Madagascar - Governance and Institutional Development Project

Iiitegrated Safeguards Data Sheet (Updated) Report No: AC129 Section I - Basic Information Date ISDS Prepared/Updated: 06/19/2003 A. Basic Project Data (from PDS) I.A.1. Project Statistics Country: MADAGASCAR Project ID: P074448 Project: Governance & Institutional Development Project Task Team Leader: Guenter Heidenhof Authorized to Appraise Date: July 10, 2003 IBRD Amount ($m): Bank Approval: December 20, 2003 IDA Amount ($m): 30.00 Managing Unit: AFTPR Sector: General public administration sector (100%) Lending Instniment: Technical Assistance Loan (TAL) Theme: Public expenditure, financial management Status: Lending and procurement (P); Other public sector governance (S) I.A.2. Project Objectives (From PDS): The main objectives of the project are to assist the Government of Madagascar (GoM) in implementing the poverty reduction strategy which is based on the Poverty Reduction Strategy Paper (PRSP) by * Rationalizing and modernizing budget and public expenditure management, * Improving accountability and transparency of Government operations, * Defining Government strategy in the area of decentralization and judicial reform, and by * Strengthening the capacity of public institutions to deal with complex change processes. The project, which will be implemented over a period of five years, intends to pave the way for subsequent budget support under a PRSC presently scheduled for FY05. It has been designed as a technical assistance operation which includes IT-system design and implementation, institutional development, capacity building, organizational and regulatory changes. I.A.3. Project Description (From PDS): The project will enhance and further deepen previous reforms initiated under the Public Management Capacity Building Project (PAIGEP I) which closed in December 2002. It can build on significant analytical work, in particular the recently completed Country Financial Accountability Assessment (CFAA) and the Country Procurement Assessment Review (CPAR). The project which would be implemented over a period of five years consists of two components: Component 1 - Improvement of transparency and economic governance This component would support a comprehensive refonn of the public finance system in Madagascar, mainly at the central government level. The component would include four sub-components: (i) Integrated public financial management systenm. The budget of the central government would be prepared and managed on the basis of a comprehensive computerized system to which all agencies involved in budget and expenditure management (Finance and Budget, line ministries, central and de-concentrated offices of central government) would be connected. The system would encompass the whole national budget: wages, non-salary operating costs, investment, debt service, income mobilization (customs, taxes). This would include the roll-out of the integrated system developed and tested in the province of Toamasina under PAIGEP I to the other five provinces. (ii) Internal and external audit and control functions. The GoM has prepared a proposal to comprehensively reform the internal and external audit functions in view of strengthening capacity and putting in place an adequate framework. This work has been complemented and further refined by the CFAA. The project will assist the GoM in implementing  2 ISDS the recommendations to strengthen internal and external controls. It will particularly focus on adjusting the existing institutional and procedural framework to international standards. In this context, the project will support the establishment of an independent internal audit function in the Ministry of Finance and Budget ('Inspection Generale des Finances'), the strengthening of other control functions ('Brigade du Tresor', 'Inspection Generale de l'Etat', 'Controle des Depenses Engages', Conseil de Discipline Financiere et Budgetaire') and the transformation of the 'Chambre des Comptes' into a 'Cour des Comptes' (Auditor General). (iii) Procurement reform. Based on the findings of the CPAR, the project will assist the GoM in adjusting the public procurement system to international standards. This will include a comprehensive reform of the existing regulatory and institutional framework as well as significant capacity building activities to ensure compliance with the new rules and regulations. (iv) Coordination, monitoring & evaluation. This sub-component will assist the GoM in strengthening monitoring and evaluation, in particular in view of the implementation of the PRSP. It will support the development of adequate mechanisms to coordinate and track the implementation of government policies, in particular at the level of the Presidency. This will include capacity building activities for Govermnent in the use of infonnation for decision making, management, public investment oversight, policy analysis, evaluation and reorientation of policies and programs within the context of the PRSP. Component 2 - Capacity building and strengthening of local training institutions This component would focus on institutional development and capacity building activities in selected government institutions. Capacity building in the Ministry of Economic Affairs, Finance and Budget aims at complementing the significant changes triggered by the refonns under component 1. Project support will also focus on the newly created Ministry of Decentralization, which will play a key role in operationalizing the decentralization agenda in Madagascar, with the goal to enable the ministry to further refine the regulatory, fiduciary, administrative and judicial framework for decentralization. To continue the reforms initiated under PAIGEP I the Ministry of Justice will receive some support to improve its operational efficiency to implement key reforms identified by the government (expedition of civil and commercial proceedings, strengthening of internal control to combat corruption). To ensure that capacity building activities can be adequately implemented the project also aims at strengthening selected local institutions that would deliver profevssional training and capacity building in particular in administrative and financial management as well as procurement. Project support will focus on the Ecole Nationale de l'Administration de Madagascar (ENAM) and the National Center for Administrative Training (Centre National de Formation Administrative, CNVFA). In addition, the project will continue to provide assistance to the institution that is responsible for the training of justices and court personnel (' Ecole Nationale de la Magistrature et des Greffes' - ENMG). The ENMG received support under PAIGEP I. The project would further strengthen the institutional capacity of ENMG, and provide it with the resources that it requires to improve its training facilities, enhance its training curriculum and deliver high quality training. In line with the government's strategy to strengthen the capacity for the provision of in-country training support the project will include the establishment of a Distance Learning Center in Madagascar as part of the Global Development Learning Network. In addition, the project will support the establishment of a project management system for the change process to ensure effective implementation of the reforms. Only a part of the total financing requirements will be taken care of under the proposed investment project. It is envisaged that the project will cover the funding needs during the lirst two years of implementation; with the beginning of the third year the Government will progressively take over funding of the project implementation through its annual budget. Investment lending would then mainly focus on training, capacity building and specialized technical advise, while modernization and recurrent costs will be gradually integrated into the Govermnent's budget. With total projected costs of US$58.Om  3 ISDS investment lending will cover US$30.0m. Future adjustment assistance is expected to complement the investment project and will ensure that the reforms continue to be implemented as planned. I.A.4. Project Location: (Geographic location, infonnation about the key environmental and social characteristics of the area and population likely to be affected, and proximity to any protected areas, or sites or critical natural habitats, or any other culturally or socially sensitive areas.) The project would implement an integrated financial management system in all six provinces in Madagascar. As part of the reform, some minor rehabilitation of existing buildings will take place in the six provincial capitals to ensure that the IT equipment is adequately installed and maintained. In addition the project will provide funding for the modernization of local training institutions that are located in the capital Antananarivo. The modernization will include refurbishment and rehabilitation of existing training facilities.The project will also finance the establishment of a Development Learning Center (DLC) in Antananarivo. B. Clheck Environmental Classification: C (Not Required) Comments: The project entails the rehabilitation of buildings of training institutions in Madagascar to improve their service delivery capacity. It is also envisaged to establish a Distance Learning Center in the capital. The DLC is likely to be located on the grounds of one of the existing training institutions in the capital Antananarivo (i.e. Ecole Nationale de l'Adninistration de Madagascar, ENAM, and Ecole Nationale de la Magistrature et des Greffes, ENMG). These training facilities are public institutions, their assets (including the land) is owned by the government. It is presently unclear if the DLC can use an existing building or if a new building has to be set-up. In case an existing building can be used, the project will finance the rehabilitation of the building in line with the requirements of the Global Distance Leaming Network. This will include the refurbishment and equipment of training rooms and the installation of a satellite dish. In case a new building is required the project will finance the relevant civil works (estimated 0.5m) for center (2 training rooms, 1 server room, offices), which will have less than 5,000 square feet. As the building would use existing infrastructure in the capital no major infrastructure changes or implications (access roads, electricity, water, sewerage) are expected to support the new building. The construction contracts would require to establish the building in line with intemationally accepted building norms which would include that no hazardous materials be used. C. Safeguard Policies Triggered (from PDS) (click on E for a detailed desciption or click on the policy number for a brief description) Policy Triggered Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) (_ Yes 0 No Natural Habitats (OP 4.04, BP 4.04, GP 4.04) (9 Yes 0 No Forestry (OP 4.36, GP 4.36) (9 Yes * No Pest Management (OP 4.09) () Yes No Cultural Property (OPN 11.03) () Yes 0 No Indigenous Peoples (OD 4.20) ( ) Yes * No Involuntary Resettlement (OP/BP 4.12) ( ) Yes 0 No Safety of Dams (OP 4.37, BP 4.37) (_) Yes 0 No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) (9 Yes 0 No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)* (9 Yes 0 No  4 ISDS Section II - Key Safeguard Issues and Their Management D. Sumnmllary of Key Safeguard Issues. Please fill in all relevant questions. If inforniation is not available, describe steps to be taken to obtain necessaty data. 11 D. Ia. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or ilTeversible impacts. The project entails complex institutional reforms to improve the public financial management system in Madagascar. No specific safeguard issues are triggered. The project will finance rninor rehabilitation of existing buildings without any major impact on infrastructure (roads, electricity, water, sewerage). The project may include the construction of a Distance Learning Center. As outlined above, the construction activity would be marginal and is not likely to interfere with safeguards. IL.D.1b Describe any potential cumulative impacts due to application of more than one safeguard policy or due to multiple project component. n/a 1I.D.lc Describe any potential long term impacts due to anticipated future activities in the project area. n/a H.D.2. In light of I, describe the proposed treatment of alternatives (if required) n/a II.D.3. Describe arrangement for the borrower to address safeguard issues Rehabilitation and construction would follow internationally accepted norms and standards. It would be ensured that no hazardous materials be used. II.D.4. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Development and implementation is/will be based on broad consultation process (mainly workshops and focus group discussions) with key stakeholders (central government, provincial govermments, targeted local communities). E. Safeguards Classificatiolt (select in SAP). Category is determined by the highest impact in any policy. Or on basis of cumulative impacts from multiple safeguards. Whenever an individual safeguard policy is triggered the provisions of that policy apply. SI. - Significant, cumulative and/or irreversible impacts; or significant technical and institutional risks in management of one or more safeguard areas S2. - One or more safeguard policies are triggered, but effects are limited in their impact and are technically and institutionally manageable [X] S3. - No safeguard issues SF. - Financial intermediary projects, social development funds, community driven development or similar projects which require a safeguard framework or programmatic approach to address safeguard issues. F. Disclosure Requirements Environmental Assess*ment/Ai alvsis/Mdanagentent Plan: Expected Actual Date of receipt by the Bank Not Applicable Not Applicable  5 ISDS Date of "in-country" disclosure Not Applicable Not Applicable Date of submission to InfoShop Not Applicable Not Applicable Date of distributing the Exec. Summary of the EA to the Executive Not Applicable Not Applicable Directors (For category A projects) Resettlement Actionl Plan/Framework: Expected Actuial Date of receipt by the Bank Not Applicable Not Applicable Date of "in-country" disclosure Not Applicable Not Applicable Date of submission to InfoShop Not Applicable Not Applicable Indigenous Peoples Development Plan/Framework: Expected Actual Date of receipt by the Bank Not Applicable Not Applicable Date of "in-country" disclosure Not Applicable Not Applicable Date of submission to InfoShop Not Applicable Not Applicable Pest Management Plan: Expected Actual Date of receipt by the Bank Not Applicable Not Applicable Date of "in-country" disclosure Not Applicable Not Applicable Date of submission to InfoShop Not Applicable Not Applicable Dam SafJty Management Plan: Expected Actual Date of receipt by the Bank Not Applicable Not Applicable Date of "in-country" disclosure Not Applicable Not Applicable Date of submission to InfoShop Not Applicable Not Applicable If in-country disclosure of any of the above documents is not expected, please explain why. n/a Sil!ned and submitted by Name Date Task Team Leader: Guenter Heidenhof 06/17/2003 Project Safeguards Specialists 1: Amadou Konare/Person/World Bank Project Safeguards Specialists 2: Kristine Schwebach/Person/World Bank Project Safeguards Specialists 3: Serigne Oinar Fye/Person/World Bank Approved by: Name D)ate Regional Safeguards Coordinator: Charlotte S. Bingham June 19, 2003 Sector Manager Brian David Levy June 19, 2003