Tunisia - Fourth Education Project

Document of The World Bank FOR OMCLAL USE ONLY Report No. 8441 PROJECT COMPLETION REPORT TUNISIA FOURTH EDUCATION PROJECT (LOAN 1961-TUN) MARCH 16, 1990 Population and Human Resources Operations Division Country Department II Europe, Middle East and North Afrie~a Regional Office 7his document has a reicted dsbution and may be sed by recipetsondy In de peforanue of dth offii duties. Its conten may not otherwie be diclosed withbot Wodd Bank authwoizatW  ATC - Apprentice Training Center CFP - Vocational Training Center OFPE - Officer for vocation Training and Employment OPS - Operational Policy Staff PCR - Project Completion Report SAR - Staff Appraisal Report VT - Vocational Training VTC - Vocational Training Center r Evolution of the scxhanme Rates At appraisal 02-81 US$ 1 - Dinar .4000 TD 1 - US$ 2.5 Period average 1981 US$ 1 - Dinar .4938 TD 1 - US$ 2.025 U n ~ 1982 US$ 1 - Dinar .5907 TD 1 - US$ 1.692 1983 US$ 1 - Dinar .6788 TD 1 - US$ 1.473 1984 US$ 1 - Dinar .7768 TD 1 - US$ 1.287 1985 US$ 1 - Dinar .8345 TD 1 - US$ 1.198 e a 1986 US$ 1 - Dinar .7940 TD 1 - US$ 1.259 * U 1987 US$ 1 - Dinar .8287 TD 1 - US$ 1.207 1st semester 1988 average US$ 1 - Dinar .8516 TD 1 - US$ 1.174 Estimated project's life average 81/88 US$ 1 - Dinar .8333 TD 1 - US$ 1.200  w~~~~~~~~~~~~~~~~~~~~~~~~~~ b VOl OFIICIAL USEOLY T1E WORLD BANK Washington D.C. 20433 U.S. OPsra' EVhAetia March 16, 1990 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUU'ECT: Project Completion Report: TUNISIA - Fourth Education Proiect (Loan 1961-TUN) Attached, for information, is a copy of a report entitled "Project Completion Report: Tunisia - Fourth Education Project (Loan 1961-TUN)" prepared by the Europe, Middle East and North Africa Regional Office with Part II of the report contributed by the Borrower. Attachment IThi documeant ha a _u disuibutio an may be udby mci&ts oIn he pfotem*me of th_ ofiew dtiuie Its cononts mayrnot othorEe be dmiscBd witbot Wodd IBank aut |m  FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT TUISIA FOURTH EDUCATION PROJECT (WAN 1961-TUN) TABLE OF CONTENTS Pag2 No. Preface i Evaluation Summary ii PART I - Project Review from Bank's Perspective .1 Project Identity. 1 Project Background .................... 1 Project Objectives and Description. 2 Project Design and Organization. 3 Project Implementation. 4 Project Results. 6 Bank Performance. 9 Borrower Performance .................... 9 Consulting Services ................................. 9 Project Documentation and Data ..... ................. 10 Project Sustainability .............................. 10 PART II - Project Review from Borrower's Perspective .... ....... 13 Objectives .......................................... 11 Original Loan Amount .................. 11 The Amendment dated April 21, 1986 .11 Extension of Closing Date .11 Delays in Project Execution .12 Status of Components .12 Evaluation of Civil Works Components, Conclusions 13 Evaluation of Equipment Component, Conclusions 14 Quantitative Aspect of the Project .14 Financial Aspect of the Project .15 Action Plan to Finalize Payments on IBRD Loan TUN-1961 .17 Annex 1 - Breakdown of Componants of IBRD- Financed Projects .19 Annex 2 - Quantitative Aspect of Project .20 This document has a restrcted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Table of Contents (cont"d) PART III - Statistical Information .............................. 21 Related Bank Loans .................................. 21 Project Timetable ................................... 21 Cumulative Estimated and Actual Disbursements ....... 22 Project Implementation .............................. 23 Project Costs and Financing ......................... 25 Project Resu.ts ........... .......................... 26 Status of Covenants ......... ........................ 27 Use of Bank Resources ........ ....................... 28 Annex I - Comparative Schedule of Implementation .... 30 Annex II - Evolution of the Exchange Rates .... ...... 32  PROJECT COMPLETION REPORT rUNISI FOURTH EDUCATION PROJECT (LOAN 1961-TUN) PREFACE This is the Project Completion Report (PCR) on the Fourth Education Project in Tunisia, for which Loan 1961-TUN in the amount of US$26 million was approved in March 1981. The Loan was closed on December 31, 1988, two years behind schedule. Following a cancellation of US$5 million in April 1986, the reduced Loan of US$21 million was disbursed except for a balance of US$1.8 million which was cancelled. The last disbursement was made on October 5, 1989. The PCR was jointly prepared by the Population and Human Resources Operations Division, Country Department II, EMENA Region (Preface, Evaluation Summary, Parts I and III) and the Borrower (Part II). Preparation of this PCR was started during the Bank's final supervision mission in December 1988, and is based, inter alia, on the Staff Appraisal Report and Loan Agreement; supervision reports; correspondence between the Bank and the Borrower; ana internai BianK memoranda.  - it - PROJECT CONPtETION REPOR FOURTH EDUCATION PROJECT (LOAN 1961-TUN) EVALUATION SUMMARY Objectives 1. The objectives of the Fourth Education Project in Tunisia were: (i) to increase the supply of techntical manpower at skilled worker and lower technician levels through the establishment of seven new vocational training centers (VTCs) and one apprentice training center (ATC), and the expansion of 13 existing VTCs and 2 ATCs; (ii) to improve the quality of existing training centers through the re-equipping of four VTCs and the ATC; and (iii) training related to project management and specialist services to assist with long-term planning. 2. Implementing agency was the Office for Vocational Training and Employment (OFPE), an autonomous organization under the umbrella of the Ministry of .abor. A Bank loan in the amount of US$ 26 million was to support this project (paras. 2-4). IJmRalentaLon ExZlerience 3. Loan 1961-TUN was approved on March 26, 1981 and became effective on November 18, 1981. It experienced delays in implementation stemming, first, from Borrower/Bank disagreement on space standards which slowed down the architectural design work and all subsequent activities, then the absence of a project coordinator foreseen for the first three years of implementation, and the part-time work of the PIU director. The PIU was rather inexperienced, particularly with procurement procedures and disbursement questions, but improved its performance considerably over the course of implementation. As an extraneous complication, two contractors bankrupted before their tasks were completed (para. 11). 4. A Loan Agreement modification in April 1986 cancelled US$ 5 million (19% of Loan funds), increased the civil works disbursement percentage from 26% to 50%, and changed the mix of project activities: the ATCs were removed from the list of project institutions (their role to be assumed in part by existing VTCs), and three/two other VTCs were to benefit from upgrading and extension/new construction program. In addition, two mobile training units were included in the project. The diminished Loan was disbursed except for US$1.8 million, and the accounts closed on October 5, 1989, after an extension of the Closing Date from December 31, 1986 to December 31, 1988 (para. 12).  - iii - FLesults 5. The project has led to the establishment of a modern, well equipped vocational training system which is able to offer Its trainses much more practical instruction than used to be the case in the older and under-equipped facilities (para. 15). 6. Its impact on the labor market is difficult to assess, as the trade system established in accordance with the Loan Agreement is not yet operational. In addition, the present downturn in economic activities appears temporarily to disguise the longer-term demands of the economy for technical manpower (para. 16). Sustainabi_lity 7. The VTCs appear to be running on a tight budget, reflecting the general budgetary austerity. The Government has responded to diminishing demand for training in specific areas (e.g., construction) reflecting the present downturn of economic activities by a temporary consolidation of training programs. On the whole, this realistic attitude and the obvious policy support the vocational system enjoys bodes well for its future. The advisory councils should contribute to a better dovetailing of training programs with the needs of the economy. Finally, the gradual shift of vocational training to a se:toral training concept is seen as achieving a greater degree of program flexibility (para. 25). Firinzs and Las sp laarn1d 8. The project experience confirms, first, the great difficulties in setting up an effective trade (or more generally, output monitoring) system and second, the importance of flexibility in the institutional arrangements for vocational training.  *1- PROJECT COMPLETION REPORT FOURTH EDUCATION PROJECT (LOAN 1961-U) PART x Prolect Review from Bank's Pergpective- I. Prolect Identity Project Name: Fourth Education Project Loan Number: 1961 TUN Country: Tunisia Sector: Education Subsector: Vocational Training Loan Amount: $26 million - reduced to $21 million in April 1986. Board Approval: March 1981 Effectiveness: November 1981 Original Closing Date: December 31, 1986 Actual Closing Date: December 31, 1988 II. Proiect Background 1. In the 70's, Tunisia experienced a rapid economic growth, result- ing in impressive social gains, particularly in education. Employment generation to reduce unemployment (around 15% in the late 70's) and absorb the increasing annual additions to the work force were among the main priorities of Tunisia's development strategy. The 1982-86 Plan in prepara- tion at the time of identification of the Fourth Education Project defined a strategy of job creation through increased investment in manufacturing industries and an accompanying effort in expanding vocational and technical training to meet the country's skilled manpower needs, in the context of a lessening reliance on overseas employment for Tunisian workers (by 1979 only about 2% of the Tunisian labor force was working abroad, as compared to about 13% in 1971).  - 2 - 2. The Fourth Education Project (US$26 million, FY81) aimed at expanding training opportunities for school leavers, upgrading the skills of the workforce and broadening the range of adult training opportunities. This was to be done through the establishment of new centers and creation of new sections and the expansion and upgrading of the apprenticeship training scheme. In addition, the project aimed at reinforcing the insti- tutional and training capacity of the Office des Travailleurs Tunisiens A l'Entranger, de VEmploi et de la Formation Professionnelle (known as l'Office), the agency responsibl2 for vocational training (VT) within the Ministry of Social Affairs. III. Project Obiectives and Description 3. Project Objectives: The project was designed to: (a) increase the supply of skilled technical manpower in response to regional employment needs through the establishment of seven new vecational training centers (VTC's) and the addi- tion of new sections to the e-xisting centers; (b) improve the quality of vocational training and apprentice training by re-equipping poorly equipped workshops; and (c) assist in the development and strengthening of the vocational/apprenticeship training systems through the financing of technical assistance related to the organization planning, management and evaluation of the Office's opera- tions, together with staff training. 4. Project Components: These objectives were to be achieved through: (a) Construction, furniture and equipment for: (i) seven new vocational training centers; (ii) a new apprentice training center; (iii) extensions to 13 existing vocational and 2 apprentice training centers; (b) furniture and equipment for re-equipping four vocational centers and one apprentice center; and (c) technical expertise to assist in long-term planning of the vocational training system, and training related to project management.  IV. Project DeaiBn and Orjanizatton 5. By the m'd 70's, the Tunisian authorities emphasized the need to make education and training more relevant to the needs of the economy and labor market. With the Third Education Project, the Bank had endorsed the shift of emphasis from general to technical education. The Project helped introduce practical work into grades 5 and 6 by prov!ding workshops for primary schools and the expansion or equipping of some primary teacher training colleges so that they couild train practical teachers for the work- shops. The authorities, however, were increasingly aware of the need to address pressing issues such as: (i) lack of coordination between training institutions and employers; (ii) limited relevance of training programs to the needs of the labor market; and (4ii) insufficient participation of employers in training efforts. The Government had started to address this probl m through the creation of advisury councils, with strong local emplo>ar representation for each so-hool and vocational training center, and regional councils comprising trainers/teachers, administrators and employ- ers to provide a broader perspective on employment needs. 6. In the fall of 1977, the Tunisian Government formally requested Bank assistance in the field of vocational training. In light of the implementation problems the Third Education Project was experiencing at the time (after loan effectiveness, the Government had reconsidered its educa- tion priorities and did not wish to proceed with the project as appraised), the Bank was reluctant to launch another operation in the education sector. Moreover, the Third Education Project provided for a study of the relation- ships between the education/training system and the job market with the objective of establishing a viable employment policy for the 1977-81 Plan, on which the Bank wished to anchor its future assistance. 7. Project definition and preparation was a lengthy and intermittent process which spanned over three years (until post-appraisal mission of September 80). This was due essentially to two unrelated reasons, one concerning strategy, and the other technical differences of opinion. The Tunisian Government was in the process of defining its strategy on voca- tional and apprentice training, tackling the issues related to planning, coordination and future directions. At the same time, Office and Bank staff were identifying and preparing project components without concerning themselves too much about the relationship to the overall country strategy on VT. In fact, project appraisal was delayed by nine months at the Minister of Planning's request, while the various government ministries and agencies involved in the policy formulation finalized a strategy. 8. Secondly, project preparation was slowed down by prolonged technical discussions between government and Bank staff on two matters: workshop equipment costs and space standards for training centers. The Government equipment cost estimates, based on French market prices, were substantially higher than the Bank's estimates, based on Bank norms for vocational training and on 1980 prices, likely to be quoted under ICB. Reconciliation of the c nt estimates only occurred during a post-appraisal  - 4 - mission. An increase in the loan amount resolved the issue. Lengthy debaves on space standards delayed the preparation of architectural designs, resulting not only in delayed preparation but in a ons-year imple- mentation de'ay. The debates, however, were not fruitless since the agreed space standards were in fact implemented. 9. These delays could have been, if not entirely avoided, certainly lessened with more careful planning, both on the Bank and the Government's side. But a more lasting impact of the intense focus on technical issues was the relative neglect. of broader institution building objectives. Although provision was made in the project for technical assistance to the Office, it was mainly targetted for expertise in procurement and in super- vision of civil works. Limited provision (18% of all technical assistance) was made for expertise in vocational training systems, programs, monitoring and evaluation, and assessment of relevance to labor market. During project preparation, an OPS education advisor expressed concern that this was primarily a hardware project and that 95% of project financing was going to provision of physical facilities, equipment and furniture. No answer is recorded in the project files. V. Project Implementation 10. There were three salient aspects of implementation: (1) substan- tial delays in start up activities and slower than anticipated implemen- tation; (ii) changes in project designs and cancellation of a portion of the lean; and (iii) partial success of the technical assistance component. These points are discussed more extensively below. 11. Delavs in Droject implementation. From the very beginning, the project experienced substantial delays (see Annex I for Comparative Implementation Schedule): the lengthy debates on space standards that slowed down the preparation of the project also delayed the preparation of architectural designs, resulting in a one-year postponement of the construction program. Project implementation also suffered from the absence of a project coordinator, an expert from outside the Office's structure to be hired for the first three years of implementation. His terms of reference, presented in a Supplemental Letter to the Loan Agreement, were the following: (i) assure the planning, coordination and monitoring of all project components (construction, equipment, recruitment and training of VTC trainers and administrative staff; (ii) organize end rationalize the VT system by analyzing and making recommendations for changes on selection, orientation and examination procedures, curriculum development and trainer recruitment procedures; and (iii) design and Implement a cost analysis system. Some of the coordinator's functions were ssumed by the project unit, headed by one of the directors of the Office who, while project director, maintained his other functions. The functions the unit assume'd were essentially those related to the planning and imple- mentation of the construction and equipment components. The unit, fairly inexperienced at the start of the project, was understandably fully occupied with the implementation o' these components, a task which was at the core of its terms of reference. Its initial inexperience resulted in substantial delays in establishing adequate procurement procedures and,  later on, an effective reimbursement mechanism. Over time, however, the unit became quite adept in both. One may wonder if there would not have been partial duplication of assignments, had the coordinator been hired. However, the coordinator's functions pertaining to the software aspects of the project (analysis of selection/orientation procedures, programs devel- opment and evaluation, and cost analysis of training) were altogether neglected, the nomination of a coordinator (four years into project imple- mentation) remaining a fact on paper only. Again, the limited attention given to the technical assistance component was felt in this aspect of the project (the project coordinator was to be assisted by expertise outside the Office in his assessment of the VT delivery system). The hiring of the project coordinator before the start of project execution may have pre- vented start up delays and facilitated the use of technical assistance. To ensure satisfactory implementation, the Bank should insist that the appointment of key managers be a condition of loan effectiveness. Finally, the bankruptcy of two contractors also contributed to the extensive delays observed. 12. Changes in project design. In April 1986, the Loan Agreement was amended to: (i) replace the construction and equipping of the four appren- tice centers with the further upgrading and extension of three of the VTCs already covered by the Project and the inclusion into the project of two additional VTCs; (ii) increase the disbursement percentages for civil works from 26% to 50%; and (iii) cancel US$ 5 million, out of the US$ 26 million loan. The Government decided, and the Bank concurred, to utilize existing VTCs to accommodate apprenticeship programs, by keeping the VTCs open after hours and on holidays. In addition, on-site training was encouraged a a more efficient training delivery method, particularly in remote areas. The funds made available by the cancellation of the appren- tice centers were utilized to expand and equip two new VTCs workshops and equip two others, in order to enhance teacher effectiveness, often impaired by poorly equipped and inadequate training facilities. These funds were further utilized to purchase two mobile units for training truck drivers and for maintenance training. This new aspect of the project reflected the interest in flexible, low cost, ad hoc training programs to meet the chang- ing manpower needs of the country. The Bank was confident that the Office could absorb the additional recurrent expenditures, which proved to be true. In countries where labor markets evolve rapidly, project description should be flexible enough to be easily adapted to changing manpower needs (see also para. 16 on the type of facilities and training most adapted to evolving labor needs). At the same time, disbursement percentages for civil works were increased from 26% to 50%, to reflect the actual indirect foreign exchange cost of civil works 'ecently observed in the project - since appraisal, the Tunisian Dinar/US dollar exchange rate had moved at a faster rate than the differential inflation between local and foreign costs. Finally, it was also decided to cancel US$ 5 million (or 19%) of the loan, in light of the favorable trend of the dollar exchange rate as opposed to the currencies used to purchase equipment. By 1986, the Dinar purchasing power of the Bank loan had doubled from the time of appraisal. (See page 14 for revisions to project costs expressed in dollars, reflect- ing favorable exchange rate fluctuation and Annex II for evolution of exchange rates during the life of the project).  - 6 - 13. Utilization of technical assistance. Lack of attention to tech- nical assistance for long-term system development had the effect of TA largely being used for alternative purposes, mainly for the preparation of equipment lists and for other activities related to the physical aspects of the project. About 26 months of expert services were used for architec- tural design and for the inventory and evaluation of the Office's infra- structure azn equipment. An additional 24 months were used in 1988, more as a res.a_ of the formulation of the reform package leading to the Education and Training Sector Loan (FY 89) than in the framework of the Fourth Education Project. In June 1988, the Office's mandate was expanded to include the supervision of labor market 'ctivities and the coordination of all training activities in the country. UNDP has designed a technical assistance program to assist the Office in implementing its new organiza- tLonal structure and strengthen its human resources. The program is co- financed by the Bank and is executed by ILO. Finally, foreign fellowships for about 370 persons (both trainers and administrative staff) were granted under the project. Very little of the Bank's loan proceeds were used for that purpose, however, since the Office had access to various bilateral funds. 14. ProsLet Risk: The Staff Appraisal Report is silent on project risks. It did, however, state that, although the project was the first operation between the Bank and the Office, the latter had a core staff of experienced administrators Pnd technicians (presumably competent enough to successfully implement the pcoject). This assessment was overly optimistic as is explained in para. 20. In most SARs, risk assessment is often limited to the physical execution of the project. Particular attention should be given to evaluating the risks involved with the potential lack of action on institution building and other 'software' components of a project. The other important risk that the SAR could have identified was the unavailability of counterpart funding, a problem which slowed down several other projects at the time. As it turns out, this was not a problem, in spite of the economic downturn the Tunisian economy experi- enced during part of the life of the project. Owing to slow implemen- tation, the demand for counterpart funds was stretched out over a longer time frame than anticipated, thus making yearly Government funding of the project much more manageable. VI. Project Results 15. Phvsical Facilities: As a result of the project, the VT system of the country now has physical installations that are being used for quality training. The project impacted on 26 VTCS run by l'Office, of which 7 were created under the project, 14 were expanded and upgraded, and 5 were reequipped. The expansion of the Office VTC system had an important impact on training conditions. Where, prior to the project, there had been only four to eight fully equipped training places in a workshop enrolling 16 trainees, there are now 16 well equipped training places. Consequently, trainees receive much more hands-on training. This overall picture is true for all centers affected by the re-equipping program, although it cannot be quantified in the same way for all specializations.  * -~~~~~~~~~~~~7 - 16. Oualitative Results: The project called for (and made it a covenant in the Loan Agreement) the design of a tracer system and the carrying out of tracer studies for the graduates of each project insti- tution for five years after the first group of trainees graduated. It also called for the creation of advisory councils, essentially a group of local employers, to ensure close links with industry and the continued relevance of training to labor market needs. These advisory councils have been established and are functioning well: it is with their guidance, among other, that the Office reorients its training programs. They remain, however, a mostly informal and incomplete mechanism for following up on graduates' employment and can, at best, provide a limited share of the information the tracer studies were meant to furnish. A formal tracer system was not established. Although not specifically identified in his terms of reference, it is in all likelihood one of the project coordi- nator's many tasks which were never carried out. Formal tracer studies were never carried out either. As the table below shows, the relative importance of trades taught in the project VTCs have evolved over the life of the project and reflect more recent industry needs. This information remains at the level of secondary observation. Detailed studies of graduate outcome are still needed to fully assess the relevance of the training. When discussing the relevance of training, the issue of rapidity of responsiveness must be addressed. The lead time involved in planning and creating new facilities, both in their hardware and software contents, is longer than the pace at which industry needs change. The sectoral training center approach, to be implemented under the forthcoming Education and Training Sector Loan, will enable the Office to respond rapidly and flexibly to changing labor market demand: existing VTCs' will be converted into sector dedicated training centers catering to the needs of specific industries and services. The conversions will be implemented on the basis of sub-projects prepared by the Office and industry associations. Production Capacity of the Office by Spiecialty Before the urolect At roiect coemletion (a) X Increase Production I of Productien X of durln8 Capacitv Total Camacir Total Imlementation Metal WorkersI Electriciansl Electronicians 1,074 18X 2,057 21X 922 Building trades 2,833 472 3,527 35S 242 1echanicslAutomotive 328 51 590 61 802 Secretarial 170 3X 579 61 340X Textile & Clothlng 581 10X 605 62 4X Transportation 639 llX 2,224 22X 348X Leather & Shoes 368 62 374 4X 21 Other 47 OX 140 .X ,298Z T0TAL 6,040 1002 10,096 100X 671 (a) September 1989. 0802g  17. The project also had an impact on the social environment, as expanded and improved boarding facilities in the project institutions have made it possible for candidates from more remote areas to have access to training and, in some centers, to provide access to girls for the first time 308 young women are enrolled in the VTCs created or expanded by the project today as opposed to about 100 at the start of the project), and to offer overall better quality of accommodations. 18. Furthermore, the project resulted in a higher level of qualifica- tion on the part of instructional staff. In addition to the 370 overseas fellowships financed through the loan proceeds and bilateral aid, an in- country training program was organized, mainly to familiarize instructors with the new equipment. The country now disposes of a corps of technically well qualified instructors that are self-confident enough to implement the changes ahead. 19. The main shortcoming of the project is that it did not meet its institution building objectives. Thirteen years of expert services were to be used by the Office to strengthen its role in the planning, coordination, management and operation of VT and in improving the efficiency of its training programs. When the project was revised in 1986, the funds for expert services were cut down by a third, reducing the expert services to about 8.5 years (or 104 months). In the first 6 years of implementation (1982-1987), only 24 months (or 23%) were utilized, exclusively on archi- tectural design and inventory of the Office's buildings and equipment (see para. 13). In 1988, UNDP designed and started executing a technical assis- tance program to assist the Office implement its new organizational struc- ture, and strengthen its human resources. The program is cofinanced by the Bank under the Fourth Education Project and executed by IIO. Although this program clearly meets the institution building objectives of the project, it was not designed as an attempt to meet these objectives at the eleventh hour of the project but rather as an indispensable first step in readying the Office for the preparation of the Education and Training Sector Loan. 20. Quantitative Results: 80 workshops were created under the project and an additional 120 were expanded or reequipped. The table in para. 16 shows that student capacity went up 67%, from 6040 to 10100. It assesses the quantitative impact of the project on the basis of before and after the project. Any comparison between project targets set for 1986 (anticipated project completion), and project accomplishments in 1989 (actual completion), is not very meaningful: the profile of training has changed considerably during the years of project implementation - the configuration of specializations, the duration of courses, and above all the employment opportunities for graduates have changed with the evolution of the country's economic situation. The fact that the targets set were not adhered to must be viewed as a positive outcome of the project, reflecting a good grasp of the evolving conditions and a flexible approach.  -9- VII. Bank Performance 21. Bank performance parallels the overall project accomplishment: strength with regard to the physical components, lesser attention on the system development features of the project. The all-absorbing and indis- pensable resolution of issues related to construction and equipment (space standards, workshop cost estimates) during project preparation was done at the cost of the institution building and training assessment components. In its paragraph on risks, the Staff Appraisal Report in fact failed to identify tlhe difficulty the Office would have in carrying out its first operation with the Bank, as well as its inexperience in recruiting the necessary outside expertise. The light emphasis on the qualitative objec- tives of the project was continued during the early years of project imple- mentation when the Bank had to assist the Government in resolving the obstacles to a timely start up (production of architectural design, exten- sive assistance with all stages of procurement). Moreover, over the years (and partly owing to the lengthy implementation), the project was super- vised by about ten different Bank staff members. Nonetheless, the Bank managed to ensure institutional continuity and approached implementation with flexibility to newly developing situations (changes in project design to accommodate the Government's wish to utilize VTCs for apprenticeship programs, revision of cost estimates and disbursement percentages to reflect evolving world financial considerations). VIII. Borrower Parrmance 22. For the most part, the Office's main strengths and weaknesses are the same as those observed for the project and the Bank: overall satisfac- tory (albeit slow) implementation of the physical components, lesser atten- tion given to system development features. Moreover, the high turnover in the Bank's staff responsible for this project was matched by an equally high turnover in the Office's top management (five managing directors in the life of the project). The burden of continuity falling on the imple- mentation unit coupled with the desire to oversee all aspects of project implementation led to a certain concentration of information and decisions in the unit. Very little feedback was requested from the project's bene- ficiaries: the training centers' staff and trainees. Little interest, until 1988 at least, seems to have been taken in tracing the actual employ- ment outcomes of the Office's VTC graduates, including the ones from project-financed centers. IX. Consulting Services 23. Consultants were used at all levels of project preparation and implementation, although in inadequate quantity to fully meet the objectives of the project related to institutional building and to the strengthening of the VT delivery system. However, the experts recruited performed satisfactorily in the fields assigned with the exception of architecture, where there was considerable variation in the quality of architectural designs and of supervision of construction of VTCs.  - 10 - X. Project Documentation and Rata 24. The legal documents pertaining to the project followed the usual format. Their particular strength lay in their flexibility so that they were easily amended to reflect changes. Data for the preparation of this Project Completion Report were readily available at the Office and at the Bank, although on the part of the Bank, changes in format reports over the years made it difficult to establish coherent time series. XI. Proiect-8uatainabilLi 25. As a result of the project, the country now has in place a wider network of better equipped VTCs which offer more geographical equity. Although specialty-specific in their initial design, these facilities are now being converted into sector-dedicated training centers under the Education and Training Sector Loan. This conversion makes the centers more responsive to changing labor market demands and should ensure them full utilization for the future. In addition, the corps of well qualified technical instructors trained under the project should provide higher quality training to new students for years to come.  - 11 - PART II - Project Review from Borrower' kegsgective 1. Objectives Assistance from IBRD requested by the Tunisian Government since June 1978 (signature of loan agreement May 18, 1981, effective date of loan November 18, 1981, loan opening date June 29, 1982) for the purpose of modernizing, renewing a,nd developing the vocational training system managed by the Office, to enable it to meet the expressed and latent skilled manpower needs of the country's economy. The draft application submitted to IBRD comprises the following activities, designed to strengthen and develop vocational training, including apprenticeship: - renewal of training equipment - additional training equipment - procurement of equipment for new centers - construction and fitting out of training facilities and common facilities 2. Original loan amount (IBRD share in USS millions) - Civil works 4.6 - Equipment 12.4 - Technical assistance 1.0 - Fellowships 0.1 - Unallocated 7.9 Total 26.0 3. The amendment dated Agril 21. 1986. negotiated and approved by the two Rarties (OFPP and IBRD in agreement with the Planning Ministry) amends the financial structure of the loan as follows: - Civil works 7.0 - Equipment 11.0 - Technical assistance 0.6 - Fellowships 0.1 - Unallocated 2.3 Total 21.0 4. Extension of closing date To attain the project objectives, IBRD was asked to authorize two closing date extensions (one year each). First extension - Closing date: December 31, 1987 instead of December 31, 1986 - Last disbursement date: June 30, 1988 instead of June 30, 1987  - 12 - Seoond extension - Closing date: December 31, 1988 instead of December 31, 1987 - Last disbursement date: June 30, 1989 instead of June 30, 1988 5. Delays in oroject execution The two extensions were requested to make up for the cumulative delay in project execution, essentially due to the following causes: 5.1 The Fourth Education Project was the first project executed by OFPE, which had never before been required to execute projects of such magnitude (lack of experience in project monitoring, engineering, etc.). 5.2 Complex and long-drawn out procurement procedure (8-12 months between the bid call and the meeting of the departmental commission on procurement and signature of the contracts). 5.3 Slow equipment deliveries and acceptance. 5.4 Frequent changes in key IBRD personnel (four Division Chiefs during project execution). 5.5 IBRD's extensive restructuring during 1988. 6. Status of comonents 6.1 Civil works Construction has been completed on all centers; all that remains to be done is the finishing work on the following centers: - GAPSA: (90% executed), probable acceptance March 31, 1989. - ENFIDHA: (952 executed), probable scceptance March 31, 1989. - BEN AROUS II: electricity (651 executed), probable acceptance March 31, 1989. (See detailed breakdown, Annex I) 6.2 Equipment All the equipment contracts have been signed. Deliveries should be completed end March-early April 1989. (See detailed breakdown, Annex I) 6.3 Technical assistance It is true that this component is not emphasized, when compared to other categories, but this is essentially due to the fact that the technical assistance requirements have been met:  - 13 - - through bilateral cooperation (OFPE - AFPA) for management standards; - by an OFPE expert in infrastructure and equipment evaluation (TOR approved by IBRD in January 1988). - by a consulting firm hired to audit the project. The follo-ing numbers of OFPE technicians have done internships abroad each year: 1984 1985 1986 1987 TOTAL 78 126 105 62 371 7. Evaluation of civil works component. conclusions The initial planning of the civil works component was very rigorous. But, it did not take into account the Borrower's legal or economic realities, namely: 7.1 The frequent lack of certain construction materials on the domestic market. 7.2 Inclement weather conditions (wind and rain in winter, excessive heat in summer), which can hold up construction for some time. 7.3 Default on the part of certain contractors, causing the borrower to terminate several contracts. The proper course of action would have been either to provide OFPE with a project execution and monitoring capacity, or to treat all construction contracts as turnkey contracts, so as to have only one contractor to deal with. The huge number of multi-party contracts has led to the accumulation of enormous delays in execution. This is mainly due to the fact that coordination is becoming more and more difficult, if not impossible. The delays accumulated by one contracting party are automatically passed on to the next party, resulting in missed deadlines. 7.4 The choice of construction sites has, for certain projects, resulted in the need for supplementary works that were not foreseeable at the time of the study. Examples are Sousse Electronique (construction of a protective embankment); JEBENIANA (elevation above ground zero); SOLIMAN (90 cm of fill for flood control); GAFSA (ground zero); ENFIDHA. In future, it would be wise to ensure that the architectural design is compatible with the characteristics of the site (soil analysis, rainfall study, feasibility study). In conclusion, the option selected by the borrower, namely the purchase of sites at nominal prices, has been offset by the additional expenditures arising out of the poor choices made (e.g. SOLINAN connection water supply by SONEDE: TD31,000; GAMKARTH: connection STEG: TD21,585 DT).  - 14 - 8. Evaluation of equipment component. conclusions 8.1 EguiRment registers [cadastresi The equipment registers serving for the preparation of technical dossiers for the bid proceedings contain various gaps with respect to the technical specifications on certain items. These gaps have now been remedied in agreement with the suppliers. This operation took anywhere between 15 days and 2 months, quite apart from the large volume of correspondence between borrower and supplier. It is recommended that in future the item to be purchased be described with the maximum of technical details. 8.2 Bid aDRraisal The tardiness in the bid appraisal procedure was mainly due to the fact that the technician handling the appraisal was not the one who prepared the technical dossier. 8.3 Methodologv for lot classification Following is the borrower's methodology: Homogeneous, inseparable lots, by sector. The following homogeneous lots are used as a basis for the award of equipment contracts for the mechanical sector: I.Machinery 2. Tools 3. Fitting out While this methodology has the advantage of involving only one supplier, it complicates the acceptance procedure. For a single contract, 4-10 acceptance points are scattered throughout the Republic, without taking into account the multitude of contracts, suppliers and lots, hence the need for a huge number of trips throughout the country to accept often negligible quantities of equipment. In future, it is recommended that calls for bids on equipment contracts be issued by individual training unit, since this will involve a single acceptance point, providing the training unit with all of its equipment and ensuring that its activities can all get under way simultaneously. 9. Ouantitative aspect of the proiect (see Annex II)  - 15 - 10. Financial aspect of the project Evaluation of financial procedure, conclusions. For the disbursement of Loan No. 1961 TUN for the Fourth Education Project, IBRD has drawn up a procedure to be adopted by the borrower (Republic of Tunisia - OFPE) for the withdrawal of loan proceeds. 10.1 Present procedure For every operation generating a withdraws.l of loan proceeds, the borrower should adopt the following procedure: (a) 9xtrations prior to withdrawal of loan Rroceeds Prior to any withdrawal application, the borrower should first, following the chronological order of operations, ~.end duplicate copies to IBRD of: t the architectural drawings (for civil works) and the technical dossiers (for equipment), for approval: - the bid appraisal reports; - comparative tables and selected reports, to obtain "non objection" c contracts duly signed as commitments against the loan. (b) Withdrawals of loan proceeds All withdrawals are effected through an official application signed by the borrower's authorized representative (OFPE's President and Managing Director). This application, to be submitted to IBRD in duplicate, should comprise: - an application for the withdrawal of funds; - a fund withdrawal table; - copies of invoices or accounts; - acceptance slips and reports; - any other necessary document in support of the withdrawal of funds (bank guarantees, summary statements, etc.). The withdrawal applications used by the borrower within the framework of this Fourth Project are numbered successively, starting from 1, and are of two types: direct payment applications and reimbursement applications. Different forms are used for each type.  - L6 - Direct Rayment apglicatiions This type of application is used by the borrower for payments to foreign suppliers for equipment and technical assistance, or for fellowships abroad. The forms used in this case are those for procedure III. bpglications for reimbursement This type of application is used for reimbursement of the share of IBRD loan funds that the borrower has advanced to local suppliers on IBRD's behalf. The forms used in this case are those for procedure I. It should be noted that IBRD replaced the above-mentioned forms in October 1988. The new ones may be used for both types of withdrawal application, which simplifies correspondence. 10.2 ProRosals and conclusions Use of the Bank's procedure for the withdrawal of loan proceeds and the internal procedure for monitoring and management of the IBRD project has led to two types of difficulty, which have prevented satisfactory project execution. (a) Difficulties inherent in the Bank's procedures The principal difficulty encountered in application of those procedures concerns the grace period granted by IBRD before the last disbursement (six months after the loan closing date). This period is unrealistic, in light of possible delays in delivery by suppliers, the fact that some items do not match the order and have to be replaced, the time needed for preparation, forwarding and authorization of invoices and acceptance slips, etc. The second difficulty lies in the conversion of funds committed against a loan in dollars. While IBRD notifies the borrower of the status of disbursements with their dollar equivalents, the same is not ture of commitments, which has led the borrower to use an arbitrary rate in making such conversions.  - 17 - With respect to the above gaps, we propose that IBRD: - extend the grace period (last disbursement date) from six months to one year; - send the borrower a quarterly statement of commitments against the loan, expressed in dollars, to enable the borrower to handle Its commitments in relation to the appropriations (since the latter are expressed in dollars). (b) Difficulties inherent in the borrower's internal projLect management procedures The internal procedures have given rise to certain difficulties during project execution, namely: - The existence of two units handling payments on the IBRD project (Financial Directorate, budget unit title II, for dinar payments, and the project unit's bookkeeper for foreign exchange payments). This has led to the existence of two project information centers, slow reimbursements procedures, and difficulties in project component evaluation. It is therefore recommended that in future the payments on any IBRD project all be handled by the project unit's bookkeeper, that a special bank account be opened for the local currency counterpart to the IBRD loan, and that IBRD-financed projeccs be shown separately in the equipment budgets for OFPE. - At the Equipment Directorate (project execution unit), the authorization of IBRD project invoices is handled by a unit also dealing with the authorization of invoices relating to other projects. 11. Action glan to finalise payments on IBRD loan TUN - 1961 A steering committee met on January 4, 1989 (minutes of the same date), chaired by Mr. Taoufik Baccar, to adopt a new strategy for accepting equipment geared to the last disbur3ement date (June 1989). It was decided to adopt three methods of acceptance depending or the nature of the equipment. (a) Tool contracts General acceptance to take place at :he Ariana central depot. The acceptance team will comprise: - a DST official (responsible for acceptance and administrative documents) - a representative of the supplier - principals, or their representatives, of the centers concerned.  - 18 - (b) Sm*al eauirnient eontg ras Since start-up can take place at centers similar to Tunis (CFP Radfs, CPMAT Ariana, CFP Ben Arous, Ariana central depot), the equipment will be accepted at one of those locations, by a team composed of: - a DET official (responsible for acceptance and administrative documents) - a representative of the supplier - the principals, or their representatives, of the centers concerned - an instructor who participated in the technical bid appraisal. (c) Contracts for tools and machinery (requiring assembly and start-up) Two scenarios are contemplated: (1) If the tools are to be delivered separately from the mac.hinery: acceptance will take place as in (a) above, while the machinery will be accepted on the site. (2) If tools and machinery are covered by the same delivery, acceptance will be on the site. The on-site acceptance team will comprise: - a DET official (responsible for acceptance and administrative documents) - a representative of the supplier - bhe principal of the center - the instructor who will use the tools and machinery. N.B. An instructor who participated in the technical bid appraisal will be invited, as necessary, to be a member of the various acceptance teams.  BREAKDOWN OF COMPONENTS OF IBRO-FINANCED PROJECTS SL. PhIUE Centers Construction Eauiment Nature of Operation X Executed Completion X Delivered Completion Date oate l C.P.M.A.T. ARIANA 100% - 100% - EXT. G.C. & C.E. 2 C.F.P.I.C. ARIANA 100% - 100% - EXT. G.C. & C.E. 3 INST. TEXTILE OEN-DEN 100% - 100% - EXT. G.C. & C.E. 4 I C.F.P.B. BEN AROUS 100% - 100% - EXT. G.C. & C.E. s C.F.P. RADES 100% - 90% Apr-89 EXT. G.C. & C.E. 6 GABES II 100% - 90% Apr-89 NEW CENTER 7 ELECTRONIQUE SOUSSE 100% - 100% - NEW CENTER 8 C.P.B.I.M. MDNASTIR - - 100% - COMPT. EQUIP. & C.E. 9 MEDENINE - - 95% Apr-89 COMPT. EQUIP. & C.E. 10 EL JEM - - 100% - COMPT. EQUIP. & C.E. 11 EL GRINE - - 100% - COMPT. EQUIP. & C.E. 12 C.F.P EMFIDHA 96% Apr-89 - EXT. G.C. 13 C.F.P. BEJA 100% - 70% May-89 EXT. G.C. & C.E. 14 MANDIA 100% - 70% May-89 EXT. G.C. & C.E. 15 MISAKEN 100% - 100% - EXT. G.C. & C.E. 16 II SIDI-BOUZID 100% - 70% May-89 EXT. G.C. & C.E. 17 SILIANA 100% - 100% - EXT. G.C. & C.E. 18 C.M.F. SOUSSE 100% - 100% - EXT. G.C. & C.E. 19 C.F.P. GAFSA 95% Apr-89 40% May-89 NEW CENTER 20 C.F.P. SOLIMAN 100% - 95% May-89 NEW CENTER 21 C.M.F. LA MARSA 100% - 100% NEW CENTER 22 III BEN AROUS (SIR KASSAA) 100% - 70% May-89 NEW CENTER 23 DJEBENIANA 100% - SO% May-89 NEW CENTER 24 TABRKA 100% - SO% May-89 EXT. G.C. & C.E. 25 KORBA 100% - 70% May-89 EXT. G.C. & C.E. 26 MOKNINE - - SO% May-49 C.E. 27 ADDENDUM THIBAR - - - May-89 C.E. 28 C.M. ADRTY - - 100% May-89 A.N. 29 MATERIEL BURAUTIQUE - - 100% - A.N. C.E. = ADDITIONAL EQUIPMENT EXT. G.C. = CIVIL WORKS EXTENSION A.N. = NEW PURCHASE  - 20 - Annex 2 QUANTITATIVE ASPECT OF PROJECT IBRD NO. 1961-TUN NO. VOCATIONAL TRAINING CENTER SECTION # INSTALLED CAPACITY 1 C.P.M.A.T. ARIANA 9 130 2 C.F.P.I.C. ARIANA 6 87 3 C.F.P.H. DEN DEN 15 225 4 C.F.P.B. BEN AROUS r 17 225 5 C.F.P. RADES 16 234 6 C.P.B.I.M. MONASTIR 6 84 7 C.F.P. MEDENINE 6 90 8 C.F.P. EL JEM 6 82 9 C.F.P. EL GRINE 8 128 10 C.F.P.B. GABES II 6 96 11 C.N.F TECH. EN ELECTRONIQUE 6 96 SOUSSE 12 C.F.P. ENFIDHA 4 60 13 C.F.P. BEJA 7 105 14 C.F.P. MAHDIA 5 72 15 C.F.P.B. M'SAKEN 5 75 16 C.F.P. SIDI BOUZID 6 90 17 C.F.P. SILIANA 8 120 18 C.F.P. EMPLOIDE DE BUREAU SOUSSE 6 120 19 C.F.P. GAFSA 11 162 20 C.F.P.B. SOLIMAN 7 105 21 C.F.P. EMPLOI DE BUREAU GAMMARTH 12 240 2! BEN AROUS II (EX. MEGRINE) 3 45 BIR EL KASSM 23 C.F.P. SFAX II JEBINIANA 14 214 24 C.F.P. THIBAR 3 45 25 C.F.P. TABARKA 3 45 26 C.F.P. MOKNINE 1 15 27 C.F.P. KORBA 3 45 TOTAL 199 3,035 EXISTING SITUATION 120 1,800 PLUS NEW SITUATION 79 1,235  - 21 - PART III Statistical [oma