The World Bank Sint Maarten Hospital Resiliency & Preparedness Project (P167532) REPORT NO.: RES41067 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SINT MAARTEN HOSPITAL RESILIENCY & PREPAREDNESS PROJECT APPROVED ON AUGUST 16, 2018 TO SINT MAARTEN MEDICAL CENTER (SMMC) HEALTH, NUTRITION & POPULATION LATIN AMERICA AND CARIBBEAN Regional Vice President: Carlos Felipe Jaramillo Country Director: Lilia Burunciuc Regional Director: Jaime Saavedra Practice Manager/Manager: Michele Gragnolati Task Team Leader(s): Carolyn J. Shelton The World Bank Sint Maarten Hospital Resiliency & Preparedness Project (P167532) I. BASIC DATA Product Information Project ID Financing Instrument P167532 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 16-Aug-2018 31-Jul-2024 Organizations Borrower Responsible Agency Sint Maarten Medical Center (SMMC) Sint Maarten Medical Center (SMMC) Project Development Objective (PDO) Original PDO Improve the preparedness and capacity of hospital services in Sint Maarten Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-B3788 26-Aug-2020 03-Sep-2020 30-Oct-2020 31-Jul-2024 3.61 3.61 0 TF-A8176 10-Aug-2018 22-Aug-2018 06-Sep-2018 31-Jul-2024 25.00 22.50 2.50 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Sint Maarten Hospital Resiliency & Preparedness Project (P167532) II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES A. Introduction 1. This Project Paper seeks the approval of the Country Director for a proposed simple restructuring of the Sint Maarten Hospital Resiliency & Preparedness Project (P167532) in order to reallocate grant proceeds across the expenditure categories. B. Project Background and Status 2. The Sint Maarten Hospital Resiliency and Preparedness Project aims to improve the preparedness and capacity of hospital services in Sint Maarten. The Project is financed by two grants from the Sint Maarten Reconstruction, Recovery and Resilience Trust Fund administered by the World Bank: the initial grant (TF-A8176) in the amount of US$25 million was approved on August 16, 2018 and declared effective on September 6, 2018; an additional financing (TF-B3788) in the amount of US$3.61 million was approved on August 26, 2020 to cover a cost overrun related to essential upgrades, and was declared effective on October 30, 2020. Both grants are scheduled to close on July 31, 2024. 3. The Project is implemented by the Sint Maarten Medical Center (SMMC) and has three components: Component 1 - Building and launching of the new hospital (US$17 million TF; US$75 million counterpart funds) focuses on the design upgrade, construction, and equipment (medical and non-medical), training (for equipment) and maintenance services for the new hospital; Component 2 - Transition and Contingency Plan for Sint Maarten Medical Center (US$11.31 million TF) aims to prioritize essential upgrades to allow for the continuity of services while improving the existing hospital services’ preparedness and capacity for future extreme weather conditions, particularly while the new hospital is being built; and Component 3 - Project Management (US$300,000 TF; US$500,000 counterpart funds) finances related operating expenses, equipment, and personnel necessary for the project’s execution. 4. The PDO and Implementation Progress (IP) have consistently been rated Moderately Satisfactory or higher throughout project implementation. These ratings were validated by the December 2022 implementation support mission and the Sint Maarten Country Portfolio Performance Review held in early March 2023. As of July 2023, two of the Project’s three PDO indicators – (i) reduction in medical referrals abroad and (ii) implementation of the Emergency Disaster Preparedness Plan and Evaluation Plan according to procedures - have now been achieved. Following the updating of clinical practice guidelines (CPGs), technical audits to assess the use of the CPGs (third PDO indicator) are expected to begin by end-December 2023. While completion of the new hospital is not explicitly referenced in the PDO-level indicators, it is tracked as an intermediate results indicator (IRI). As such, the IP rating was downgraded from Satisfactory to Moderately Satisfactory in the March 2023 Implementation Status and Results report (ISR) to account for delays associated with the new hospital construction. All other remaining IRIs are expected to be achieved or surpassed by the July 31, 2024 closing date, including the updating of CPGs for prevalent health conditions, completion of essential upgrades to the existing hospital, training of health personnel, and continued increased in reported patient satisfaction. 5. As of July 2023, 91 percent of the total grant proceeds have been disbursed (90 percent of the original US$25 million grant financing has disbursed, and the first additional grant of US$3.61 million has fully disbursed). The Recipient and main implementing agency (SMMC) has remained in compliance with key covenants, including those related to staffing, safeguards, audits, and financial management (FM) reporting requirements. The safeguards The World Bank Sint Maarten Hospital Resiliency & Preparedness Project (P167532) performance has been satisfactory, and the safeguards classification remains Category B. No new safeguards policies will be triggered. C. Proposed Changes 6. In line with the formal request made from SMMC in a letter to the World Bank dated July 7, 2023, this proposed restructuring would reallocate grant proceeds across the expenditure categories, as shown in Section III "Detailed Changes". The proposed reallocation of funds introduces changes across both the original grant (TF-A8176) and the additional grant (TF-B3788). Under the original grant (TF-A8176), the proposed reallocation is needed as Category 1 was charged for all related consulting services and training activities. The proposed reallocation would repost funds from Categories 2 and 3 of the original grant (TF-A8176) to compensate for planning adjustments under Categories 1 and 4. Under the additional grant (TF-B3788), the proposed reallocation would more accurately reflect eligible expenditures under the more restrictive Category 1 (Goods, non-consulting services, consulting services, training, and operational costs for Parts 2(a)(ii) and Part 3), and allow for eligible expenditures under Category 2. Finally, the proposed reallocation through this restructuring will ensure that sufficient funds remain for planned consulting services and trainings under Category 1 of the original grant (TF-A8176). III. DETAILED CHANGES REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed TF-A8176- Gds, NCS,CS,Tr, 4,715,000.00 4,350,627.43 7,146,506.27 100.00 100.00 001 OP Currency: Wks under Part USD 300,000.00 265,807.00 265,807.00 100.00 100.00 2(a)(i) Wks under Part 4,485,000.00 1,244,128.35 1,801,022.02 100.00 100.00 2(a)(ii) Wks under Part 15,500,000.00 15,619,660.28 15,786,664.71 100.00 100.00 1(b) Total 25,000,000.00 21,480,223.06 25,000,000.00 The World Bank Sint Maarten Hospital Resiliency & Preparedness Project (P167532) TF-B3788- GO,NCS,CS,TR,O 001 P-Pts 2(a)(ii) ,Pts 2,970,000.00 613,383.01 613,383.01 100.00 100.00 Currency: 3 USD CW under Part 640,000.00 736,000.00 2,996,616.99 100.00 100.00 2(a)(ii) Total 3,610,000.00 1,349,383.01 3,610,000.00