Algeria - Second Education Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 5208 PROJECT COMPLETION REPORT ALGERIA SECOND EDUCATION PROJECT (LOAN 1209-AL) July 25, 1984 Education and Manpower Development Division Europe, Middle East and North Africa Region This document has a restricted distribultion and may be used by recipients only in the performance of their official duties. Its contents may n odhwise be disclosed without World Bank athorization.  FOR OFFICIAL USE ONLY ALGERIA SECOND EDUCATION PROJECT (LOAN 1209-AL) PROJECT COMPLETION REPORT Glossary CTC - Office de Contrble Technique de Construction (Building Inspector's Office) EDC - Educational Development Center ICB - International Competitive Bidding INELEC - Institut National d'Electricitd et d'Electronique (National Institute of Electricity and Electronics) INGM - Institut National de Gdnie M4canique (National Institute of Mechanical Engineering) MOE - Ministry of Education MOHE - Ministry of Higher Education MOLI - Ministry of Light Industry MOL - Ministry of Labor MOHI - Ministry of Heavy Industry TA - Technical Assistance This document has a restricted distribution and rnay be used by recipients only in the performance of their oficial duties. Its contents may not otherwise be disclosed without World Bank authorization.  ALGERIA SECOND EDUCATION PROJECT (LOAN 1209-AL) PROJECT COMPLETION REPORT Table of Contents Page No. PREFACE. .. BASIC DATA. HIGHLIGHTS ................................................ iv SUMMARY AND CONCLUSIONS ................................... vii I. THE PROJECT ............................. 1 Background ........1..........,,........................ I Project Items .....................................,,., 2 II. PROJECT IPLEMENTATION. 5 Overview ....... ... 5 Covenants and Borrower Performance. 5 Civil Works. 5 Historical Review. 5 Current Situation. 8 Performance of the Consultant Architects. 9 Performance of the ContractinE Firm. 9 Bank Supervision .10 Equipment Procurement .10 Technical Assistance ................................... .10 Educational Objectives ........... 11 III. PROJECT COST AND FINANCINC ........... 13 Costs ..............13 Construction. 3 Equipment . Disbursements ................................. 14 TABLES 1. Allocation of Loan Funds ............................... 4 2. Faculty at INELEC .....................1... I 3. Tracer Study of 1981/82 Graduates from INELEC .. 11 4. Engineers and Higher Technician Graduates from INELEC 12 5. Project Costs by Type of Expenditure .. ..... .... 14 6. Disbursements by Type of Expenditure .. ........... 14 ANNEX 1. Disbursement Schedule ....................... 15 CHART Estimated and Actual Implementation and Disbursements .. 16 ATTACHMENT I - Comments from the Borrower ........................ . /  - i - ALGERIA SECOND EDUCATION PROJECT (LOAN 1209-AL) PROJECT COMPLETION REPORT Preface This report presents a Project Completion Report (PCR) of the Second Education Project in Algeria (Loan 1209-AL), for which a loan of US$47.0 million was approved on February 9, 1976. The loan account was closed on December 31, 1981 after the undisbursed balance of US$37.24 million had been cancelled. The Project Completion Report was prepared following a field visit by EMENA education staff in April 1982. The director of the principal project institution, INELEC, made a substantial input to the report. The project has not been audited by the Operations Evaluation Department. The PCR was sent to the Government for comment in February 1984. Comments received from the Government have been taken into account in finalizing the report and an English translation of the comments is reproduced as Attachment I.  - ii - ALGERIA SECOND EDUCATION PROJECT (LOAN 1209-AL) PROJECT COMPLETION REPORT A. Key Project Data Appraisal Actual or Item Estimate Current Estimate Total Project Cost (USt million) 78.0 106.0 1/ Overrun CX) 36% Loan Amount (US$ million) 47.0 47.0 Disbursed (US$ million) 47.0 9.76 Cancelled as of 12/31/81 (US$ million) 37.24 Date Physical Components Completed 09/80 06/85 Proportion Completed by Above Date CX) 100 8% Proportion of Time Overrun (%) - 90% Economic Rate of Return (%) n.a. n.a Financial Performance n.a. n.a Institutional Performance Good n.a B. Other Project Data Original Actual or Item Plan Revisions Est. Actual First Mention in Files or Timetable - 04/15/75 Government's Application - - - Negotiations 01/05/76 - 01/05/76 Board Approval 02/09/76 - 02/09/76 Loan/Credit Agreement Date 03/09/76 - 03/09/76 Effectiveness Date 06/04/76 - 06/04/76 Closing Date 12/31/81 - 12/31/81 Borrower Democratic and Popular Republic of Algeria Executing Agency Ministry of Heavy Industry Fiscal Year of Borrower January 1 - December 31 Follow-on Project Name Third Ed.Proj. Fourth Ed. Proj. Fifth Ed. Proj. Loan Number 1378-AL 1595-AL 1803-AL Amount (US$ million) 35.8 90.0 87.0 Loan Agreement Date 05/15/1977 09/26/1978 03/26/1980 1/ The project has not been completed. This figure represents the total proj- ect cost as estimated by the completion mission.  - iii - C. Mission Data Sent Month, No. of Mission Composition 1/ No. of Date of Item by Year Weeks A G T E 0 Manweeks Report Identification Bank 10/73 1.0 1 1 2.0 11/19/73 Preparation " 11/74 1.0 1 1 2.0 12/13/74 Preappraisal " 01/75 3.0 1 1 1 1 1 15.0 Appraisal t 06/75 3.0 1 1 1 1 1 15.0 01/27/76 Total 8.0 3 4 2 3 2 34.0 Supervision I " 07/76 2.0 1 1 4.0 09/17/76 Supervision II " 01/77 1.0 1 1 1 1 4.0 02/04/77 Supervision III " 05/77 1.0 1 1 2.0 07/22/77 Supervision IV " 10/77 0.5 1 1 1.0 11/18/77 Supervision V tt 06/78 0.5 1 0.5 06/15/78 Supervision VI t 09/78 0.5 1 1 1 1.5 10/26/78 Supervision VII n 01/79 0.5 1 0.5 02/23/79 Supervision VIII 06/79 0.5 1 1 1 1.5 07/10/79 Supervision IX 10/79 0.5 1 1 1 1.5 11/30/79 Supervision X " 01/80 0.5 1 1 1.0 02/19/80 Supervision XI I 06/80 0.5 1 1 1 1.5 07/21/80 Supervision XII t 11/80 0.5 1 0.5 12/04/80 Supervision XIII " 02/81 0.5 1 1 1.0 03/26/81 Supervision XIV t 06/81 0.5 1 1 2 1 2.0 08/10/81 Supervision XV 10/81 0.5 1 1 1 1.5 12/04/81 Completion " 04/82 0.5 1 1 1 1.5 07/31/82 Total 10.5 2/ 16 8 9 5 2 25.5 I/ Mission composition: A = Architect, G = General Educator, T = Technical Educator, E = Economist, 0 = Other 2/ This figure is approximate as the missions were also involved in other project activities. Two or three working days out of five were rounded to half a week. D. Country Exchange Rates Name of Currency (Abbreviation) Dinar Algerian (DA) Year: Appraisal Year Average Exchange Rate: US$1 = 3.834 Intervening Years Average US$1 = 3.704 Completion Year Average US$1 = 4.348  - iv - ALGERIA SEODND EDUCATION PROJECT (LOAN 1209-AL) PROJECT COMPLETION REPORT Highlights 1. The Second Education Project in Algeria--Loan 1209-AL--provided a loan of US$47.0 million, which was approved in February 1976, to (a) assist in construction, furnishing, equipment and technical assistance for a new Institute of Electricity and Electronics at Tlemcen, (b) provide technical assistance for the Ministry of Education's (MOE) efforts to reform the primary and secondary education sytem, and (c) finance preinvestment studies for the Ministries of Labor (MOL), Higher Education (MOHE), Light Industry (MOLI) and Heavy Industry (MOHI). 2. By the Closing Date (December 31, 1981) only about 21% of the loan proceeds (USt9.76 million) had been disbursed and the undisbursed balance of the loan was cancelled as of March 31, 1982 (paras. 3.01 and 3.05). The project failed to meet the appraisal objectives (under (a) above) of creating 1,000 places for engineer training and 2,000 places for technicians urgently required for the electricity/electronics sub-sector. Although work is under way to create these places at Tlemcen, no firm schedule is possible given the contractor's performance to date. Only 8% of the works have been implemented, and no firm schedule for their completion could be determined (para. 2.18a). The difficulties encountered in project implementation are largely attributable to managerial and technical problems which were not apparent at the time of contractor prequalification. Despite the slow disbursement record and the fact that only a limited amount (8%) of the civil works at Tlemcen were completed by the Closing Date, the project was successfully implemented in many respects. Specifically, (a) INELEC has been established and is successfully functioning at an interim facility at Boumerdas pending completion of civil works at Tlemcen (paras. 2.01 and 2.32). (b) Although the annual output of engineers and technicians produced at Boumerd4s is far less than the national requirement and project objectives, the quality of the INELEC program is excellent and training is modern and effective (para 2.32). The laboratories of the existing school at Boumerd4s have been updated by equipment purchased under the loan (para. 2.29). In addition INELEC has direct access to the latest technical information on electronics by virtue of its use of English as the language of instruction, and through its recently trained faculty.  - v - (c) The educational and physical planning for INELEC was well conceived by the architects and the Educational Development Center (EDC) of Watertown, Massachusetts (para. 2.03). Their collaboration with the director of INELEC was excellent. These plans will serve well once the civil works are completed and the program at Boumerdas is transferred and expanded at Tlemcen. (d) By the Closing Date the proportion of INELEC faculty who were Algerian had increased from zero to over three-quarters, due to overseas training provided under the fellowship program (para. 2.30). (e) The placement/employment record of INELEC graduates is good, as evidenced by results of the tracer system established under the Loan (para. 2.33). (f) The preinvestment studies funded under the loan have proved useful; four of the five studies in fact led to Bank-financed components in subsequent education projects (para 1.05). (g) Technical assistance to assist the MOE in training planners, administrators and other education specialists has been successful and these staff are now contributing to the reform of the formal system of technical education which is well under way (para 2.31). 3. With regard to the construction of the Tlemcen campus, the history is as follows: The civil works component of the project was divided into two phases to aid implementation--Phase I included academic facilities and laboratories Phase II consisted of dormitories, amphitheater and other student and staff facilities. At Project Closing, Phase II was not yet contracted. 4. For Phase I, a contract with an Algerian contractor (the lowest bidder, following a thorough prequalification process) was signed in February 1979, nearly two years after construction had been scheduled to begin. The subsequent performance of the contractor led to further delays due to problems involving designs, labor and materials. The contractor was unable to mobilize a sufficient and well-qualified workforce at the site. In addition, other problems experienced by the contracting firm, including lack of experience in dealing with foreign architectural firms and with certain imported materials, cash-flow problems, and extensive commitments to other on-going projects, contributed to the delays (paras. 2.24 and 2.25b). Construction was also closed down for nearly a year when the Government assigned priority to reconstruction following the Ech Cheliff (El Asnam) earthquake. 5. On the positive side, the performance of the consultant architect was efficient. The Director General in INELEC collaborated well with the architects. He also worked hard to resolve the construction problems at Tlemcen although with only limited success.  - vi - 6. The project highlights the problems facing the still evolving construction sector notably in site management, logistics and skilled manpower. 7. The limited amount of equipment which was purchased under the Second Project to update the Boumerdgs campus has been efficiently installed and maintained (para. 2.29).  - vii - Summary and Conclusions i. A Bank loan (1209-AL) of US$47.0 million was extended to the Democratic and Popular Republic of Algeria in 1976 to finance a Second Education Project, the major objective of which was to assist the Government to establish a Higher Technical Institute for Electricity and Electronics (INELEC) at Tlemcen, 80 km south of Oran, by financing the foreign costs of civil works and equipment. Other components were: technical assistance and fellowships for staff at INELEC; technical assistance and fellowships for the Ministry of Education (MOE) in its efforts to reform the primary and secondary education system; and the financing of various pre-investment studies planned by the Ministries of Labor (MOL), Higher Education (MOHE), Light Industry (MOLI) and Heavy Industry (MOHI). ii. The major failing of the project lay in the slow pace of construc- tion (only 8% of the civil works at Tlemcen were completed by the Closing Date). As a result of the organizational and financial problems that had held back construction, the Bank and the Algerian authorities were unable to establish a firm schedule for completion of the works. In order to tackle these problems and achieve the target of creating 1,000 engineer-level and 2,000 technician training places within the current Plan period (1981-1984), an ad hoc committee (Heavy Industry, Planning and Housing) has been formed to explore possible solutions (for example, splitting the works between several contractors). Nevertheless, there were several positive achievements; (a) INELEC's technical assistance and fellowship program has been satisfactorily completed. As of school year 1981/82, 44 out of 57 faculty at the Institute are Algerian as a result of this training. (b) INELEC is functioning--albeit in temporary accommodations in Boumerdas-as an effective institution, which has graduated 201 higher technicians and 47 engineers in the fields of electrical and electronic engineering since its inception in March 1976 (Table 4). INELEC is also unique in Algeria in that it uses English as the medium of instruction. There are several reasons for this choice; ready access to the rapidly evolving body of technical information on electronics; coherence between programs of instruction and the training received by the Algerian faculty (trained in the U.S. and the U.K.); and the ability to recruit faculty from those countries. (c) a tracer study (Table 3) has been introduced at INELEC, as required under Section 3.04 (a) of the Loan Agreement, which indicates the successful placement of the majority of the gtaduates; (d) all five preinvestment studies were completed in a timely manner, four leading to Bank-financed components in subsequent education projects; and  - viii - (e) the fellowship allocation to the MOE in connection with the educational reform was generally well utilized. iii. Based on the above, it is considered that the project successfully met, in qualitative terms, its educational objectives, but that inasmuch as the Tlemcen campus for INELEC was not completed, a severe quantitative constraint has been placed on the country's ability to meet its present and future needs for higher electrical/electronic technicians and engineers. More than 2000 applications are received from qualified school-leavers for the 100 places available annually at Boumerdas. INELEC should therefore remain a high priority for the Government in the future.  I. THE PROJECT Background 1.01 At the time of appraisal, reorganization and expansion of technical education was in line with the Algerian Government's strategy of rapid industrialization coupled with educational reform. Responsibility for the education and training of middle and upper level personnel employed in specific sectors, i.e. technicians and engineers, rested with the ministry concerned, and for that reason the INELEC component was proposed and prepared by the Ministry of Heavy Industry (MOHI) assisted by the Educational Development Center (EDC) of Watertown, Massachusetts. An institution was planned with a total enrollment of 2,000 higher technician students in four-year programs following Grade 13 of formal schooling, plus 1,000 engineer students in five-year programs following the Baccalaureate. Annual output was seen as 440 higher technicians and 190 engineers. 1.02 During project appraisal, the Algerian Government and the Bank agreed to locate the institution in Tlemcen (close to electronic assembly plants in a new industrial zone), at a total cost of US$67.0 million (including contingencies). It was to offer programs in the following interrelated disciplines: electrical power, electronics manufacturing processes, digital electronics and electronic communications. About US$2.0 million was allocated to foreign technical assistance in order to establish and launch the various curricula, laboratories and workshops, plus about 50 man-years of overseas fellowships for the training of selected Algerian faculty. 1.03 The civil works component of the project (estimated at appraisal as US$49.93 million) was broken into two phases to aid implementation. The first phase (Phase I hereafter) included academic facilities and laboratories: the second (Phase II hereafter) was to include dormitories; amphitheaters and other student and staff facilities. Preliminary designs for Phase I were approved by the Bank in January 1977. Due principally to delays in payment of the architects, the master plans were not ready until November that year. Bid documents were ready by May 1978. At the same time, some 12 firms, including one Algerian firm, had been preselected. The lowest bidder, the Algerian firm, received a contract in February 1979 (almost two years after construction had been originally scheduled to start) for US$57.8 million. Bids were received for Phase II in June 1979 from the winner of the Phase I contract and from three foreign firms. However, bids were high--two to three times the cost of Phase I per square meter--and it was decided to declare the tender unsuccessful and proceed to direct negotiation with individual, preselected firms. At the time of writing, Phase II remains uncontracted. Phase I developed a series of problems: failure of the contractor to develop site level drawings; work interruptions due to the Ech Cheliff (El Asnam) earthquake; and above all, failure of the contractor to effectively mobilize men and resources on site--in large part because of overstretched capacity and ongoing internal reorganization (para. 2.25). Work began on site in May 1980 (almost a year after contract award) but progress was desultory; in June 1981 less than 10% of the work had been completed, due to the absence of resources (workers, equipment, materials). In October 1981 it was noted that little progress had been made since June. Annex 2 gives the aide-memoire left with the Government on that occasion.  ALGERIA II-PCR - 2 - It was felt that considerable time would be needed to complete the buildings. The project was therefore closed on the scheduled date, by joint agreement of the Algerian Government and the Bank, following the first joint review of Bank projects in Algeria. 1.04 Other elements of the project were implemented successfully: by the Closing Date the majority of the staff was Algerian, trained overseas under the fellowship program (para. 2.30); and about US$2.0 million had been disbursed for equipment to completely update the laboratories of the existing school at Boumerdas. 1.05 In addition to this major item, the agreed project included financing for five separate preinvestment studies relative to future projects in various ministries (Heavy Industry, Labor, and Higher Education) and technical assistance aimed at assisting the MOE to achieve its objective of reforming the formal system of technical education by training planners, administrators and other education specialists. This reform is now well advanced, and is founded on a planned rapid growth of upper secondary technical education. This is to be offered through an expanded network of "technicums" (secondary schools with technical and prevocational curricula) which are intended to progressively replace the lower secondary "colleges d'enseignement technique" and uvDer cycle "lycees techniques" now in operation. The Third Educ:tion Project is aiding in the establishment of this network. Project Items 1.06 The project consisted of the following: Part A: (a) Construction, furnishing and equipment for a new Institute of Electricity and Electronics at Tlemcen with an approximate gross area of 30,000 sq.m. for academic and communal facilities, 33,000 sq.m. for boarding facilities and 1,000 sq.m. for covered areas; (b) Twenty-six man-years of technical assistance to the institute for specialists to serve as heads of various departments during the first two years of operation, plus approximately 50 man-years of fellowships for training Algerian faculty abroad (U.S.A. and U.K.). Part B: Eighteen man-years of consultant services together with 42 man-years of fellowships to assist the MOE in carrying out its work program covering the study, experimentation and implementation of primary and secondary education reform. Part C: (a) Thirty man-months of technical assistance to the MOL to facilitate a preinvestment study on the development of vocational training centers (VTCs) and the need for instructors. This led to the inclusion of two VTCs under the Third Education Project (Loan 1378-AL), one of which is under construction and the other being contracted;  ALGERIA II--PCR - 3 - (b) Fourteen man-months of technical assistance to the MOL to facilitate a study on the development of an instructor training institute to meet the needs of the VTCs. This led to the financing of such an institute at Annaba under the fourth education project (Loan 1595-AL). This institute is now under construction after successful ICB. Part D. (a) Thirty-four man-months of specialist services to the MOHE to facilitate a study on the use of automatic data processing of management information systems in higher education. This led to the inclusion of a data processing system which is now being procured under the fifth education project (Loan 1803-AL); (b) Thirty-six man-months of technical assistance to the MOHE to facilitate a study on the introduction of modern teaching technologies in higher education. The study was completed in April 1978, but its findings were rejected by the MORE as being unsuitable for adoption in the Algerian context. Part E: Eighty-four man-months of technical assistance to the MOHI, to facilitate a study of the national need for engineers and higher technicians. This led to the inclusion of the National Institute for Mechanical Engineering (INGM) under the Fourth Education Project (Loan 1595-AL). 1.07 Table 1 gives a breakdown of allocation of Loan funds as follows:  ALGERIA II--PCR - 4 - Table 1: ALLOCATION OF LOAN FUNDS Loan Amount % of Total Expenditure Category (uS$) Financed 1. Equipment: 14,660,000 (a) imported 100% of foreign cost (b) imported, but purchased locally 80% 2. Furniture: 2,390,000 (a) imported 100% of foreign cost (b) imported, but purchased locally 80% (c) locally manufactured 65% 3. Civil Works 20,610,000 45% 4. Professional Services 2,770,000 70% 5. Technical Assistance and Fellowships 3,540,000 80% 6. Unallocated 3,030,000 Total USt 47,000,000  ALGERIA II--PCR - 5 - II. PROJECT IMPLEMENTATION Overview 2.01 The project did not provide the number of training places foreseen for INELEC and disbursements fell far short of the loan total, since only US99.76 million out of US$47.0 million had been drawn down by the Government by the Closing Date. Nevertheless, judged against the original qualitative objectives, the project did meet with a measure of success. For example, INELEC is functioning as a highly respected institution, all studies were satisfactorily completed and most led to components in subsequent projects. All the technical assistance allocation for INELEC was taken up and has produced positive results. Only in the case of the MOE was the technical assistance program incomplete, although that Ministry's fellowship allocation was taken up. The non-completion of the civil works at Tlemcen was the most serious shortcoming in project implementation, only 8% of the work having been finished by the Closing Date and only US$4.46 million disbursed against a total of USt20.61 million available. At present, no firm schedule for completion of this infrastructure can be established pending the recommendation/decision of the ad hoc government committee (Ministries of Heavy Industry, Planning, Finance), appointed to explore solutions to this major problem. The reasons behind this situation are dealt with below. Covenants and Borrower Performance 2.02 All covenants were satisfactorily met by the Borrower, although the performance of individual ministries varied widely so far as the submission of the required annual proposals for technical assistance was concerned. Of the three ministries involved, the NOHI performed best in this regard, and INELEC was tireless in its efforts to resolve the construction problems at Tlemcen. Quarterly reports were submitted promptly, and Bank missions received every cooperation. Civil Works Historical Review 2.03 Under a contract signed in 1976, the Educational Development Center (EDC) of Watertown, Massachusetts, which included the participation of several American universities, developed in close cooperation with the National Institute of Electrical and Electronic Engineering (INELEC) of Algeria, the educational and physical requirements of the project, including an Architect's brief This preparatory document--addressing the problem of creating a higher technical, English-language school-has remained the blueprint for the continuing development of the school. 2.04 Among 13 foreign architectural firms interested in the project, six were preselected. A Boston-based architectural firm was selected by the Borrower, approved by the Bank, and on September 23, 1976, a contract was signed commissioning them to carry out architectural designs. The contract included the design of staff and faculty housing-which would not be Bank-financed. This design was in two phases: the first for the academic  ALGERIA II--PCR - 6 - facilities and the first "tranche" of student and staff housing; the second for the library, the amphitheaters and the second "tranche" of student and staff housing. The contract for the preparation of bid documents stipulated the firm's responsibility for prior approval of the shop drawings which would be prepared by the contractor, as well as responsibility for the supervision of site works. The shop drawings indicated the site organization and methods of excavation and types of shuttering to be employed. Thus, they constituted an integral part of the contractor's work program. 2.05 The Bank received and approved the preliminary plans for Phase I in January 1977. Delay in payment of the architects' fees caused a six-month slippage in the schedule of preparation for the construction documents. This was compounded by the October 1977 decision in to reduce the site area of the new institute from 100 hectares to 34 hectares. However, the site location in the industrial suburb of Tlemcen, close to an electronic assembly plant, proved eminently suitable. 1/ 2.06 The architects completed the master plans in November 1977. A local contractor was chosen for the preliminary sitework while the bid documents for Phase I were under preparation. In collaboration with different engineering firms, the architects completed the bid documents for Phase I in May 1978. Construction for Phase I was provisionally scheduled to start in September 1978 (instead of March 1977 as envisaged at appraisal). 2.07 INELEC started prequalifidltion procedures (open to international as well as local contracting firms) in early 1978 and the Bank reviewed and agreed on the prequalification of 12 contractors for civil works, of which one was an Algerian state-owned firm. 2.08 During Seotember 1978, site earthworks were completed satisfactorily and all preselected contractors submitted their bids. 2.09 Initially, the lowest bidder was an Italian firm. The Algerian firm then reduced its price, becoming the lowest bidder. At the same time, a suggestion was made to the local firm by the consultant architectural firm that they establish an association with an experienced foreign firm with special reference to management aspects. The civil works contract for Phase I was finally awarded to the Algerian firm for US$57.8 million in February 1979 and construction was scheduled to begin on that date. 2.10 Because of problems in developing shop drawings on the basis of the architects' documents, the contractor postponed the start-up of construction until September 1979. Efforts to improve the technical and operational management of the project through an agreement between the contractor and a French firm on a joint venture for this contract were unsuccessful. Finally, another Algerian firm, identified as a possible source of technical expertise, proved unable to assist the contractor in developing shop drawings because of previous commitments. 1/ INELEC remarked in their comments that there had never been any question of reducing the area of the original INELEC site to 34 hectares and that the area has therefore remained unchanged.  ALGERIA II--PCRl - 7 - 2.11 In June 1979, INELEC received bids for Phase II of the civil works. The contractor for Phase I and three foreign firms competed for this contract, but unit prices were considerably higher than those for Phase I (ranging from two to three times the price per sq. m.). It seems likely that foreign contractors inflated their prices to cope with obligatory use of local subcontractors and materials, and bureaucratic and logistical problems. Finally, the foreign firms dropped their bids and the MOHI rejected the local contractor's bid as too high (almost double the price of Phase I). Negotiations between the MOHI and the two prospective contractors for Phase II were still under way in January 1981, and no award was envisaged by that date. 2.12 Prolonged disputes between the contractor and the architects continued during 1979 and 1980 over Phase I, on such topics as the use of local cement (instead of imported, anti-corrosion cement), the use of sea sand, graduation of aggregate, cleaning of gravel, plumbing, etc. The limited number of drawings which the contractor developed had to be sent to Boston for approval before the contractor could submit them to the "Office de Contrtle Technique de Construction" (CTC) for a building permit. 2.13 On May 1, 1980, excavation started on the foundations of three buildings in Phase I--38 months behind the start-up date for civil works scheduled at the time of appraisal. A June 1980 supervision mission estimated completion of Phase I by March 1983 and completion of Phase II by March 1984, this last date being based on the assumption that a contract would be signed with the consultants in September 1980. Work stopped, awaiting CTC approval of the foundation designs, which was obtained in November 1980. 2.14 In February 1981 it was reported that all site work had stopped because the contractor had mobilized its equipment and staff to assist in the reconstruction of the earthquake- stricken town of Ech Cheliff (El-Asnam). 2.15 In June 1981, some of the contractor's equipment had been returned to the site, but little progress was being made, and the workforce was insufficient and of poor quality. After failing twice, through ICB, to obtain bids for Phase II, the MOHI decided to negotiate the award of the Phase II contract with the Phase I contractor. 2.16 In October 1981 it was noted that the contractor had been unable to: (a) mobilize effectively (only 40 workers--poorly trained--out of a possible 600 were on site, and there was a shortage of materials and appropriate equipment); (b) ensure an adequate cash flow to the operation to improve the standard of work (poor quality of concrete was noted); and (c) adhere to the revised implementation schedule agreed upon in June 1981. It was not possible to draw up any reasonable schedule for completion of the buildings. Between June 1981 and October 1981, no progress was made. 2.17 Consequently, at the November 1981 joint review of Bank-financed projects, the Algerian Government and the Bank together decided to maintain the Project Closing Date of December 31, 1981.  ALGERIA II--PCR - 8 - Current Situation 2.18 The completion mission visited the site at Tlemcen on April 7, 1982. Following a site tour and discussions with the resident chief engineer, the regional deputy director of the contractor and the resident representative of INELEC on the site, the mission summarized the situation regarding the civil works as follows; (a) less than 8% of the work had been completed at that date--negligible progress since June 1981; the completed work represented mainly the foundations of three service buildings, a reinforced concrete skeleton up to the second floor for two boarding units, and the columns of a third up to the first floor level. The quality of concrete was bad because salt-contaminated sand had been used and the grading of aggregate was inadequate; (b) the contractor had received from INELEC the sum of DA 45.0 million, of which only DA 4.5 million was for works claims, the remainder being for site installation and mobilization; gc) there was a shortage of equipment (especially cranes) on site. There were also few workmen --only about 140 instead of the agreed 500 to 600. Consequently, monthly production was estimated at between DA 0.6 million to DA 1.0 million, instead of DA 8.0 million; and Cd) the initial contract (for Phase I) of DA 214 million had been increased to DA 364 million. 1/ 2.19 The architectural firm's resident architect left Algeria in February 1982 when his contract expired. In future, INELEC intends calling on the firm for short-term consultancies. The contractor is now employing an Algerian firm to produce the necessary shop drawings and is envisaging the use of four subcontractors to help speed up the execution of works--a solution which could aggravate site management problems. 2.20 The contract for Phase II is still under negotiation and the idea of a fixture joint venture between a local and a foreign contractor has not been completely abandoned. 2.21 The joint review committee is charged with examining the problems encountered so far and following-up on the implementation of the project. 2.22 Given the above uncertainties, a firm time schedule remains difficult to determine. No completion dates have been suggested by any of the authorities involved. 1/ INELEC remarked in their comments on item (d) that the original contract has not been changed and that the figure of DA 364 million was the amount of the re-estimation of the individual plan items.  ALGERIA II--PC- - 9- Performance of the Consultant Architects 2.23 The architectural firm converted the architect's brief into a functional and successful master plan, developed the drawings and bid documents in a timely manner and collaborated constructively with the Director General of the Institute. He expressed his full satisfaction with their performance in the design and supervision of the project. 2.24 The problems arose mainly between the architects and the contractor and, on some of these, more constructive action by the architects might have led to improved relations. Such measures might have included: (a) an understanding of the lack of experience of the contractor in working with U.S. architects and in applying certain international specifications; (b) flexibilitY toward the substitution of certain local materials for imported ones, providing quality did not suffer (e.g. cement, sanitary and electrical fittings, etc.); and (c) in view of the contractor's inability to contract locally for the shop drawings, the architects might have attempted to assist them in obtaining the services of a qualified firm. Performance of the Contracting Firm 2.25 The civil works contract was awarded to the contractor not only because they were the lowest bidders, but also because they had a good record of implementing projects in Algeria and were consequently prequalified. The problems which hampered their efforts to implement the INELEC project can be summarized as follows (a) they were undergoing a far-reaching reorganization along regional lines. Limited resources and cash-flow problems were compounded by the firm being awarded a large housing project in Tlexcen; the scarce equipment and skilled labor at Tlemcen had as a result to be shared between the two sites. It was also apparent that the firm was unable to attract a skilled workers-in part due to other competing projects at Tlemcen but also due to overall conditions of employment. Many of its ,workers" were in fact displaced agricultural laborers. MObilization of all contracting firms to participate in the reconstruction of the earthquake-striken town of Ech Cheliff (El Asnam) forced the contractor to close down its site activities and remove its staff and equipment for almost a year; (b) they did not have sufficient experience with U.S. architectural firms or in using certain imported materials. Strained relations between the contractor and the architect over the quality of materials, workmanship and specifications were further exacerbated by the tedious procedure of having to send shop drawings to Boston for approval by project engineers before submitting them to CTC for the required permits. The drawings and calculation notes sometimes took more than six weeks to arrive; and  ALGERIA II-PCR - 10 - (c) they were incapable of marshalling the necessary resources to generate the shop drawings required to start work on the basis of the working drawings presented by the architects and engineers and were also unable to commission other firms (such as local or locally based French or Romanian firms), or to establish a joint venture with a foreign contractor. Bank Supervision 2.26 Between July 1976 and October 1981, the Bank sent 15 missions to Algeria. The average interval betweeen missions was about 4-1/2 months. The missions were composed of general educators, technical educators, architects and economists and totalled 90 man-days. The situation and trends were described in the mission report and suggestions and recommendations were raised at the highest level, notably with the Ministry of Finance. The missions monitored the procurement process for equipment, the studies which were completed as planned, and the choice of effective technical assistance for INELEC. Equipment Procurement 2.27 The urgent need to establish INELEC as quickly as possible, in view of the national shortage of electronics engineers and technicians, led to the decision to commence operations in temporary premises at Boumerd&s in March 1976. Equipment procurement therefore proceeded earlier than would otherwise have been the case if the opening had been phased to coincide with the completion of the Tlemcen campus. From a total of US$14,660,000 allocated for equipment procurement, US$1,957,000 was disbursed at the Closing Date, which, although only 13.5% of available funds, has fully equipped the few available laboratories and workshops at BoumerdAs. The remaining 86.5% of the funds were to have replicated the Boumerd4s equipment in line with the larger student enrollment planned at Tlemcen. The mission was favorably impressed with the way in which this equipment (most of it of a highly sophisticated nature in line with both current electronics technology and the level of programs being conducted) had been installed and was being maintained. Technical Assistance (TA) 2.28 Of the US$3.54 million originally allocated to TA, US$1.79 million remained undisbursed at the Closing Date. The main objective of the INELEC TA program was to allow for: (a) the recruitment of specialists to produce curricula, install equipment and start up courses; and (b) to train selected Algerian graduates overseas in preparation for their becoming members of the faculty. The care taken by the INELEC management to recruit high caliber expatriates showed results as, almost without exception, they performed excellently and devoted much time to the training of their Algerian counterparts. Table 2 below illustrates the success achieved. Table 2: FACULTY AT INELEC --- ------- -Year