ethiopia. privatization technical assistance project _en
TRANSCRIPT
ETHIOPIA: PRIVATIZATION TECHNICAL ASSISTANCE PROJECT
COMPLETION REPORT
Mrs. D. GAYE Regional Director OREA Ext. 2040 Mr. G. NEGATU Director OSGE Ext. 2077 Mr. C. SANTISO Division Manager OSGE.1 Ext. 2186
Project Number: P-ET-KFO-002 Project Name: Privatization Technical Assistance Project
Country (ies): ETHIOPIA
PROJECT COMPLETION REPORT (PCR)A. PROJECT DATA AND KEY DATES
II. KEY DATES
I. BASIC INFORMATION
06. 30. 2009
MID-TERM REVIEW
Actual Date
Lending Instrument(s) Grant Environmental Classification: 2 Req. Mitig. Meas.Sector: INSTITUTIONAL SUPPORT
Board Approval : 08.11.2000Project Concept Note Cleared by Ops. Com. N/A Appraisal Report Cleared: 11.2000
08.11.2001
CLOSING 31.12.2003
Percent Disbursed: 100%
Borrower: GOVERNMENT OF ETHIOPIA
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
Restructuring(s): N/A
Amount Cancelled: 0.00 Amount Disbursed: 3,000,000
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Co-financers and other External Partners: WORLD BANK: UA 0.75 mill. GTZ: UA 3.07 mill. DFID: GBP 320,000
Original Commitment Amount: 3,000,000
EFFECTIVENESS 12
Original Date Difference in months[Actual-Original]
01.11.2001
08.11.2000
Format Approved by Ops. Com. on 03/04/09
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3
PCR Team Members
All summary ratings are auto-generated by the computer from the relevant section in the PCR. CRITERIA
OVERALL BANK PERFORMANCE
3
Design and Readiness
Implementation
SUB-CRITERIA RATING
BORROWER PERFORMANCE
OVERALL BORROWER PERFORMANCE
Timeliness
OVERALL PROJECT OUTCOME
Design and Readiness
Supervision
PROJECT OUTCOME
BANK PERFORMANCE
Achievement of Outcomes
Achievement of Outputs
3
III. RATINGS SUMMARY
3
3
3
3
3
0
2
IV. RESPONSIBLE BANK STAFF
AT COMPLETION
Regional Director D. GAYE
C.D MTEGHA
C.D MTEGHA
Sector Director A. MTEGHA G. NEGATU
AT APPROVALPOSITIONS
Task Manager S. OLANREWAJU
PCR Team Leader
D. MAKONNEN (CONSULTANT); F.LAKEW (PTAP);
H. BEN BARKA (ETFO)
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PROJECT COMPLETION REPORT (PCR)B. PROJECT CONTEXTSummarize the rationale for Bank assistance. State: -what development challenge the project addresses,-the Borrower's overall strategy for addressing it,-Bank activities in this country (ies) and sector over the past year and how they performed, and-ongoing Bank and other externally financed activities that complement, overlap with or relate to this project.
Please cite relevant sources. Comment on the strength and coherence of the rationale.
[250 words maximum. Any additional narrative about the project's origins and history, if needed, must be placed in Annex 6: Project Narrative]
Development challenges: The CSP 1999-2001 highlighted the folliowing challenges: Transition to private sector led economy, high unemployment, inefficient public enterprises, low level of productivity, attracting FDI, inadequate institutional capacity, among others.
Borrowers’ strategy: The EPRDF government's Sustainable Development and Poverty Reduction Program (SDPRP) 2002/03-2004/05 ; and its successor the Plan for Accelerated and Sustained Development to End Poverty (PASDEP) covering the period 2005/06-2009/10 sought to generate market-based and robust pro-poor economic growth.
(ii) Investment attraction - providing access to the private capital to propel national economic development; and
Complementarity: WB financed technical assistance project on Private Sector Development-Capacity Building (PSD-CB) with its sub-component 'accelerating the implementation of the Ethiopian Privatization' complements the ADB's PTAP.
(iii) Relieving tied resources that enable the government to re-deploy its scarce resources and privatization proceeds to higher priority poverty reduction programs.
Please refer to Annex 6 for detailed articulations.
(i) Creating a dynamic enterpreneur group as partner in the economic development process to enhance contribution of private sector to sustainble economic growth;
Specific Objectives of the PTAP include:
Project components of the PTAP include: Transaction support, institutional support, environmental audit, and public awareness promotion program and post privatization monitoring and impact analysis.
Bank's activities: Support the Government of Ethiopia to achieve a sustained pro-poor economic growth.
Overall, the Bank Groups' active portfolio consists of 24 operations that cover the following sectors: agriculture (10), transport (4), industry (1), public utilities (5), social sector (2) and multi-sector (2); with total net commitments amounting to UA 683.3 million.
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PROJECT OBJECTIVES DIMENSIONS ASSESSMENT
2. Describe the major project components and indicate how each will contribute to achieving the Project Development Objective(s).
� Create a dynamic enterpreneur group as partner in the economic development process thereby enhancing the contribution of the private sector to sustainable economic growth;
Project was relevant to country's overall development priorities.
Objectives were achieved but not within the expected timeframe
Project was consistent with the Bank's country strategy
The project was consistent with the Bank's corporate strategy of poverty reduction.
RELEVANT a) Relevant to the country's development prioritiesb) Objectives could in principle be achieved with the project inputs and in the expected timeframe
3. Provide a brief assessment (up to two sentences) of the project objectives along the following 3 dimensions. Insert a working score, using the scoring scale provided in Appendix 1.
WORKINGSCORE
ACHIEVABLE
CONSISTENT
1. State the Project Development Objective(s) (as set out in the appraisal report)C. PROJECT OBJECTIVES AND LOGICAL FRAMEWORK
� Transactions Support (Preparation of transaction studies and related short-term training of staff) - improved the negotiating capacity of the Government in its divestiture and relieved about Birr 4.0 billion tied resources for priority sectors;� Institutional Support (Technical assistance to the Privatization and Public Enterprises Supervising Agency (PPESA) - Strengthened capacity of PPESA to support the privatisation of large-scale and complex PEs (80);� Public Awareness Promotion Program (To build stakeholders’ and the public’s support for the privatization program) - attracted both local and international buyers ; � Post Privatization Monitoring & Impact Analysis - Performance monitoring, monitoring of compliance with the provisions of sales contracts, and impact analysis to strengthen the operations of the Post-Privatisation Directorate and enforce the analysis of economic and social impacts of the privatisation program; and� Environmental Audit - Focusing on the environmental audit for which the ADB has provided transactions support to strenghten the Ethiopian Environmental Authority, among others, in identifying the environmental liabilities of PEs and mitigating the environmental impacts of privatised companies.
4
2
4
3d) Consistent with the Bank's corporate priorities
c) Consistent with the Bank's country or regional strategy
PROJECT COMPLETION REPORT (PCR)
� Relieve tied resources - enabling the Government to re-deploy its scarce resources and privatization proceeds to higher priority and poverty reduction programs.
� Attract Investment - providing access to the private capital to propel national economic development;
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4. Post Privatization Monitoring & Impact Analysis - Performance monitoring, monitoring of compliance with the provisions of sales contracts, and impact analysis;
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);
Public and investor awareness of the privatisation program improved
Contracting out public information promotion to private proffessional media.
Environmental audit of 20 enterprises completed.
1. Transactions Support - Preparation of and related short-term training of staff on transactions documents for 20 enterprises.
3. Public Awareness Promotion Program - Designed to build stakeholders’ and the public’s support for the privatization program;
EPA technical capacity to implement the privatisation program enhanced.
OUTPUTS EXPECTED OUTCOMES 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. 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
5. Environmental Audit - Focusing on the environmental audit of the 20 enterprises for which the ADB has provided transactions support.
Environmental Audit
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
1. Contracting out of PE's divesture preparation to private consulting firms. 2. Short term training programs.
Provision of policy and technical advice, training and MIS
Number of training programs offered and information systems functional by June 2009
Plans of awareness promotion for different target groups successfully implemented by June 2009
Impact analysis system put in place by June 2009.
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
Strengthened capacity of PPESA to effectively implement the privatization action plan, thereby reducing the size of the portfolio of state enterprises
1. Improved Government (PPESA) advocacy skills 2. Increased awareness and interest of private enterpreneurs (both domestic and foreign)
Hiring consultants to undertake sector studies and periodic impact analysis
Systems for post privatisation impact analysis established and reports of sector studies for the restructuring of other PEs competed.
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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).
LOGICAL a) Presents a logical causal chain for achieving the project development objectives
Log frame was not well designed and does not necessarily present a casual chain for achieving development objectives.
2
LOG. FRAME DIMENSIONS ASSESSMENT WORKING SCORE
2
MEASURABLE b) Expresses objectives and outcomes in a way that is measurable and quantifiable
A baseline data should have been worked out at the start of project implementation. The indicators should also have been refined during project implementation.
1
THOROUGH c) States the risks and key assumptionsRisks are not indicated in the log frame but assumptions are and these conversely feature as risks.
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D. OUTPUTS AND OUTCOMES
I. ACHIEVEMENT OF OUTPUTS
Weighted Score(auto-calculated)
Share of Project Costs in percentage
(as stated in Appraisal Report)Working Score
Actual OutputsExpected Outputs
MAJOR ACTIVITIES
In the table below, assess the achievement of actual vs. expected outputs for each major activity. Import the expected outputs from the log. frame in Section C. Score the extent to which the expected outputs were achieved. Weight the scores by the activities' approximate share of project costs. Weighted scores are auto-calculated by the computer. The overall output score will be auto-calculated as the sum of the weighted scores. Override the auto-calculated score, if desired, and provide justification.
PROJECT COMPLETION REPORT (PCR)
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 web-site is under finalization. 3
Transaction preparation reports of 123 PEs completed: and 85 PEs brought to the point of sale by June 2009.
25,7
4
0,244
2. EPA technical capacity to implement the privatisation program enhanced.
PPESA technical capacity in valuation enhanced.
2
2,04451,1
12,2
1. Transaction preparation reports of 123 PEs completed; at least 80 PEs brought to the point of sale by June 2009.
0,771
5. Environmental audit of enterprises completed.
Environmental audit of 20 enterprises completed, and waste and energy audits of 7 PEs under finaization. 3 4,5
OVERAL OUTPUT SCORE[Score is calculated as the sum of weighted scores] 3
0,135
Provide justification for over-riding the auto-calculated score
Insert the new score or re-enter the autocalculated score 3
Check here to override the auto-calculated score
0
4. Systems for post privatisation impact analysis established and reports of sector studies for the restructuring of other PE's completed.
Impact Assessment Study under finalization.
1 6,5
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1. Using available monitoring data, assess the achievement of expected outcomes. Import the expected outcomes from the log. frame in Section C. Score the extent to which the expected outcomes were achieved. The overall outcome score will be auto-calculated as an average of the working scores. Override the auto-calculated score, if desired, and provide justification.
3
OVERALL OUTCOME SCORE[Score is calculated as an average of the working scores] 3
2. Increased Government revenues through publid enterprises sales
2. Additional outcomes. Comment on the project's additional outcomes not captured in the log. frame, including cross-cutting issues (e.g., gender).
OUTCOMESWorking Score
3
1. Strengthened capacity of PPESA to effectively implement the privatization action plan, thereby reducing the size of the portfolio of state enterprises.
Strengthened capacity of PPESA to effectively implement the privatization action plan, thereby reducing the size of the portfolio of state enterprises.
3. Increased awareness of the Government led Privatization Program
The country earned net proceeds in the amount of Birr 4.0 billion from the the sale SOEs through 2006.Increased awareness and interest of private entrepreneurs (both domestic and foregin) to acquire and/or manage SOEs, and improved Government advocacy skills
Refer to Annex 6.2 for further details.
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.
Check here to override the auto-calculated score
Health insurance: P rivatized companies have made significant improvements in health insurance coverage for employees compared with pre-privatization benefits.
Provide justification for over-riding the auto-calculated score
3
Expected Actual
3
Insert the new score or re-enter the autocalculated score
II. ACHIEVEMENT OF OUTCOMES
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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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USE OFCOUNTRY SYSTEMS
c) Project procurement, financial management, monitoring and/or other systems are based on those already in use by government and/or other partners.
ASSESSMENT
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b) Project design includes adequate risk analysis.
Project design includes average risk analysisRISK ASSESSMENTAND MITIGATION
a) Project complexity is matched with country capacity and political commitment.
There was a political commitment to privatization. Project design was not complex.
2
While the GoE procurement laws and regulations were found acceptable, the actual procurement procedures adopted under the project were in line with the Bank's procurement rules.
2
REALISM
2. For each dimension of project design and readiness for implementation, provide a brief assessment (up to two sentences). Insert a working score, using the scoring scale provided in Appendix 1.
Limited capacities of the project executing agency during project appraisal, led to the design of GTZ support through hiring of an experienced administration officer.
A coordinated approach between the three co-financing partners increased synergies, minimized duplication of efforts and ensured swift project implementation.
In June 2004, and with limited interruptions, partners such as DFID and the WB took over funding of the administrative officer.
This was in response to GTZ’s withdrawal of its assistance following massive budgetary cuts in its worldwide operations.
1. State the extent to which the Bank and the Borrower ensured the project was commensurate with the Borrower’s capacity to implement by designing the project appropriately and by putting in place the necessary implementation arrangements. Consider all major design aspects, such as extent to which project design took into account lessons learned from previous PCRs in the sector or the country (please cite key PCRs); whether the project was informed by robust analytical work (please cite key documents); how well Bank and Borrower assessed the capacity of the implementing agencies and/or Project Implementation Unit; scope of consultations and partnerships; economic rationale of project; and provisions made for technical assistance.
[200 words maximum. Any additional narrative about implementation should be included at Annex 6: Project Narrative]
PROJECT COMPLETION REPORT (PCR)
PROJECT DESIGN AND READINESS FOR IMPLEMENTATION DIMENSIONS
For fulfillment of conditions delays encountered due to weak institutional capacity and Bank supervision. Please refer to Annex 6.5.
E. PROJECT DESIGN AND READINESS FOR IMPLEMENTATION
WORKING SCORE
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3
Monitoring indicators and plan not agreed upon before project launch.
BASELINE DATA
Borrower
WORKING SCORE
f) Monitoring indicators and monitoring plan were agreed upon before project launch.
2
3
Responsibilites for project implementation were clearly defined.
PROCUREMENTREADINESS
e) Necessary implementation documents (e.g. specifications, design, procurement documents) were ready at appraisal.
Partially;specifications for goods, short-term experts not given during appraisal.
h) Baseline data were available or are were collected during project design.
2
2Not available during project design.
MONITORINGREADINESS 2
For the following dimensions, provide separate working scores for Bank performance and Borrower performance:Bank
CLARITY d) Responsibilities for project implementation were clearly defined. 3
3
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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.
F. IMPLEMENTATION
PROJECT COMPLETION REPORT (PCR)
1. State the major characteristics of project implementation with reference to: adherence to schedules, quality of construction or other work, performance of consultants, effectiveness of Bank supervision, and effectiveness of Borrower oversight. Assess how well the Bank and the Borrower ensured compliance with safeguards.
[200 words maximum. [Any additional narrative about implementation should be included at Annex 6: Project Narrative.]
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.
While adherence to schedules was poor, performance of consultants, effectiveness of Bank supervision and borrower's oversight was very good.
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.
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.
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).
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3
3
TIMELINESS
c) Bank provided quality supervision in the form of skills mix and practicality of solutions
Project Covenants
WORKING SCORE
Environmental Safeguards The borrower implicitly compiled with environmental safeguards.
Project Covenants
a) Extent of project adherence to the original closing date. If the number on the right is:below 12, score 4between 12.1 to 24, score 3between 24.1 to 36, score 2beyond 36.1, score 1
Fiduciary Requirements
The Bank has provided quality supervision.
PROJECT IMPLEMENTATION DIMENSIONS ASSESSMENT
BANK PERFORMANCE
The Bank implicitly complied with fiduciary requirements.
The Bank has provided quality management.d) Bank provided quality management oversight
b) Bank complied with:
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.
3
3
f) Borrower was responsive to Bank supervision findings and recommendations
The borrower implicitly complied with fiduciary requirements
g) Borrower collected and used monitoring information for decision making
Borrower adequately used monitoring information for decision making.
BORROWERPERFORMANCE
The borrower was adequately responsive to Bank's supervision findings and recommendations.
e) Borrower complied with:
Fiduciary Requirements
1
The Bank has satisfactorily complied with project agrements. 3
3
Difference in months between original closing date and actual closing date or date of 98% disb.
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Environmental Safeguards The Bank implicitly complied with environmental safeguards.
3
3
3
3The borrower has satisfactorily compiled with project agreements.
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2. Briefly describe the PCR Process. Describe the Borrower’s 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]
4
WORKING SCORE (auto-calculated)if the difference is 6 months or less, a 4 is scored. If the difference is 6.1 or more, a 1 is scored
PROJECT COMPLETION REPORT (PCR)G. COMPLETION
30.06.09 0
Date PCR was sent to [email protected] Difference in months
Date project reached 98% disb. Rate (or closing date if applicable)
1. IS THE PCR DELIVERED ON A TIMELY BASIS, IN COMPLIANCE WITH BANK POLICY?
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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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;
H. LESSONS LEARNED
Summarize key lessons for the Bank and the Borrower suggested by the project’s 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
See Annexe 6 for further details
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.
vii) There is need to link downstream project interventions with ongoing upstream operations that seek to address systemic challenges and capabilities.
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PROJECT DESIGN AND READINESS SUB-SCOREBaseline data wre available or were collected during design. 2
3
Monitoring indicators and monitoring plan were agreed upon during design.
3
OVERALL BANK PERFORMANCE SCORE
Necessary implementation documents (e.g. specifications, design, procurement documents) were ready at appraisal.
The log frame expresses objectives and outcomes in a way that is measurable and quantifiable.
4Project Objectives were relevant to country development priorities.2
3
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2
Project design includes adequate risk analysis.
The log frame states the risks and key assumptions.
4Project Objectives were consistent with the Bank’s country or regional strategyProject Objectives could in principle be achieved with the project inputs and in the expected time frame.
The log frame presents a logical causal chain for achieving the project development objectives.
Responsibilities for project implementation were clearly defined.
Project procurement, financial management, monitoring and/or other systems were based on those already in use bygovernment and/or other partners. 2
3
21
WORKING SCORESUB-CRITERIA
Project complexity was matched with country capacity and political commitment.
Project Objectives were consistent with the Bank’s corporate priorities
Design and Readiness2
BANK PERFORMANCE
Fiduciary Requirements 3
SUPERVISION SUB-SCORE
Bank provided quality management oversight.
333333
Supervision:
PCR was delivered on a timely basis
Bank provided quality supervision in the form of skills mix provided and practicality of solutions.
Environmental Safeguards
2
Bank complied with:
Project Covenants
1Achievement of outcomes
PROJECT COMPLETION REPORT (PCR)
33
3
Timeliness
Achievement of outputs
PROJECT OUTCOME
OVERALL PROJECT OUTCOME SCORE
I. PROJECT RATINGS SUMMARYAll working scores and ratings are auto-generated by the computer from the relevant section in the PCR.
CRITERIA
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3
Environmental Safeguards 3
Monitoring indicators and monitoring plan are agreed upon and baseline data are available or are being collected 2PROJECT DESIGN AND READINESS SCORE
Borrower complied with:
3
IMPLEMENTATION SUB-SCORE3
Fiduciary Requirements
Borrower was responsive to Bank supervision findings and recommendations. 3Borrower collected and used of monitoring information for decision-making. 3
BORROWER PERFORMANCE
3Project Covenants 3
Implementation
Necessary implementation documents (e.g. specifications, design, procurement documents) are ready at appraisal. 3
Design and ReadinessResponsibilities for project implementation are clearly defined. 3
OVERALL BORROWER PERFORMANCE SCORE
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STEP SIGNATURE AND COMMENTS DATE
J. PROCESSING
Sector Director Approval
Regional Director Clearance
Sector Manager Clearance
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APPENDIX 1
Scale for Working Scores and Ratings
SCORE
Note: The formulas round up or down for decimal points. Only whole numbers are computed.
NA
EXPLANATION
Very Good- Fully achieved with no shortcomings
Good- Mostly achieved despite a few shortcomings
Fair- Partially achieved. Shortcomings and achievements are roughly balanced
Poor- Very limited achievement with extensive shortcomings
Non Applicable
4
3
2
1
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.
5. List of Supporting Documents
Mandatory
1. Project Costs and Financinga. Project costs by componentb. 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.
LIST OF ANNEXES
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.
4. Procurement Plan. Please attached the most recent Procurement Plan
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 UA’000
GTZ* UA’000
IDA UA’000
GOE UA’000
TOTAL UA’000
ADF % SHARE
Transactions Support 1,458 0 71 3227 4,756 30.6
Institutional Support 348 1,944 0 0 2,292 15.2
Public Awareness Promotion 734 187 0 0 921 100
Post Priv. Impact Analysis 185 0 0 0 185 79.4
Environmental Audit 130 0 0 0 130 0.0
EPA Operating Support 0 0 0 1,428 1,428 0.0
Base Cost 2,855 2,131 71 4,655 9,712 29.4
Price Contingency 143 106 4 233 486 29.4
Total Cost 2,998 2,237 75 4,888 10,198 29.4
Note: * 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
2
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
2.2 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 Date Of Mission Mission Composition 1 11-17 Nov, 2001 Mr. Stephen Olanrewaju, Chief Economist, OCDE.1
Mr. I. SAMBA, Senior Environmentalist, OCDE.1
2 30 June – July 5, 2002 Mr. Stephen Olanrewaju, Chief Economist, OCDE.1
3 08-17 Dec, 2003 Mr. George Namakando, Principal Economist
4 05-15 Sept , 2004 Mr. George Namakando, Principal Economist
5 28 Sept – 13 Oct, 2005 Mr. George Namakando, Principal Economist
6 15-26 Feb, 2007 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
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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)
Annex 3. Summary of Supervision Rating
INDICATORS
RATINGS
Precedings report This report
19.05.2009 11.12.2006 14.05.2007 30.10.2007 17.09.2008
A. PROJECT IMPLEMENTATION
Compliance with loan conditions precedent to entry into force 3 3 3 3 3
Compliance with General Conditions 0 0
Compliance with Other Conditions 3 3 3 3 3
B. PROCUREMENT PERFORMANCE
Procuremet of Consultancy Services 1 2 2 2 2
Procurement of Goods and Works 2 2 2 2
C. FINANCIAL PERFORMANCE
Availability of Foreign Exchange 2 2 2 2 2
Availability of Local Currency 3 3 3 3 3
Disbursement Flows 2 2 2 2 2
Cost Management 2 2 2 2 2
Performance of Co-Financiers 2 3 3 3 3
D. ACTIVITIES AND WORKS
Adherence to implementation schedule 2 1 2 1 1
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Performance of Consultants or Technical Assistance 2 3 3 3 3
Performance of Contractors 0 0
Performance of Project Management 2 2 2 2 2
E. IMPACT ON DEVELOPMENT
Likelihood of achieving development Objectives 2 2 2 2 2
Likelihood that benefits will be realized and sustained beyo 2 2 2 2 2
Likely contribution of the project towards an increase in 2 2 2 2 2
Current Rate of Return 0 0
F. OVERALL PROJECT ASSESMENT
Current Supervision Average
2.14
2.27
2.33
1.89
1.89
Current Trend over time
2.10
RATINGS: 3 = Highly Satisfactory, 2 = Satisfactory, 1 = Unsatisfactory, 0 = Highly Unsatisfactory, ‘ ‘ = Non applicable
STATUS
Implementation Progress (IP) = 2.00
Development Objectives (DO) = 1.50
OVERALL STATUS : NON PROBLEMATIC PROJECT / NON POTENTIALY PROBLEMATIC PROJECT /
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Annex 4: Procurement Plan Summary (as of April, 2009)
Amount Paid by African Development Fund – in UA
Expenditure Category Costs & Commitments
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
SL 605,483
- 469,55560,353
8,7691,144,160
2. Equipment 2.1. IT Hard and Software 2.3. Promotional Material Sub-Total 2
NSH 197,880
- 197,880
3. Training Training
Oversees TrainingExperience Sharing Training
Library and DocumentationSub-Total 3
SL 132,104
- - -
132.1044. Promotional Expenses
PublicationsWorkshops
Media ExpensesSub-Total 4
SL 55,037
7,64094,566
157,2435. Miscellaneous
Impact Studies Study Materials
Sub-Total 5
NSH - - -
6. Environmental Audit SL 91,663Base Cost 1,723,050Funds reprogrammed for the African Food Crisis Response Initiative 1,000,000Total 2,723,050
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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.
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Annex 6: Brief Project narrative
6.1 Background
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).
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6.1.5 The 1999-2001 CSP underpinned the Bank’s support to PTAP, as it had a focus on private sector development. The CSP identified the need for Bank Group’s 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 country’s 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 public’s 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 no-objection requests from the Bank. This was compounded by the Bank’s 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 Government’s 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 GoE’s 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.
1 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
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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.
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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.
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6.7. Summary of Bank funded Activities Carried Out under the Project
Planned Activities Actual Performance
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);
• Transaction preparation of 20 PEs completed • Business valuation of additional 12 PEs outsourced to individual
consultants completed • Asset valuation of additional 14 PEs outsourced to individual consultants
completed
Institutional Support, strengthening the PPESA’s management through:
o the recruitment of local and international technical experts,
o staff training through local, overseas and on‐the‐job training programs,
o experience sharing and marketing tours, o upgrading of information systems o acquisition of soft and hardware, etc.
• International Experts o 15 international short‐term experts of various disciplines employed
for a total of 345 person days o 2 international long‐term advisors employed (publicity and
marketing, and post‐privatization and contract monitoring • Local Experts
o 8 local short‐term experts of various disciplines employed for a total of 250 person days
• Training o 10 tailor‐made training programs conducted (business and asset
valuations, structured English and report writing, basic application of computers, and ethics and anti‐corruption)
• Upgrading of Information Systems o Upgrading of web‐site o Upgrading of network o Upgrading of tailor‐made privatization software o Acquisition of broadband
• Acquisition of Soft and Hardware o Procurement of IT hard and software o Procurement of promotional equipment
Environmental Audit of selected SOEs and strengthening the • TOT on environmental audit
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auditing and enforcement capacities of the Environmental Protection Authority
• Training on environmental audit • Training on waste and energy audit • Procurement of laboratory equipment • Environmental audit of 20 PEs • Waste and energy audit of 7 PEs • Review of outsourced full and partial environmental audit on 24 and 72
PEs, respectively Public Awareness Promotion Program, designed to build stakeholder and public support for the privatization program and to promote the Ethiopian privatisation program
• Various promotional workshops conducted • Preparation of profiles on PEs slated for privatisation • Preparation of promotional materials • Financing of international promotional publications
Post Privatization Monitoring & Impact Analysis to enhance PPESA’s capacity to conduct performance & compliance monitoring against sales contract covenants and post privatization impact analysis
• Post‐privatisation impact assessment study completed • Post‐privatisation impact monitoring system reviewed
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6.8. Support for Needs
Activities Support
Transaction Support • Transaction preparation of 20 PEs completed • Business valuation of 12 PEs • Asset valuation of 14 PEs
Institutional Support • International Experts o Employment of privatisation advisors, valuation experts and strategic
experts • Local Experts
o Employment business and asset valuers, IT experts, legal advisor and environmental expert
• Training o Provision of tailor‐made training programs on business and asset
valuations; structured English and report writing; basic application of computers; ethics and anti‐corruption; and communication, public and media relations
Environmental Audit • Tailor‐made training programs on environmental audit, • Environmental audit of 20 PEs • Waste and energy audit of 7 PEs • Recruitment of environmental advisor for quality control of outsourced
environmental audits Public Awareness Promotion Program • Privatisation promotional workshops
• Profiles on PEs slated for privatisation • Publication of promotional materials (annual calendars, leaflets,
newsletters, coverage on international magazines) Post Privatization Monitoring & Impact Analysis • Post‐privatisation impact assessment study
• Post‐privatisation impact monitoring system review
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6.9. Summary of Equipment Supplied
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Note: Table does not include outstanding procurements of IT hard and software and promotional equipment.
Sl. No. Item Quantity Cost I. IT Hard and Software
1 Computer 57 54,481.06
2 Printer 20 15,585.87
3 Scanner 3 3,040.27
4 Server 1 8,130.36
5 Server UPS 2 1,436.05
6 UPS 37 6,421.48
7 Fax Machine 2 988.69
8 Photocopy Machine 3 3,429.19
9 Accessories 1,718.48
10 Various Software 1,087.90
Sub-Total 96,319.34
II. Laboratory Equipment for EPA
Auto Sampler 1 14,705.88
Hydrogen Hydride System 1 14,705.88
Sound Level Meter with Calibration 1 1,902.71
Portable Particle Sizing Aerosol
Monitor 1 15,050.38
Argon Gas Cylinder 1 641.03 Consumables 414.78
Installation and Commissioning 5,199.85
Sub-Total 52,620.51
Grand-Total 148,939.85
SUMMARY OF COMMENTS AND RESPONSES Issue
Response
Perhaps the project was too ambitious with too many components?
The project may seem ambitious with too many components (institutional support, public awareness promotion, and post privatization monitoring and environmental audit). However, in reality, it did achieve the expected outcomes as measured against the existing log frame. This good achievement occurred despite the fact that excessive delays in the Bank’s activities in the early years due mainly to the relocation of the Bank’s headquarters from Abidjan to Tunis and the absence a project task-manager The project was also designed not to operate in isolation, but to complement the interventions financed by the WB and the GTZ. Privatization of PEs in developing economies needs multi-faceted approaches and interventions. The project components were skillfully selected to complement each other and meaningfully contribute towards the achievement of the project goal.
How much can you say with certainty did the project contribute to the government’s improved revenue?
According to the information obtained from PPESA, the latest figure on privatization proceeds is 4.0 billion birr. Moreover, the increase in the number of PEs has also resulted in a significant increase in tax revenues. It is worth mentioning here that the initially declared goal of the GoE to maximize revenue due to privatization has been subsequently revised to include other objectives such as private sector development and relieving tied resources.
In your additional outcomes section, are these outcomes The additional outcomes like increase in salaries is actually the findings of the PPESA, Privatization Impact Assessment Report using
that came to pass, or did you assume that they did?
a sample of 22 privatized PEs.
Regarding risks to sustained achievement of outcomes, I don’t understand how the risk of employee retention arising from poor salaries and working conditions was mitigated.
As stated in Section D. No.2, ‘it has been toned down (partially mitigated) through recruitment of new staff and the provisions of continuous training and expertise funded by the project.
Can more statistics be used in the outcomes section to convey more strongly the outcomes?
This is a valid suggestion. Accordingly, in the next version of the PCR annexes, a comprehensive table of ‘summary of activities carried out 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
PART A Considering that the DfID provided resources for the Administrative Officer, it would be better to include it as an external partner.
Details included both in the main document and Annexes
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.
Misleading sentence under reference removed Under Part B
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 government revenue without baseline data or based on use of qualitative words like “improve”? You may thus need to revisit the section.
project implementation.
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 project’s life? Limited government or political commitment to continue with the process may thus be a major risk.
Addressed as above. Reviewed and addressed in revised documents. This is construed as a statement. 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 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)
Done. Addressed in revised document.
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.
This Forum did not exist. This suggestion has been included under lessons learnt. Noted and agreed. This has been included under lessons learnt.
PART G 8. 1. Fill in the empty rows.
2. In light of decentralization, it would have been better to fully involve the FO in writing the report (by allowing them to comment on it before circulation). In as much as the PCR was jointly undertaken by
Done ETFO assigned a focal point who supported the design and drafting of the PCR. The ETFO Economist was also included in the Peer Review Team.
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 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.
Noted. This is reflected under lessons learnt. 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
the privatization programme was to reduce the size of portfolio of public enterprises (p6). I think the PCR could have provided more information on the
Difficult to say due to lack of data (as indicated under Baseline issues). PPESA is currently drafting the TOR to outsource the collection of relevant data in addition to the post privatization ongoing
number of SOEs before the process began and how they affected GOE’s fiscal position. Instead of 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.
impact assessment study. But these points have been reflected under lessons learnt.
ADDITIONAL COMMENTS FROM RD TEAM Lessons learnt Section should be reviewed: 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
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.
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 1999-2002 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)