Professional Documents
Culture Documents
TECHNICAL
ASSISTANCE PROJECT
Executing Agency(ies) [List the main Ministries, Project Implementation Units, Agencies and civil society organizations responsible for implementing project activities.] PRIVATIZATION AND PUBLIC ENTERPRISE SUPERVISING AGENCY Co-financers and other External Partners: WORLD BANK: UA 0.75 mill. GTZ: UA 3.07 mill. DFID: GBP 320,000
Actual Date
08.11.2001
54
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4. Summarize the log. frame. If a log. frame does not exist, complete the table below, indicating the overall project development objective, the major components of the project, the major activities of each component and their expected outputs, outcomes, and indicators for measuring the achievement of outcomes. Add aditional rows for components, activities, outputs or outcomes if needed. COMPONENTS ACTIVITIES OUTPUTS 1. Transaction preparation reports of 123 PEs completed and at least 80 PEs brought to the point of sale by June 2001. 2. 10 tailor-made training programs conducted EXPECTED OUTCOMES 1. Strengthened capacity of PPESA to effectively implement the privatization action plan, thereby reducing the size of the portfolio of state enterprises. 2. Increased Government revenues through public enterprises sales INDICATORS TO BE MEASURED Bringing at least 80 of the 123 PEs to the point of sale by June 2009 and complete the preparation reports for the other 43 by June 2009
1. Contracting out of PE's 1. Transactions Support - Preparation of divesture preparation to private and related short-term training of staff on 2. Short transactions documents for 20 enterprises. consulting firms. term training programs.
2. Institutional Support - Recruitment of international and local experts in various disciplines to provide technical assistance to the Privatization and Public Enterprises Supervising Agency (PPESA);
Number of training programs offered and Strengthened capacity of PPESA to information systems functional by June effectively implement the privatization action plan, thereby reducing the size of 2009 the portfolio of state enterprises
3. Public Awareness Promotion Program Designed to build stakeholders and the publics support for the privatization program; 4. Post Privatization Monitoring & Impact Analysis - Performance monitoring, monitoring of compliance with the provisions of sales contracts, and impact analysis; 5. Environmental Audit - Focusing on the environmental audit of the 20 enterprises for which the ADB has provided transactions support.
1. Improved Government (PPESA) advocacy skills 2. Increased awareness and interest of private enterpreneurs (both domestic and foreign)
Plans of awareness promotion for different target groups successfully implemented by June 2009
Hiring consultants to undertake Systems for post privatisation sector studies and periodic impact impact analysis established and analysis reports of sector studies for the restructuring of other PEs competed. Environmental Audit Environmental audit of 20 enterprises completed.
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5. For each dimension of the log. frame, provide a brief assessment (up to two sentences) of the extent to which the log. frame achieved the following. Insert a working score, using the scoring scale provided in Appendix 1. If no log. frame exists, score this section as a 1 (one). LOG. FRAME DIMENSIONS LOGICAL ASSESSMENT WORKING SCORE
a) Presents a logical causal chain for achieving Log frame was not well designed and does not necessarily present a casual chain for achieving development objectives. the project development objectives b) Expresses objectives and outcomes in a way that is measurable and quantifiable c) States the risks and key assumptions A baseline data should have been worked out at the start of project implementation. The indicators should also have been refined during project implementation. Risks are not indicated in the log frame but assumptions are and these conversely feature as risks.
2 1 2
MEASURABLE THOROUGH
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MAJOR ACTIVITIES Expected Outputs 1. Transaction preparation reports of 123 PEs completed; at least 80 PEs brought to the point of sale by June 2009. Actual Outputs Transaction preparation reports of 123 PEs completed: and 85 PEs brought to the point of sale by June 2009.
Working Score
4 2. EPA technical capacity to implement the PPESA technical capacity in valuation enhanced. privatisation program enhanced. 2 3. Public and investor awareness of the privatisation program improved Public and investor awareness improved through media coverage, PPESA publications and news letters and up-grading of the website is under finalization. Impact Assessment Study under finalization.
51,1
2,044
12,2
0,244
25,7
0,771
4. Systems for post privatisation impact analysis established and reports of sector studies for the restructuring of other PE's completed. 5. Environmental audit of enterprises completed.
1 Environmental audit of 20 enterprises completed, and waste and energy audits of 7 PEs under finaization.
6,5
4,5 OVERAL OUTPUT SCORE [Score is calculated as the sum of weighted scores] Check here to override the auto-calculated score
0,135 3
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3 3 3 3
Check here to override the auto-calculated score Provide justification for over-riding the auto-calculated score
Insert the new score or re-enter the autocalculated score 2. Additional outcomes. Comment on the project's additional outcomes not captured in the log. frame, including cross-cutting issues (e.g., gender). Health insurance: P rivatized companies have made significant improvements in health insurance coverage for employees compared with pre-privatization benefits. Training technical skills : Almost every privatized company has invested in on-going training to employees in areas of productivity and control. Environmental standards : More than 70% of the privatized companies have made investments to improve environmental standards. Social responsibility : Many of the privatized companies have provided social services to communities where they operate.
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3. Risks to sustained achievement of outcomes. State the factors that affect, or could affect, the long-run or sustained achievement of project outcomes. Indicate if any new activity or institutional change is recommended to help sustain outcomes. The analysis should draw upon the sensitivity analysis in Annex 3, where appropriate.
(i) Replacement of public monopolies with private monopolies has not occurred in Ethiopia since most PEs were sold to various indigenous investors. (ii) Limited capacity of the PPESA, which may hinder the implementation of the privatization program. This has been mitigated through appropriate capacity building. (iii) The inability of public establishments to retain trained staff due to poor salary and conditions of service remains a major problem. But it has been addressed through recruitment of new staff. Provision of continuous training and expertise funded by the project have created sufficient in-house capabilities. (iv) Weak commitment from the government may have influenced the privatization process. However, the actual commitment was strong.
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PROJECT DESIGN AND READINESS FOR IMPLEMENTATION DIMENSIONS REALISM RISK ASSESSMENT AND MITIGATION a) Project complexity is matched with country capacity and political commitment. b) Project design includes adequate risk analysis.
ASSESSMENT There was a political commitment to privatization. Project design was not complex.
WORKING SCORE 3
While the GoE procurement laws and regulations were found acceptable, the actual procurement c) Project procurement, financial USE OF management, monitoring and/or other systems procedures adopted under the project were in line with the Bank's procurement rules. COUNTRY SYSTEMS are based on those already in use by government and/or other partners.
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WORKING SCORE For the following dimensions, provide separate working scores for Bank performance and Borrower performance: Bank CLARITY d) Responsibilities for project implementation were clearly defined. Responsibilites for project implementation were clearly defined. 3 3 Borrower
e) Necessary implementation documents (e.g. Partially;specifications for goods, short-term experts not given during appraisal. specifications, design, procurement documents) were ready at appraisal. f) Monitoring indicators and monitoring plan were agreed upon before project launch. h) Baseline data were available or are were collected during project design. Monitoring indicators and plan not agreed upon before project launch.
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While adherence to schedules was poor, performance of consultants, effectiveness of Bank supervision and borrower's oversight was very good. 10 supervision missions (on an average 11 days each) to PPESA have been undertaken by the Bank with effective outcomes and good working relationships and conformity with officials of PPESA. The Environmental Protection Authority (EPA) has been strengthened through training and provision of equipment to identify environmental liabilities. In turn, the enforcement of mitigation measures have greatly improved. Refer to Annex 6 for detailed explanations. 2. Comment on the role of other partners (e.g. donors, NGOs, contractors, etc.). Assess the effectiveness of co-financing arrangements and of donor coordination, if applicable. According to the terms of the Protocol of Agreement, GTZ financed the recruitment of an administrative officer/project coordinator in August 2000, among other, to enforcea coordinated approach between AfDB, WB and GTZ and increase synerfies while minimizing duplication of efforts. In response to the early withdrawal of GTZ in July 2004, DFID provided the necessary funds to safeguard the continued services of the project coordinator until December 2005. In October 2006, after an interruption of over ten months, the funding of administrative officer was secured under the World Bank (WB) funded Private Sector Development Capacity Building Project (PSD-CB Project). 3. Harmonization. State whether the Bank made explicit efforts to harmonize instruments, systems and/or approaches with other partners. The Bank has made explicit efforts to ensure the continued success of the privatization program in harmonizing instruments, systems and approaches with other partners. For instance, the ADF funded activities are further supported by the World Bank Private Sector Development Capacity Building Project. The WB financed projectis designed to strengthen the acceleration of the Ethiopian Privatization Program through the upgrading of the institutional capacity of PPESA, the provision of advisory services, the full and partial environmental audit of selected SOEs, the design and implementation of a voluntary retrenchment program and the study of a system of monitoring compliance of contracts. Through the provision of the project coordinator, synergies between the various development partners supporting this program have been increased and duplication of efforts has been avoided. Furthermore, because the procurement and disbursement systems of the ADB and the World Bank are similar, harmonization has been ensured.
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4. For each dimension of project implementation, assess the extent to which the project achieved the following. Provide a brief assessment (up to two sentences) and insert a working score, using the scoring scale provided in Appendix 1. PROJECT IMPLEMENTATION DIMENSIONS a) Extent of project adherence to the original closing date. If the number on the right is: below 12, score 4 between 12.1 to 24, score 3 between 24.1 to 36, score 2 beyond 36.1, score 1 b) Bank complied with: Environmental Safeguards Fiduciary Requirements BANK PERFORMANCE Project Covenants c) Bank provided quality supervision in the form of skills mix and practicality of solutions d) Bank provided quality management oversight e) Borrower complied with: Environmental Safeguards Fiduciary Requirements BORROWER PERFORMANCE Project Covenants f) Borrower was responsive to Bank supervision findings and recommendations g) Borrower collected and used monitoring information for decision making The Bank implicitly complied with environmental safeguards. The Bank implicitly complied with fiduciary requirements. The Bank has satisfactorily complied with project agrements. The Bank has provided quality supervision. The Bank has provided quality management. 3 3 3 3 3 Difference in months between original closing date and actual closing date or date of 98% disb. 1 54 ASSESSMENT WORKING SCORE
TIMELINESS
The borrower implicitly compiled with environmental safeguards. The borrower implicitly complied with fiduciary requirements The borrower has satisfactorily compiled with project agreements. The borrower was adequately responsive to Bank's supervision findings and recommendations. Borrower adequately used monitoring information for decision making.
3 3 3 3 3
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30.06.09
2. Briefly describe the PCR Process. Describe the Borrowers and co-financers' involvement in producing the document. Highlight any major differences of opinion concerning the assessments made in this PCR. Describe the team composition and confirm whether a site visit was undertaken. Mention any major collaboration from other development partners. State the extent of field office involvement in producing the report. Indicate whether comments from Peer Reviewers were received on time (provide names and positions of Peer Reviwers). [100 words maximum] The PCR process is jointly undertaken with the Borrower and ADB Team and consultant. Co-financer (WB) was extensively consulted. Comments from the Peer Reviewers were received on time albeit the short turn around time provided. Summary of the comments are attached. Peer Review Team: A. Zerihun (Economist, ETFO); F. Kamanga (Senior Governance Expert, MWFO) and E. Gondwe (Investment Officer, OPSM)
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H. LESSONS LEARNED
Summarize key lessons for the Bank and the Borrower suggested by the projects outcomes i) Need to develop a robust Log frame which should be regularly updated, ii) OVI's needed to have been refined and strengthened to facilitate verification of outputs and outcomes; iii) A regular development partner/GoE forum should be institutionalized to address implementation issues; iv) Reliable (gender disaggregated) baseline data is critical v) Project execution agencies should be strengthened with systems, structures and experience to implement technical assistance projects; vi) FO participation is critical vii) There is need to link downstream project interventions with ongoing upstream operations that seek to address systemic challenges and capabilities. Meetings held with PPSEA officials and a Privatization Roundtable Meeting further garnered the following lessons: (a) Continued support to the private sector in the introduction of good corporate governance is critical; (b) Strengthening of the provision of trained and skilled expertise or privatized industries is imperative; (c) Effective utilization of PPSEA trained manpower after the phasing out of the privatization program should be institutionalized; (d) Enterprise, input suppliers needs to be privatized simultaneously in order to ensure smooth and efficient production of goods; and, (e) After an enterprise is privatized Government should ensure and encourage those previous buyers and input suppliers continue their marketing relationship with the new privatized enterprise. See Annexe 6 for further details
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BANK PERFORMANCE
3 3 3 3 3 3 3 3
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BORROWER PERFORMANCE
Design and Readiness Responsibilities for project implementation are clearly defined. Necessary implementation documents (e.g. specifications, design, procurement documents) are ready at appraisal. Monitoring indicators and monitoring plan are agreed upon and baseline data are available or are being collected PROJECT DESIGN AND READINESS SCORE Implementation Borrower complied with: Environmental Safeguards Fiduciary Requirements Project Covenants Borrower was responsive to Bank supervision findings and recommendations. Borrower collected and used of monitoring information for decision-making. IMPLEMENTATION SUB-SCORE OVERALL BORROWER PERFORMANCE SCORE
3 3 2 3
3 3 3 3 3 3 3
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J. PROCESSING
STEP
DATE
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APPENDIX 1
Scale for Working Scores and Ratings
SCORE
EXPLANATION
NA
Non Applicable
Note: The formulas round up or down for decimal points. Only whole numbers are computed.
LIST OF ANNEXES
Mandatory
1. Project Costs and Financing a. Project costs by component b. Financing by sources of funds 2. Bank Inputs. List the key team members, and their specialties, during preparation and supervision. Provide a consolidated list of Preparation, Supervision and Completion Missions in chronological order. Provide the date and ratings of the last supervision report. 3. Economic Analysis (ERR) and Financial Analysis, if appropriate Re-estimate the economic rates of return based on costs and benefits at completion, and compare with apprailsal estimates. Break down by components as appropriate. Analyze the sensitivity of the ERR to key assumptions. Present a financial analysis for project beneficiary entities.
Optional
6. Project Narrative. Key factors not covered in the main template that affected the design and implementation of the project. Such factors, both positive and negative, could include: climate and weather, political changes, contractual or personnel matters, technical issues, procurement processes, and interactions with other partners. If any of these factors is significant enough to affect the evaluation ratings, it should be noted in the template with a reference to this annex.
Annexes
Annex 1: Project Costs and Financing: (a) Project costs by component and (b) financing by source of funds
Source of Finance of the Overall Technical Assistance Project by Component and Financing by Source of Funds Component ADF UA000 Transactions Support Institutional Support Public Awareness Promotion Post Priv. Impact Analysis Environmental Audit EPA Operating Support Base Cost Price Contingency Total Cost Note: 1,458 348 734 185 130 0 2,855 143 2,998 GTZ* UA000 0 1,944 187 0 0 0 2,131 106 2,237 IDA UA000 71 0 0 0 0 0 71 4 75 GOE UA000 3227 0 0 0 0 1,428 4,655 233 4,888 TOTAL UA000 4,756 2,292 921 185 130 1,428 9,712 486 10,198 ADF % SHARE 30.6 15.2 100 79.4 0.0 0.0 29.4 29.4 29.4
* The GTZ support is DM 5.5 million and DFID was GBP 320,000 * World Bank support has been subsequently reduced to UA 4.21 million
Exchange rate:
UA 1 = US$ 1.34
Annex 2: Bank inputs 2.1 Preparation Mission Oct 2000 MR. A. MTEGHA, Director, OCDE, (Team Leader) Mr. W. G. BENE-HOANE, Division Manager, OCDE.1 Mr. S. A. OLANREWAJU, Chief Economist, OCDE.1 Mr. I. SAMBA, Senior Environmentalist, OCDE.1 Mr. Hassan H. FARAH, Principal Investment Officer, OPSD.2 Appraisal Mission- Oct. 2000 Mr. Stephen Olanrewaju, Chief Economist, OCDE.1 Mr. Hassan H. FARAH, Principal Investment Officer, OPSD2 Mr. I. SAMBA, Senior Environmentalist, OCDE.1 2.3 Supervision Missions
No 1 Date Of Mission 11-17 Nov, 2001 Mission Composition Mr. Stephen Olanrewaju, Chief Economist, OCDE.1 Mr. I. SAMBA, Senior Environmentalist, OCDE.1 2 3 4 5 6 30 June July 5, 2002 08-17 Dec, 2003 05-15 Sept , 2004 28 Sept 13 Oct, 2005 15-26 Feb, 2007 Mr. Stephen Olanrewaju, Chief Economist, OCDE.1 Mr. George Namakando, Principal Economist Mr. George Namakando, Principal Economist Mr. George Namakando, Principal Economist Mr. Jeremiah Mutonga Chief Financial Management Expert, Economic and Financial Reform Div. 7. 14-18 May , 2007 Mr Toiwo Adeniji, Chief Financial Analyst, Economic and Financial Management Div. 8 6-12 Nov, 2007 Mr. Jeremiah Mutonga Chief Financial Management Expert, Economic and Financial Reform Div. 9 15-30 Sept, 2008 Mr. Jeremiah Mutonga Chief Financial Management Expert, Economic and Financial Reform Div. 10 18-22 May, 2009 Ms. Chigomezgo Mtegha, Senior Governance Expert OSGE.1
2.2
2.4
Project Completion Mission: 15 May - 2 June, 2009 Mr. Dawit Makonnen, Consultant, Macroeconomist; supported by Mr. Fekade Lakew (PPESA), Ms. Habiba Ben Barka (ETFO) and Ms. Chigomezgo Mtegha (OSGE.1)
Precedings report
14.05.2007 30.10.2007 17.09.2008
A. PROJECT IMPLEMENTATION
3 0
3 0 3
B. PROCUREMENT PERFORMANCE
2 2
2 2
2 2
2 2
C. FINANCIAL PERFORMANCE
Availability of Foreign Exchange Availability of Local Currency Disbursement Flows Cost Management Performance of Co-Financiers
2 3 2 2 2
2 3 2 2 3
2 3 2 2 3
2 3 2 2 3
2 3 2 2 3
3 0
3 0 2
E. IMPACT ON DEVELOPMENT
Likelihood of achieving development Objectives Likelihood that benefits will be realized and sustained beyo Likely contribution of the project towards an increase in Current Rate of Return
2 2 2
2 2 2
2 2 2
2 2 2 0
2 2 2 0
2.14
2.27
2.33
1.89
1.89
Current Trend over time RATINGS: 3 = Highly Satisfactory, 2 = Satisfactory, 1 = Unsatisfactory, 0 = Highly Unsatisfactory, = Non applicable
2.10
Expenditure Category 1. Consultancy Service 1.1. Outsourcing 1.2. Technical Assistance 1.2.1. International Short Term Experts 1.2.2. Local Short Term Expert 1.3. External Auditor Sub-Total 1 2. Equipment 2.1. IT Hard and Software 2.3. Promotional Material Sub-Total 2 3. Training Training Oversees Training Experience Sharing Training Library and Documentation Sub-Total 3 4. Promotional Expenses Publications Workshops Media Expenses Sub-Total 4 5. Miscellaneous Impact Studies Study Materials Sub-Total 5 6. Environmental Audit Base Cost Funds reprogrammed for the African Food Crisis Response Initiative Total SL
Costs & Commitments 605,483 469,555 60,353 8,769 1,144,160 NSH 197,880 197,880 SL 132,104 132.104 SL 55,037 7,640 94,566 157,243 NSH 91,663 1,723,050 1,000,000 2,723,050
SL
Annex 5: List of supporting documents AfDB, Appraisal Report, Privatization Technical Assistance Report, Oct. 2000. AfDB, Ethiopia: 2006 2009, Country Strategy Paper Mid. Term Progress Report, 24 Nov.2008. AfDB, Quarterly Progress Report Submitted by PPESA. July 2002 June 2002; June 2004. Dec. 2004. AfDB, Memorandum Ethiopia Proposal for A TAF Grant of UA 3,000,000 to Finance the Privatization Technical Assistance Project, 18 Oct. 2000. AfDB, Project Bi-Annual Progress Report, from 2000 Dec.2008 Bi-Annually. AfDB, Supervision Summaries PPSEA, Privatization Impact Assessment Report, March 2009.
6.1.1 The Government of Ethiopia enacted a reform programme, in 1992, to progressively liberalize the environment for private investment and entrepreneurship, including handing over state-owned enterprises to the private sector. As part of its public sector reform and private sector development process, in 1994, Ethiopia initiated a privatization program aimed at reducing the size of the portfolio of public enterprises. The Ethiopian Privatization Agency (EPA) was established in the same year by Proclamation No. 87/1994 to provide the institutional framework for ensuring an orderly implementation of the privatization program. During the first phase of the program, the EPA privatized 176 PEs, comprising of mostly small enterprises using in-house expertise and government resources. To facilitate the successful implementation of the second phase of the privatization program (involving larger and more complex enterprises) initiated in 1998, the government prepared a technical assistance project aimed at strengthening the institutional capacity of the EPA and sought the support of the African Development Fund (ADF), the German Development Co-operation (GTZ) and the World Bank for its implementation. 6.1.2 Accordingly, the African Development Fund (ADF) approved a grant of UA 3.0 million to the GoE in November 2000 to finance the PTAP. The primary objective of the project was to promote the development of a dynamic private sector in Ethiopia through the privatization of state enterprises, thereby limiting the involvement of the Government in the productive sectors of the economy. The grant was declared effective on 11 August 2001 following the fulfillment of conditions. 6.1.3 The Privatization and Public Enterprises Supervision Agency (PPESA), reorganized through the merger of the former Ethiopian Privatization Agency (EPA) and the Public Enterprises Supervising Authority (PESA) in August 2004, is the Project Executing Agency. The Environmental Protection Authority is executing the Environmental audit component of the project in accordance with a contract signed between the former EPA and the Environmental Protection Authority on January 2002. 6.1.4 As per the terms of the Grant Protocol of Agreement, GTZ financed the recruitment of an administrative officer/project coordinator in August 2000, to among other objectives ensure a coordinated approach between the ADB, WB and GTZ and increase synergies while minimizing duplication of efforts. However, in 2003, GTZ decided to end its support for the project. In July 2004, the British Department for International Development (DFID) provided the necessary funds to safeguard the continued services of the project coordinator until December 2005. In October 2006, after an interruption of over ten months, the funding of the administrative officer was secured under the World Bank (WB) funded Private Sector Development-Capacity Building Project (PSD-CB Project).
6.1.5 The 1999-2001 CSP underpinned the Banks support to PTAP, as it had a focus on private sector development. The CSP identified the need for Bank Groups assistance to the implementation of the privatization programme through institutional support and the provision of advisory services to further improve the private sector business climate in the country.
6.2
Project design
6.2.1 The main goal of the ADF grant of UA 3 million for the Privatization Technical Assistance Project was to promote a dynamic private sector development thereby enhancing the contribution of the private sector to sustainable economic growth and poverty reduction. This was consistent with the countrys overall economic development goals as defined in the SDPRP.. 6.2.2 The specific objectives of the project were to: Create a dynamic entrepreneur group as partner in the economic development process thereby enhancing the contribution of the private sector to sustainable economic growth; Attract investment-providing access to the private capital to propel national economic development Relieve tied economic resources: enabling the Government to re-deploy its scarce resources and privatization proceed to higher priority and poverty reduction programs. 6.2.3 The project components comprised of: Transactions Support - Preparation of and related short-term training of staff on transactions documents (due diligence and privatization strategy, financial audit, financial restructuring, asset & business valuation, and information memorandum), for 20 enterprises. Institutional Support - Recruitment of international and local experts in various disciplines to provide technical assistance to the Privatization and Public Enterprises Supervising Agency (PPESA); Public Awareness Promotion Program - Designed to build stakeholders and the publics support for the privatization program; Post Privatization Monitoring & Impact Analysis - Performance monitoring, monitoring of compliance with the provisions of sales contracts, and impact analysis; and Environmental Audit - Focusing on the environmental audit of the 20 enterprises for which the ADB has provided transactions support. A summary of Bank supported institutional capacity building activities are listed under Annex 6.7.
6.3
Project Implementation
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6.3.1 The Protocol of Agreement was signed in March 2001 and the first disbursement was made into the special account in April 2002, after one year. There were excessive delays in processing direct payments and obtaining responses for noobjection requests from the Bank. This was compounded by the Banks relocation from Abidjan to Tunis and absence of a project task-manager. These constraints were exacerbated by institutional weaknesses of PPESA, especially in handling Bank procurement procedures. The consequent delays in implementation necessitated the extension of the initial disbursement deadline from 31st December 2003 to 31st December 2005 and subsequently to 31st December 2007. Further extension of the deadline to 30th June 2009 was granted by the Bank. 6.3.2 Following the designation of a Task Manager at H/Q in 2006 project supervision and collaboration with the implementing agency improved, thereby increasing the pace of project implementation. This has consequently enabled PPESA to accelerate the privatization of PEs. 6.3.4 The total budget allocated by the ADB for the implementation of the project was UA 2.998 million. Funds released by the Bank into the Special Account amounted to UA 1,383,477. In addition to disbursements into the Special Account, the Bank has made direct payments for outsourced services amounting to UA 610,779. 6.3.5 Upon the Governments request, the Bank in November, 2008 reallocated UA 1.0 million to the African Food Crisis Response Initiative aimed at addressing the acute foreign currency shortage for the importation of fertilizer.1 The reduced scope of the project necessitated a re-prioritization of the remaining activities. The shortfall on some of the activities (e.g. equipment and training, transaction advisors and contract compliance monitoring) will be financed under the on-going World Bank Private Sector Capacity Building Project. 6.4 Project benefits
6.4.1 Beyond the immediate objective of capacitating PPESA, the benefits of the project have to be seen in the context of the wider impact of privatization reforms. The benefit assessment is based on the GoEs Privatization Impact Assessment Report2 currently under finalization. 6.4.2 To date, the GoE has earned net proceeds from privatization of more than Birr 4.0 billion; attributed to the sale of PEs. While privatization has helped boost government revenue, the initially declared goal of maximising revenue from privatization was subsequently revised to emphasize more on the objectives of privatization such as entrepreneurial development and private sector capital attraction and re-deployment of tied up resources to core government functions.
Other projects in the portfolio were affected by the reallocation exercise which generated UA 39 million for the food crisis . 2 PPESA, 2009: Post Privatization Impact Assessment Draft Report
6.4.3 The Impact Assessment survey revealed that privatized companies have shifted the focus from mere production to a customized market focus, resulting in increases in revenue and establishment of new markets. Almost all of the owners of the 18 sampled privatized companies made capital investments subsequent to their privatizations. For example, a total of Birr 1,257 million was invested in modernization, expansion, quality control and/or environment control. However, although data pertaining to the employees is not complete for all sampled companies, the overall number of employees decreased on average from 11,098 employees at pre-privatization levels to 10,258 employees at 2007/2008 post-privatization levels (approximately 7.6% decrease). In general, overall post-privatization salaries increased by approximately 2 to 3 times from pre-privatization levels. Unfortunately, the review was unable to establish gender disaggregated data on the employees. 6.4.6 As already mentioned, the Privatization Program has also contributed to revitalizing the confidence of the private sector in Ethiopia. As a result, 26 SOEs were divested to Foreign Direct Investors for a total purchase price of approximately $400 million from seven different countries. These acquisitions have provided a signal to the international and domestic investors that Ethiopia is an attractive place in which to do business. This has been further affirmed by increase in number of both domestic and international bidders for SOEs. 6.4.7 Many of the assessed companies have taken the corporate responsibility of providing social services to the communities where they operate, thus improving the livelihood of people from these communities. Examples include: financing the construction of schools in rural villages, teaching improved agricultural techniques to farmers in the communities, providing food and water for townspeople, making significantly larger premium payments for employees to their provident funds thereby increasing employees pensions at the time of retirement, offering free medicine to employees and their families, providing HIV/Aids education and improving safety conditions in companies. 6.5 Sustainability
6.5.1 It is envisaged that the project benefits will be sustained beyond the completion of the project, given the emphasis placed on institutional and performance monitoring capacity building. The training programme undertaken to date has in fact helped strengthen the in-house capacities of PPESA staff. Although the ADF funding for the project was reduced due to the reallocation, its sustainability is assured. This is because some of the capacity building needs which could not be met through the project have been subsumed into the ongoing World Bank financed program. Moreover, the project has built core skills that will be critical in sustaining the privatization process. 6.6 Lessons
6.6.1 Lessons to be discerned from this project that could inform the design of future Bank-funded programs include: There is need for a robust Log frame which should be regularly updated, , particularly when serious delays in project implementation occur.
10
The OVI need to be refined and strengthened to facilitate verification of achievement of anticipated objectives. There has to be a regular GoE/development partner forum for addressing implementation issues and bottlenecks. Such a forum would ensure joint performance review, coordinate project implementation and facilitate joint decisions. . A reliable (gender disaggregated) baseline data, which enable a meaningful impact analysis, has to be established. This needs to be taken into account in designing similar technical assistance projects. Project execution agency did not have the necessary systems, structures and experience to implement technical assistance projects assisted by multiple donors. For such projects, complimentary capacity strengthening support to bolster project administration should be provided. Until recently, the AfDB Ethiopia Field Office was not active in the supervision of the project. FOs should play more proactive role and be delegated greater decision making responsibilities to ensure timely responses to no objection requests thus mitigating unnecessary delays. Further, there is need for more regular technical supervision missions with appropriate skill mix. There is need to link downstream project interventions with ongoing upstream operations that seek to address systemic challenges and capabilities to ensure achievement of better development results.
11
6.7.
PlannedActivities
Transaction Support, involving the preparation of transaction documents (due diligence & privatization strategy, financial audit, financial restructuring, asset & business valuations and information memorandum) for selected State Owned Enterprises(SOEs); InstitutionalSupport,strengtheningthePPESAsmanagement through: o o o o o the recruitment of local and international technical experts, staff training through local, overseas and onthejob trainingprograms, experiencesharingandmarketingtours, upgradingofinformationsystems acquisitionofsoftandhardware,etc.
EnvironmentalAuditofselectedSOEsandstrengtheningthe
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auditingandenforcementcapacitiesoftheEnvironmental ProtectionAuthority
Trainingonenvironmentalaudit Trainingonwasteandenergyaudit Procurementoflaboratoryequipment Environmentalauditof20PEs Wasteandenergyauditof7PEs Reviewofoutsourcedfullandpartialenvironmentalauditon24and72 PEs,respectively Variouspromotionalworkshopsconducted PreparationofprofilesonPEsslatedforprivatisation Preparationofpromotionalmaterials Financingofinternationalpromotionalpublications Postprivatisationimpactassessmentstudycompleted Postprivatisationimpactmonitoringsystemreviewed
13
Activities TransactionSupport
Support Transactionpreparationof20PEscompleted Businessvaluationof12PEs Assetvaluationof14PEs InternationalExperts o Employmentofprivatisationadvisors,valuationexpertsandstrategic experts LocalExperts o Employmentbusinessandassetvaluers,ITexperts,legaladvisorand environmentalexpert Training o Provisionoftailormadetrainingprogramsonbusinessandasset valuations;structuredEnglishandreportwriting;basicapplicationof computers;ethicsandanticorruption;andcommunication,public andmediarelations Tailormadetrainingprogramsonenvironmentalaudit, Environmentalauditof20PEs Wasteandenergyauditof7PEs Recruitmentofenvironmentaladvisorforqualitycontrolofoutsourced environmentalaudits Privatisationpromotionalworkshops ProfilesonPEsslatedforprivatisation Publicationofpromotionalmaterials(annualcalendars,leaflets, newsletters,coverageoninternationalmagazines) Postprivatisationimpactassessmentstudy Postprivatisationimpactmonitoringsystemreview
InstitutionalSupport
EnvironmentalAudit
PublicAwarenessPromotionProgram
PostPrivatizationMonitoring&ImpactAnalysis
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Note:TabledoesnotincludeoutstandingprocurementsofIThardandsoftwareandpromotional equipment.
Sl. No. I. 1 2 3 4 5 6 7 8 9 10 Item IT Hard and Software Computer Printer Scanner Server Server UPS UPS Fax Machine Photocopy Machine Accessories Various Software Sub-Total Laboratory Equipment for EPA Auto Sampler Hydrogen Hydride System Sound Level Meter with Calibration Portable Particle Sizing Aerosol Monitor Argon Gas Cylinder Consumables Installation and Commissioning Sub-Total Grand-Total 1 1 1 1 1 Quantity Cost
57 20 3 1 2 37 2 3
54,481.06 15,585.87 3,040.27 8,130.36 1,436.05 6,421.48 988.69 3,429.19 1,718.48 1,087.90 96,319.34
II.
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Perhaps the project was too ambitious with too many components?
Regarding risks to sustained achievement of outcomes, I As stated in Section D. No.2, it has been toned down (partially dont understand how the risk of employee retention arising mitigated) through recruitment of new staff and the provisions of continuous training and expertise funded by the project. from poor salaries and working conditions was mitigated.
Can more statistics be used in the outcomes section to This is a valid suggestion. Accordingly, in the next version of the PCR annexes, a comprehensive table of summary of activities carried out convey more strongly the outcomes? under the project will be included (see attachment 1.). Comments 6 to 8 on Lessons Learned Revised Lessons learnt sections in both PCR and Annexes
Details included both in the main document and Annexes PART A Considering that the DfID provided resources for the Administrative Officer, it would be better to include it as an external partner. Misleading sentence under reference removed Under Part B PART B On developmental challenges, please specify the sectors which were underdeveloped, experienced low levels of productivity and had low salaries/poor conditions of service before the privatization. PART C Expected outcomes and indicators for parts 4 and 5 of the LF are not indicated. While objectives/outcomes 1 and 2 are measurable, the rest are not. The bases are not clear, e.g. how does one Agreed. The measuring of impacts is best accomplished in reference to a baseline data which should have been established at the start of project implementation. The OVI should also have been refined during project implementation to enable the achievement of anticipated results. Both measures have been neglected during
measure improvements in public awareness and in project implementation. government revenue without baseline data or based on use of qualitative words like improve? You may thus need to revisit the section. PART D 1. As stated above, give reasons why you cannot state the outcomes for objectives 4 and 5. (see above) 2. While Ethiopia earned Birr 4 bn from sale of SOEs, can we attribute the 11 % growth to the privatization? What has been the general performance of the privatized firms so that we can appreciate the project impact? (see above) 3. 3M. Risks (iii): how does recruitment of new staff reduce the problem of low salaries and poor conditions of service? 4. On the Annex, it is being said that through privatization, salaries went up by 2 to 3 times compared to pre-privatization era; did this not apply to most of the firms which were previously state owned? 5. On (iv), please clarify on how government could influence the privatization process. Do you see governments privatizing all the identified SOEs in the long run considering that not all were privatized during the projects life? Limited government or political commitment to continue with the process may thus be a major risk.
Addressed as above.
The GoE is in the process of privatizing the remaining 65 PEs out of the initial portfolio of 123 PEs. This is to be accomplished within two to three years. This has been highlighted further in the document.
PART E 6. 1. The PCR has focused on partnership issues at Done. Addressed in revised document. the expense of other critical issues. You need to highlight some of the design issues which were considered or taken into account in designing the project with a view for readers to appreciate the design strengths and flaws. (see revised input) PART F 7. 2. Was there a forum under which donors met to discuss project implementation issues and bottlenecks? Existence of such a forum may also assist in lesson drawing for improving project implementation. 4. One of the challenges of having the new format is that little information is provided (run into the temptation of answering yes/no to most question appearing in tables) at the expense of providing clarity to issues. In most tables, I felt that you could have tried to elaborate more in trying to support your arguments. In terms of quality of supervision, I wonder if the combination of the officers in Annex 2 was really the best mix the Bank could have come up with. The project also required people who are conversant with public sector reform and fiduciary issues. PART G 8. 1. Fill in the empty rows. This Forum did not exist. This suggestion has been included under lessons learnt.
Noted and agreed. This has been included under lessons learnt.
Done
2. In light of decentralization, it would have been ETFO assigned a focal point who supported the design and drafting better to fully involve the FO in writing the report (by of the PCR. The ETFO Economist was also included in the Peer allowing them to comment on it before circulation). Review Team. In as much as the PCR was jointly undertaken by
the Borrower and the Bank, there are certain issues which may need input from and follow-up by the FO. For example, does the FO agree with most of the ratings in the Report? Has the opening of the FO eased some of the problems which existed before the opening of the Office? What lessons can be drawn from the delays in finalizing the project? I think also that the project performed poorly in Noted. This is reflected under lessons learnt. implementing the project within the initial approved period. Were it not for the financial crisis, it is doubtful if all the resources would have been utilized- thus there can be some lessons to learn from these implantation bottlenecks. True, the implementation of the project has been delayed mainly due to the temporary relocation of the Bank to Tunis, the frequent abs cense of task manager and therewith delays in addressing no objection request, coupled with the re-organization of the project executing agency. In addition, the appraisal was to ambitious and had set only two years for project implementation which is very optimistic for such a complex technical assistance project. The start of project implementation was also highly delayed, mainly due to problems faced in fulfilling preconditions precedent to the entry into force of the grant agreement. This fact has been included in the PCR. However, PPESA also highlight that the FO is increasingly playing an active role in accelerating no objection requests since its strengthening in the recent past.
ANNEX 6 AND GENERAL COMMENT 9. Going by the project narrative, the main purpose for Difficult to say due to lack of data (as indicated under Baseline the privatization programme was to reduce the size issues). PPESA is currently drafting the TOR to outsource the of portfolio of public enterprises (p6). I think the PCR collection of relevant data in addition to the post privatization ongoing could have provided more information on the
number of SOEs before the process began and how impact assessment study. But these points have been reflected they affected GOEs fiscal position. Instead of under lessons learnt. highlighting the general project contributions, like increased growth, increased disposable income and GOE earning Birr 2.07 bn from sale of SOEs, reference could have been made to specific effects arising from privatization. E.g. What would have been the net gains (profits less costs) during the period under consideration? Has FDI gone up because of privatization and how has efficiency of privatized firms improved? How much has GOE saved or realized after privatizing the institutions. There would have been a Costs-Benefit Analysis to see how the project has impacted on (a) the government fiscal performance; (b) social structures-people lost jobs; and (c) how the privatized firms are performing. ADDITIONAL COMMENTS FROM RD TEAM Lessons learnt Section should be reviewed: Section reviewed and further firmed up to ensure all peer reviewer comments are reflected and succinct. The current figure Birr 4 Billion is provided by PPESA. Ato Fekade will assist if there are updated figures available. Details on CSP 1999-2001 provided in both Excel and Narrative Sections. This has been highlighted as a separate section. Some lessons have been reflected but could be expanded by ETFO who were also involved in the process. This paragraph has been revised accordingly.
The revenue figures from privatization should be updated. The figure indicated is for 2006: More details on the CSP to which the project was aligned are required: The reallocation of UA1 million to the food crisis should be treated separately and the reasons given for reducing the funding and the impact of this action on the project: I do not see the link between the adoption of new
privatization guidelines and improved pace of project implementation (6.3.3)_ . The key factor was improved project supervision by the Bank and improved collaboration with the implementation agency. Mention of the CSP Mid-Term Review and the PASDEP is misplaced. The relevant PRSP was the SDPRP, the earlier PRSP. The relevant CSP was the one covering the 19992002 Period. This Paragraph has been revised accordingly.
PCR PEER REVIEW TEAM COMPOSITION: 1. A. ZERIHUN (ECONOMIST, ETFO) 2. F. KAMANGA (SENIOR GOVERNANCE EXPERT, MWFO) 3. E. GONDWE (SENIOR INVESTMENT OFFICER, OPSM)