The World Bank Uttarakhand Workforce Development Project (P154525) REPORT NO.: RES56397 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF UTTARAKHAND WORKFORCE DEVELOPMENT PROJECT APPROVED ON JUNE 19, 2018 TO REPUBLIC OF INDIA EDUCATION SOUTH ASIA Regional Vice President: Martin Raiser Country Director: Auguste Tano Kouame Regional Director: Lynne D. Sherburne-Benz Practice Manager/Manager: Keiko Inoue Task Team Leader(s): Namrata Raman Tognatta, Meghna Sharma, Syed Rashed Al-Zayed The World Bank Uttarakhand Workforce Development Project (P154525) I. BASIC DATA Product Information Project ID Financing Instrument P154525 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 19-Jun-2018 30-Jun-2023 Organizations Borrower Responsible Agency Republic of India Government of Uttarakhand Project Development Objective (PDO) Original PDO The Project Development Objectives (PDO) are to improve the quality and relevance of training at priority Industrial Training Institutes (ITIs) and to increase the number of labor-market-relevant workers through short-term training in Uttarakhand. Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-88770 19-Jun-2018 18-Sep-2018 04-Dec-2018 30-Jun-2023 67.20 49.62 17.58 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Uttarakhand Workforce Development Project (P154525) II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES Project Status: 1. The project was approved on June 19, 2018, and became effective on December 4, 2018. The original loan amount was US$74 million (Loan No. 8877-IN), of which US$6.8 million was cancelled through a restructuring in August 2020. The current loan amount is US$67.2 million. The project was restructured for a second time in January 2022 to (i) modify select Disbursement Linked Indicators (DLIs) such that they are aligned with the sequencing of implementation of upgradation activities, and (ii) introduce new DLIs to incentivize activities that support building resilience in the system. 2. An Implementation Support Mission (ISM) was held from May 1-5, 2023, and project rating towards achievement of the Project Development Objective (PDO) and Implementation Progress has been rated as ‘Moderately Satisfactory’. 3. The project’s PDO is to improve the quality and relevance of training at priority Industrial Training Institutes (ITIs) and to increase the number of labor market-relevant workers through short-term training in Uttarakhand. These objectives are measured by four PDO indicators. Status of year 5 (end of project) targets are presented below. a. Job placement rate among priority ITI graduates: The project has achieved the Year 5 target with overall 34.5 percent ITI graduates placed against a target of 32 percent, exceeding the targets for both males (36.4 percent against 33 percent) and females (27 percent against 15 percent). b. Number of students enrolled in priority ITIs: While there has been an increase in enrolment from the last year with 5,796 students enrolled in priority ITIs, the project is falling short of the expected end of project (EoP) target of 6,100. Similarly, in the case of female enrolment, enrolment has increased over the previous year with the share of females in total enrolment at 12.3 percent; however, the project is lagging the EoP target of 25 percent. c. Job placement rate among short-term trainees: Short-term trainings, certifications and placements for Year 5 are underway. Based on partial data, the overall placement rate is currently 14 percent against a EoP target of 49 percent, with 18 percent for males and 12 percent for females. Achievement on this target will be updated after completion of certification and placements for ongoing training (June 2023). d. Number of trainees obtaining certification from short-term training: The project is on track to achieve the target for this indicator with 30,251 beneficiaries certified against the EOP target of 32,000. Of these, 68.1 percent are women (against a target of 55 percent) and 26 percent are from Scheduled Caste (SC)/Scheduled Tribe (ST) categories (against a target of 22 percent). 4. Progress towards the Intermediate Results Indicators: The project has met all the five EoP targets for the intermediate results indicators related to ITI training and is on track to meet the EoP indicator for short- term training by June 2023. Overall, the project has benefitted 64,968 beneficiaries (including ITI and short-term training students). The project has exceeded the targets for professional development of ITI teachers and staff by training 97 percent staff against EoP target of 95 percent. The EoP targets related to improved administrative capacity of ITIs has been met with an inter-department action plan approved by the Department of Skill Development and Employment (DSDE) to steer institutional reforms. The project has conducted quarterly communication and awareness campaigns on skills training in the state as per target. As part of citizen engagement, the project has completed several surveys and The World Bank Uttarakhand Workforce Development Project (P154525) studies with beneficiaries. The insights from these surveys have informed the design of ongoing activities related to enrolment, training, and placement support activities. Instructor feedback on the quality and relevance of professional development trainings has also been gathered and is being used to develop plans for continuous professional development of staff. 5. Component 1 focuses on improvements to the ITI system – enhancement of selected priority ITIs and capacity building of staff. Enhancement of project ITIs includes upgradation of existing trades, introduction of new trades – all achieving affiliation as per standards prescribed by the National Council of Vocational Training (NCVT) – and quality improvements in the institutions. a. Enhancement of project ITIs. Civil works required for upgradation of trades is complete in 15 of the 23 project ITIs. Weather conditions, especially heavy rain in the hilly areas of the region and disruptions in supply chain of materials and accessories have delayed the timeline for completion of civil works. As a result, civil works that were due to be completed by April 2023 require additional time and are expected to be completed by October 2023. The procurement and delivery of tools and equipment required for upgradation is timed with the completion of civil works in project ITIs and follows a staggered schedule whereby tools and equipment are ordered in batches, and delivered to project institutions where construction works have been completed. This is important as it minimizes the risk of damage to tools/equipment during delivery and installation. The timeline for completing the procurement of tools/equipment, that were due to be completed by April 2023, requires additional time (December 2023), and follows a detailed plan of action developed by the project team which is monitored regularly by the project leadership. The final step for upgradation involves securing NCVT affiliation for the upgraded trades during the project period. Affiliation requires completion of identified civil works, procurement, and adequate instructors/staff at project ITIs. The state has approved recruitment of instructors for the ITI system. The hiring process is expected to be completed by January 2024. b. Quality Improvement Activities. The project has completed all activities related to provision of professional development/training of ITI instructors and staff, has achieved related time bound DLI targets and has put in place a system that will enable the Department of Skill Development and Employment (DSDE) to coordinate and manage professional development activities after project closure. The project’s efforts to improve employment outcomes of ITI graduates include establishing linkages with industry for training provision and instructor capacity development, provision of job preparation support and organization of placement events. This has been enabled through Industry Linkage Cells established in all project institutions. Further, two Centers of Excellence (CoE) are being set up at two project ITIs in partnership with leading industries. The selection of industry for the CoE partnership followed a detailed process that included submission of proposals by leading industries in manufacturing and electrical sectors and final vetting by a state-level committee representing different departments within the state government. The project is on track to complete the installation of necessary equipment by June 2023, but additional time is required to make the CoEs fully operational and complete training for the first batches of instructors and trainees, by January 2024. c. Resilience-building Activities. Among the quality initiatives initiated under the project, improving the digital capabilities at the ITIs through use technology for various management, administrative and governance functions of ITIs is being undertaken. Towards this objective, the project would like to implement the Enterprise Resource Planning (ERP) system using the modules developed under SAMARTH of University of Delhi and the team is in discussion with officials from the Ministry of Education (MoE) to facilitate this. A fully functional ERP system is expected by December 2023. The World Bank Uttarakhand Workforce Development Project (P154525) 6. Component 2 focuses on NSQF-compliant short-term training provided by private training providers. The implementation of this training has consistently faced delays – at first due to the delays in project initiation, then due to COVID-related closures, and more recently due to the review and upgradation of short-term training programs at the national level which has led to delays in assessments and certification of trainees across states. Despite these delays, 37,600 youth have participated in short-term training programs over the course of the project period and, 30,251 have been certified against the EoP target of 32,000. The project has ensured that disadvantaged youth, including women, benefit from these training programs. The project is piloting two approaches to short-term training provision – (i) training for women and disadvantaged youth in high-end skills (designated as NSQF Level 5 and above) in demand in the labor market, which requires these youth to have completed a bachelor’s degree in technical fields, and thereby aims to improve their employability; and (ii) training by domain experts, i.e. providers who bring expertise and offer employment opportunities in niche areas. These pilots offer an opportunity to the state to review short-term training program options and select those where the potential for employability is highest. Both pilot programs are being studied through surveys of trainees and trainers to draw lessons on quality and effectiveness of these programs. These pilots are expected to be completed by August 2023, consequently the findings from the surveys can be available by September 2023. 7. Component 3 includes Technical Assistance and Project Management. The project has made progress on all TA activities and the project rating for Component 3 is ‘Satisfactory’. The project has completed two rounds of tracer studies, carried out an assessment of the governance and functioning of the DSDE that has resulted in an action plan jointly vetted by the department of training, employment and skill development mission, and supporting employability skills training (for students as well as for instructors). A comprehensive evaluation of project activities to assess the project’s impact is planned, and the project is in discussion with potential organizations/institutions to lead the evaluation study. The findings from the study are expected by February 2024. 8. Disbursement Status: The current disbursement rate of the project is 74 percent. The project is expected to disburse an additional US$5 million by June 30, 2023, which will take the disbursement rate to 81 percent. Rationale for Restructuring 9. During its initial years, the project faced considerable implementation delays owing to staffing gaps and capacity challenges, followed by the COVID-19 pandemic that halted all training activities for over a year. The delays in implementation led to a low pace of expenditures incurred under the project and low disbursement rates until 2020. Since then, however, the project has addressed staffing gaps, strengthened monitoring of project activities and improved implementation capacity, which has resulted in improved utilization of the available financing and achievement of targets. The disbursements under the project have been on an upward trajectory going from US$26 million in 2021 to US$ 39 million the following year and now up to US$50 million. While the project has been able to make up for some of the past delays on training activities (like short-term training, and professional development of staff) by targeting larger numbers for training provision each year, upgradation activities, particularly civil works and the linked procurement of tools and equipment, require more time and are also subject to external factors such as weather conditions in the hills and supply-chain delays. The Government of Uttarakhand has therefore requested the Government of India for a 9-month extension of the project implementation period to successfully complete ongoing project activities. This follows discussions held during the Tri-Partite Review Meeting (TPRM) of July 2022 and the project’s achievement of the disbursement target set during the TPRM. 10. The extended period will be utilized to complete the following: The World Bank Uttarakhand Workforce Development Project (P154525) a. Upgradation of Priority ITIs – this includes completing the required ongoing civil works (by October 2023) and procurement of tools and equipment (by December 2023) so that the trades can get NCVT affiliation during the project period. b. Establishment of fully functional CoEs by January 2024 so that investments undertaken to foster and sustain industry partnerships can modernize and improve the relevance of ITI training, while also serving as key resource centers for capacity building of ITI instructors in advanced technologies. c. Establishment of a fully functional ERP system by December 2023 to enable project ITIs to develop digital capabilities for efficiency and resilience. 11. With the above, the extended period will enable the project to successfully complete all project activities and thereby achieve the project’s development objective, as well as ensure sustainability of the quality initiatives initiated under the project. No new activities will be introduced during the extension period, instead, the additional implementation time will be utilized to complete ongoing activities, including a robust project evaluation study to assess the impact of interventions introduced under the project. The proposed project extension will also allow for full utilization of the available financing towards achievement of the project’s development objectives, including meeting end of project targets by the end of the proposed extension period. Description of Proposed Changes The following changes are proposed as part of the present restructuring: 1. The project closing date is extended by 9 months from June 30, 2023, to March 31, 2024. 2. The end of project target date in the Results Framework is accordingly updated to coincide with the proposed closing date of March 31, 2024. 3. No other changes are proposed to the Results Framework. No changes are proposed to the DLI matrix. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IBRD-88770 Effective 30-Jun-2023 31-Mar-2024 31-Jul-2024