Nepal - Population and Family Health Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 22177 IMPLEMENTATION COMPLETION REPORT (IDA-26000) ON A CREDIT IN THE AMOUNT OF SDR 19.4 MILLION (US$26.7 MILLION EQUIVALENT) TO THE KINGDOM OF NEPAL FOR THE POPULATION & FAMILY HEALTH PROJECT June 25, 2001 Health, Nutrition and Population Sector Unit South Asia Region This document has a restricted distribution and may be used by rpients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective December 2000) Currency Unit = Nepalese Rupees (NRs.) NRs. 74.25 = US$ 1.00 (at Closing) US$ 1.00 = NRs. 49.00 (at Appraisal) FISCAL YEAR July 16 - July 15 ABBREVIATIONS AND ACRONYMS CTCs - Clinical Training Centers CPR - Contraceptive Prevalence Rate CTC - Clinical Training Center DFID - Department for Intemational Development DHOs - District Health Offices DOHS - Department of Health Services FPIMCH - Family Planning and Maternal Child Health GTZ - Deutsche Gesellschaft fur Technische Zusammenarbeit (German) HAs - Health Assistants HMG - His Majesty's Government HP - Health Post IDA - International Development Association IMR - Infant Mortality Rate LMD - Logistic Management Division MCH - Maternal and Child Health MIS - Management Information System MMR - Maternal Mortality Rate MOF - Ministry of Finance MOH - Ministry of Health MOPE - Ministry of Population and Environment MTR - Mid-Term Review NFHS - National Fertility Health Survey NHTC - National Health Training Center NPC - National Planning Commission OPD - Out Patient Department PFHP - Population and Family Health Project PHCC - Primary Health Care Center PIU - Project Implementation Unit RMN - Resident Mission of Nepal SAR - Staff Appraisal Report SHP - Sub-Health Post TFR - Total Fertility Rate UNFPA - United Nations Population Fund USAID - United States Agency for International Development VDC - Village Development Committee WB - World Bank Vice President: Mieko Nishimizu Country Manager/Director: Kenichi Ohashi Sector Manager/Director: Richard Lee Skolnik Team Leader/Task Manager: Ian. P. Morris/Tirtha Rana  FOR OFFICL USE ONLY NEPAL POPULATION & FAMILY HEALTH PROJECT CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 4 5. Major Factors Affecting Implementation and Outcome 9 6. Sustainability 12 7. Bank and Borrower Performance 14 8. Lessons Leamed 16 9. Partner Comments 19 10. Additional Infonnation 26 Annex 1. Key Performance Indicatorx/Log Frame Matrix 27 Annex 2. Project Costs and Financing 29 Annex 3. Economic Costs and Benefits 33 Annex 4. Bank Inputs 34 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 38 Annex 6. Ratings of Bank and Borrower Performance 39 Annex 7. List of Supporting Documents 40 Annex 8. Project Output/Outcome Supportive Tables (Table I - 5) 43 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization.   Project ID: P0 10460 Project Name: POPULATION & HEALTH Team Leader: Tirtha Rana TL Unit: SASHP ICR Type: Core ICR Report Date: June 27, 2001 1. Project Data Name: POPULATION & HEALTH L/C/TFNumber: IDA-26000 CountryIDepartment: NEPAL Region: South Asia Regional Office Sector/subsector: HR - Reform and Financing KEY DATES Original Revised/Actual PCD: 05/04/1989 Effective: 07/15/1994 07/15/1994 Appraisal: 10/05/1993 MTR: 09/16/1997 09/16/1997 Approval: 04/12/1994 Closing: 12/31/2000 12/31/2000 Borrower/Implementing Agency: KINGDOM OF NEPAL/MINISTRY OF HEALTH Other Partners: NA STAFF Current At Appraisal Vice President: Mieko Nishimizu Joseph D. Wood Country Manager: Kenichi Ohashi Ann Hamilton Sector Manager: Richard Lee Skolnik Martin Karcher Team l eader at ICR: Tirtha Rana Badrud M. Duza ICR Primary Author: Tirtha Rana 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: UN Institutional Development Impact: M Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: Yes  3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The Bank's 1989 Social Sector Review for Nepal underscored the central importance of population and health interventions. Detailed assessment by His Majesty's Government of Nepal, backed by field investigations which was supported by a Japan Grant Fund and other sources, identified major program needs, costs, and financing gaps. A broad consensus finally emerged on key program actions for improving the health of mothers and children - - and a recognition that curbing Nepal's high fertility and rapid population growth (2.7% a year at Project inception) was a crucially important step toward reducing poverty. Notwithstanding the broad consensus reached the Nepal Population and Family Health Project, implemented between 1994 and 2000, was the first Bank project in Nepal's health sector. Its inception met with ambivalence and hesitation among some policymakers and donor representatives, who questioned the rationale for an IDA credit in the social sector. A long dialogue with national and international stakeholders followed, with 13 Bank missions for the Project between 1989 and 1993, several Bank missions to donor headquarters, and an international donors meeting in Kathmandu. The Project's broad goal was to support the Government's National Family Planning and Maternal and Child Health (FP/MCH) Program, aimed at increasing contraceptive prevalence, lowering total fertility, reducing maternal and child morbidity and mortality, and raising life expectancy. The Project had three specific development objectives: (a) Increasing the coverage, quality, and utilization of FP/MCH services through outreach and clinical services and assured supplies of drugs and contraceptives. (b) Improving the functioning of the grassroots health facilities by recruiting and deploying female MCH workers and providing field operations support. (c) Enhancing the Governnent's institutional and managerial capacity for effectively implementing a comprehensive population and MCH program. 3.2 Revised Objective: The objectives were not revised. 3.3 Original Components: The Project totaled US$39.0 million, of which the IDA Credit provided US$26.7 million equivalent. Its design included four clusters of components, extending to all 75 districts of the country: Outreach service delivery (US$32.1 million, more than 75 percent of Project resources) - to train and deploy female MCH workers, supported by Government funds (accounting for a quarter of the cluster resources); to improve the physical environment for service delivery through provision of infrastructure and equipment at the level of health posts (HPs) and primary health care centers (PHCCs) (about half the cluster resources); and to provide field operations support - 2 -  for staff mobility and monitoring and supervision (a quarter of the cluster resources). Clinical FP/MCH units (US$1.8 million)-to develop five units for surgical contraception and maternal and child health care. Logistics and supplies (US$1.3 million)-to construct and renovate warehouses for essential drugs, contraceptives, vaccines and equipment; to develop a transportation system for supplies; and to provide field operations support for logistics management and staff and supervisor mobility. Institutional development (US$3.8 million)-to develop a health management information system (MIS); to create seven clinical training centers for developing and upgrading the skills of FP/MCH clinical staff; to build maintenance capacity for infrastructure and equipment; and to support Project management. 3.4 Revised Components: There was no change in the original components, but within the framework of these components the scope of work was adjusted during and after the mid-term review (MTR). 3.5 Quality at Entry: Overall readiness and quality at entry are rated satisfactory. A practical problem was the Ministry of Health's (MOH) lack of familiarity with IDA procedures and requirements. While MOH was accustomed to direct implementation of programs by donors, following their spending criteria and often on a turnkey basis, this first IDA project in the sector had to be implemented in accordance with Government mechanisms and regulations. Painstaking preparations before Credit effectiveness laid the groundwork for the Project. The Borrower gained a growing understanding of the Project issues in the long, participatory process of preparation, which involved producing an extensive situation analysis, program options and cost implications, project proposals, and a detailed financing plan. The international donors meeting clarified key operational and resource issues. The project implementation unit (PIU) was set up, and its director and senior staff received procurement and disbursement training. Progress was made on development of financial and procurement plans, and the bidding documents were prepared for the initial civil works packages. Infrastructure and logistics needs were documented through countrywide surveys. All construction sites were identified and land acquisitions completed for the construction planned for the first two years. Prototype architectural designs and cost estimates for different types of health facilities were completed. An 18-month long field investigations and its result detailed the requirements for the new institutional elements envisaged in the national health policy, including the PHCCs, sub-health posts, and MCH workers. And the Project launch workshop helped to develop an initial base for the collaborating agencies and staff on the Project objectives, components, and implementation arrangements. Hence, considerable technical work and preparation for civil works was carried out before approval of the Project. Two institutional issues were inadequately addressed during project preparation: (i) the location - 3 -  of the PIU and its intricate institutional relationship with the MOH and the Department of Health Services (DOHS); and (ii) donor coordination. The planning division of the MOH was responsible for Project preparation and coordination under the guidance of the Interministerial Development Board, chaired by the Minister of MOH and the member secretary of the project steering committee chaired by the Secretary MOH. This management structure sidelined the role of DOHS which was the main implementing agency of the MOH. The DOHS only partially supported PIU implementation efforts and this increased the risk that project components would not be mainstreamed into DOHS programs. Thus, the PIU lacked adequate procurement and financial authority and faced slow decision making. Despite the Borrower's assurances during Project preparation and negotiation, these issues remained unresolved before Credit effectiveness, causing Project delays. Donor coordination was always an issue. The project preparation team and the MOH had to face skepticism from the donor agencies about the rationale for a health project financed by IDA. This contributed to the long preparation and appraisal process. The Bank, through country management and sector teams, could perhaps have played a more proactive role in encouraging the Government and donors to establish an active coordinating mechanism -- initially for the project and eventually for the benefit of the wider health sectoral program. This could have developed better synergies between donor financed projects. In addition, the political changes of the mid 1 990s led to disruptive staff turnover in the MOH and the PIU -- a portent to implementation problems to be faced by the project. The Project became effective on July 15, 1994, as scheduled, and closed on December 31, 2000 and was implemented within the framework of country's broader primary health care program. Many related program inputs were being already supported by a number of new and existing external development partners. Its timing was opportune, notwithstanding some reluctance in the donor community, allowing it to respond to health policy developed during Nepal's transition from the traditional panchayat to a democratic government. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The Project objectives were clear, focused, and realistic, embodying the sectoral priorities reflected in the Country Assistance Strategy and the country's health and population policies and Eighth Five-Year Plan. The Project substantially helped in increasing the coverage, quality, and utilization of FP/MCH services, achieved the targets for deploying female MCH workers, and strengthened the institutional capacity in a modest way for managing and implementing FP/MCH programs. In view of these achievements, the Project's performance in meeting its objectives is rated satisfactory (see Annexes I and 8 for outcome and impact indicators). The establishment of new facilities and a new cadre of village-based female MCH workers expanded access to MCH services down to the village development committees (VDC) level. Between 1994/95 and 1999/2000 outpatient visits in the outreach health facilities increased from 4.5 million a year to more than 7 million, first antenatal visits increased from 15.5% of pregnant women to 35%, and deliveries by trained health workers increased from 3.1% to 13.5%, all these records are quoted from Health MIS reports of MOH from the year 1994/95 to 1999/00. -4 -  Regular outreach clinics have been institutionalized in all VDCs. During the Project period (July 1994 - December 2000), contraceptive prevalence increased from 23% to 34.5% ( Health MIS reports 1994/95 to 1999/00), the total fertility rate per woman fell from 5.8 to 4.6 (NFHS, 1996), life expectancy is estimated to have increased from 53 years in 1991 to more than 58 in 1999 (as recorded by Ministry of Population and Environment), the infant mortality rate declined from 107 per 1,000 live births in 1991 to less than 75, in 1997 as recorded in Government's Ninth Five Year Plan document and the maternal mortality ratio fell from 8.5 per 1,000 live births in 1991 to 5.4 in 1996 (NFHS, 1996). And between 1991 and 1996 under-five mortality fell from 197 per 1,000 live births to 118 (NFHS, 1996). The Project enhanced project management, financial, and procurement management capacity in MOH system. One reflection of the maturing of capacity is the increasing focus on outcomes by MOH in program implementation and monitoring. Although the Government formally declined to retrofit monitoring and outcome indicators and targets during the MTR, the Government and Bank supervision teams continually monitored development indicators that can be linked in part to the Project. The Government set targets as indicated in National Health Policy, 1991 and the impact and outcome indicators as appropriate to project set targets and outcomes were regularly monitored through the time series information as documented in National Family Health Survey of 1996, series of annual reports produced by Department of Health Services, Ministry of Health (year 1994 to 2000) and from the report of Ministry of Population and Environment as presented in Annex 1. This Project contributed significantly to the achievement of the increased contraceptive prevalence rate (the formal objective of the project) and to other government targets; through the provision of strategically designed project inputs to enhance the level of access, coverage and quality of the FP/MCH program by: (a) expanding the network of outlying health infrastructure; (b) improving the assured supplies of drugs, vaccines and contraceptives by improved logistics management; (c) improved outreach and clinical services including through the permanent placement of MCH workers at each of the 3915 VDCs (exclusively out of counterpart contribution); (d) efforts to improve the monitoring and supervision system; and (e) enhancing the institutional and managerial capacity of Government for implementing the FP/MCH services within the established framework of an integrated primary health care program. As presented in table I of Annex 8, service utilization over the project period has been notably progressive, and the consistency of such findings are corroborated by table 2 and 3 of Annex 8 where the outcomes were assessed by three cycles of each trimester during the final last year of the Project, in each level of outreach health facility. 4.1.1 Increasing the coverage, quality, and utilization of FP/MCH services through outreach and clinical services and assured supplies of drugs and contraceptives The Project led to substantial physical and institutional improvements enhancing service outcomes in rural Nepal (Annex 1; Annex 8, Tables 1-4). Although late completion of a few of the physical facilities limited their use during the implementation period, all of them were in operation by completion of the Project. The Project established several FP/MCH units, enhancing the ability to provide surgical contraception and child health and maternal services. It constructed and renovated health posts and PHCCs, extending outreach services throughout the country. And it set up a warehouse and supply distribution network that has made service delivery more - 5 -  dependable. 4.1.2 Improving thefunctioning of the grassroots health facilities by recruiting and deploying female MCH workers andprovidingfield operations support Female MCH workers have been deployed in most sub-health posts at the VDC level in all 75 districts, serving the rural poor in outlying areas exclusively out of Government's cost and over 90% of them are regularized. Field operations support has helped to develop a countrywide monitoring and supervision system, although the system's utilization has been limited by the low subsistence for staff and supervisors in the field. Despite Bank's persistent efforts, Government's reluctance to increase the level of daily allowances and service provider's unwillingness to participate in supervision functions limited disbursement in this category of expenditure to about 61 percent only. 4.1.3 Enhancing the Government's institutional and managerial capacity for effectively implementing a comprehensive population and MCH program The Project, through the learning experience and training provided, increased MOH's in-house capacity for managing major health programs. It also provided valuable support toward strengthening the Health MIS, creating clinical training centers, and developing options for maintenance capacity, complementing the initiatives of other donors. And there is now a valuable pool of specialized skills among regular and contractual staff-skills in implementation, financial management, inter-agency coordination, and procurement of civil works, goods and services; logistics and operational training in health service delivery; and computerized financial management. 4.2 Outputs by components: 4.2.1 Outreach service delivery. This cluster of components vastly expanded countrywide access to and coverage of FP/MCH services and established a large health infrastructure network. Overall achievement under these components is rated satisfactory (ranging from highly satisfactory for logistics and supplies to modest for field operations support). MCH workers: This component to establish and deploy a new cadre of female MCH workers in sub-health posts at the VDC level in all 75 districts has been substantially implemented. Although progress slowed after the first four years, 3,100 staff have been trained for the 3,150 positions, and 2,793 are in place. The deployment (and, for some, reemployment) of the remaining 357 was pending because of civil service regulations affecting staff recruitment. Only 662 MCH workers received refresher training during the project period which is being carried out presently through support of multiple development partners (DFID, USAID, UNFPA, UNICEF and GTZ) in their respective project districts. Healthposts andprimary health care centers: Under this component the Project provided support to nearly 550 health and related infrastructure facilities, including about 60 percent of HPs and PHCCs. The cost of the enlarged scope of infrastructure development was US$ 16.5 million compared with the original estimate of US$12.46 million. Of this, US$15.9 million was - 6 -  spent for HPs and PHCCs, covering 77 percent of the allocation for outreach service delivery. The medical equipment were supplied to 525 facilities, mostly HPs and PHCCs, including 16 health centers at a cost of US$1.3 million, much less than the US$2.0 million allocated for the original 269 facilities (Annex 2.c.2). The original plan provided for constructing 125 new facilities and renovating 100 existing HPs. At the project closing, 133 new HPs were constructed and an additional 35 HPs received major renovation. Further, the HPs in hill regions were substantially expanded at the MTR to reflect revised service delivery needs. By Project closing 168 HPs were completed and fully functional, and the Government gave assurances that it would complete one HP that remained incomplete by closing of the Project from its own resources (US$20,000). During the final year the Project undertook fairly extensive repair and maintenance of another 332 HPs, which should keep them in reasonable operating order for the next 10-15 years. The project provided medical equipment to 479 HPs (all the new and renovated HPs), including basic furniture for 168 HPs and staff quarters. Of the planned 25 PHCCs, 15 were new constructions, 10 were established by renovating and extending HPS. This ambitious country-wide agenda of infrastructure was also implemented with impressive speed and efficiency. Spearheaded by a modestly staffed PIU, the efforts were carried out in about three years under daunting organizational and field constraints, including occasional insurgency near some sites. This scale and pace of development would not have been possible with Government and MOH resources and technical capacity alone, nor with the usual external funding sources. The quality of the construction has been deemed satisfactory, as confirmed by independent monitoring consultants, end-line facility surveys, and joint IDA and inter-ministerial mission reviews. The facility survey by PIU, as well as DOHS annual reports and Health MIS data, show increasing utilization of services between 1994/95 and 1999/2000 (Annex 8: Tables 1-4). Field operations support: Under this component, for which almost a quarter of the IDA Credit (US$6.1 million) was earmarked, a monitoring and supervision system for integrated primary health care delivery was developed and systematically implemented. Some 650 district and regional supervisors were also trained and a checklist, used by supervisors while in field visits, is now in use. But the inadequate daily allowance for field visits by staff permitted by Government regulations, and the revision of the criteria for field travel allowance for field visits ( staff had to travel at least 12 miles instead of the previous 5 miles from their base) seriously constrained staff and supervisor mobility in the field. Government regulations also ruled out such options as using independent monitoring consultants tied with MOH supervisors, although joint IDA-PIU and inter-ministerial field visits and dialogue provided a useful, if ad hoc, solution. These problems have resulted in less progress than expected even though the Ministry of Finance, during the preparation of the Project, had agreed to consider options to resolve this constraint. During supervision missions, this issue was brought to the attention of the highest level of Government. There was a reluctance, on behalf of Government, to address this issue for health alone. This issue got further complicated by the imbalance created by some projects directly implemented by a number of donors which topped up the government level of daily allowances. However, one positive point was that the female MCH worker field allowances were increased to match male - 7 -  village health worker for the past two years. The coverage of reporting on field services, using new checklists for integrated primary health care, has increased in all 75 districts -from less than 70% in 1993/94 to well over 90% in 1999/2000 -- this despite the insurgency affecting public service delivery in large parts of the country (Annex 8: Table 1). Towards the end of the Project, a pilot study was carried out by the Project in 15 Sub-Health posts (SHPs) of five districts to test a model of "community based supervision and monitoring" with active involvement of VDC support committees, local community members and facility level service providers. According to this study, community based supervision and monitoring system is more realistic for quality enhancement of outreach health service and proven effective in strengthening routine management of the outreach health facilities including enhanced client satisfaction. MOH is expected to gradually extend this innovative steps forward in subsequent years. 4.2.2 FPIMCH clinical units. The Project constructed seven FP/MCH units (compared to five planned) and provided them with medical equipment and basic furniture. The cost of US$0.28 million was substantially lower than the appraisal estimate of US$ 1.8 million. With these facilities having just started to function, achievement under this component is rated modest. 4.2.3 Logistics and supplies. This component has been most effective to result a fully functional logistics infrastructure for the integrated primary health care system. The Project exceeded several physical targets: it built 11 warehouses compared to seven planned, expanding storage space by 45 percent at the central level and by more than 40 percent at the regional level, and it increased cold room storage for vaccines by more than 67 percent at the regional level which was beyond the original target. It developed a transportation system-including 25 pick-up vehicles for warehouses-for distributing medical supplies and contraceptives throughout the country. The Project also surpassed targets in providing computer support, photocopiers, and fax machines for logistics monitoring and other equipment for regional warehouses and district health offices. Though not planned, but clearly needed, logistics training (management, inventory control, MIS) was given to almost 9,000 management and operational staff at all levels. Mainstreaming of the logistics operations with the Logistics Management Division of DOHS and coordination with donor agencies in systems development and training were both extremely effective. Achievement under this component is rated satisfactory. 4.2.4 Institutional capacity development. The Project set up four clinical training centers that, if equipped with skilled, experienced trainers and other technical and support staff, should improve the quality of care over time. Although the Project originally called for constructing five clinical training centers, PIU, in consultation with DOHS, reduced the number to four because fewer qualified trainers were available at the districts level than expected. The Project contributed to institutional strengthening in logistics management and, to some extent for health MIS. It improved fmancial management capacity at the district level by providing training for 69 accountants. It laid out some operational options for building maintenance capacity for physical infrastructure, and MOH has endorsed for policy recommendations. Project activities enhanced the capacity of PIU--and, in some areas of - 8 -  MOH--in financial, infrastructure and logistics management, and project implementation. Senior Project staff received training and exposure through national, regional, and international courses. These are some of the modest gains for a ministry widely viewed as having little absorptive capacity only a few years ago. If MOH could sustain the core skills, it should be able to handle similar projects in the future with minimal external assistance. However, the field operation support and quality enhancing measures for continued monitoring and supervision were not adequately dealt with appropriate incentives to outreach workers. In addition the lost opportunity during the pre-MTR period impeded the possible gains that could have been made in institutional and management capacity improvement. Hence, on the whole, achievement under this component can be rated modest. 4.3 Net Present Value/Economic rate of return: Not Applicable. 4.4 Financial rate of return: Not Applicable. 4.5 Institutional development impact: The overall institutional development impact of the Project may be rated as modest. After the initial debacles, PIU took the reins of Project management with a good deal of commitment just less than a year before the MTR when little progress was achieved for reasons beyond its control. This needs to be appreciated in light of very discouraging compensation packages and scarce resources for staff mobility that remained unresolved despite earlier assurances to the contrary. The Inter-Ministerial Project specific Development Board would have been more effective had it been formed without considerable delay and had it been empowered by HMG/N with administrative and financial autonomy. The Project Steering Committee also would have helped better if it could have worked with speed and flexibility, delegating critical procurement and financial authorities to Project Director even within the existing Government regulations. PIU, left sidetracked and away from DOHS system, was a missed opportunity to achieve much more gains out of Project resources. Similarly, lack of donors' coordination limited outcomes especially in MCH worker's refresher training and in quality of care aspects. On the positive side, the capacity of PIU was effectively strengthened in Project implementation matters, especially pioneering for Bank financed project in the sector. If the core skills at PIU could be continued in the sector, they would be asset to MOH to handle similar Projects in future with minimal external assistance. Such positive gains, however, would need to be nurtured for some time before they may be fully institutionalized and sustainable. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: Frequent changes in government. Between 1991 and 2000 the country saw a record 11 changes in government. The perennial changes in senior officials in MOH, DOHS, and PIU, with as many as 11 health ministers and 7 health secretaries, played a significant part in slowing -9-  decision making and delaying implementation. Poor donor coordination. Suboptimal coordination among the donors-and, in most cases, between the donors and the Government with lack of a common coordination forum -hampered the donors' contribution. Poor donor coordination occurred, for example, in assessing financing gaps and future needs and contributed to prolonged preparatory phase. And donor agencies often provided daily allowances that were significantly higher than Government rates, creating a disincentive for service providers and supervisors for the Project. Although in part beyond the Government's control, the poor coordination was also in part attributable to the Government, and to some extent by Bank's country management and sectoral team to facilitate its improvement. This deficiency of effective mechanisms for donor coordination was a major factor limiting incomplete utilization of Project resources and results were mixed such as; Project offered resources for refresher training of MCH workers remained unused due to lack of donor coordination and collaboration by the concemed division of DOHS led to inaction, resulting a huge backlog of refresher training, in contrast, the donor coordination in logistics management training can be considered best practice. Thanks to close collaboration in sharing resources and expertise, nearly 9,000 people received training through a joint effort by the Project and John Snow International/USAID, in conjunction with the DOHS Logistics Management Division and the National Health Training Center. In addition, about a dozen mid-level warehouse managers of MOH received international training. Slow procurement. IDA's centralized decision making for procurement early in the Project slowed procurement and disbursement clearances, contributing to delay in implementation. Delegation of considerable procurement authority to the Bank's field office in Kathmandu midway through the Project accelerated procurement clearance in civil works. And ready access to Bank procurement staff enabled PIU to develop an innovative approach for decentralized construction in the Project's last two years, without risks of misprocurement. Security problems. The Maoist insurgency in rural areas and remote districts delayed construction work by some contractors. As the situation worsened, it limited required site visits by Government and Project officials, consultants, and the IDA Task Team. 5.2 Factors generally subject to government control: Delays in appointing MCH workers. Civil service regulations restricting the appointment of regular MCH workers as well as the Public Service Commission ordering discontinuation of services of temporary ones led to absence of these staff in many Sub-Health Posts. The process for regularization of the temporary staff and new appointment against the vacancies started to take place only after a long process. Constraints on field operations support. Although institutionalized as integrated supervision with a high-level commitment by MOH, field operations support never adequately materialized. Despite persistent follow-up at the highest levels of the Government, the low daily allowance and revised field travel allowance from 5 to 12 miles continued to restrict the field movement of the service providers and supervisors supported by the Project. However, in reality, it was rather - 10 -  ambitious to expect Government to address such issues in a sectoral project. Assurance given by the Government during design of the Project did not materialize and perhaps Bank vouched much more on it. Because such matters need to be dealt in cross sector civil service reform initiatives and/or through similar health programs where donors agree to fund in a combined approach, enhancing cross support which may take some more years to build up in Nepal. Lack of timely and adequate counterpart funds. Lack of counterpart funds in specific project inputs was a problem especially in the Project's final years, when implementation and funding requirements were heavy. And it precluded procurement of additional goods out of savings from the Credit that were requested by MOH six months before Project closing. 5.3 Factors generally subject to implementing agency control: Inefficient management structure. The three-tiered Project management system -- the Development Board, the Steering Committee, and the PIU, with the latter isolated from the DOHS -- limited the mainstreaming of Project inputs and required extra efforts by both the PIU and IDA to establish a working partnership with DOHS. As mentioned in the preceding sections, the establishment of the Interministerial Development Board was a mechanism agreed to enhance addressing intersectoral concerns in population matters, civil works and to take care of sustainability concerns. The board was formed just before MTR with substantial delay. Although the board took an active role for accelerating implementation, its lack of administrative and financial autonomy precluded it from addressing issues relating to appointments, staff compensation, and the daily allowance. Despite the field operations support input, the limited authority of Board did not allow provisions for higher level of daily allowances to supervisors to be made out of the proceeds of the credit. Frequent changes in key MOH personnel. The turnover among MOH policy makers and senior officials delayed implementation and disbursement especially in pre-MTR period. Personnel strengths. During and post MTR period was staged by significant leadership, strong teamwork, staff development opportunities, and continuity of the Project Director and core Project staff which were strongly positive factors in the accelerated implementation of the Project, the well-planned procurement and distribution of goods, the best practice coordination of logistics management training, and the efforts to mainstream Project inputs with DOHS divisions. These factors also helped to sustain the collaborative partnership with the IDA Task Team. Most of the core Project staff had adequate skills, reinforced by in-service training facilitated by the Project in and outside the country. Effective financial and procurement management. Overall, financial management in the Project met best practice standards, a substantial achievement given the more than 100 cost centers across 75 districts. The asset registers in some cost centers reflected uneven practices, and monitoring and supervision of PIU accountants at district cost centers were limited, mainly because of inadequate staffing and the low daily allowance for travel. But all accounting records were satisfactorily maintained, complying with Government regulations, with requirements for monitoring the Credit, in the district health offices, being guided by the Project's accounts manual. All accounting information is computerized, and a good internal control system allows - 1 1 -  cross-checking and proper verification of transactions. Compliance with the auditing covenant was timely. Procurement management was another success story. In procurement of medical equipment, goods, and vehicles, effective planning and management led to savings of nearly 45 percent of the estimated price, allowing procurement and supply of far larger quantities than originally planned. In civil works, too, procurement was cost-effective, with exploration of alternative options- innovative construction packages, local contracting resources, decentralized management of construction-helping to improve the quality and speed the completion of work. Judicious use of monitoring consultants to complement the small PIU staff also expedited the work and ensured its quality. 5.4 Costs and financing: Estimated at US$39.0 million at appraisal, the Project was to be financed by a Government contribution of US$12.3 million and an IDA credit of US$26.7 million equivalent (SDR 19.4 million). Total disbursement of the Credit as of June 7, 2001 is noted to be US$23.87 million (91.7%), with a savings of US$2.025 million. Credit proceeds were reallocated to increase fLunding for civil works, consultants, and Project operating costs. The savings stem mainly from revision in the scope of civil works during the MTR, foreign exchange gains in the conversion of SDRs to local currency for local competitive bidding, and efficiency and economy in procurement. In fact, Government's contribution to the project has been to an extent of US$ 13.73 million exceeding the above committed amount. However, this cost was significantly inflated due to increase in salary of MCH workers and civil servants as a whole. 6. Sustainability 6.1 Rationale for sustainability rating: The sustainability of the Project's achievements is rated unlikely mostly due to: Buget: Before Project closing the budgetary implications were worked out in detail, and the Government confirmed that the necessary allocations would be reflected in future budgets. But as of today ( June 25, 2001), government did not allocate the required budget (about Nepali rupees 11 million ( Annex 8, table 5) for the remainder of the fiscal year (January to July 16 of FY01) as agreed with key government officials (MOH, Ministry of Finance (MOF) and the National Planning Commission (NPC)) during the final supervision mission of the Project. This additional allocation was needed to meet critical non-salary recurrent expenditure for transportation of essential supplies, maintenance of vehicles, field operation support and health MIS. Nevertheless, MOH and NPC have proposed budget estimates for FY02 for this purpose (Nepali rupees of 59.98 million). The Government budget for FY02 has yet to be placed before the parliament. The exact status of finally approved amount will be made public by the red book (budget book) in July 2001. There has been no visible mechanism put in place yet to ensure retention of the core skills and the institutional mechanism created in project in the areas of: management skills; procurement of - 12 -  works goods and services within PIU; and in financial management matters. The large number of health facilities constructed and renovated under the project finance would need to be functional with critical staffing, drugs, supplies and field operation support. During the entire Project implementation period these matters have been brought into attention of the government agencies. But, there has not been much improvement over the period. Although, position of MCH workers has been substantially filled up and the paramedical staff were increasingly in position in outlying health facilities ( Annex 8: Table - 4), the doctors position have been observed mostly vacant in most of PHCCs. However, the sound storage, distribution and logistic management support and skills delivered by the project is a most effective contribution followed by the large network of well furnished health facilities with supply of necessary medical equipment and staff quarters to provide increased service coverage and enhance access with improvement in quality of care supported by integrated monitoring and supervision system, backed by a health MIS, which have been irnstitutionalized under the MOH system. In addition, the Project carried out a pilot study on community monitoring and supervision in five districts, an option that MOH needs to explore along with other innovative approaches to monitoring and supervision. The newly constructed and renovated facilities will need no major maintenance for the next 10-15 years. It is difficult to sustain institutional changes with one project. There is need for continued engagement to sustain the policy dialogue and institutionalize reforms started in the project. However, some of the short term gains include building the capacities of district accountants and regular MOH staff in the PIU is well recognized. Once MOH can ensure full staffing and utilization of the health facilities, they will be able to generate user fees that can help support maintenance and replenishment of drugs and supplies. The Project's Outcome Assessment Studies, along with DOHS annual reports and health MIS records for 1994-2000, indicate that the distribution system developed by the Project for essential supplies will improve service utilization and client satisfaction. There are also potential risks to the sustainability of the Project: slackening of the Government and MOH commitment that led to the Project's success after the MTR; inadequate budgetary support; constraints on the deployment of doctors, and failure to address the limits imposed by the low daily allowance on outreach work by health workers and supervisors. Any of these issues, if not satisfactorily resolved, would limit the Project's achievements, and the Nepal health team needs to continue to focus on them in the ongoing policy dialogue and any new lending activities. 6.2 Transition arrangement to regular operations: Several important steps have been taken to ensure that key activities are sustained beyond the Project period within an integrated primary health care program: * Utilization of the physical infrastructure provided by the Project has improved. MOH can ensure full utilization by deploying the full contingent of staff needed in outreach facilities. A - 13-  maintenance system has been designed but needs to be operationalized. * A plan of action has been drawn up for handing the Project assets over to DOHS. * The Government has recognized assured support to key public health interventions as a policy priority. Its Second Long-Term Health Plan specifies that this support will be protected in public investment spending, and this is reflected in the Ninth Five-Year Plan, in MOH's work on the Medium-Term Strategic Plan to operationalize the Second Long-Term Health Plan, and in NPC's work on the Public Expenditure Review and Interim Poverty Reduction Strategy Paper. The Bank's sector work has also clearly reinforced the need for sustainable strategies for health development in Nepal. 7. Bank and Borrower Performance Bank 7. 1 Lending: The Bank's performance in lending development was generally appropriate and effective. During Project preparation Bank staff assisted the Government in articulating a clear strategic direction for Project components and outreach FP/MCH services linked to its health policy and sector plans. The Project was informed by lessons from the field investigations. No financial analyst or financial management specialist participated during project preparation or appraisal, or in the first 3-4 years of project implementation, as is now required under Bank procedures. Implementation during the project's first three years was negligible, with less than 8% of the IDA Credit disbursed. Other than the early shortcomings in financial management the early delays were due to factors which were difficult to anticipate--particularly the rapid political changes immediately after project effectiveness and the consequent management and project staff mobility. Performance improved substantially after the MTR. A financial management specialist was included on all supervision mission from November 1998 until project completion. 7.2 Supervision: Thirteen full IDA supervision missions assessed progress and assisted project implementation. Nevertheless, the initial period of implementation, as discussed, was unsatisfactory. Initially, technical and institutional support from supervision missions was inadequate to deal with the complex institutional and donor relationship issues and for formative project management capacities in MOH. Expeditious guidance on procurement matters and help in easing intersectoral constraints on implementation could have reduced delays. The MTR was instrumental in the Project's final success. It was understood by all parties that a failure to reach agreement on a restructured project and related improvements to implementation arrangements would result in cancellation of the project. During the two-phase process spread over four months IDA developed demanding time-bound action plans in full partnership with the Borrower, all of which were complied with. More progress was made in resolving long-pending issues in these four months than in the previous three years, putting the Project fully on course. A decision was made to decentralize supervision to the field office and establish a capacity to provide continuous advice on all project matters (including procurement and financial - 14 -  management). Aide-memoire and supervision reports gave regular updates on Project output, outcome, and impact indicators (though, following the norms of the time, no indicators were specifically designed during preparation). Joint IDA-PIU field visits to the Project sites helped in identifying and resolving problems promptly. In later years the formal supervision team included senior officials from MOH, NPC, and MOF. This practice, pioneered in the Project, supported efforts to mainstream Project inputs, increase the level of ownership of project objectives in the central agencies and help ensure project sustainability. The Bank's Quality Assurance Group rated the Project a "problem project and at risk" until the fifth year of implementation, even after progress accelerated. The Project was therefore assessed twice for quality of supervision, in FY00 and FY01 (QSA-3 and 4). The IDA Task Team used the Project's status to create a dialogue with the Borrower and strengthen its political commitment and implementation efforts. The QSA-4 panel rated the quality of supervision as satisfactory and identified several aspects of best practice-in particular, the focus on development effectiveness in supervision and the quality and adequacy of reporting. Strong aspects of supervision included staff continuity and integration of different skills into a coherent team, well supported by sector and country management. According to the QSA-4 panelists, " supervision was very well planned, and aide-memoires and correspondence were of high quality, offering clear guidance to the Borrower. Financial management, an important component of effective supervision in this context, was well handled and documented." 7.3 Overall Bank performance: The early delays were due to a combination of factors, most beyond the Bank's control and some beyond the Government's. Endless political changes and staff turnover, systemic problems in decision making, and macroeconomic constraints on counterpart funding all seriously impeded start-up. At all times the Bank maintained a close working relationship with the Government, at both Project and ministerial levels, and with donor agencies. Supervision missions were proactive and supportive-maintaining flexibility and clear priorities, bench-marking progress against demanding time tables, and resolving problems in a persistent and positive manner. Most important, Bank supervision was ongoing rather than limited to formal semi-annual missions, leading to consistent improvement in Project management. Country and sector management remained concerned with successful implementation and future mainstreaming and sustainability. And the field office's competent financial and procurement management team did much to help expedite implementation. Over all performance of Bank is rated satisfactory. Borrower 7.4 Preparation: Project preparation was a lengthy process. The political change of 1990, the new health policy of 1991, the indecisiveness among some stakeholders about accepting this first IDA credit in the health sector-all compounded the delay. In the mean time, the new Government has accepted the agenda of reducing poverty, slowing population growth, and improving integrated service delivery in outlying areas as national priorities. Hence, the Government, especially MOH, took full ownership of the preparation process. A participatory study involving extensive situation analysis, consideration of options, and project proposals, carried out by seven working groups - 15 -  under MOH leadership, provided a sound analytical base for Project preparation. For the first time, comprehensive analysis of the sector's resource needs was done, bringing together all the stakeholders in the international donors meeting in 1993. Through several iterative processes and a series of consultations with the Bank, the Borrower was able to negotiate a US$26.7 million IDA credit for the project. 7.5 Government implementation performance: The series of political and administrative changes-resulting in turnover among key officials and varying commitment to the Project-adversely affected implementation. But the MTR resurrected the Project, with the Government forming the long-pending Development Board (just before the MTR), delegating procurement authority to the PIU director, and hiring key staff and consultants. Integrating PIU into DOHS early in the implementation would have increased the role of DOHS in strengthening health service delivery in outlying areas; however, PIU's integration into DOHS gradually improved later in the Project. Timely availability of counterpart funding remained a problem, especially during the Project's last two years, when resource requirements were heavy. Mainstreaming of the Project inputs, although mapped in the MOH work plan, will remain a challenge, since it requires increasing allocations in the Government's recurrent budget. 7.6 Imiplementing Agency: The performance of PIU has been noteworthy. Once PIU gained procurement and financial authority, its core technical staff proved competent in procuring works, goods, and consultants and in logistics and financial management backed up by support from DOHS and MOH. The Project team in the PIU maintained a strong commitment to supporting implementation, despite the many constraints. The Project adopted innovative practices to expedite implementation, especially in carrying out civil works contracts, and successfully completed most of the activities while exceeding many physical targets. 7.7 Overall Borrower performance: Despite the early setbacks, the Project outputs are fully in place and have begun to produce positive results. After serious implementation delays before the MTR, some of which were beyond its control, the Borrower not only significantly improved implementation but exceeded targets in several areas. Thus, in the end, the Borrower's performance was satisfactory. 8. Lessons Learned Both positive and negative lessons emerged from the Project. Institutional: * Incrementally stepping up efforts to strengthen the planning and implementation capacity of MOH and PIU had enormous dividends for the Project and for MOH's ability to design and implement similar prograrns in the future with minimal external assistance. - 16-  * From an early stage, the unfamiliarity of program managers and policymakers with the PIU's role of coordinating Project inputs for appropriate programs limited support to them from the Project. Emphasis should have been given to PIU's role as a facilitator for MOH programs rather than as an implementing authority. * Early involvement of a financial management specialist at the time of project identification and preparation to ensure that a sound project financial management system is in place at project start up, including the training of a project accountant and the development of an accounting manual defining the project's financial systems and procedures, is essential for sound project financial management. * The location of project management may need to shift over time. For the Project, the MOH Planning Division was a more strategic setting during identification, preparation and design, nevertheless DOHS plays a key role in design as future implementing agency. Hence, as experienced in this Project (role of DOHS was more critical during implementation), in future Bank project DOHS should be playing key role in implementation to take into account of full mainstreaming with necessary stakeholders, as well as to look into matters of coordination and ensuring sound implementation during design phase. * The PIU alone was too small to achieve the demanding development objectives. Thus Government ownership of Project-related efforts was critical, reinforced by regular intersectoral consultations and coordination by the Borrower and Bank management. 3 Free land is not always the best located or most cost effective. Facilities constructed on marginal land donated by the Government, local community, or individuals were often more expensive to build on because of the cost involved in site development and retention. Technical and Social * Staff security is a critical consideration in the location of a health facility. Staff quarters constructed for female auxiliary nurse-midwives in isolated locations may remain underused or even unused, hampering service delivery. * Adequate consultations with communities from an early planning stage was inadequate in this Project. Improved community consultations would have been critical to gain their ownership and support, whether for the quality of construction, improved quality of care, or maintenance of health facilities. Hence, involvement of community in site selection and monitoring works as well as in service delivery is critical. Such engagement may delay work programs, especially in a project of shorter duration, but is worth the effort. In such situation, realistic planning is needed to avoid front loading of the project and to give adequate time to build community relationship. * Innovations such as decentralized construction of 40 health facilities and joint review missions involving senior government officers from finance and planning commission go a long way in - 17 -  solving local problems and enhancing ownership. Such practices need to be encouraged in the region. * Delivery of health care does not automatically follow from infrastructure and logistics support alone. Much more important are skilled staff, supplies, supportive supervision, and frequent interaction with, and ownership by, local people. * While male and female clients were equally represented at HPs, more females than males used PHCCs despite greater distances and higher drug costs. This could be more available service options and better quality in PHCCs. And this also indicates and confirms the general findings that women prefer female service providers, more of whom were available at PHCCs ( Annex 8; Table 4). * A pilot study at 15 sub-health posts in 5 districts found that community-based monitoring and supervision are effective as long as the community is involved and has formed a partnership with the service providers. Community involvement in management of sub-health posts had positive effects on staff retention, timely reporting for duty, reorganization of available resources, preparation of a data board with important vital statistics, continued drug supplies, information sharing, and, most important, client satisfaction. Operational: * The responsiveness of the Bank's approach to the new democratic Government's aspirations as stated in the National Health Policy of 1991, helped to ensure that the Project focused on prior'ties. 3 Attention to complementary program efforts and aid coordination is critical in ensuring optimal use of resources. The collaboration with partners on logistics management training was a major success. In contrast, poor donor coordination precluded the much-needed refresher training for MCH workers, even though the Project had the budget for it. * The teamwork established between the Bank Task Team and Govemnment officials through ongoing Bank review and support helped to salvage the Project implementation. * The well-planned MTR was critical in eliminating the bottlenecks in the Project implementation with a threat of cancellation. * The delegation of appropriate financial, procurement, and administrative authority to the Project director was instrumental in expediting Project implementation. * The flexibility built into the Project allowed demand-driven adjustments and, together with a supportive environment and close monitoring, led to outputs that in several cases exceeded targets. The best example of a demand-driven effort was expansion of the cold chain facilities. Although not originally planned, the effort provided very effective support for the immunization program and ongoing polio eradication initiatives. - 18 -  * Openness to alternative options for implementing civil works proved cost-effective and efficient. After a review of different strategies, the most appropriate ones were adopted, helping to expedite completion of construction and renovation. * Staff continuity on the Bank's Task Team throughout the Project and in PIU for the past four and a half years helped in retaining institutional memory and building an effective partnership. 9. Partner Comments (a) Borrower/implementing agency: February 12, 2001 Nepal Population and Family Health Project Credit No. 2600-NEP Borrower's Evaluation EXECUTIVE SUMMARY (Prepared by Ministry of Health, Project Implementation Unit and endorsed by Ministry of Health.) 1. Introduction and Objectives The six year Population and Family Health Project (PFHP) commenced in 1994 within the context of unfavorable demographic indicators and poor health infrastructure. A new Health Policy was formulated in 1991, and in order to address and identify the largely unmet health service needs of Nepalese people, several need assessment missions, working groups and the World Bank and the government commissioned studies were carried out. Detailed financing plan of the Project was developed based on the input of Health Resources Allocation study and international donors' meeting. A resource envelope of US$ 39 million was determined with the IDA credit component of US $ 26.7 million. The Project's goal was to support the Government's efforts to increase contraceptive prevalence and decrease the total fertility rate (TFR), help to reduce maternal and child morbidity and mortality, and to raise life expectancy. In order to attain these goals, the Project aimed to increase coverage, access, quality and coverage of FP/MCH services, improve the functions of grass-root health facilities, and enhance Government's institutional capacity in particular to implement comprehensive FP and MCH programs effectively. 2. Overall Achievements The reports published by MOH, project status reports, WB supervision mission reports and Project commissioned component wise End Line Studies very strongly substantiate that the Project has contributed to attain the government's efforts to increase CPR and decrease TFR, reduce maternal and child morbidity and mortality, and to raise life expectancy. For instance, IMR has decreased from 107 in 1991 to 74.7 in 1997; CPR has increased from 21.3% in 1994/95 to 34.5% in 1999. The life expectancy has increased from 53 in 1991 to 58.3 in 1999. - 19 -  In terms of specific objectives of the Project, the construction and renovation of large number of health facilities, as per the target, all over the country including some in very remote mountain areas has increased the access of the deprived rural people to the health services. The service utilization, and infrastructure development assessment studies highlight several instances where the access to and utilization of health services has increased after the construction of and equipping health facilities with, inter alia, drugs and contraceptives supplies, and providing them management support. Construction of 215 and renovation of 332 health facilities has been successfully completed within 4 years despite slow start of project activities. Due to construction of warehouses by the Project, storage capacity of MOH has increased substantially and cold room capacity by more than twofold to reach to 492.42 cubic meters. The warehouses have been equipped with storage and computer equipment, and critical medical equipment have been supplied to 525 facilities though 255 were planned. Utilization of health services has increased; the number of OPD visits in the health facilities has increased from 4.49 million in 1994/95 to 7.1 million in 199/00, Antenatal first visit by pregnant women has increased to 35% of expected pregnancies up from 15.5% in 1994/95, deliveries conducted by trained persons has increased to 13.5% 1999/00 up from 3.1 in 1994/95. These positive trends have occurred due to construction and renovation of health facilities, provision of medical equipment, supervision and monitoring support and institutional capacity development of MOH. Capacity building of MOH has occurred as a result of putting several project components in the right array and beginning to deliver mutually enabling effect out of each sub-components. The Project has supported several institutional development efforts such as HMIS, development of CTCs, maintenance capacity building of the facilities and project management. Collection of service statistics, processing and reviewing health programs' performance annually based on those health information have been initiated and eventually institutionalized. This has laid a solid basis for bottom up planning. One of the very important contribution of the Project is development of integrated supervision and monitoring encompassing system, check list and procedures, which has made supervision and monitoring system an institutional process, an already overdue critical factor in view of integration of health services more than a decade before. The project implementation process itself has been an institutional capacity building experience in real sense as MOH, for the first time, has implemented a project of this nature and scale successfully. In terms of financial management, the Project will have spent 92% of the total allocated amount at the end of the Project. This has to be considered at satisfactory level considering just an expenditure of 7.1 % at the MTR stage. The Project has to be considered very successful in terms of construction of health facilities, provision of logistics, and integration of supervision and monitoring system in the health care services. However, deployment of doctors and health workers including trained MCH workers in the health facilities still remains a formidable challenge. Sustainability and mainstreaming of Project initiatives by HMG/Nepal, such as retention of technical and management skills developed by PIU staff, provision of core staffing and budget to health facilities, effective maintenance of physical infrastructure and equipment, institutionalization of integrated monitoring and supervision system, are the challenges, which will affect the benefits of the Project and will be derived in the years to come. - 20 -  3. Borrower's and Bank's Performance 3.1 Performance of MOH and PIU PFHP is the first credit Project implemented by MOH. As such, it took about 18 months to establish PIU, and also a great deal of time and efforts to provide orientation to the officials on IDA Project management, procurement and financial system and procedures. The formation of Board with full authority to decide on policy and operational issues of the Project, on June 27, 1997 by the cabinet under the chairmnanship of Minister of Health and comprising senior officials of MOH, Planning Commission, Ministry of Finance, Department of Housing and Physical Planning was a landmark decision for laying a solid basis for successful implementation of the Project. The working procedures of the Board and the authorities and responsibilities of the Project Director were established and implemented. Before the formation of Board and delegation of authority to the Project Director, most of the decisions were taken by the Ministry through ordinary channels thus procrastinating the decision at times. The formation of Board not only accelerated the Project implementation, but also facilitated inter-ministerial co-ordination and collaboration. The commitment of MOH to ensure the continuity of the Project Director also contributed to the satisfactory performance of the Project. The Department of Health Services and the program divisions were responsive to the demands of broader program approach, which ensured inclusions of several needed activities within the framework of development objectives during the Project period. The District Health Offices were also directly involved in the infrastructure development process as MOH decentralized the construction of 40 health facilities to the district level. This approach not only proved cost-effective compared to centralized mixed packaging model of construction but also helped to solve local problems arising on ownership issues. The Ministry of Health and other departments were very responsive to the Bank's approach of joint review missions. The senior officials of MOH, NPC and Ministry of Finance also participated in the supervision missions, particularly during the later part of the Project. This teamwork of MOH and the Bank, not only helped to understand the Project better, but this participatory team approach resulted to earn sustained commitment to the Project. Apart from more than a dozen international non-governmental organizations, UN agencies, USAID, GTZ, UNFPA and DFID support Nepal's large part of health program. The coordination and continuous interaction with these agencies not only helps to identify the needs and assess the resources requirement but also helps to avoid resources overlaps. However, the Ministry could not develop an effective mechanism of establishing coordination between the donors, technical assistance providers, I/NGOs and private sector working in the health sector. This resulted into lack of resources in some sectors, but at the same time having more financial assistance in another sector. This weakness is very well recognized by the Hon. member of the Planning Commission and Planning Division of MOH. MOH has a critical challenge of mainstreaming the Project efforts and creating an institutional mechanism that ensures proper maintenance of the physical facilities developed by the Project. As the Secretary, MOH rightly observed the Project starts from January 1, 2001 for MOH, as it has to integrate several program initiatives after the Project is closed by the end of December, 2000. -21 -  Institutionalization of integrated supervision and monitoring at all levels-central to periphery level-remains a formidable challenge, and supervisory skills of the staff still need to be developed. The PIU senior team comprising Director, and sectional head-infrastructure development; logistics; supervision and monitoring; and accounts section worked very well as a cohesive team. The job description with clearly defined authorities and responsibilities of all PIU staff was developed and a performance evaluation criterion established. Weekly senior management team meeting, which reviewed the performance of the last week and discussed on the plans of the ensuing week, was ensured during the later part of the Project which was instrumental in timely accomplishment of the activities. A systematically assessed training need of the staff and provision of overseas and domestic training helped to upgrade the skills of the staff, particularly in project management, financial, procurement and contract management and computer operations. Despite a low level of salaries and per diem rates, which resulted into high staff turnover, the staff performed very well commensurate with the size of the Project and in accordance with the IDA procedures. This is very well reflected in the achievements of the physical targets set and revised from time to time and very high absorptive capacity estimated to more than 92% of the total project budget at the end of the Project period. As already dealt upon in the earlier paragraphs, the Project may be said as a 3 1/2 year project in true sense in terms of timeframe of implementation of actual project activities. And it has achieved most of its targets and plans during 3 V2 year period itself. This is really exemplary accomplishment. The institutional capacity of MOH has been increased due to PFHP, though there was no capacity and skills to manage credit project of this magnitude and size until the Project was initiated. PIU has been able to accomplish the targeted plans with a very small core team, particularly infrastructure, with the compliment of the consultants. However, the quality of the construction has suffered in few places due to paucity of staff to supervise the on-going construction activities. 3.2 Performance of the Bank The role played by the Bank to make the project a successful one need not be overemphasized. The Bank played a proactive role to develop institutional systems for implementation of this first-ever credit project implemented by Ministry of Health. It continuously worked with the senior officials of the Government to form a separate Development Board to steer the Project and set up management systems of PIU and orient them through its own support and several consultants. Experience has already proved that a separate Board was necessary with authorities and responsibilities to implement the project of such magnitude and scale. The World Bank played a very crucial role in initiating the project. It was not only instrumental in undertaking the need assessment in collaboration with the Government to identify the broader issues of population and health program in Nepal, but also working closely with the Government in project formulation. Several studies were commissioned and Bank missions worked with Government representatives to identify the priority health program needs and resource gaps, and the potential components of Bank assistance to improve the health conditions and develop the - 22 -  institutional capacity of Ministry of Health to deliver the health services. The World Bank played a pivotal role in working with the Ministry of Health in setting up the institutional mechanism for implementation of the Project and orienting the senior governnent officials on IDA policies and procedures through overseas training and continuous interaction and dialogue. During the project implementation period of six years, 13 Bank supervision missions visited Nepal, reviewed the progress of project implementation and worked with Health Minister and other senior Government officials in identifying the policy and implementation bottlenecks, and provided technical assistance to overcome the difficulties. Despite very slow project implementation during pre-MTR period, the Bank painstakingly continued to work with the Government to make the Project a successful and a crucial need for improving Nepal's health. It provided the services of the Architectural consultant during the IDA mission and interim consultation, particularly in the infrastructure development who assisted the PIU staff on regular basis. These untiring efforts slowly transferred the Project from, widely perceived by senior officials of MOH, the 'Bank managed project' to 'MOH project' gradually, as the senior officials of the MOH opined. The flexibility of incorporating activities based on the need of the different program divisions also helped to secure the commitment of the senior officials of MOH to the Project. The system of joint review mission with MOH, NPC and MOF representatives were considered by the Government officials as highly effective in resolving implementation bottlenecks. The mission visited many construction sites scattered allover the country-some located in very remote areas. The Nepal Resident Mission (RMN) of the Bank provided continuous support and technical assistance to PIU staff. The RMN continuously worked with senior government officials to overcome policy and implementation bottlenecks encountered by the Project. Continuity of sector officer, during the entire Project period, also played a significant role in the satisfactory performance of the Project. Apart from project related assistance, the Bank also very closely worked with the Ministry of Health and other donors in developing Nepal's long-term vision in health. It not only provided the services of several consultants in assessing the need and identifying the issues that need to be addressed on long-term basis, but also actually helped Ministry of Health to draft and finalize the Long-term Health Plan (LTHP). 4. Major factors affecting implementation and outcome Though the Project has moved very slowly during the first phase of the Project causing a great concern on the overall accomplishment of the expected outcomes, its pace increased significantly in the second phase. A number of impending factors were identified by the IDA Mission Reports and Mid-term review carried out during mid 1997. In the post-MTR stage, policy and management problems identified from the beginning of the Project were resolved through various measures. Formation of Development Board with required authorities and responsibilities engineered the real take off of the Project. Establishment of separate Project Implementation Unit (PIU), continuity of the Project Director and delegation of required authorities to him proved to be an effective institutional mechanism and management system. The World Bank from its Head -23 -  Quarter and Nepal Resident Mission Office provided continuous effort to resolve implementation bottlenecks, and technical assistance contributed significantly for successful implementation of the Project. Towards, the initial years of the Project, PIU was not considerably familiar with Bank's procurement procedures and its requirements, especially those for works, goods and services. The procurement related documents forwarded from PIU to the Bank needed longer review and comments at the Field Office itself, before it was submitted to Bank's Head Quarter for final clearance. In this process, elapsed schedule was a concern in the Project, for bids processing. However, over the years of Project implementation, PITJ gained significant experience and in the mean time, the Procurement authority was decentralized to the Field Office of the Bank and it helped substantially in clearance of procurement matters from the Bank, expediting the work performance in the Project. However, several factors adversely affected smooth implementation of the Project. First, the PFHP being the most first project financed from loan money encountered several problems at the take off stage itself due to lack of experience of MOH to implement credit projects in the health sector. Second, lack of line authority of PIU and accountability of DOHS to PIU was also responsible for poor perforrnance, such as non-submission of financial reports on time. Third, though land was donated for construction of new health facilities throughout the country, as per the policy of the Government, many sites were inappropriate in terms of area, accessibility and appropriate construction site. Lack of mechanism for involvement of the community in the site selection and construction supervision and monitoring resulted into conflicts in several places delaying the project implementation. Inappropriate sites not only raised the construction and consultancy cost, but did discourage community involvement and trust. The adaptation process became almost re-designing one. And engagement of same consultants for design and supervision and monitoring comprehensive work proved to be a weak internal control mechanism, not providing an opportunity of unearthing any weakness in the earlier process. 5. Sustainability and Mainstreaming of Project Initiatives Since the long-term success of the Project depends largely on the sustainability of Project efforts by the Government, it is already planning to ensure the financial, technical and institutional sustainability of the Project initiatives after the IDA funding comes to an end in December 2000. Integration of Project initiatives is a main challenge that will be addressed carefully. The most critical areas of sustainability are: a) Retention of technical, operational, management and procurement skills developed by PIU: The Project has incurred significant amount of resources in terms of time, efforts and money to develop the skills of PIU staff. Most of the senior staffs of PIU have received overseas training on contract management, financial management and procurement management. And a significant amount of financial resources has been invested in local training also. While care should be taken to place the four core permanent HMG staffs in the appropriate job in the future, a roster of resource pool listing other temporary and contractual staffs has been maintained. This trained team may be use for similar nature of projects in the future. - 24 -  b) Ensure core staffing and operational budgets of Health Facilities: While the health facilities constructed will, as the studies have suggested, contribute towards retaining technical staff, this alone will not, however, guarantee the retention of technical staff particularly doctors. Experience has proved that raising of salary and benefits by even up to 400% does not solve this chronic problem. The study commissioned recently by PIUJ has shown that many health facilities do not have critical manpower, options will be explored for retention of key technical officials including doctors in the PHCCs and other health facilities c) Training and Deployment of MCH Workers: Though with the plan to train 250 MCH workers in the current year will complete the basic training, 650 MCH Workers are still temporary awaiting permanent appointment. Apart from these issues, the systems of upgrading their skills through refresher training will be institutionalized through inter aila, budgetary provisions. About 662 workers have been provided refresher training. d) Effective maintenance and utilization ofphysical infrastructure and equipment: The medical equipment supplied by the Project will require replacement and regular repair, for which adequate operational budget has to be provided for. Effective maintenance and utilization of physical infrastructure needs priority attention. An appropriate and effective institutional mechanism for regular monitoring of physical condition of health facilities combined with regular budgetary provision will be arranged. e) Integrated monitoring and supervision system: Integrated supervision and monitoring system initiated by the Project will be sustained by mainstreaming in MOH system. There are mainly three issues that would warrant priority attention to sustain the momentum; first, integration of supervision and monitoring system in the regional, district and periphery level, second, provision of adequate budget, third, appropriate policies encouraging supervision visits. Additional resources that needs to be provided for the current year falls short by NRs. 8.5 million for the supervision and monitoring system, MOH has already processed with NPC and MOF for additional allocation as well as that required for next fiscal year. fi Transportation Cost and HMIS: Transportation cost of contraceptives and medicine will have to be provided by the Government. Further, in order to have HMIS in place, 76% of the total budget financed through IDA component amounting to NRs. 8.6 million will be provided for in Next MOH budget. 6. Key lessons learnt Several lessons have been learnt from the Project implementation. Some of the key lessons learnt are: First, for successful implementation of the Project there is a need to have flexibility in the project design, which will allow incorporation of activities, based on the identified needs and revise resource allocation. Second, separate Development Board with authorities and responsibilities to steer the Project is very effective to implement such time bound projects. Alternatively a separate unit within Department of Health Services may also increase its acceptance particularly in the districts, as an authority and help to institutionalize project efforts. - 25 -  Third, construction and renovation of large number of health facilities scattered in various geographical locations of the country may be accomplished by small size of core staff with the compliment of consultants. Based on the initial experience, it was also learnt that the Consultants' terns and conditions need to be properly developed so that they are also made responsible for any performance lapses, poor construction quality and delayed performance. It is also learned from implementation experience that the consulting firm developing the design should be independent from supervision and monitoring. Fourth, experience has proved that instead of large size scattered packaging, it is appropriate to make small clustered packaging, with decentralized management to the districts. Fifth, a systematic need assessment should be done before supplying the medical equipment. Sixth, interagency collaboration is crucial for effective performance of logistics management system. Seventh, sustained commitment of high level officials with adequate daily allowance is critical for effective monitoring and supervision at all management level and service delivery. Eighth, involvement of community representatives to manage and supervise local health facilities assures increased utilization of services and better management of health institutions. Ninth, development of accounting manual defining the system and procedures governing the financial management of the Project, and training the accountants is important for effective financial management. One of the key lessons learnt is that due to successful implementation of six year PFHP effectively within 3 1/2 years, the institutional capacity of MOH has enhanced significantly able to manage such a big project - with MOH professional staffs complimented by national consultants unlike other aid-projects where there are several expatriate consultants and advisers. The MOH rates this Project as highly successful, and that has paved the way of designing, planning and implementing other big programs or Project required to provide health services to the needy people of Nepal. (b) Cofinanciers: Not Applicable. (c) Other partners (NGOs/private sector): Not Applicable. 10. Additional Information - 26 -  Annex 1. Key Performance Indicators/Log Frame Matrix Outcome / Impact Indicators: Indicator/Matrix Projected in last PSR Actual/Latest Estimate Contraceptive Prevalence Rate (%) 31 During the Project period (July 1994 - (Outcome) (See Footnote 1) December 2000) contraceptve prevalence increased from 21.3% to 34.5% ( Health MIS reports 1994/95 and 1999/00, while SAR has recorded R as 23 % during design phase.) Total Fertility Rate Unit (birth per woman) 4 During project period, the total fertility rate (Impact) per woman fell from 5.8 to 4.6 (NFHS, 1996) Matemal Mortality Rate/i 000 live births 4 The matemal mortality ratio fell from 8.5 per ((Impact) 1,000 live births in 1991 to 5.4 in 1996 (NFHS, 1996). Average expectancy of life (in years) 65 Life expectancy is estimated to have (Impact) increased from 53 years in 1991 to more than 58 in 1999 (as recorded by Ministry of Population and Environment) Infant Mortality Rate/I 000 live births 50 As recorded in Governmenfs Ninth Five Year (Impact) Plan document in 1997, the infant mortality rate declined from 107 per 1,000 live births in 1991 to less than 75 per 1,000 live births in 1997. Under 5 Mortality Rate/i 000 live births 70 Between 1991 and 1996 under-five mortality (impact) fell from 197 per 1,000 live births to 118 (NPC, 1997) Utilization of services - Number of New OPD Data not available 7,036,459 (Annual Report, DOHS, 1999/00) cases (No. of patients) (Outcome) Deliveries conducted by trained persons (%) Data not available 13.5% (Annual Report, DOHS, 1999/00) (Outcome) Antenatal first visits by pregnant women (%) Data not available 35.0% (Annual Report, DOHS, 1999(00) Health Post/Primary Health Care Centers Data not available 95.5% (Annual Report, DOHS, 1999/00) reporting MIS (%) (Outcome) Sub Health Posts reporting MIS (%) Data not available 92.0% (Annual Report, DOHS, 1999/00) Note: I) The project had as its only formal indicator the Contraceptive Prevalence Rate. From the mid-term review HMG and the Bank agreed to informally monitor the other five documented indicators. 2) Messages in parenthesis of Actuail/Latest Estimate column are the source of data. - 27 -  Output Indicators: IndicatorlMatrix Projected in last PSR Actual/Latest Estimate Civil works construction completed (Sites) 215 216 + 332 R (see footnote 1) Medical equipment for facilities (No. of 540 525 facilities) Equipment supply to Regional Medical 11 11 Stores (No. of Medical Stores) Training in integrated supervision (central, 600 647 regional & district level staff) (No. of trainees) Training in Logistics and Financial 9,812 9,010 Management (No. of trainees) Sub Health Posts with MCH Workers (No. of 3,200 2,793 MCH Workers) MCH Workers given basic training 3,200 3,100 MCH Workers given 45 days refresher 3,200 662 training No. of Outreach Clinics serving 3,915 VDCs 133,900 105,920 End of project Note: 1) Repair & Maintenance - 28 -  Annex 2. Project Costs and Financing Annex 2a. Project Costs by Components (US$ million equivalent) Project Component Appraisal Estimate ActualULatest Estimate Percentage or Appraisal A. Outreach Service Delivery MCH Workers 8.90 8.87 99.66 Health Posts 12.00 14.46 120.50 Primary Health Care Centers 4.10 4.48 109.27 Field Operation Support 7.20 4.39 60.97 Sub Tota 32.20 32.20 100.00 B. FP/MCH Clinical Unit 1.80 0.52 28.89 C. Logistics & Supplies Store Construction Rennovation 0.50 0.93 186.00 Supplies Transport 0.40 0.00 0.00 Warehouse - Furniture 0.00 0.12 Vehicle 0.00 0.31 Monitoring Equipment 0.00 0.22 Field Operation Support 0.30 0.00* 0.00 Sub Tota 1.20 1.58 131.67 D. Institutional Development Management Information System 1.20 0.66 55.00 Clinical Training Centers 0.10 0.13 130.00 Maintenance Capacity Development 0.10 0.01 10.00 Project Management 2.40 2.50 104.17 Sub Tota 3.80 3.30 86.84 GRAND TOTAL 39.00 37.60 96.41 *This expense is incorporated in Outreach Service Delivery- Field Operation Support - 29 -  Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) i Procurement Method i Expenditure Category ICB N.B.F. Total Cost NCB ~~Other' _ _ _ _ _ _ _ _ _ 1 .Works 0.00 14.90 0.30 0.00 15.20 (0.00) (13.40) (0.30) (0.00) (13.70) 2. Goods 3.00 0.20 0.40 0.00 3.60 (3.00) (0.20) (0.20) (0.00) (3.40) 3. Services 0.00 0.00 1.40 0.00 1.40 (0.00) (0.00) (1.40) (0.00) (1.40) 4. Training 0.00 0.00 0.40 0.00 0.40 (0.00) (0.00) (0.40) (0.00) (0.40) 5. Miscellaneous 0.00 0.00 18.40 0.00 18.40 (0.00) (0.00) (7.80) (0.00) (7.80) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 3.00 15.10 20.90 0.00 39.00 ________=______________ (3.00) (13.60) (10.10) (0.00) (26.70) This Annex is 2b Project Costs b Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent) Procurement Method Expenditure Category ICBCB B Other2 N.B.F. Total Cost 1. Works 0.00 18.83 0.00 0.00 18.83 (0.00) (15.64) (0.00) (0.00) (15.64) 2. Goods 1.76 0.30 0.32 0.00 2.38 (1.63) (0.27) (0.29) (0.00) (2.19) 3. Services 0.00 1.40 0.20 0.00 1.60 (0.00) (1.40) (0.20) (0.00) (1.60) 4. Training 0.00 0.39 0.00 0.00 0.39 (0.00) (0.38) (0.00) (0.00) (0.38) 5. Miscellaneous 0.00 0.00 14.40 0.00 14.40 (0.00) (0.00) (4.06) (0.00) (4.06) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 1.76 20.92 14.92 0.00 37.60 ( 1.63) (17.69) (4.55) (0.00) (23.87) This Annex is 2b Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 2' Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. - 30 -  Annex 2c.1. Project Financing by Component (US$ million equivalent) Project Component Appraisal Estimale Actual Latest Estimatc Percentage of Appraisal IDA HMGIN Total IDA H :MG/ Total IDA IHMG/.N Total A. Outreach Service Delivery MCH Workers 0 8.90 8.90 0.00 8.87 8.87 0 99.66 99.66 Health Posts 10.80 1.20 12.00 12.12 2.34 14.46 112.22 195.00 120.50 Primary Health Care Centers 3.70 0.40 4.10 3.77 0.71 4.48 101.89 177.50 109.27 Field Operation Support 6.10 1.00 7.10 3.09 1.30 4.39 50.66 130.00 61.83 Sub Total 20.60 11.50 32.10 18.98 13.22 32.20 92.14 114.96 100.31 B. FP/MCH Clinical Unit 1.60 0.20 1.80 0.44 0.08 0.52 27.50 40.00 28.89 C. Logistics & Supplies Store Construction Renovation 0.40 0.10 0.50 0.77 0.16 0.93 192.50 160.00 186.00 Supplies Transport 0.30 0.10 0.40 0.00 0.00 0.00 0.00 0.00 0.00 Warehouse - Furniture 0.09 0.03 0.12 0.00 0.00 0.00 Vehicle 0.31 0.00 0.31 0.00 0.00 0.00 Monitoring Equipment 0.22 0.00 0.22 0.00 0.00 0.00 Field Operation Support 0.30 0.00 0.30 0.00 0.00 0.00* 0.00 0.00 0.00 Sub Total 1.10 0.20 1.30 1.39 0.19 1.58 126.36 95.00 121.54 D. Institutional Development Management Information System 1.10 0.10 1.20 0.46 0.20 0.66 41.82 200.00 55.00 Clinical Training Centers 0.10 0.00 0.10 0.11 0.02 0.13 110.00 0.00 130.00 Maintenance Capacity Development 0.10 0.00 0.10 0.01 0.00 0.01 10.00 0.00 10.00 Project Management 2.10 0.30 2.40 2.48 0.02 2.50 118.10 6.67 104.17 Sub Total 3.40 0.40 3.80 3.06 0.24 3.30 90.00 60.00 86.84 Grand Total 26.70 12.30 39.001 23.87 13.73 37.60 89.40 111.63 96.41 * This expense is incorporated in Outreach Service Delivery- Field Operation Support - 31 -  Annex 2c.2. Project Financing details by Component and Procurement review category (U.S$ million equivalent) Project Cost [tems Project Component Sub-Component ___________: _______ IDA :IG:,N Total A. Outreach Service Delivery MCH Workers a. Salary - 8.87 8.87 Health Posts a. Prior Review* 8.21 1.68 9.89 b. Post Review* 1.83 0.37 2.20 c. Repair & Maintenance 1.00 0.20 1.20 d. Medical Equipment Pha 0.86 0.01 0.87 e. Furniture 0.22 0.07 0.29 Sub-total _ 12.12 2.33 14.45 Primary Health Care Centers a. Prior Review* 3.32 0.68 4.00 b. Post Review* - - - c. Repair & Maintenance - - d. Medical Equipment Pha 0.37 - 0.37 e. Furniture 0.08 0.03 0.11 Sub-total 3.77 0.71 4.48 Field Operations Support Project Operating Cost 3.08 1.32 4.40 B. FP/MCH Clinical Unit a. Construction 0.40 0.08 0.48 b. Furniture . - - c. Medical Equipment 0.04 - 0.04 ______________________ Sub-total _ 0.44 0.08 0.52 C. Logistics & Supplies Store construction & renovat a. Store construction & re 0.77 0.16 0.93 Supplies Transport Warehouse - Furniture b. Furniture 0.09 0.03 0.12 Vehicle c. Vehicle 0.31 - 0.31 Monitoring Equipment d. Monitoring Equipment 0.22 - 0.22 Field Operation Support _____________________ Sub-total 1.39 0.19 1.58 D. Institutional Development Management Information System 0.46 0.20 0.66 Clinical Training Centers I 0.11 0.02 0.13 Maintenance Capacity Development 0.01 - 0.01 Project Management 2.49 0.01 2.50 ______________________ Sub-total 3.07 0.23 3.30 _______________________ Grand Total 23.87 13.73 37.60 * Procurement review category for construction of HPs, PHCCs - 32 -  Annex 3. Economic Costs and Benefits No economic costs and benefits analysis was carried out at the time of project appraisal or for the ICR. - 33 -  Annex 4. Bank Inputs (a) Missions: Stage of Project Cychs - No. of Persons and Specialty Performance Rating ( 2.g. 2 Economists, I FMS. etc.) Implementation l)evclopnent Month/Year Count _ Specialt_ Progress i Objective Identification/Preparation September 13-26, 6 Sector Manager, Population 1989 Specialist, Economist, Education (Identification Specialist, 2 Consultant November 1-8, 3 Sector Manager, 2 Consultant 1989 (Identification) July 27-August 11, 6 Sr. Economist, 2 Population 1990 Specialist, Economist, Obstetrics (Pre-Appraisal) and Gynecologist, Public Health Specialist October 4 2 Population Specialist, 30-November 21, Economist, Consultant 1990 (Preparation) February 10-28, 6 Sector Manager, Population 1991 (Preparation) Specialist, Economist, Education Specialist, 2 Consultant April 13-28, 1991 4 2 Population Specialist, (Pre-Appraisal) Economist, Consultant AppraisallNegotiation July 2-19, 1991 8 Sr. Economist, 2 Population (Technical Specialist, Economist, Appraisal) Obstetrics and Gynecologist, Public Health Specialist, Young Professional, Operations Analyst November 11-20, 3 2 Population Specialist, Young 1991 (Interim Professional mission) January 7-23, 1992 3 2 Population Specialist, Young (Interim mission) Professional March 30- April 5 2 Population Specialist, 23, 1992 3 Consultant (Appraisal) February 22- 7 2 Population Specialist, March 14, 1993 Population Economist, Operation (Technical Research Specialist, Architect, assistance to JGF Coordinator, Social Sector operations research Specialist under JGF) April 21- May 14, 5 Population Specialist, 1993 Population Economist, Operation (Institutional Research Specialist, Architect, arrangements for Architecture Procurement readiness) Specialist - 34 -  September 15- 8 2 Population Specialist, 2 October 6, 1993 Operations Analyst, 2 Architect (Final Appraisal & Consultant, Logistic Specialist, Pre-Negotiation) Population Economist January 18-21, 5 2 Procurement Specialist, 1994 (Negotiation, Operations Analyst, Principle held in WB, HQ) Counsel, Disbursement Officer Supervision July 21-August 5, 7 Population Specialist, Health S S 1994 Management Specialist, Architect Consultant, Operation Research Specialist, Program Management Specialist, Procurement Specialist, Logistic Specialist May 17-30, 1995 8 2 Population Specialist, Health & U S Population Specialist, Architect Consultant, Operation Research Specialist, Implementation Specialist, Logistic Specialist, Public Health Specialist October 30 - 5 2 Population Specialist, U U November 12, 1995 Population & Health Specialist, Architect Consultant, Logistic Specialist June 22- July 3, 5 2 Population Specialist, S S 1996 Population & Health Specialist, Architect Consultant, Logistic Specialist December 5-19, 5 Population Specialist, Education S S 1996 Specialist, Health Sector Specialist, Architect Consultant, Health Management Specialist May 29- June 10, 7 2 Population Specialist, S S 1997 Management Consultant, Health Sector Specialist, Architect Consultant, 2 Procurement Specialist September 16 6 2 Population Specialist, Health S S October 1, 1997 Sector Specialist, Architect Consultant, 2 Procurement Specialist April 16- May 1, 6 Population Specialist, Health S S 1998 Sector Specialist, Architect Consultant, Program Officer/Financial Management, 2 Procurement Specialist, Health Management Consultant - 35 -  November 24 - 30, 6 2 Population Specialist, Health S S 1998 Sector Specialist, Architect Consultant, Financial Management Specialist, Procurement Specialist July 18- 30, 1999 7 Human Resource Specialist, S S Population Specialist, Health Sector Specialist, Public Health Specialist, Architect Consultant, Financial Management Specialist, Procurement Specialist December 1-10, 7 Human Resource Specialist, S S 1999 Population Specialist, Health Sector Specialist, Public Health Specialist, Architect Consultant, Financial Management Specialist, Procurement Specialist July 10- 21, 2000 4 Population Specialist, Health S S Sector Specialist, Architect Consultant, Procurement Specialist December 4-15, 5 Population Specialist, Health S S 2000 Specialist, Architect Consultant, Financial Management Specialist, Procurement Specialist ICR March 2001 4 Population Specialist, Health Specialist, Financial Management Specialist, Procurement Specialist -36 -  (b) Staff: Sta-C of Project Cycle . Actuall Latest Estimate ,____ _ 'No. Staftiweeks u LSs ('00() Identification/Preparation 514.1 636.8 AppraisalNegotiation 726.7 1,539.6 Supervision 350.5 548.5 ICR Included in SPN Included in SPN cost cost Total 1,591.3 2,724.9 Note: According to the ICR guidelines, annex should include Bank-financed and trust fund consultants. The Supervision costs include ICR's Actual/Latest Estimate. - 37 -  Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M-Modest, N=Negligible, NA=Not Applicable) Rating .IMacro policies O H OSUOM O N * NA 21 Sector Policies OH OSUOM O N ' NA Z Physical DH *SUDM ON ONA Z Financial O H OSUOM O N O NA . Institutional Development 0 H O SUO M 0 N 0 NA -]Environmental O H OSUOM O N * NA Social >A Poverty Reduction 0 H O SU * M O N 0 NA .3Gender OH OSUOM ON ONA L Other (Please specify) O H OSUOM O N O NA :Q Private sector development 0 H 0 SU 0 M 0 N * NA g Public sector management 0 H O SU O M 0 N 0 NA LII Other (Please specify) O H O SU O M O N O NA - 38 -  Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bank performance Rating Z Lending OHS OS OU OHU A Supervision OHS OS Ou OHU 3 Overall OHS OS O u O HU 6.2 Borrowerperformance Rating . Preparation OHS OS O U O HU ] Government implementation performance O HS O S 0 U 0 HU 3 Implementation agencyperformance OHS OS Ou O HU 7] Overall OHS OS O U O HU - 39 -  Annex 7. List of Supporting Documents Preparation - HMG/N 1. Reports on Phase I, 1I and III Working Groups on (1991): i) Outreach Service Delivery in Health Posts and Below ii) Clinical FP/MCH Service Delivery iii) Supplies and Logistics iv) Central Management va) IEC and Demand Generation vb) Population Policy vi) Malaria Control Preparation - The World Bank I. Nepal: Poverty and Incomes, 1991 2. Country Assistance Strategy Paper, 1992 3. Financial Plan for the Health and Population Sector, Technical Notes, April 18, 1993 4. Financing Plan for Health and Population Program - Program Highlights and Key Issues, May 25, 1993 5. Preliminary Design and Basic Layout with Field Data (Prototype Design), December 1993 6. Design and Cost Estimate of Primary Health Care Center - Yodukuha, Dhanusha (Prototype Design), December 1993 7. Cost Estimate (Prototype Design), December 1993 8. Bill of Quantity (Prototype Design), 1994 9. Cost Tables (Detailed + Summary), January 27, 1994 101.Background and Highlights of Findings of Operations Research on Delivery of Family Health Service in Rural Nepal, December 18-19, 1995 Preparation - Trust Fund (JGF) 1. Alternate Approaches: A Key for Integrated Logistics Systems, October 1993 2. Research and Study Report on Rural Health Service Implementation, 1993/94 (In Nepali) 3. Primary Evaluation of New National Health Policy Implementation Effect (In Nepali), 1994 4. Operations Research on Population and Family Health - The Baseline Survey, 1994 5. Family Health Service Delivery in Three Rural Areas of Nepal, 1994 6. Proceedings of the Seminar on Dissemination of Findings of Operations Research on Family Health Service Delivery in Rural Nepal, December 18-19, 1995 7. Family Health Service Delivery in Three Rural Areas of Nepal, 1995 8. Health Facilities Infrastucture Survey, August 1995 Implementation - HMG/N 1. Report on the Project Launch Workshop, July 27-28, 1994 and September 13, 1994 2. Work plans and Budgets FY 1994/95, Project Implementation Volume (PIV) for: 1994 - 2000; FY 1998/99; FY 1999/2000 3. Project Progress Reports - July 1994 to December 2000 4. Reports on Mid-term Review: i) Needs Assessment and Individual Preliminary Design of FP/MCH Units at Doti and Kalaiya - 40 -  Hospitals and CTC Units at Rajbiraj, Nepalgunj and Kailali Hospitals, March 1997 ii) Organization and Management, Supervision and Monitoring, Logistics Management, Civil Works, May 1997 iii) Inventory Checking of Medical Equipment in Health Facilities of Nepal, October 1997 iv) Report of Monitoring of Civil Works of HPs and PHCCs, November 1997 v) Assessment of Medical Equipment/Infrastructures in Health Posts and Primary Health Care Centers, April 1998 vi) A study on Physical Facilities, Supplies, Staffing and Service Utilization in Health Facilities of Nepal, April 1998 5. Medical Equipment Supplied through World Bank Source: Phase I - IV 6. Reports on Maintenance Capacity Development: i) Health Post and Primary Health Care Center Maintenance Program, November 1999; ii) Policy Paper, April 15, 2000 7. Accounts Reports on: i) Accounts Manual (in Nepali), 1997 ii) The backlogs of reimbursable expenditure of the cost centers upto FY 1998/99 iii) Audit and Unaudited Reports - 1993/94 - 1998/99 iv) Pilot Project: Performance Audit Report, April 20, 2000 8. Reports on MCH Workers i) Rapid Assessment, 1999 ii) Maternal and Child Health Workers - Activity Evaluation, 2000 Implementation - The World Bank I. Project Launch Workshop - Manual 2. Country Portfolio Performance Review, June 3-4, 1996 and February 11, 1997 3. Portfolio Improvement Plan (PIP) - February 1999 4. Annual Review of Portfolio Performance for FY2000, June 28, 2000 5. QAG - Rapid Supervision Assessment (RSA3), July 1999 6. Quality Assessment (QSA4) Final Assessment, November 20, 2000 7. Report on an Audit of Portfolio Supervision in The South Asia Region (Draft), February 12, 2001 8. Aide-Memoires, 590, PSRs - July 1994 to December 2000 and Technical Reports of Architect Consultant during biannual supervision mission - December 1996 to July 2000 Completion - HMG/N 1. End line Survey Reports (November 2000) on: i) Outcome Assessment ii) Community Based Monitoring and Supervision iii) Assessment of Effectiveness of Supervision and Monitoring Function and Training iv) Assessment of Effectiveness of Project Inputs and Training on Logistics Management v) Assessment of Performance of Financial Management and Effectiveness of Financial Management Training vi) Perforrnance Assessment of Infrastructure Development Component 2. Implementation Completion Report, Ministry of Health, December 2000 Reference -41 -  1. Program of Action of the UN International Conference on Population and Development, 1994 2. Eight (1992-1997) and Ninth (1997-2002) Five Year Plan, National Planning Commission 3. National Fertility Health Survey, Ministry of Health, 1996 4. Country Assistance Strategy, The World Bank 1998 5. Annual Reports, Department of Health Services, 1994/95 - 1998/1999 6. Health Management Information System, Planning and Foreign Aid Division, DOHS, 1999/2000 7. Nepal Population Report, Ministry of Population and Environment, 2000 8. Public Expenditure Review, Volume III: Social Sectors, The World Bank, March 2000 9. Nepal Operational Issues and Prioritization of Resources in the Health Sector, The World Bank, June 2000 -42 -  Annex 8. Project Output/Outcome Supportive Tables Table 1. Trend of Service Utilization at Outlying Health Facilities (1994-2000) Indicator Unit 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 Contraceptive % 21.3 28.2 31.0 31.3 32.6 34.5 Prevalence Rate (Outcome) Utilization of Number 4,485,520 5,167,378 5,933,330 7,115,981 6,983,297 7,036,459 Services - New OPD Cases (Outcome) Antenatal First %of 15.5 19.4 21.4 25.8 27.0 35.0 Visit by Pregnant expected Women pregnancies Deliveries % of 3.1 4 6 8.1 13.4 13.5 Conducted by expected Trained Persons pregnancies (Outcome) Sub Health Posts / 73.7 48 48 86 91.0 92 reporting MIS HP/PHCCs % 72.0 88 92 96 97 95.5 reporting MIS Sources: I, Annual Reports, Departrnent of Health Services - 1994/95 - 1998/99 2. HMIS data-Planning and Foreign Aid Division, Department of Health Services, 1999/2000 - 43 -  Table 2. Service Utilization at 23 HPs and 13 PHCCs Three cycle analyses by each Trimester during 1999-2000 Services (No. of cases) First Cycle Second Cycle Third Cycle Primary Health Care Centers Family Planning Users 86,404 99,546 117,383 Deliveries by Trained Personal 752 806 938 Antenatal Visits 5,138 6,207 7,595 Diarrhoeal Cases 3,789 2,970 6,213 Measles Immunizations 4,725 4,789 4,575 Health Posts Family Planning Users 92,379 99,275 114,627 Deliveries by Trained Personal 908 1,079 1,020 Antenatal Visits 5,138 6,207 7,595 Diarrhoeal Cases 5,400 4,076 7,208 Measles Immunizations 6,404 5,861 6,714 Source: PIU - Outcome Assessment of Population and Family Health Project, Final Report, November 2000 -44 -  Table 3. FP/MCH Clinics planned and conducted - Three cycle analysis by each Trimester during 1999-2000 Primary Health Care Center Level Types of Clinics Planned and Conducted Cycle I Cycle II Cycle III Total Antenatal Visits Planned (No.) 332 121 155 Antenatal visits conducted (%) 85.7 91.7 94.8 Total Immunization Clinics Planned (No.) 228 229 245 Total Immunization Clinics Conducted (%) 89.5 100 100 Total Outreach Clinics Planned (No.) 612 269 241 Total Outreach Clinics Conducted (%) 73.2 67.7 60.58 HP Level Total Antenatal Visits Planned (No.) 327 380 388 Antenatal Visits Conducted (%) 84.1 100.0 100 Total Immunization Clinics Planned (No.) 629 640 647 Total Immunization Clinics Conducted (%) 83.1 94.33 98.6 Total Outreach Clinics Planned (No.) 712 322 681 Total Outreach Clinics Conducted (%) 66.0 69.6 82.09 Source: PlU - Outcome Assessment of Population and Family Health Project, Final Report, Novernber 2000 Table 4. Percentage of Surveyed Health Facilities having Clinical Staff by Three cycle analyses by each Trimester Facilities First Cycle Second Cycle Third Cycle District Hospital having Staff Nurses 75.0 75.0 87.5 Primary Health Care Centers having Doctors 41.6 30.8 23.1 Health Posts having Auxiliary Nurse-Midwifes 83.3 86.9 95.6 Sub Health Posts having MCH Workers 100.0 87.5 87.5 Source: PIU - Outcome Assessment of Population and Family Health Project, Final Report. November 2000 -45 -  Table 5. Estimated Funding gap and Additional fund required out of HMG/N Regular Budget (Amount in NRs.) S. For Remaining No. Budget Items Period of For FY2001102 Total FY2000101 1. Transportation Support 2,500,000 14,000,000 16,500,000 2. Maintenance of Vehicles 2,700,000 2,700,000 3. Field operation Support 8,544,579 41,277,000 49,821,579 4. Health Management 2,000,000 2,000,000 Information System Total 11,044,579 59,977,000 71,021,579 -46 -