The World Bank Ethiopia Public Procurement System Strengthening Project (P179041) REPORT NO.: RES57117 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF ETHIOPIA PUBLIC PROCUREMENT SYSTEM STRENGTHENING PROJECT APPROVED ON AUGUST 3, 2022 TO MINISTRY OF FINANCE GOVERNANCE EASTERN AND SOUTHERN AFRICA Regional Vice President: Victoria Kwakwa Country Director: Ousmane Dione Global Director: Arturo Herrera Gutierrez Practice Manager/Manager: Elmas Arisoy Task Team Leader(s): Demelash Demssie, Anjani Kumar The World Bank Ethiopia Public Procurement System Strengthening Project (P179041) ABBREVIATIONS AND ACRONYMS BoF Bureau of Finance ESF Environment and Social Framework ESS Environment and Social Standard FM Financial Management FY Fiscal Year FPPPA Federal Public Procurement and Property Authority GBV Gender-Based Violence GDP Gross Domestic Product GoE Government of Ethiopia GRS Grievance Redress Service GPP MDTF Global Procurement partnership Multi-Donor Trust Fund IBRD International bank for Reconstruction and Development IDA International Development Association IFMIS Integrated Financial Management and Information System IFR Interim Financial Report MAPS Methodology for Assessing Procurement System PDO Project Development Objective PP Procurement Plan PPSD Project Procurement Strategy for Development STEP Systematic Tracking and Exchanges in Procurement ToR Terms of Reference WBG World Bank Group The World Bank Ethiopia Public Procurement System Strengthening Project (P179041) BASIC DATA Product Information Project ID Financing Instrument P179041 Investment Project Financing Environmental and Social Risk Classification (ESRC) Moderate Approval Date Current Closing Date 03-Aug-2022 30-Jun-2023 Organizations Borrower Responsible Agency Ministry of Finance Public Procurement and Property Authority Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY Total Project Cost 0 Total Financing 0 Financing Gap 0 DETAILS -NewFin3 The World Bank Ethiopia Public Procurement System Strengthening Project (P179041) Project Development Objective (PDO) Original PDO Contribute for strengthening public procurement system and performance in Ethiopia by supporting issuance of new and revised legal framework, upgrading skills and producing tools and evidence on key aspects of the procurement system as identified in the MAPS recommendation. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-B9280 08-Aug-2022 08-Aug-2022 08-Aug-2022 30-Jun-2023 .58 .49 .09 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Progress to date 1. The project has shown positive progress in all major planned activities which are summarized below. (a) The preparation of procurement legal documents in the newly established Sidama and Southwest Regional states. (i) Sidama: The draft procurement proclamation and procurement directive are prepared in Sidama regional states. In addition, the regional states carried out consultation with various stakeholders including procuring entities, relevant members of the regional council, PPPA and procurement officers. The documents are ready for ratification by the regional council. (ii) South West Regional state The draft procurement proclamation and procurement directive are prepared in South west regional states. In addition, the regional states carried out consultation with various stakeholders including procuring entities, relevant members of the regional council, PPPA and procurement officers. The documents are ready for ratification by the regional council. (b) Establishment of training program for staff in the regulatory bodies. a. PPPA hired an international consulting firm to support the preparation of training modules and for providing Training of Trainers. Accordingly, the consulting firm prepared draft training modules in three functional areas which are reviewed and commented by PPPA. The consulting firm is expected to finalize the training modules in the next two to three weeks. The World Bank Ethiopia Public Procurement System Strengthening Project (P179041) b. After finalizing the training modules, the consulting firm will provide training of trainers on the documents for senior staff to be selected from federal and regional procurement regulatory bodies. (c) Evidence based procurement assessment and preparation of documents. a. Emergency procurement procedure: A consultant hired by PPPA prepared and submitted final emergency procurement procedure after incorporating comments provided by stakeholders. b. Report on sustainable public procurement: Consultants hired by PPPA prepared and submitted draft report on sustainable public procurement which is under review in PPPA and stakeholders. c. Procurement record management procedure: The consultant hired by PPPA prepared and submitted final procurement record management procedure after incorporating comments from stakeholders. (2) Activities to be completed within the proposed new project closing date: Almost all of the planned documents will be completed within the existing project closing date. However, providing training to staff in the regulatory bodies, and other stakeholders on the prepared documents remain to be completed within the extended project closing date. The team also confirm that (i)The PDO remains achievable by the proposed extended Closing Date; (ii) the Recipient’s performance is satisfactory (or moderately satisfactory); and (iii) there are no overdue audits (3) Rationale for extending the closing date: The project implementation period was much shorter than the originally planned time frame due to the delay in the approval of funding to the project. However, PPPA carried out most of the planned activities but few activities related to training and finalization of documents are remaining. Thus, the team is considering restructuring of the project to extend the project closing date by two months and ensure proper completion of all of the planned activities. The team has received request for extension from the client. This one-month extension is as per the DFI’s clearance for reduction of the grace period from 5 to 4 months. (Email dated June 22,2023, attached as part of the restructuring paper II. DESCRIPTION OF PROPOSED CHANGES A. Extension of project closing Date: a. This restructuring proposes extension of the oroject clsing date by one month from June 30,2023 up to July 30,2023. b. The schedule for training of staff in the procurement regulatory bodies is extended up to July 30,2023 B. The Summary of Performance of E&S Risk Compliance There are progresses in the implementation of Environment and Social Risk Mangement (ESRM) of the project since its effectiveness. These include the project implementer has assigned an Occupational Health and Safety (OHS) trained staff to oversee the Environment, Social, Health and safety (ESHS) activities during project implementation. Public Procurement and Property Authority (PPPA) has ensured the adoption of the existing HR Manual during project staff recruitment, managing issues related to labor and working conditions, benefits and entitlements as per the Labor Proclamation. Furthermore, in addition to the adoption of the existing public grievance mechanism (GM), workers' GM has been also availed to be accessed by all workers who may have any concerns. However, the project needs to strengthen further stakeholder engagement activities, the operationalization of the existing GMs to receive and facilitate timely resolution of grievances, provide trainings to its staff on OHS, Grivance Redress Mechanism (GRM), Stakeholder Engagement, Gender based Violence (GBV) prevention, gender and social The World Bank Ethiopia Public Procurement System Strengthening Project (P179041) inclusion, etc. and regularly submit a six-monthly monitoring report on the implementation of the Environment and Social Commitment Plan (ESCP). ES Explanation Table Describe any E&S issues and impacts associated with the change in project design. Identify and describe any potential large scale, significant and/or irreversible impacts. Describe any potential indirect and/or long-term impacts due to anticipated future activities in the project areas. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. Describe measures taken by the borrower to address E&S policy issues. Provide an assessment of borrower capacity to plan and implement the measure described. Identify key stakeholders and describe the mechanism for consultation and disclosure on E&S policies, with an emphasis of potentially affected people. ES NOTE TABLE 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 Ethiopia Public Procurement System Strengthening Project (P179041) 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-B9280 Effective 30-Jun-2023 30-Jul-2023 30-Nov-2023 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Expected Disbursements (In US$) Fiscal Year Annual Cumulative 2022 0.00 0.00 2023 543,355.02 543,355.02 2024 36,644.98 580,000.00 Note to Task Teams: End of system generated content, document is editable from here.