Turkey - First Health Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 19477-TU IMPLEMENTATION COMPLETION REPORT REPUBLIC OF TURKEY FIRST HEALTH PROJECT (Loan No. 3057-TU) June 30, 1999 Human Development Unit Europe and Central Asia Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (as of December 1998 ) Currency Unit = Turkish Lira US$1 = TL 259,627.00 AVERAGE EXCHANGE RATES 1989 1990 1991 1992 1993 1994 1995 1996 1997 2,120.30 2,606.36 4,168.11 6,864.36 10,965.42 29,669.76 45,678.35 81,035.40 151,238.89 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS BHSM - Basic Health Statistics Module DOT - Department of Treasury FHP - First Health Project GDP - Gross Domestic Product GNP - Gross National Product GOT - Government of Turkey IBRD International Bank for Reconstruction and Development ICR - Implementation Completion Report INHSS - Integrated Health Service Scheme MIS - Management Information System MOH - Ministry of Health MSA - Management Service Agreement PCC - Project Coordinating Committee PCU - Project Coordination Unit PIU - Project Implementation Unit RM - Resident Mission SOE - Statement of Expenditures SPO - State Planning Office UNDP - United Nations Development Program UNOPS United Nations Project Service Facility TURKEY'S FISCAL YEAR January 1- December 31 Vice President: Johannes Linn, ECAVP Country Director: Ajay Chhibber, ECCO6 Team Leader: Armin Fidler, ECSHD Sector Leader: Annette Dixon, ECSHD  FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT Republic of Turkey First Health Project (Loan No. 30570-TU) Table of Contents PREFACE EVALUATION SUMMARY ....................................................- i PART I. PROJECT IMPLEMENTATION ASSESSMENT .1 A. BACKGROUND AND PROJECT OBJECTIVES . . 1 B. ACHIEVEMENT OF OBJECTIVES. 5 C. MAJOR FACTORS AFFECTING THE PROJECT. 7 D. PROJECT SUSTAINABILITY .. 9 E. BANK PERFORMANCE .0 F. BORROWER PERFORMANCE .11 G. ASSESSMENT OF OUTCOME 1. . H. FUTURE OPERATION OF PROJECT DELIVERABLES . .12 I. KEY LESSONS LEARNED .12 PART 2. STATISTICAL TABLES .15 TABLE 1: SUMMARY OF ASSESSMENTS .17 TABLE 2: RELATED BANK LOANS AND CREDITS .18 TABLE 3: PROJECT TIMETABLE .18 TABLE 4: CUMULATIVE LOAN DISBURSEMENTS .19 TABLE 5: KEY INDICATORS FOR PROJECT IMPLEMENTATION AND OPERATION .20 TABLE 6: STUDIES INCLUDED IN PROJECT .21 TABLE 7: PROJECT COST AND FINANCING .22 TABLE 8: STATUS OF LEGAL COVenants .23 TABLE 9: COMPLIANCE WITH OPERATIONAL MANUAL STATEMENTS .26 TABLE 10: BANK RESOURCES - STAFF INPUTS . .26 TABLE 11: BANK RESOURCES - MISSIONS . .27 Appendices: A. MISSION'S AIDE MEMOIRE ............................................... 31 B. MILAS STATE HOSPITAL: ILLUSTRATIVE EXAMPLE OF PROCUREMENT PROCEDURES (AND COSTS INCREASES) FOR CIVIL WORKS ............................................... 33 C. INDIVIDUALS INTERVIEWED DURING ICR PREPARATION 3/1999 ......... 35 D. BORROWER'S CONTRIBUTION ............................................... 37 E. MAP This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  LIST OF TABLES, BOXES AND FIGURE LIST OF TABLES TABLE 1: SELECTED DEMOGRAPHIC AND HEALTH INDICATORS ...............................1 TABLE 2: SELECTED HEALTH INDICATORS ..................................................... 2 LIST OF BOXES Box 1: FACTORS CONTRIBUTING TO COST INCREASES FOR CIVIL WORKS .............. 6 Box 2: SUPERVISION RATiNGS 1990-98 ........................... ......................... I 1 LIST OF FIGURE FIGURE 1: STAGES OF PCU-MOH RELATIONSHIP ....................................................9  IMPLEMENTATION COMPLETION REPORT REPUBLIC OF TURKEY FIRST HEALTH PROJECT (Loan 3057-TU) PREFACE This is the Implementation Completion Report (ICR) for the First Health Project in Turkey, for which Loan 3057-TU in the amount of US$75 million was approved on May 11, 1989, and made effective October 17, 1990. The loan was closed on December 31, 1998 (compared with the original closing date of December 31, 1997), after an extension of one year was requested by the Government and granted by the Bank. Final disbursement took place on June 11, 1999. As of June 30, 1999, a balance of US$3.84 million was cancelled. In order to settle outstanding payments for hospital equipment an extension of the grace period from four to six months was granted and approved by the Bank. The extended grace period ended June 30, 1999. The total project cost was $146.7 million (SAR estimate), with an actual cost of US$209.08 million (the balance was contributed by the Government of Turkey (GOT). At project closing, there were outstanding liabilities of the Government of Turkey) of about US$ 31.2 million, mostly due to change orders and cost overruns on civil works.' This ICR was commissioned by Armin Fidler (Health Program Team Leader), and was prepared by Elliott Hurwitz (Consultant), Danelle Howell-Vaughn (Procurement Assistant), and Ayda Aysun Yurekli (Health Economist). Preparation of this ICR was begun during the Bank's final supervision/completion mission, March 16-26, 1999, and is also based on materials in the project file. The borrower contributed to preparation of the ICR by providing their viewpoint to the ICR team, commenting on the draft ICR, and contributing their own assessment of the project (Appendix D). A list of the individuals interviewed is also included as Appendix C. With respect to extension of the grace period, it should be noted that a July, 1998, mission informed the GOT that there would be at least US$20 million in cost overruns, and around US$2 million in final payments due for medical equipment which had been received, but which could not be installed until hospital completion. The GOT gave assurances that the hospitals would be completed by end-1998 and the US$2 million paid. The Bank verified with the GOT in November 1998, that the project would close on December 31, 1998, and at that time the Department of the Treasury confirmed this and requested that the project be closed. In the same exchange, the Bank was reassured that funds had been requested from the State Planning Office (SPO), and that all liabilities would be satisfied prior to project closure on December 31, 1998. 1 These overruns are discussed in more detail below in Box 1 and Appendix B.  IMPLEMENTATION COMPLETION REPORT REPUBLIC OF TURKEY FIRST HEALTH PROJECT (Loan 3057-TU) EVALUATION SUMMARY Background and Project Objectives: In the past two decades Turkey has made substantial economic progress: per capita GNP rose from US$1,940 in 1980 to US$3,160 in 1998, and population growth moderated to an annual rate of around 1.8 percent (1990-97). At the same time, the proportion of urban population rose dramatically - from 44 percent in 1980 to 72 percent in 1997. Among health indicators, infant mortality fell substantially, from 109 per thousand live births in 1980 to 42 in 1996. However, Turkey still remains far behind OECD averages and falls behind some comparable lower-middle income countries. In particular, high infant and maternal mortality rates - 45 per 1,000 live births, and 183 per 100,000 live births respectively - are cause for concern. The data reflect higher-than-average fertility, poor ante- and post-natal care, unsafe deliveries, and improper birth spacing. Malnutrition among children is also a serious problem, especially in rural areas and eastern Turkey. There are wide disparities in economic and social development across regions, between urban and rural areas, and by gender. Health Sector Reform: Prior to 1980, the GOT attempted to enhance the quality and accessibility of rural health services through implementing the Integrated Health Service Scheme. This was designed to expand coverage into rural areas, but this was not achieved and the public health system remained inefficient: the Ministry of Health (MOH) public health policy consisted mainly of building hospitals. After more than two decades of neglect and underfunding, the GOT began to increase health allocations following the 1987 Basic Law on Health Services. This law extended MOH regulatory functions, but the MOH lacked managerial capability to deal with these new responsibilities. Therefore, in the late 1980s, establishing a more equitable and efficient health system that could deal with large regional disparities of access and quality continued to be a challenge for the GOT. Project Scope and Objectives: The First Health Project (FLP) was the first Bank experience in the HNP sector in Turkey. The FHP was the first of Bank-supported sector investments that by 1998 would expand to a 3-project portfolio (FHP, Second Health Project, Primary Health Care Services Project) and a deepening dialogue on sector reform. The overall goal of the FBP was to begin to develop a more efficient and partly self-financing public health system capable of providing higher quality services. While continuing MOH policy of collecting some user charges for curative services, charges for indigent patients would be waived. At the same time the system was expected to deliver free preventive services for all. The FHP had three specific objectives: (1) Improve the health status of people in eight underserved provinces by extending geographic access and improving the quality of services. (2) Enhance the efficiency of service delivery and improve financial sustainability (3) Strengthen the management capacity of the Ministry of Health (MOH)  - ii - Since the FHP was the first Bank financed health sector effort in Turkey, it was expected to lay a foundation for further Bank supported work and initiate sectoral reform. The FBP covered the entire public health system in 8 of 67 provinces and was implemented via 2 components: 1. Reorganize and Strengthen Provincial Health Services (initially, US$134 million): * Construction of new facilities/upgrading of existing ones, strengthening of provincial management, reorganization of referral procedures, and provision of equipment and vehicles. * Implementation of 15 health programs, targeted at maternal care, child care, control of communicable diseases, and improved front-line curative care. * Redeployment and better utilization of staff, provision of in-service and induction training, and provision of health education training for primary school teachers. 2. Institutional Development (US$12 million): * Health manpower development, through teacher training, curriculum revision, study tours, and attendance at international seminars. * Development of a Health Management Information Systems (MIS).