The World Bank Zambia:Strengthening Public Procurement System for Economic Development (P178539) REPORT NO.: RES57196 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF ZAMBIA:STRENGTHENING PUBLIC PROCUREMENT SYSTEM FOR ECONOMIC DEVELOPMENT APPROVED ON JUNE 30, 2022 TO GOVERNMENT OF REPUBLIC OF ZAMBIA GOVERNANCE EASTERN AND SOUTHERN AFRICA Regional Vice President: Victoria Kwakwa Country Director: Nathan M. Belete Global Director: Arturo Herrera Gutierrez Practice Manager/Manager: Elmas Arisoy Task Team Leader(s): Khalid Bin Anjum, Ishtiak Siddique The World Bank Zambia:Strengthening Public Procurement System for Economic Development (P178539) ABBREVIATIONS AND ACRONYMS 7NDP Zambia’s Seventh National Development Plan BOZ Bank of Zambia DA Designated Account DFIL Disbursement and Financial Information Letter DSA Debt Sustainability Analysis e-GP e-Government Procurement GDP Gross Domestic Product GM Grievance Mechanism GRS Grievance Redressal Service IBRD International Bank for Reconstruction and Development ICT Information and Communication Technology IDA International Development Association IFR Interim Financial Reports KPIs Key Performance Indicators LMP Labor Management Plan MAPS Methodology for Assessment of Public Procurement System MDB Multilateral Development Bank MDTF Multi Donor Trust Fund M&E Monitoring and Evaluation The World Bank Zambia:Strengthening Public Procurement System for Economic Development (P178539) OCDS Open Contracting Data Standard PDO Project Development Objectives PE Procuring Entity PEFA Public Expenditure and Financial Accountability PFM Public Financial Management PPB Public Procurement Bill PPSD Project Procurement Strategy for Development SMEs Small and Medium Enterprises SOEs State-Owned Enterprises SOE Statement of Expenditure STEP Systematic Tracking of Exchanges in Procurement TOR Term of Reference WBG World Bank Group ZPPA Zambia Public Procurement Authority The World Bank Zambia:Strengthening Public Procurement System for Economic Development (P178539) BASIC DATA Product Information Project ID Financing Instrument P178539 Investment Project Financing Environmental and Social Risk Classification (ESRC) Low Approval Date Current Closing Date 30-Jun-2022 30-Jun-2023 Organizations Borrower Responsible Agency Government of Republic of Zambia Zambia Public Procurement Authority (ZPPA) Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY Total Project Cost 0 Total Financing 0 Financing Gap 0 DETAILS -NewFin3 Project Development Objective (PDO) Original PDO Enhance Public Procurement performance of Zambia with improved efficiency, transparency, and private sector participation OPS_TABLE_PDO_CURRENTPDO The World Bank Zambia:Strengthening Public Procurement System for Economic Development (P178539) Summary Status of Financing (US$, Millions) Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-B9030 09-Sep-2022 09-Sep-2022 15-Nov-2022 30-Jun-2023 .43 .15 .28 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The initial timeline for implementation of this Project as per the Grant proposal was 2 years. However, due to the overall MDTF closing date, the team was advised by the MDTF secretariat to close the Grant by Jun 30, 2023. The project timeline was challenging from the beginning as the Grant became effective on Nov 15, 2022. 2. The implementing agency, Zambia Public Procurement Authority (ZPPA) is keen to implement the Project. ZPPA signed the contract for the e-learning platform and the contract completion date is Jun 30, 2023. The technical part of the platform is ready however the content preparation is facing delays. The content preparation and incorporation into the platform require another month. The procurement process of hiring of change management firm is completed and the contract is cleared by the Auditor General and Ministry of Finance for contract signing. The Individual consultant for the Data Analytics portal has prepared the functional requirements however the firm hiring process for initiating implementation is yet to be initiated. These two key contracts under the Grant are on hold due to the approaching Grant closing date of Jun 30, 2023. ZPPA requested the Bank in May 2023 to give a no-cost time extension of the Grant for 12 months as they are ready to sign the contracts for the development of the data analytics portal and engage the firm for change management. The extension will support the successful completion of the two activities and the remaining work of the e-learning platform. 3. In June, the MDTF secretariat informed the task team that they are in the process of extending the parent MDTF closing date till June 2024. Most of the donors of the MDTF have already signed the agreement for extension of the parent MDTF except the European Union which has committed to sign it by July 2023. The MDTF secretariat by obtaining waiver for the disbursement grace period from the WFACS department has advised the task team to extend the Project closing date till July 2023. Once the EU signs off the one-year extension agreement of the parent MDTF, the Project would be further extended till June 2024. II. DESCRIPTION OF PROPOSED CHANGES 4. The proposed change is to extend the Project closing date from June 2023 to July 2023. Another round of project restructuring will be done in July 2023 to extend the Project closing date till June 2024. This is because the parent MDTF is not yet extended till June 2024 which is under process as mentioned under paragraph 3 above. The World Bank Zambia:Strengthening Public Procurement System for Economic Development (P178539) Environment and Social The project's environmental and social risk is low, and its compliance with environmental and social standards is satisfactory. The grant supports the enhancement of the public procurement performance of Zambia by implementing the full and mandatory use of e-GP and, therefore, the project is anticipated to generate positive environmental and social impacts. The project activities include capacity building, e-learning, communication and behavioral change, data analytics on procurement performance and project management. III. SUMMARY OF CHANGES Changed Not Changed Loan Closing Date(s) ✔ Disbursement Estimates ✔ Implementing Agency ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ Legal Covenants ✔ Institutional Arrangements ✔ The World Bank Zambia:Strengthening Public Procurement System for Economic Development (P178539) Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications TF-B9030 Effective 30-Jun-2023 31-Jul-2023 31-Oct-2023 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Expected Disbursements (In US$) Fiscal Year Annual Cumulative 0000 0.00 0.00 2022 0.00 0.00 2023 0.00 0.00 2024 305,000.00 305,000.00