Directors of FLO and DCD and consists of Chiefs of the EPI, NCD and STD Divisions of DCD and the Project Division of FLO, and the Directors of CAPM and NIHE. 11. Detailed planning of National-level Component activities for both components will be undertaken by CAPM which has established two technical units of full-time professional staff, one on immunization and the other on health promotion. The health promotion technical unit will work closely with the NIHE on providing TA and guidance to the cities on intervention design and evaluation, with the CAPM Institute for Food Hygiene and Nutrition for nutrition aspects of the project, and with the CAPM HIV Unit and the National STD Center in Nanjing on STD/HIV issues. The CAPM units are accountable to MOH through DCD and will coordinate input and involvement of other experts and technical agencies, such as universities and the inter-city cooperative network for health promotion human resources development. An adequate level of staffing with coverage of appropriate range of expertise is crucial to project success and identifiable teams have been established within CAPM for health promotion interventions, human resources development and surveillance. It is noted that the technical units will become part of a proposed permanent Center for Disease Control and Prevention to be established within CAPM. 12. Administrative and operational requirements of the project will be the responsibility of the FLO. FLO will liaise with provinces and cities on these matters. Technical guidance and implementation assistance to provinces and cities on all other aspects of program activities and overall monitoring of the project activities will be the responsibility of DCD. 13. Expert committees on EPI and Health Promotion have been set up to advise on policy formulation, development of training materials, and project implementation and evaluation. They will report to the Project Coordination Group.  - 54 - ANNEX 3 IV. Key Activities 14. The attached table sets out key activities and responsible unit(s) according to function and project component.  NATIONAL-LEVEL COMPONENT ACTIVTIES Function Immunization Responsible I Health Promotion Responsible l______________ l________________J Unit Unit Policy development, - Prepare national control -MOH/DCD -Develop National NCD Control -MOH/DCD coordination and strategies and guidelines for Strategy dissemination tetanus toxoid (TT) and - Disseminate and implement -MOH/DCD hepatitis B National STD/HIV Strategy - Prepare training manual for -MOH/DCD - Disseminate and implement -MOH/DCD mass campaign on TT protocols for STD diagnosis and - Follow-up surveillance and -MOH/DCD treatment case reporting - Promote national level policy -MOH & - Develop and coordinate -MOH/DCD & development for tobacco control PHCC operations research as needed CAPM - Establish national guidelines -MOH/DCD & for nutrition improvement and CAPM LA promote national level food and nutrition policy - Develop policy on financing -MOH/PFD for prevention P  Function hImmunization | Responsible | Health Promotion Responsible Unit Unit Supervision, - Establish procedures and -MOH/DCD - Provide guidance on design -CAPM & implementation assistance, guidelines for supervision at and implementation of NIHE reporting, evaluation, and each level, from province to interventions dissemination village - Assist cities with special -CAPM & - Monitor progress on project -MOH/DCD investigation and pilots as NIHE implementation needed - Provide reports to World -MOH/FLO - Undertake evaluation of -CAPM Bank interventions - Conduct mid-term and -MOH - Monitor progress on project -MOH/DCD project completion review and implementation evaluation - Provide reports to WB -MOH/FLO - Disseminate project results -MOH & through newsletters, annual CAPM conferences, etc. On Training, materials - Conduct research on -CAPM - Conduct qualitative research -NIHE development, and IEC attitude, perception and on effective channels of health coordination practices that influence communications acceptability of immunization - Set up national HRD Working -CAPM - Develop communication -CAPM Group on a network basis strategy and design - Coordinate development of -CAPM communication program and provide quality assurance alternatives to address various for training materials population groups - Develop protocols for -CAPM & - Review existing training -MOH/DCD & intervention design, evaluation NIHE materials and revise or CAPM and IEC activities develop new materials as - TOT for city-level personnel -CAPM necessary - Review university curriculum -CAPM, PHCC for health promotion & MOH/STE w  Function Immunization Responsible Health Promotion Responsible [ I Unit Unit Surveillance system - Coordinate three cluster -CAPM - Set up BRFSS and -CAPM coordination surveys Environmental Indicators - Improve national EPI -CAPM Surveillance in project cities management information - Provide training to cities on -CAPM system surveillance system - Provide training in data -CAPM implementation and analysis collection and analysis - Undertake initial data analysis -CAPM - Provide training on basic -CAPM and disseminate results for computer skills BRFSS - Establish measles -MOH/DCD & - Assist Liuzhou and Weihai in -CAPM surveillance system CAPM establishing death reporting system - Standardize and refine death -CAPM reporting system - Assist Chengdu and Tianjin in -CAPM evaluating morbidity reporting system TA and foreign training - Provide & manage TA and -MOH/DCD & - Coordinate foreign TA, -MOH/FLO & and study tour Coordinate provincial level CAPM training and study tours for CAPM coordination study tour/TA cities - Provide/arrange local TA -CAPM  Function Immunization | Responsible 1 Health Promotion | Responsible Unit Unit Institutional/leadership - Organize development of -MOH/DCD & - Develop appropriate structure -MOH, CAPM development and capacity- planning and management CAPM and process at national level for & NIHE building at national and expertise for senior national project period and beyond provincial levels and provincial officials - Develop and implement -MOH, CAPM - Upgrade technical capacity -CAPM communications strategy for & NIHE on data analysis including project coverage and program - Develop expertise currently -CAPM management lacking at national level, e.g. social sciences, evaluation research, communications - Undertake workforce planning -MOH to meet future health promotion needs - Organize national high-level -MOH/DCD & policy seminars for leaders CAPM 00 -Organize management training -MOH/FLO & and study tours for senior CAPM officials and leaders - Assess capacity building -MOH/DCD & (including training) effectiveness CAPM  - 59 - ANNEX 4 REPLACEMENT AND LONG-TERM SUSTAINABILITY OF THE COLD CHAIN 1. Justification. During the 1980s, as part of its participation in the Expanded Program on Immunization (EPI) and its commitment to the Universal Childhood Immunization goal for 1990, China with international assistance embarked on the establishment of a complete cold chain system extending from the vaccine factories to village level immunization posts. Most of the vehicles and equipment used in this cold chain were purchased and installed in the late 1980s. In the rush to expand capacity, inadequate provisions were made by the government at each level for the inevitable need to replace equipment as it wears out. Although some replacement purchases have been made and a limited amount of donations are still provided, the current levels are inadequate to prevent serious deterioration in the cold chain in the next few years, including breakdowns of the system in some areas. Assistance is needed while the government establishes a more sustainable long-term replacement program. In addition to replacement of the current cold chain, some expansion and changes in standards are needed, both to improve quality and to accommodate new vaccines, in particular the routine use of hepatitis B vaccine. 2. Standards. In order to calculate the requirements for cold chain replacement and expansion, both for the project period and in the future, a series of standards were established based on experience in China and international standards used by the World Health Organization. These are as follows: (a) The standard types and quantities of cold chain equipment needed at province, prefectural, county, township and village level depending on the size of the units and the organization of immunization services within them (See Table A4-1). Due to the need to improve sterile technique at the immunization point level, steam sterilizers, needles and syringes are included in the list even though they are not "cold chain" equipment per se. (b) The estimate unit costs for appropriate equipment of each type, and the proportion of the standard quantity for each type and level that will need to be provided during the next five years in order to restore and expand the cold chain. This proportion is based on a review of the current situation in China and the expected working life of each type of equipment. 3. Calculations. Based on the above standards, equipment replacement during the project was calculated. (a) First, provinces provided information on the number and characteristics of each level of their immunization services (province, prefecture, county, township and village). (b) Second, replacement quantities were calculated by multiplying the number and types of service units in each province by the equipment standards for that level and the replacement proportion under the project. Numbers of equipment were rounded up to the nearest integer.  - 60 - ANNEX 4 (c) Third, costs of equipment replacement were estimated by multiplying equipment numbers by equipment unit costs (See Table A4-2 and ANNEX 6 for summary costs). 4. Sustainability. In order to avoid repeating the mistake of not planning for long-term replacement, the average life-expectancy of each type of equipment was estimated and overall replacement needs for each of three five year periods after the project were calculated, preparing the needs assessment for a total of 20-year plan for the cold chain. The costs of the three five year periods after the project will need to be borne entirely by the government. Although costs vary between periods, the overall cost can be estimated as equivalent to about 0.14 RMB per capita per year, including the costs of replacing sterilizers, needles and syringes. While not negligible, such an amount is well within the capacity of all project provinces. Each province was requested to establish a system for meeting these costs both in terms of counterpart funds during the project and full costs after the project. 5. During appraisal all provinces agreed with the long-term needs assessment for the cold chain replacement program. In some provinces measures to ensure financial support for the long-term have already been initiated, including increased government budget allocations, and designation of some of the funds collected from EPI contracts or rural taxes to support cold chain replacement. The project provinces have also proposed, but not yet adopted, additional measures including financing from rural cooperative medical insurance, pre-financing of future needs by establishing an equipment depreciation fund, charges on health care institutions that fail to provide EPI services, use of funds previously allocated to special polio national immunization days, solicitation of donations for major items, and a request that national finance department guidelines be established making cold chain replacement a standard line item in the health budget.  - 61- ANNEX 4 Table A4-1: COLD CHAIN EQUIPMENT LIST AND REQUIREMENT STANDARDS By Level ITEM USAGE VOLUME & QUANTITY 1. PROVINCE -20C freezer room storing OPV, MV for 6 mo 15M/1500m pop. 15+30M or both +5C cold room storing BCG, DPT, HB, TT for 12 15M/600m pop. months, OPV & MV for short time 15+30m or both standby generator provide power supply for cold 1 unit (if necessary) chain equipment when power supply not available +5C refrigerated transport vaccine for lower 2 units (8M) vehicle level sectors ordinary van supervision, transport equipment 2 units 2. PREFECTURE 2.1 PREFECTURE OF >500M POPULATION -20C freezer room storing OPV, MV for 6 mo 15M (1 set) +5C cold room storing BCG, DPT, HB, TT for 6 15M (1 set) months -20C freezer making & storing icepack 1 set standby generator provide power supply when 1 set (if necessary) power supply not available +5C refrigerated transport vaccines for county 4M (1 unit) vehicle level ordinary van transport equipment, supervision 1 unit & maintenance cold box (25 icepacks) for emergency 25L/set/60m pop. spare icepack for ice-lined refrigerator 25 icepacks/60m pop. 2.2 PREFECTURE OF 300-500M POPULATION -20C freezer storing OPV, MV for 6 mo 300L/set/lOOm pop +5C cold room storing BCG, DPT, HB, TT for 6 mo 15M (1 set) -20C freezer making & storing icepack 2 sets standby generator provide power supply when power 1 set (if necessary) supply not available vaccine trans- transport vaccines 1 unit portation vehicle ordinary van transport equipment, supervision 1 unit & maintenance cold box (25 icepacks) transport vaccines 25L/set/15m pop spare icepack for emergency 25 icepacks/12m pop  - 62 - ANNEX 4 ITEM USAGE VOLUME & QUANTITY 2.3 PREFECTURE OF c300M POPULATION -20C freezer storing OPV, MV for 6 months 300L (set)/lOOm pop. +5C refrigerator storing BCG/DPT/HB/TT for 6 mo 300L (set)/75m pop -20C freezer making & storing icepack 2 sets standby generator provide power supply when power 1 set (if necessary) supply not available vaccine transport transport vaccines 1 unit vehicle ordinary van transport equipment, supervision 1 unit & maintenance cold box (25 icepacks) transport vaccines 25L/15m pop. spare icepack for emergency 25 icepacks/12m pop 3. COUNTY 3.1 COUNTY LEVEL (only transport vaccine for township level, township can make icepack) -20C freezer storing OPV, MV for 3 mo 300L (set)/200m pop +5C refrigerator storing BCG/DPT/HB for 3 mo 300L (set)/150m pop -20C freezer making and storing icepack 1 set standby generator provide power supply when power 1 set (if necessary) supply not available ordinary van transport equipment, supervision, 1 set personnel, vaccines cold box (25 icepacks) transport vaccines 25L (set)/15m pop spare icepack for emergency 25 icepacks/6m pop 3.2 COUNTY LEVEL (transport vaccine for township level, provide ready to use icepack; no power supply or unstable power supply at township level) besides all equipment listed under item 3.1, add cold box, used for transport ready-to-use icepacks, 75 icepacks per cold box, 1 set of 25L cold box every 10 villages 4. TOWNSHIP 4.1 TOWNSHIP LEVEL (provide immunization per village) +5C refrigerator storing vaccines 75L (set)/township -20C freezer making & storing icepack 100L (set)/township vaccine carrier (with for immunization at village 2 sets/village 8 icepacks) level spare icepack for ice-lined refriger. 4 pcs/vaccine carrier  -63- ANNEX 4 ITEM USAGE VOLUME & QUANTITY 4.2 TOWNSHIP LEVEL (provide immunization per township) +5C refrigerator storing vaccines 75L (set)/township -20C freezer making & storing icepacks 100L (set)/township vaccine carrier (with for immunization at township 5 sets/township 8 icepacks) level spare icepack for ice-lined refriger. 4 pcs/vaccine carrier sterilizer 2 sets/township stove for sterilization 1 set/township syringe 200 pcs (lml)/township needle 48 pcs (26G)/township (only for BCG) needle 168 pcs/township (only for DPT, MV, HB) forceps 1 pc/sterilizer 5. VILLAGE 5.1 VILLAGE LEVEL (provide immunization per village) sterilizer (alum.) sterilization at village level double rack sterilizer/ village; plastic basin/ village (at least steri- lizing 80 syr./needles stove for sterilization 1 set/village syringe 100 pcs (lml)/village needle 24 pcs/village (only for BCG) needle 84 pcs/village (only for DPT, MV, HB) forceps 1 pc/sterilizer 5.2 VILLAGE LEVEL (provide immunization per township) not provide sterilization & immunization equipment Notes: (1) The standards are made on the basis that all equipment will be out of order after 5 years of operation; project provinces should implement the standards according to their actual situations; the volume of each kind of equipment is the net volume for storing vaccines. (2) c: stands for celsius centigrade. (3) M: stands for cubic meter.  - 64 - ANNEX 4 Table A4-2: COLD CHAIN EQUIPMENT REPLACEMENT/RENEWAL COST (1996 - 2015) By Type of Equipment and by Five Year Period Replacement Period and Cost Service Type of Equipment (US$ million) Life/Years 1996 - 2000 2001 - 2005 2006 - 2010 _J2011 - 2015 Walk-in Freezer 0.243 - - 0.243 15 0.240 l Walk-in Cooler 0.445 - - 0.445 15 0.297 - Chest Freezer 6.940 - - 6.940 15 - ~~2.480 - Refrigerator 6.024 - 6.024 - 10 4.016 - 4.016 Cold Box 0.518 - 0.518 - 8 0.689 - 0.689 Vaccine Carrier 5.806 - 5.806 - 8 5.806 - 5.806 Standby Generator 4.131 - 4.131 15 Refrigerated Van 0.760 - 0.760 - 8 0.280 - 0.280 Ordinary Van 10.755 - 10.755 - 8 10.755 - 10.755 Steam Sterilizer 6.334 - 6.334 - 10 Immunization Equipment 6.334 6.334 6.334 6.334 6 48.290 6.334 36.531 18.093 TOTAL 24.563 - 21.546 48.290 30.897 36.531 39.639  - 65 - ANNEX 5 PROJECT IMPLEMENTATION ARRANGEMENTS The project areas were selected based on the criteria specified in paragraph 2.6 of this Staff Appraisal Report and the programs proposed for those project areas were appraised. For the Immunization Component, the project areas included the provinces of Gansu, Guangxi, Guizhou, Hebei, Henan, Hubei, Shaanxi, Shanxi, Xinjiang and Yunnan. For the Health Promotion Component, the project areas included the cities of Beijing, Chengdu, Liuzhou, Luoyang, Shanghai, Tianjin and Weihai, and the province of Yunnan. Each of these project entities would be required to undertake to carry out the following: PART A - Immunization Component Financial Provisions (a) Each participating province would make the Credit proceeds available to its counties, as far as possible on a grant basis, otherwise on terms at least as favorable as the terms on which the province receives the funds from the Borrower. Project Management (b) Each province shall: (i) maintain throughout the project period, a Project Leading Group, chaired by a Vice Governor and including officials from the health and finance bureaus and the planning committees and other relevant sectors; (ii) maintain throughout the project period, a Project Office with a full-time director; (iii) maintain at the county level a Project Leading Group, a Project Office headed by a project director; and (iv) carry out regular project monitoring and reporting in accordance with agreed formats and frequencies. Policy Measures (c) Each province shall: (i) continue to provide, free of charge, sufficient EPI vaccines (against tuberculosis, diphtheria, pertussis, tetanus, polio and measles) to cover the whole population of the province throughout the project period;  - 66 - ANNEX 5 (ii) prepare, in accordance with terms of reference acceptable to the Association, a long-term strategy for the replacement of cold chain equipment with a view to its adoption after the project completion; (iii) carry out at least six rounds of vaccination sessions each year; (iv) implement measures acceptable to the Association designed to increase access of the poorest families to its immunization programs, and ensure that all children shall have access to its immunization programs regardless of their registration status; and (v) procure only reusable syringes and needles, rather than disposable ones, except in cases of those urban areas where safe disposal practices are followed consistent with the policy recommended by the World Health Organization, and sterilize and dispose all syringes and needles in accordance with this policy. PART B - Health Promotion Component Financial Provisions (a) Each participating province would make available Credit proceeds to its cities or counties on terms and conditions which would be at least as favorable as the terms on which it receives the funds from the Borrower. Project Management (b) Each participating city or province shall: (i) establish, and maintain throughout the project period, an Inter-sectoral Policy Guidance Committee, a Project Leading Group within the health bureau, and a Project Office within the health bureau to coordinate project implementation, each with membership, terms of reference and resources satisfactory to the Bank; and (ii) maintain throughout the project period: a working group for interventions; a full-time interventions manager; and a full-time training coordinator. Policy Measures (d) Each jurisdiction shall: (i) submit its annual plans and proposals for implementation of the health promotion interventions to the Borrower for review and approval and provide a summary for the Association's no objection before those interventions are implemented;  - 67 - ANNEX 5 (ii) include in its annual plans, a plan designed to control and reduce smoking of tobacco products; (iii) ensure that the treatment of patients with STDs and HIV shall be based on a policy of anonymity; and (iv) provide training to private practitioners treating STD and HIV cases.  SUMMARY OF PROJECT COSTS Table 1: EXPENDITURE ACCOUNTS BY COMPONENTS - BASE COSTS (S million) Health Promotion Immunization Institutional Human Central Physical Cold EPI Development & Resources Health Contingencies Chain Training IEC Management Policy Reform Development Surveillance Interventions Immunization Promotion Total % Amount I. Investment Costs A. Equipment Cold Chain Equipment 35.42 - - - - 35.42 5.0 1.77 Other Equipment 2.33 - - 0.10 0.29 0.70 0.94 0.25 0.16 4.77 5.0 0.24 Subtotal Equipment 37.76 - - 0.10 0.29 0.70 0.94 0.25 0.16 40.20 5.0 2.01 B. Vehicles Vehicles and Vans 14.14 - - - 0.12 - 0.25 0.63 - 0.05 15.18 5.0 0.76 Refrigerated Vehicles 0.99 - - - - - 0.99 5.0 0.05 Subtotal Vehicles 15.13 - - - 0.12 - 0.25 0.63 - 0.05 16.17 5.0 0.81 C. T.T. & Hep. B Vaccines Tetanus Toxoid - - - 0.28 - - - 0.28 5.0 0.01 Hepatits B - - - 8.95 - - - - - - 8.95 5.0 0.45 Subtotal T.T. & Hep. B Vaccines - - 9.22 - - - - - 9.22 5.0 0.46 oc D. Training Local Short-Term - 12.46 - 0.06 0.07 0.29 0.50 0.08 - 13.46 5.0 0.67 Local Long-Term - 0.02 - - - - 0.02 5.0 0.00 Foreign - 0.38 - - 0.09 0.18 0.17 0.17 0.06 0.12 1.15 5.0 0.06 StudyTour - 0.32 - - 0.18 0.06 0.11 0.14 0.11 0.09 1.01 5.0 0.05 Subtotal Training - 13.18 - - 0.33 0.31 0.56 0.81 0.24 0.21 15.64 5.0 0.78 E. Technical Assistance Local TA - 0.02 - 0.03 0.02 0.04 0.08 0.14 0.16 0.47 5.0 0.02 Foreign TA 0.17 0.01 0.02 0.01 0.03 0.14 0.19 0.57 5.0 0.03 Subtotal Technical Assistance - - 0.19 - 0.04 0.04 0.05 0.10 0.28 0.34 1.04 5.0 0.05 F. Materials Development - - - - 0.54 0.28 1.40 3.89 - - 6.11 5.0 0.31 Total Investment Costs 52.88 13.18 0.19 9.22 1.13 0.91 2.96 6.37 0.77 0.75 88.37 5.0 4.42 II. Recurrent Costs A. Program Support Program Support - - 6.65 26.58 0.54 0.28 1.40 3.89 0.19 0.28 39.80 5.0 1.99 T. T. Program Support - - - 1.56 - - - - 1.56 5.0 0.08 Subtotal Program Support - - 6.65 28.15 0.54 0.28 1.40 3.89 0.19 0.28 41.37 5.0 2.07 B. Equipment O&M 2.53 - - - 0.01 0.02 0.05 0.07 0.02 0.02 2.72 5.0 0.14 C. Vehicles O&M 0.86 - - - 0.01 - 0.02 0.05 - - 0.93 5.0 0.05 Total Recurrent Costs 3.39 - 6.65 28.15 0.55 0.30 1.47 4.00 0.21 0.30 45.02 5.0 2.25. Total BASELINE COSTS 56.28 13.18 6.84 37.37 1.68 1.22 4.43 10.38 0.98 1.05 133.40 5.0 6.67 Physical Contingencies 2.81 0.66 0.34 1.87 0.08 0.06 0.22 0.52 0.05 0.05 6.67 - - Price Contingencies 5.44 2.83 1.67 8.42 0.35 0.24 0.94 2.32 0.17 0.18 22.56 4.8 . Total PROJECT COSTS 64.53 16.67 8.85 47.66 2.12 1.51 5.60 13.21 1.19 1.29 162.62 4.8 7.74 Taxes 7.99 - - - 0.03 0.00 0.07 0.17 0.00 0.01 8.28 4.8 0.39 Foreign Exchange 30.90 0.81 0.20 5.15 0.43 0.38 0.68 1.05 0.42 0.53 40.56 4.8 1.93  SUMMARY OF PROJECT COSTS Table 2: COMPONENTS PROJECT COST SUMMARY % % Total (RMB Ten Thousand) (USS Million) Foreign Base Local Foreign Total Local Foreign Total Exchange Costs A. Imrnunization Cold Chain 23,518.20 23,753.91 47,272.12 28.00 28.28 56.28 50 42 Training 10,485.41 587.41 11,072.82 12.48 0.70 13.18 5 10 IEC 5,596.83 145.53 5,742.36 6.66 0.17 6.84 3 5 EPI Management 27,517.17 3,873.33 31,390.50 32.76 4.61 37.37 12 28 Subtotal lrwnunization 67,117.61 28,360.18 95,477.80 79.90 33.76 113.66 30 85 B. Health Promotion Institutional Development & Policy Reform 1,097.95 316.82 1,414.78 1.31 0.38 1.68 22 1 Human Resources Development 746.28 274.39 1,020.67 0.89 0.33 1.22 27 1 Surveillance 3,214.38 508.26 3,722.65 3.83 0.61 4.43 14 3 Interventions 7,928.96 786.06 8,715.03 9.44 0.94 10.38 9 8 Subtotal Health Prormotion 12,987.58 1,885.54 14,873.12 15.46 2.24 17.71 13 13 ' C. Central Immunization 514.76 304.88 819.64 0.61 0.36 0.98 37 1 Health Promotion 499.15 384.94 884.09 0.59 0.46 1.05 44 1 Subtotal Central 1,013.91 689.82 1,703.73 1.21 0.82 2.03 40 2 Total BASELINE COSTS 81,119.10 30,935.54 112,054.64 96.57 36.83 133.40 28 100 Physical Contingencies 4,055.96 1,546.78 5,602.73 4.83 1.84 6.67 28 5 Price Contingencies 17,360.75 1,586.62 18,947.37 20.67 1.89 22.56 8 17 Total PROJECT COSTS 102,535.80 34,068.94 136,604.74 122.07 40.56 162.62 25 122 0%  - 70 - ANNEX 7 ESTIMATED CREDIT DISBURSEMENT SCHEDULE Bank Semester China Annual Cumulative Annual Cumulative FY Ending Overall Health ($ million) (% of total) Sector 1996 July-Dec 1995 0 0 Jan-June 1996 3 3 5.0 5.0 5.0% 5.0% 1997 July-Dec 1996 6 6 11.2 16.2 11.2% 16.2% Jan-June 1997 14 10 14.2 30.4 14.2% 30.4% 1998 July-Dec 1997 26 14 16.2 46.6 16.2% 46.6% Jan-June 1998 38 18 12.1 58.7 12.1% 58.7% 1999 July-Dec 1998 50 22 17.1 75.8 17.1% 75.8% Jan-June 1999 62 30 9.1 84.9 9.1% 84.9% 2000 July-Dec 1999 70 38 8.1 93.0 8.1% 93.0% Jan-June 2000 78 50 5.7 98.7 5.7% 98.7% 2001 July-Dec 2000 86 58 1.3 100.0 1.3% 100.0% Jan-June 2001 90 66 2002 July-Dec 2001 94 74 Jan-June 2002 96 82 2003 July-Dec 2002 98 90 Jan-June 2003 100 94 2004 July-Dec 2003 - 98 Jan-June 2004 - 100 Notes: The Bank Group's Health and Overall profiles are according to WB 1994's standard disbursement profiles.  PROJECT IMPLEMENTATION SCHEDULE Calendar Year 1995 1996 1997 1998 | 199 9 2000 2001 2002 Bank Fiscal Year 1995 1997 198 1999 2000 2001 2002 Quarter Q3 Q4 QI Q2 Q3 Q4 QI Q2 Q3 Q4 QI Q2 Q3 Q4 QI Q2 Q3 Q4 QI Q2 Q3 Q4 Ql Q2 Q3 Q4 QI Q2 Civil WorksI Design, Contracting & Construction Warranty Period =T Equipment & Vehicles Prepaation of Bidding Documents Invitation for Bids Contract Awards & Delivery Warranty Period Technical Assistance Specialist Services .... .. .............- . Operation Research Loan Processing & Gen. Admin. Negotiations X Board Approval x Credit Signing . . . x Effectiveness .XII Retroactive Financing - Announcement of GPN X Mid-Term Review ____X Audit Reports due Dates X _ x X x x Project Completion x Credit Closing X lmplementation Completion Report I | X go  - 72 - ANNEX 9 PROJECT PERFORMANCE MONITORING 1. Actions to Monitor Outcome Objectives. Tracking key monitoring indicators is necessary to measure the impact of the project inputs on the key development objectives. These indicators have been prepared and will be monitored throughout the project cycle. At the mid-term review, the need to fine-tune or restructure the project design will be based on the data received from these indicators. 2. As the reduction of morbidity and mortality is the ultimate goal of the immunization program, demonstration of a reduction in these two areas should provide final proof of success or failure. In the context of the Health Promotion Component, outcome will be measured by behavioral changes and environmental changes which will be conducive to eventual modification of risk factors. Many of the ultimate outcomes, e.g., disease prevention and reduced mortality, may not decrease in the project period, except perhaps injuries. Given the essential role program monitoring and evaluation play in determining the impact of a given intervention on development objectives, three sets of indicators will be used to monitor and evaluate progress during implementation of the Immunization and Health Promotion Components: input indicators, process/output indicators and outcome indicators. 1. Immunization Component A. Outcome Indicators 3. Outcome Indicators will track whether or not the development objectives of the project have been met. Criteria for selection of these outcome indicators for health status are: (a) that the indicator is known to be sensitive to the intervention introduced under the project; and (b) that data will be readily available through routine collection on a county and provincial basis without special surveys. Based on these criteria, outcome indicators selected include: (a) infant mortality rate; (b) under 5 mortality rate; and (c) disease incidence trends for poliomyelitis, measles and neonatal tetanus. 4. Process indicators will enable the program managers and the Association to assess desirable improvement in management and quality of immunization programs, e.g., increase in immunization coverage, and improvements in management and quality of vaccine handling and distribution. Eight process indicators will be tracked annually. (a) coverage of EPI (4 vaccines) (through review of immunization records by county EPI supervisors annually, with estimations of coverage using both registered children and estimated births for each township); (b) coverage of measles vaccine, annually for province, prefecture, and counties for children under age 5; (c) number of counties reporting age and immunization status of all measles cases (annually); (d) coverage of hepatitis B vaccine, urban and rural; (e) coverage of tetanus toxoid for women of childbearing age and pregnant women;  - 73- ANNEX 9 (f) supervision rates from county to township (minimum 2x per year per township), township to village (2x per year per village); (g) proportion of village doctors implementing single needle and single syringe policy; and (h) the number of immunization sessions held annually. 5. Evaluation of Coverage. In addition to the routine reports, population based assessment of vaccine coverage (modified WHO cluster survey) will be carried out at the beginning, middle and the end of the project to establish baseline coverage and validate routine reports. The cluster survey provides an estimate of coverage by examining seven children within the target age-group in each of 30 randomly selected clusters. Provided that these 210 children are randomly selected, the evaluation can, with 95 percent confidence, predict the antigen coverage being achieved within plus or minus 10 percent limits. The design of the cluster survey will be finalized by CAPM in a manner satisfactory to the Association. B. Performance Indicators 6. Input indicators will track planned investment in terms of time (staff-weeks and staff-months) in training programs by level of health workers and procurement of goods (cold chain equipment and other training and equipment -- disbursement rate). These indicators will be represented in standard input tables of each major sub-component of the project. 7. Output indicators will track items such as: (a) number of training modules that have been revised and completed by a given date during the project cycle; (b) equipment or vehicles that have been procured; (c) the number of village, township and county health workers that have been trained; and (d) the number of prefectures, counties, and townships equipped with cold chain equipment. These indicators will be tracked in output tables for each component of the project. II. Health Promotion Component A. Outcome and Environment Indicators 8. Outcome indicators can be used to monitor progress toward meeting development objectives of the project. In the context of health promotion, these are: behavioral changes, knowledge, and risk factor prevalence (smoking rates in the population by age, percentage of doctors that are non- smokers), which can be measured through the BRFSS. 9. Environment indicators measure outcomes in changes in policy, e.g., market shares of media sports, implementation of no smoking in public areas and number of non-smoking signs in schools, work-site and hospitals. These environmental indicators will be tracked during the project. 10. Output indicators will track items such as: (a) the number of reports, policies implemented, study tours and overseas training completed by a given date during the project cycle; (b) the number of students trained; number of private doctors trained with standard STD management; number of clinics providing condoms with STD management; (c) the equipment or vehicles that have been procured; (d) response rate of questionnaires and timely report rate under the behavioral risk factor surveillance; (e) number of persons covered under the intervention by setting; and (f) number of mass  - 74 - ANNEX 9 media programs and number of health columns in newspapers under the intervention sub-component. These indicators will be tracked in standard output tables for each major sub-component of the project. B. Performance Indicators 11 Input indicators are used to monitor progress toward meeting the implementation objectives of the project. Input indicators will track planned investment in terms of contracting technical assistance (staff weeks) and training activities and procurement of goods (disbursement). 12. Input/Output Tables have been prepared for each sub-component of the project. These tables will be finalized during the first supervision mission and will be used to monitor the progress in project implementation. As part of project supervision undertaken by the Association, the above input and output indicators will be monitored twice a year. Environment indicators will be monitored three times during the project. In addition, a special coverage survey will be carried out at the beginning, middle and the end of the project to establish a baseline and to validate routine reports.  - 75 - ANNEX 10 ECONOMIC ANALYSIS I. Introduction 1. This section shows how epidemiological and demographic data are used to calculate the benefits of the project as healthy years of life gained (HYL) or disability adjusted life years saved (DALY) from immunization program. It then examines cost-effectiveness of the programn compared with program alternatives in Section II, and assesses the fiscal impact of the project in Section III. Section IV conducts a sensitivity analysis of different vaccine parameters. The penultimate section succinctly describes the project's impact on poverty alleviation. 2. Economic Benefits. The results show that the Immunization Component would save about 4.8 million DALY annually in the ten project provinces, reflecting about 60 percent reduction in the burden of communicable diseases. This is based on such epidemiological data as the average age at onset, case fatality rates, the duration of disability, and the incidence of diseases. The total disease burden -- the sum of all DALY lost by the population in the ten project provinces -- is computed first (Table 1)1'. It is clear that non-communicable diseases (NCDs) account for the bulk of the disease burden -- 68 percent of total DALY lost -- followed by communicable diseases (22 percent) and injuries (10 percent). Of the total DALY lost, malignant neoplasm and cardiovascular diseases steal more than a half of healthy life years in these provinces (Table 2). Having estimated the loss in DALY, the next step is to compute the gains in DALY that would be possible under the immunization program. Based on the number of immunizations, their efficiency and the target population, DALY saved per vaccination is calculated (Table 3). Multiplying column (2) by column (5) generates DALY saved annually per immunization (column 6). The sum yields savings of about 4.86 million DALY per year. 3. Furthermore, the Immunization Component would save approximately $622 million in lost income and treatment costs, reflecting a significant return on project investment. Monetary values of benefits -- the value of life saved from reduced illness time and deaths avoided, reduced expenditure on treatment, and value of time spent in home care -- are estimated with data from several household surveys. In this respect, a year of life saved is valued at annual per capita national income, and treatment costs are adjusted for reduced use and coverage. 4. It is worth pointing out that in some cases the data on the duration of disability and proportion of permanent disability were not available from the project provinces. In such cases the national social weights were assumed in the DALY calculations. Alternatively, social weights by age from other countries with similar age patterns of mortality can be used, but they vary more widely across cultures and social context than within a country. Indeed, DALY estimates vary significantly when global weights are used. 1' For details on methodology to calculate DALY, see C.J.L. Murray and A.D. Lopez, "The Global Burden of Disease," World Development Report, 1993; Background Paper.  - 76 - ANNEX 10 II. Cost-Effectiveness and Program Alternatives 5. The cost-effectiveness of the immunization program is calculated against program alternatives --that is the cost and effect of outpatient care in the absence of the project (Table 4). Estimates of DALY saved per RMB from vaccines are compared with alternative programs of outpatient treatment. Data on costs per visit and average annual coverage of outpatient care are from several surveys. Multiplying incidence with coverage and cost per visit yields total cost. Dividing DALY saved per immunization from Table 3 by total cost gives DALY saved per RMB. The results demonstrate clearly that immunization programs are much more cost-effective. For instance, for a fixed amount of resources, vaccination against measles and DPT would save 13 and 7 times more healthy life years, respectively, than would outpatient treatment. Thus, immunization services that have few acceptable private alternatives would have a particularly large payoff to the public. III. Fiscal Impact (Project Sustainability) 6. Whether the project has a positive fiscal impact overall depends largely on whether levels of recurrent expenditures needed to operate new facilities after the project ceases are sufficient. The additional recurrent costs requirements created by new investments are estimated and then examined in relation to projected recurrent expenditure constraints in government health budgets. At the end of the project, the total cost is $26.27 million, and the value of investment remaining at the end of project is $15.51 million. Total cost less value of investment at the end of project is $10.76 million. From these estimates, for operating cost in sixth year and thereafter, the government would need $4.93 million annually (RMB 40.9 million at a 1995 exchange rate). This figure represents less than one percent of projected total recurrent government health budget of RMB 4.5 billion in 2000. Since cost sharing and other measures to reduce recurrent costs are now being introduced in many communities of the ten project provinces, the incremental recurrent cost will be well within sustainable limits. IV. Sensitivity Analysis 7. Sensitivity of the project is analyzed with respect to changes in such parameters as the cost of vaccines, the effectiveness of vaccines, and the population coverage of immunizations. The sensitivity is tested with an increase of cost of vaccines from 10 to 25 percent; DALY saved per RMB did not make any significant difference in Table 5. But the project is more sensitive to changes in the effectiveness of vaccines. Thus, the successful implementation of the immunization program depends largely on how the program is managed including the condition of cold chain, and the maximum effectiveness depends on whether immunization is carried out according to a full schedule, e.g., second and third doses for DPT. In turn, effectiveness of vaccines is sensitive to the changes in the vaccination rate. The project is also sensitive to changes in coverage of immunizations for tuberculosis and hepatitis B. For instance, if the population coverage for BCG falls below 20 percent, DALY saved per immunization falls significantly and is not a cost-effective option when compared with outpatient care. Three important conclusions emerge from the sensitivity analysis. First, the costs of vaccines are very low, and even significant cost increases will not reduce the marked gains in healthy life years. Second, the management and surveillance of the cold chain are sensitive to the design of immunization programs. Finally, hepatitis B and BCG vaccines should be administered more effectively.  - 77 - ANNEX 10 V. Poverty Alleviation 8. Under the project the majority of beneficiaries (66 percent) belong to poor families in 392 poverty counties. Components to promote immunization and health would have both direct and indirect effects on their welfare. Because these components would enhance the access of poor children and mothers to EPI, thus preventing future illnesses directly, the components would also help indirectly reduce the loss of income among working mothers due to illness, thus eventually augmenting their productivity and income earning opportunities.  - 78 - ANNEX 10 Table 1: BURDEN OF DISEASES IN THE PROJECT PROVINCES (Disability Adjusted Life Years Lost) Diseases |1993 DALY ('000) As a Percentage of Total DALY Communicable Diseases 8,491 21.6 Hepatitis 4,230 10.7 HIV 58 0.1 Polio 23 0.1 Measles 402 1.0 Tetanus 203 0.5 Tuberculosis 3,263 8.3 Pertussis 310 0.8 Diptheria 2 0.0 Non-Communicable Diseases 26,801 68.1 Malignant Neoplasms Stomach Cancer 3,648 9.3 Liver Cancer 6,493 16.5 Trachea & Lung Cancer 2,329 5.9 Breast Cancer 615 1.6 Cervix Uteri Cancer 128 0.3 Leukaemia 5,948 15.1 Cardiovascular Rheum Heart Disease 334 0.8 Ischemic 1,293 3.3 Cerebrovascular 6,013 15.3 Injuries 4,077 10.4 Transport Accidents 1,899 4.8 Poisoning 103 0.3 Falls 169 0.4 Fire 759 1.9 Drowning 912 2.3 Drugs 235 0.6 TOTAL DALY 39.369 100.0 Source: Staff calculation (1995) from CAPM survey data (1993-94).  - 79 - ANNEX 10 Table 2: CHINA: BURDEN OF DISEASES BY CAUSE IN 10 PROVINCES (Disability Adjusted Life Years Lost) (1993) Diseases/Episode DALY Lost Rank ('