The World Bank Second State Statistical System Development Project (P092429) REPORT NO.: RES43047 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SECOND STATE STATISTICAL SYSTEM DEVELOPMENT PROJECT APPROVED ON JUNE 28, 2007 TO RUSSIAN FEDERATION POVERTY AND EQUITY EUROPE AND CENTRAL ASIA Regional Vice President: Anna M. Bjerde Country Director: Renaud Seligmann Regional Director: Lalita M. Moorty Practice Manager/Manager: Salman Zaidi Task Team Leader(s): Buyant Erdene Khaltarkhuu The World Bank Second State Statistical System Development Project (P092429) I. BASIC DATA Product Information Project ID Financing Instrument P092429 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 28-Jun-2007 30-Jun-2021 Organizations Borrower Responsible Agency Russian Federation Federal State Statistical Service (ROSSTAT) Project Development Objective (PDO) Original PDO The main objective of the project to assist the government of the Russian Federation to produce reliable, timely and accurate economic, financial, socio-demographic and other data for policy formulation and decision making in line with international good practiceand frameworks. Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-48670 28-Jun-2007 30-Nov-2007 22-Apr-2008 30-Jun-2021 10.00 9.91 .09 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank Second State Statistical System Development Project (P092429) Project Overview 1. This restructuring seeks a six-month of extension for the Second State Statistical System Development Project (STASYS2). The closing date extension will allow the procurement and implementation of activities that were delayed due to the COVID-19 lockdown in Moscow, and restricted movement measures in Russia and globally. In addition, the extension will allow the ongoing relevant activities under the STASYS2 project to link and provide arrangements for successful implementation in-line with the recently endorsed development strategy of Rosstat and the state statistical system of the Russian Federation until 2024 (Strategy 2024). 2. The STASYS 2 project supports the upgrade of core economic and social statistical indicators, improvement in statistical data collection, and processing and dissemination at federal and subnational levels. This is achieved through: (a) catalyzing the introduction of advanced statistical methodologies and international standards into Federal State Statistical Service (Rosstat) operations, (b) essential upgrade of the Information and Communication Technology infrastructure at the central and subnational Rosstat offices, and (c) targeted training of statistical staff. Overall, these improvements are expected to result in better availability of statistical data and increased user satisfaction. 3. The original project amount was US$50 million, out of which the IBRD loan accounts for US$10 million. At the second and third extensions of the project, the Russian co-financing part was increased by US$16 million and US$40 million respectively, which totals US$106 million of overall project funds. The fourth extension has increased the counterpart co-financing by US$25 million, bringing the total project funds to US$131 million and the closing date to June 30, 2021. The activities envisaged in the initial Procurement Plan for the period 2008-2018 have been completed in full. For the activities included in the Procurement Plan for the project extension period (2019-2021), contracts for approximately US$17 million (68%) out of US$25 million were signed, of which US$4 million were already disbursed under the completed assignments as of August 10, 2020. At present, 11 packages included in the Procurement Plan within various project components for a total amount of US$8 million are at the stages of preparing terms of reference and technical requirements, and/or at the stage of selection procedures. Project Status and Results 1. The Project is on track to meet its development objectives. Progress towards meeting the Project Development Objective (PDO) and implementation progress are both rated Satisfactory during the last supervision mission of November 2019. The intermediate and PDO indicators are expected to be met by the project closing date. As of August 10, 2020, the disbursement is US$110 million (84% of the project amount). 2. Overall achievements and improvements can be noted in the areas of: a. Compliance with international recommended standards. For example, the implementation of 2008 System of National Accounts reached 90% compared with 63% in 2015 and applications of other international standards listed in the Statistical Action plan is at the target rate 77% compared with 73% in 2015. b. Efficiency in the data collection and production. Official statistical reporting forms are automated and the submissions are 100% electronic. Regional office staff are dealing with primary data processing less thanks to the systems upgrade and modernization of design and technology. c. Better data dissemination. In response to increased demand for data, Rosstat has produced the quarterly and annual socioeconomic data according to the time schedule and had over 5 million visits recorded at the end of 2019 compared with 2.9 million in 2015. 3. The project is in compliance with the financial management requirements. There are no outstanding audits. The clean audit report for 2019 was received by the Bank in July 2020 and is acceptable to the Bank; no issues were raised in the management letter. The latest Interim Unaudited Financial Reports (IUFR) were submitted for the second The World Bank Second State Statistical System Development Project (P092429) quarter 2020. Project procurement risk is Low, and Procurement performance rating is satisfactory as per the Bank’s latest PRAMS assessment of April 06, 2020. Rationale for Restructuring 1. In response to the Borrower’s request of July 2, 2020, the project restructuring will include a six-month extension of the closing date from June 30, 2021 to December 31, 2021. 2. The extension is required to (a) provide an opportunity to link the ongoing project activities with the Strategy 2024 which has been approved by the Ministry of Economic Development of the Russian Federation (No. MO-104 of September 6, 2019) and identified key measures related to the digitalization of state statistics; and (b) allow time to implement and/or find an alternative solutions to the execution of activities that have been delayed due to COVID-19 pandemic situation. 3. The Strategy 2024 has introduced a new coordination procedure for all statistics producing agencies with regards to development of information systems and the digitalization of production processes. In order to comply with this new procedure, the execution of the activities planned under the Component B “Development of the modern design and technology for statistical data collection, processing and dissemination” requires time beyond the closing date of June 30, 2021. For example, procurement packages B.19.a (to develop concept for using big data in the official statistics and determine the areas of technical and technological requirements in the state statistical system) and B.19.b (to develop an information system for using various sources in calculating the consumer price index and trade statistics) commenced in June 2020. Rosstat is preparing the framework, readied itself to generate the information system, and has reached an agreement with the Federal Tax Services of Russia to receive source data. These are necessary foundations for successful implementation and long-term results. 4. The current COVID-19 pandemic and related measures have caused delays in the project implementation and procurement activities. For example, the activity C.1.13 under the Component C “Enhancement of social statistics,” to support the monitoring and compilation of Sustainable Development Goal indicators, involves expert missions from Germany. It has been postponed due to the travel ban. Delays occurred in signing the contracts for C.1.15 and C.1.16 activities when the consulting firms shifted to a remote operating mode in March, 2020. This further delayed the start of the 12-month implementation period. The work carried out under these contracts is directly related to the creation of the “social welfare” specified in the draft National Economic Recovery Plan for 2020-2021. In addition, the training activities envisaged under the Component D “Human resources development” are postponed because of the restricted measures put in place due to the COVID-19. For example, a face to face training on D.3.2.33 “Introducing efficient data treatment under the implementation of modern IT systems” is cancelled until further notice. 5. The proposed extension of the STASYS2 loan closing date is, therefore, necessary to complete preparation of ToRs and implementation of ongoing activities under the Components B, C and D. For activities B.11.3, B.19.b, B.20, B.21, C.1.15 and C.1.16 (see the table in Annex 1 of the borrower’s extension request Attachment file), the development of ToR and subsequent approvals at the beneficiary agencies were delayed by the remote work instituted at the beneficiary agencies. Thus, the bid issuance for above contracts is planned in the second half of 2020, and consequently the implementation and disbursement are expected go beyond the current closing date of June 30, 2021. 6. The Borrower’s rationale for the proposed six-month extension is driven by the length of the lockdown issued by the government. Now, the restriction of movement in Moscow city has been lifted, the contracted local service providers and beneficiary agencies are back to regular operating mode and have started implementation. Under the current estimate, five out of eight ongoing activities are expected to need additional implementation time. For example, the contract under B.3.2 to introduce an integrated approach to organizing and conducting household (population) sample surveys using a methodological and technological platform is expected to be completed by September, 2021. The ToR is being restructured for C.1.13 to allow development of online training and remote The World Bank Second State Statistical System Development Project (P092429) delivery of services by the German experts. Alternative method – online training activities are being discussed and planned for D.3.1.5, D.3.1.6 and D.3.2.32. 7. Although the project can be extended until May 14, 2022, six months will provide sufficient time to compensate for delays and execution of remaining activities by local and international service providers. The current remaining balance is US$21 million with US$16 million projected to be paid in 2020 and US$5 million in 2021. The estimated amount to be paid during the six-month extension period (July 1 – December 31, 2021) is US$2.0-2.5 million and will not exceed 2% of the total project funds. 8. This will be the fifth extension of the STASYS2 closing date. Since this extension accrues to a total loan closing date of more than two years, it requires the Regional Vice President decision. The cumulative period of extension will be 9 years and 4 months. 9. The project restructuring will not change the PDO or the results framework but allow the project to maintain and achieve the set targets and outcomes. The composition of the Project components, institutional and implementation arrangements will also remain unchanged. There is no change in the project risk category. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 28-Feb-2014, 28-Feb- 2014, 31-Dec-2015, IBRD-48670 Effective 25-Aug-2012 31-Dec-2021 30-Apr-2022 31-Dec-2018, 30-Jun- 2021, 30-Jun-2021