45733 DATA SHEET TEMPLATE FOR PROJECT PAPER Borrower: The Dominican Republic Responsible agency: Secretaria de Educacion _c / Current closing date: 12/31/2009 Indicate ifthe restructuring is: Board approved X RVP approved Does the restructuredproject require any exceptions to Bank policies? -Yes XNo Have these been approved by Bank management? -Yes No I s approval for any policy exception sought from the Board? -Yes XNo Revisedproject development objective/outcomes The overall Project Development Objectives remain unchanged. However, one PDO outcome indicator would be eliminated, given that it cannot be attributed to the project without supplementary data, and three outcome indicators would be modified to allow for improved project monitoring and to ensure a strong focus on impact. In addition, output targets for classroom construction and rehabilitation would be revised to adjust for increasedunit costs. Does the restructured project trigger any new safeguard policies? No. Revised Financing Plan (US$m.) Source Local I Foreign I Total Borrower 14.48 5.52 20.00 IBRD/IDA 22.18 19.82 42.00 Others Total 36.66 25.34 62.00 2 INTRODUCTORY STATEMENT 1. This Project Paper seeks the approval o f the Board o f Directors to restructure the DominicanRepublic Early Childhood Education Project, Loan 7144 DO (P054937)', and the accompanying Loan Agreement. Project restructuring refers to introduction o f significant changes inthe project and falls into one o f two categories: (a) first-order restructurings, which involve changes to project development objectives and/or associated outcome targets. All such restructurings are approved bythe Executive Directors under the absence-of-objection procedures; and (b) second-order restructurings, which do not involve any changes to project development objectives or associated outcome targets. All such restructurings are approved by the Regional Vice Presidents(RVPs). 2. According to OP/BP 13.05 (IS), this Project requires a first-order restructuring given the proposed changes to the Project Development Objective (PDO) outcome indicators, though the original PDOs remain unchanged. 3. The proposed restructuring would enable the project to adapt to unforeseen cost increases, improve project monitoring and permit flexibility in procurement and financial management to facilitate the achievement o f project goals. As noted above, it would not modify the PDOs, which remain valid and achievable, but rather would modify select output and outcome indicators. I t would revise downward the output indicators for preprimary classroom construction and rehabilitation to adjust for an unexpected increase incivil works unit costs. Inaddition, it would eliminate one PDO outcome indicator and modify three others in order to ensure that all outcome indicators measure only what can be attributable to the project, are sufficiently specific and quantifiable to be monitored, and focus strongly on impact. Furthermore, it would formalize an activity within Component 2 as a stand-alone subcomponent. It would also amend the procurement schedule to eliminate the aggregate limits for the use of the various procurement methods and the selection o f consultants (i-e., NCB, Shopping, Procurement o f Small Works, Direct Contracting, Least Cost Selection, Selection based on Consultants' Qualifications and Selection o f Individual Consultants) and allow the use o f the single-source selection method for consulting services provided by a teacher training institute uniquely positioned to provide high-quality teacher training in early childhood education. Finally, it would allow for the reallocation o f loan proceeds among expenditure categories. All o f these changes comprise part o f a proposed amendment to the project Loan Agreement, described briefly below. 4. On February 13, 2008, the Ministry o f Treasury o f the Dominican Republic formally requested that the Bank carry out an amendment to the Loan Agreement to extend the project closing date by eighteen months from June 30, 2008 to December 31, ' According to OP/BP 13.05 (16), "During project implementation, if priorities or circumstances surrounding the project change, it may be desirable to introduce corresponding changes in the project, its design, or the implementation arrangements (for example, administrative, organizational, procurement, financial, environmental management, or resettlement arrangements, or the timing o f agreed actions)". 3 2009, reassign funds among expenditure categories and allow the use o f the single-source selection method for consulting services (see Annex A). The extension o f the closing date was requested to allow sufficient time for the full utilization o f the loan, since implementation progress has been slow, particularly in the area o f civil works. Given that the closing date extension did not require an amendment to the Loan Agreement nor formal restructuring, it was approved by the Bank on March 18, 2008. In addition, the Ministryo f Education reported that it hadreached the aggregate limit on NCB, and it was therefore using I C B for bids that would otherwise require national bidding. The Bank analyzed these issues and determined that aggregate limits for the use o f various procurement methods and the selection o f consultants should be eliminated, since the aggregates no longer serve their intended purpose, but that this change needed to be part o f the Loan amendment. Finally, given that PDO outcome and output indicators for the Project are specified as part o f the Loan Agreement and its annexes, modifications to these indicators must also be reflected in an amendment. (See proposed amendment in Annex B). BACKGROUND 5. A US$42.0 million loan was approved by the Board o f Executive Directors on September 5, 2002 to support the implementation o f an Early Childhood Education Project in the Dominican Republic. The Bank's loan became effective on December 2, 2003, a delay o f nearly 15 months that has contributed to a lower than expected level o f disbursement.The Project Development Objectives include the following: (i) increase to access to early childhood development services for all children ages zero to five, as measured by preprimary enrollment rates and the expansion o f non-formal services provided by communities and agencies; and (ii)to strengthen the quality o f early childhood education that is available to children ages zero to five. Key investments include classroom construction and rehabilitation, teacher training, financial and technical support for community-managed projects, and support for policy and strategy development. As o f June 30, 2008, 38.1 percent o f the loan proceeds and counterpart funds have been disbursed and an additional 28.0 percent have been committed. 6. Overall implementation is rated as satisfactory, albeit behind schedule due in part to the initial delay in effectiveness. Key achievements under the project's three programmatic components are outlined below: 7. Component I: Expanding Preprimary Education Services. This component, which includes the construction o f regional model centers and new classrooms, has experienced the slowest rate o f implementation, but it has made some progress. The project has constructed only five regional model centers (out o f the original target o f 17), which serve as models for preprimary classrooms in their physical infrastructure and provide much needed space for teacher development activities. Furthermore, it has constructed a modest number o f new classrooms (81 out o f the original target o f 600), creating 6,060 new pre-school places and thereby contributing to increased preprimary enrollment (which reached 82 percent o f all five-year-olds and 73 percent o f the poorest five-year-olds in 2007, an increase o f 10 and 22 percentage points respectively from baseline levels in 2002). As o f June 30, 2008, 24.7 percent o f the Bank and counterpart 4 funds allocated to this component have been disbursed and 30.6 percent have been committed. 8. Component 2: Increasing ECD Education Quality. This component, which encompasses teacher training, the application o f a pedagogical model for early childhood development (ECD), and the rehabilitation o f existing classrooms among other activities, has made substantive progress. In particular, the pedagogical model has improved the quality o f teaching and learning, as evidenced by increased student performance on the Early Years Evaluation (EYE) instrument and reduced repetition among students who participated in the pilot phase o f the project relative to the national population. Furthermore, 92 classrooms have been rehabilitated (out o f the original target o f 600), which has created 5,520 new pre-school places and correspondingly contributed to increased enrollment. As o f June 30, 2008, 55.4 percent o f the funds allocated to this component have been disbursed and 30.5 percent have been committed. 9. Component 3: Institutional Strengthening in the Education Sector. This component consists o f a Grant Program to provide financial and technical support for civil society organizations (CSOs) offering non-formal ECD services, as well as support for coordination across the sectors and institutions involved in ECD. The Grant Program for Non-Formal ECD for children aged 0-4 has served as a model for bridging the government and CSO sectors and has benefited from a strong, multi-stakeholder Board of Directors. WhiIe the Grant Program originally aimed to reach 20,000 direct beneficiaries and 80,000 indirect beneficiaries through 200 initiatives, it has already reached more than 50,000 beneficiaries directly and more than 100,000 indirectly through the 60 initiatives carried out as o f M a y 30, 2008. Also under this component, the project launched a Consultative Roundtable for Early Childhood in February 2008, which will regularly convene stakeholders from different sectors to address key issues at the early childhood level. As o f June 30, 2008, 55.4 percent o f the funds allocated to this component have beendisbursed and 46.6 percent have been committed. RATIONALE FOR RESTRUCTURING 10. Factors accounting for the slow implementation o f classroom construction and rehabilitation, in combination with rising civil works costs that limit the purchasing power o f the remaining funds, have rendered unachievable the output indicators for constructed and rehabilitated classrooms and school spaces, even with the extension o f the closing date. In addition to the 15-month delay in declaring effectiveness, processes associated with bidding, contracting, supervision and payment have been slow, and the tropical storms o f 2007 impededconstruction. Furthermore, unexpected increases in the price o f cement (20 percent in the first half o f 2007) and structural steel (15 percent inthe same period), among other inputs, have led to a dramatic increase in the unit costs o f construction and rehabilitation for classrooms and facilities such as bathrooms, kitchens, recreation areas, and fencing. While the unit costs for new and rehabilitated classrooms were estimated at US$20,000 and US$8,000 respectively at appraisal, repeated competitive bidding has shown the current costs to be US$45,000 and US$13,000 respectively. Assumingthat financing does not increase, project funds are sufficient only to construct 310 classrooms (258 in schools and 52 in regional model centers) and rehabilitate 443 classrooms (425 in schools and 18 in regional model centers), rather than 5 to achieve the original targets o f 600 each. This also translates into a reduction in the number o f pre-school places created, from 36,000 new places and 36,000 rehabilitated places to 18,600 and 26,580 respectively. While the Bank indicated in July 2007 that it would be open to the possibility o f additional financing to achieve the original targets, it was informed by the Ministry o f the Economy, Planning and Development in December 2007 that this was not presently an option, due to lack o f fiscal space. 11. Four o f the project's five PDO outcome indicators2 would be revised to aid project monitoring and to maximize impact: 1. PDO Indicator I: Increase the enrollment rate of five-year-olds in preprimary education from 71.8% to 86%. Given the Government's policy o f universal preprimary enrollment and its efforts to achieve this goal, increases in enrollment among the entire population cannot be attributed entirely to the project. According to the ISR submitted subsequent to the Mid-Term Review, target enrollment i s expected to be met independent o f the project's civil works. The PP therefore proposes that this indicator be eliminated formally. Still every effort will be made to obtain a reasonable estimate o f the project's contribution to the increase in overall enrollment (e.g., by comparing the number o f classrooms built and rehabilitated by the project to the number built and rehabilitated by the Ministry o f Education). 2. PDO Indicator 3: Carry out 200 initiatives involving cross-sectoral and public- private collaboration in the provision of early childhood services, benefiting 20,000 children directly and 80,000 others indirectly, The experience o f the Grant Program has shown that larger' grant recipients possess the reach and capacity to affect a significant number o f beneficiaries, which may obviate the need for a high number o f funded initiatives. This suggests a greater focus on impact (Le., the number o f beneficiaries) and a lessened focus on outputs (initiatives). Hence, the target number o f 200 initiatives would be eliminated. 3. PDO Indicator 4: Original: Decrease the percentage of time during which children in preprimary classes are not actively engaged, by five percentage points; Proposed revision at mid-term: Increase capacities in communication and socio-emotional development of pre-school children. While both the original and the proposed revised versions o f this indicator attempt to capture important information on preprimary students' performance, such as their level o f engagement, communication skills and socio-emotional development, neither i s currently defined in a measurable way. The PP therefore proposes that this indicator be replaced with a measure that i s quantifiable and that makes use o f an instrument (the Early Years Evaluation) already in use by the project, which also offers some baseline information. 'PDOIndicator 2 remains unchanged, since it i s reasonable to believe that an increase in the preprimary enrollment o f the poorest quintile i s attributable to the project, given its use o f a supply and demand study to target high-poverty areas for construction and rehabilitation. 6 4. PDO Indicator 5: Achieve significant difference in grade repetition and dropout rates in grades 3 and 4 for children that attended regional model centers as compared to those rates for the totalpopulation in grades 3 and 4. In order to monitor accurately the academic outcomes among pre-school students associated with the project, this indicator would be modified in terms o f the population evaluated, the specificity o f measurement, and the indicator itself. First, the population would comprise those covered by the project, rather than only those who attended regional model centers. Second, the concept o f a "significant difference" in grade repetition between project beneficiaries and the national population would be replaced by an actual number. Third, the indicator would no longer include dropout rates, given that they are unreliable because they do not correct for students who leave school due to transferring, rather than dropping out. 12. The project would include as part o f Component 2 a new subcomponent, Rincones Tecnoldgicos, intended to incorporate Information and Communication Technologies (ICTs) at the preprimary education level. This new subcomponent would provide children with a head start in ICTs at an early age and would support the application o f the E C D pedagogical model. Two hundred and fifteen classrooms would benefit from this intervention in approximately 99 schools. Rincones Tecnoldgicos received a no-objection from the Bank as an activity within Component 2 on December 5, 2005, conditional on the establishment o f a baseline on the knowledge and use o f ICTs at this level, before purchasing computer equipment. Given that the implementation o f ICTs in classrooms comprises a distinct activity from those in any o f the other current subcomponents (that is, from 2.1 teacher training, 2.2. application o f the pedagogical model, 2.3 creation o f resource centers, 2.4 provision o f materials, 2.5 rehabilitation o f classrooms, and 2.6 work with families), Rincones Tecnologicos should not be included in one o f the other subcomponents but rather should be upgraded to a stand-alone subcomponent, 2.7. 13. Furthermore, the PP proposes modifications to the Loan Agreement that will permit single-source selection o f a uniquely qualified provider. In order to carry out a large-scale teacher training program, the Government has requested permission for the single-source selection o f a specific teacher training institute, Instituto Salomk UreZa. The Bank's Guidelines for the "Selection and Employment o f Consultants" allows for the single-source selection o f consultants, including firms and organizations, whenever "only one firm i s qualified or has experience o f exceptional worth for the assignment" (Section 111, Paragraph. 3.10, letter d). This provision applies to the Instituto Salomk UreZa, the only teacher training institution inthe Dominican Republic that has developed the kindo f training sought by the project at a sufficient level o f quality. A 2007 OECD review o f the Dominican Republic's education policies noted the high quality o f this institution and its graduates, particularly relative to other higher education institutions offering teacher training. The unique and exceptional services critical to project implementation to be provided by this institution justify the use o f single-source selection, and the Bank i s satisfied with the supportive evidence submitted by the client that supports this assertion (see Annex C). However, the 2002 Loan Agreement between the Dominican Republic and the International Bank for Reconstruction and Development (Loan 7144-DO), Schedule 4 (Procurement), Section 11, Employment o f Consultants, does not list single- source selection o f consultants and excludes any reference to paragraphs 3.9 to 3.13 o f 7 Section 111. Hence, this proposed change requires an amendment the Loan Agreement to allow for the single-source selection o f Instituto Salomi UveSa. Schedule 4 (Procurement), Section 11, Employment o f Consultants, Part C, Other Procedures for the Selection o f Consultants, would therefore be modified accordingly. 14. Finally, the PP proposes modifications to the Loan Agreement that will render the bidding process more efficient and will enable the Government to focus the Bank's resources so as to maximize impact. The Bank recognizes the need to make bidding more efficient by eliminating the unnecessary constraint imposed by aggregate limits for the use o f various procurement methods and the selection o f consultants. In using ICB for bids that would otherwise requireNCB, solely due to having reached the aggregate limit on the latter, the Government invests more time and resources than i s necessary. In addition, the Government should be permitted additional flexibility in reallocating funds between expenditure categories in order to reach the project's goals, particularly in the area o f civil works. PROPOSED CHANGES 15. Proposed changes include the following: 1) elimination o f one PDO Outcome Indicator and modificationo f three other PDO Outcome Indicators; 2) modification o f the PDO Output Indicators for classroom construction and rehabilitation; 3) formalization o f Rincones Tecnoldgicos as a stand-alone subcomponent within Component 2; 4) permission for single-source contracting with a teaching training institute; 5) elimination o f aggregate limits for the use o f various procurement methods and the selection o f consultants; and 6) permission for reallocation o f funds among categories. These changes are described further below. 16. Proposed changes to the PDO Outcome and Output Indicators are shown in Tables 1 and 2 respectively. An updated Results Framework i s presented in Annex D, while performance to date using the restructured outcome and output indicators i s summarized inAnnex E. Table 1. PDO Outcome Indicators Original PDO Indicator 1:Net enrollment pre-school enrollment rate increases from 72% to 86% by end o f project. PDO Indicator 2: Net enrollment pre-school enrollment rate o fpoorest increases from 51% to 86% by end o f project. PDO Indicator 3: Carry out 200 initiatives involving cross-sectoral and public-private collaboration inthe provision o f early childhood services, benefiting 20,000 children directly and 80,000 indirectly. PDO Indicator 4: Decrease the percentage o f time during which children in pre-primary classrooms are not actively engaged, by five percentage points. PDO Indicator 5: Achieve significant difference in grade repetition and dropouts rates in grades 3 and 4 for children that attended regional model centers as compared to those rates for the total population in grades 3 and 4. 8 Restructured PDO Indicator 1: Eliminated. PDO Indicator 2: Unchanged. PDO Indicator 3: Carry out initiatives involving cross-sectoral and public-private collaboration in the provision o f early childhood services, benefiting 50,000 children directly and 100,000 indirectly. PDO Indicator 4: Increase capacities in communication and socio-emotional development of pre-school childrenas measured by the EYE instrumentfrom 3.0 to 3.4 among the childrenbenefiting from the project by the end o f the project. PDO Indicator 5: Achieve a difference of at least 3 percentage points ingrade repetition ingrades 3 and 4 Ifor children that benefited from the project as compared to those rates for the total population in grades 3 - - .~ and 4 by the end o f the project. Source: PAD (2002), MTR (2007), ISRs (2008), operations portal. Table 2. PDO Output Indicators Original 36,000 new places for pre-school education, as a result o f construction o f 600 new classrooms and 17 model pre-schools. 36,000 improvedplaces for pre-school education, as a result o f rehabilitation o f 600 existing classrooms. Inall Model Pre-Schools and in 50% ofpre-schools nationwide are hnctioning Parent Committees. Restructured About 18,600 new places for pre-school education, as a result o f construction o f about 258 new classrooms and about 18 regional model centers. About 26,580 improved places for pre-school education, as a result o f rehabilitation o f about 425 existing classrooms and about 18 classrooms inregional model centers. Unchanged. Source: PAD (2002), MTR (2007), ISRs (2008), operations portal. 17. Given that the aggregate limits for the use o f various procurement methods and the selection o f consultants would be eliminated, as discussed earlier, it is proposed that the Procurement Plan now be the basis for determiningthe most appropriate procurement method for each contract and for obtaining the Bank's approval o f the use o f that method. 18. The proposed formalization o f Rincones Tecnolbgicos as a stand-alone subcomponent and changes pertaining to single-source selection o f consultants and financial management have already been discussed. An updated costing table, including the reallocation o f funds among expenditure categories, i s presented inAnnex F. 9 ECONOMIC AND FINANCIAL ANALYSIS 19. Given that civil works costs have increased but project financing has not, the project i s expected to produce a lower number o f beneficiaries at a higher cost per beneficiary, which merits a reexamination o f the project's economic analysis. 20. The client commissioned a new economic analysis for the Mid-Term Review (2007). According to this study, the Internal Rate o f Return (IRR) o f the project with the updated unit costs is estimated at 14.4 percent, and the Net Present Value (NPV) at a discount rate o f 12 percent i s US$76 million. These results show that the project i s still socially profitable. A sensitivity analysis shows the results to be robust up to a 20 percent increase in expected recurrent costs and a 50 percent reduction in expected gains arising from lower repetition and drop-out. Under this more conservative scenario, the IRR remains 14 percent and the NPV i s US$56 million. Hence, it i s recommended that the project be completed despite the increases in civil work costs. 21. The fiscal impact described in the PAD remains valid and unchanged, since the loan amount has not changed. Inaddition, since the original proposed target o f 86 percent preprimary enrollment i s likely to be achieved despite the lower number o f preschool spaces created by the project, it i s reasonable to assume that the project's unmet original construction goals will not impose an excessive fiscal burden inthe future. 22. The proposed changes do not affect the original technical, institutional, social or safeguard aspects o f the project as appraised. EXPECTED RESULTSAND BENEFITS 23. The original expected outcomes of improved access to quality Early Childhood Education remain valid. Although the project i s acknowledged to play less o f a role in expanding overall preprimary enrollment, it continues to focus on enrollment among the poorest and to support critical improvements to quality, particularly important as the Government fulfills its policy o f universal preprimary coverage. 24. By enhancing educational outcomes, the restructured project will contribute both to poverty alleviation by promoting higher individual returns to education and to higher aggregate economic growth by enhancing labor productivity. The focus on access o f the poorest to quality Early Childhood Education ensures that this is an equitable, pro-poor growth strategy. This is consistent with the sector goals originally established inthe 1999 Country Assistance Strategy and currently in force in the 2005 Country Assistance Strategy, as well as the findings o f the 2006 Country Economic Memorandum and Poverty Assessment. RISKS 25. Following his reelection in M a y 2008, President Leone1 Fernandez appointed a new Minister o f Education on August 16, which resulted in changes in project personnel that could potentially affect the progress and continuity o f activities. However, several key personnel will remain involvedwith the project until suitable replacements have been 10 identified by the Ministryand approved by the Bank, Inaddition, the Task Team Leader met with the new Minister, as well as the broader project team, on September 18 to discuss the overall project status and the most critical issues. Finally, the project team and World Bank staff have agreed to hold a monthly videoconference to ensure that project activities remain on track. 26. Macro-economic conditions and fiscal constraints also pose a risk to project implementation and the sustainability o f funding for E C D beyond the life o f the project. Inflation, particularly in construction costs, has posed challenges for the implementation o f the project's infrastructure components and may continue to do so if costs continue to rise. The Bank i s currently in discussions with the government regarding how best to mitigate this risk. Furthermore, competing fiscal priorities, such as efforts to address the effects o f 2007's tropical storms, and high public debt ratios constrain the government fiscally. These conditions led to the recent decision by the government not to pursue additional financing for this year. However, it i s hoped that strong economic growth, coupled with the government's commitment to universal access to preprimary school for five-year-olds, will help to sustain early childhood education beyond the closing date of the loan. PROCUREMENT/FINANCIAL MANAGEMENT/ SAFEGUARDS 27. The two changes in the project's procurement arrangements are the inclusion o f single-source contracting and the elimination o f aggregate limits for the use o f various procurement methods and the selection o f consultants (see Annexes B and C). The financial management arrangements included in the PAD remain valid, as do the PAD safeguards assessments (see section E. Summary Project Analysis). 11 ANNEX A: LETTER REQUESTING AMENDMENT TO THE LOAN AGREEMENT Estiniada Sefirjrcl Nos ieteninos ai A ~ de PrBstamo No ~7144DO firmado errtra el & h w w ~ ~ ~ o Dominicans y 01 Bai-ico Inteirasronal de Raconstrucci6n y Fomento (RIRF; d c ai financkamiento clef Proyecto pars el Fortalecimtentode de la EducacionIniciai" A parti. de ia eJalLiacion de media terniino llevada 8 cab0 en junic 2007 durante la lVIisioi del Banco Munclial, presidida por 10s Seilores Sam Carlsuii y Raja D KaMar ~:ort&sriients IP salicitamos introducrr fres (3) enmiendas a! Acuetclb de Ijres:ana detdliailas a cuntrrruacibn (I} ewtonder en dieciocho 178) weses la fecha de cimre del rderidr: creditn de forma tal que @stabea e1 31 de diciembre de 2009, t:) perimtir 18 reasigr-mmn da fondm ai-tie ias cetegarias de dpwnihok- encontradasen el PROGRAMA 1 del Acuerdo de Prsstanio . 12 13 ANNEX B: SUMMARY OF LEGAL COVENANTS/ PROPOSED AMENDMENT TO THE LOANAGREEMENT Rationale Modifications to PDO outcome and output indicators. One o f the project's PDO outcome indicators (Indicator I)would be eliminated since it cannot be attributed to the project, while three others (Lndicators 3-5) would be revised to aid project monitoring and to maximize impact3. In addition, the PDO output indicators associated with classroom construction and rehabilitation would be revised to account for increased civil works unit costs. The following table presents the new set o f output and outcome indicators. Annex D depicts the new results framework, which also includes baseline information. PDO Output Indicators PDO OutcomeIndicators About 18,600 new places for pre-school education, as a Indicator 2: Net enrollment pre-school enrollment result o f construction o f about 258 new classrooms and rate o f poorest increases to 86% by end o f project. about 18 regional model centers. (unchanged from original) About 26,580 improved places for pre-school Indicator 3: Carry out initiatives involving cross- education, as a result o f rehabilitation o f about 425 sectoral and public-private collaboration inthe existing classrooms and about 18 classrooms inregional provision o f early childhood services, benefiting model centers. 50,000 children directly and 100,000 indirectly. Inall Model Pre-Schools and in50% o fpre-schools Indicator 4: Increase capacities incommunication nationwide are functioning Parent Committees and socio-emotional development o f pre-school (unchanged from original) children as measured by the EYE instrument from 3.0 to 3.4 among the children benefiting from the project. Indicator 5: Achieve a difference o f at least 3 percentage points in grade repetition in grades 3 and 4 for children that benefited from the project as compared to those rates for the total population in grades 3 and 4. 28. Introduction ofa new subcomponent. The project will include in Component 2 a new subcomponent, Rincones Tecnoldgicos, intended to incorporate Information and Communication Technologies (ICTs) at the preprimary education level. This new subcomponent provides children a head start in ICTs at an early age. Two hundred and fifteen classrooms would benefit from this intervention in approximately 99 schools. Rincones Tecnoldgicos received a no-objection from the Bank as an activity within Component 2 on December 5, 2005, conditional on the establishment o f a baseline on the knowledge and use o f ICTs at this level, before purchasing computer equipment. Given that the implementation o f ICTs the classrooms comprises a distinct activity from those in any o f the other current subcomponents (that is, from 2.1 teacher training, 2.2 application o f the pedagogical model, 2.3 creation o f resource centers, 2.4 provision o f materials, 2.5 renovation o f classrooms, and 2.6 work with families), Rincones Tecnoldgicos should be upgraded to a stand-alone subcomponent, 2.7. 3PDO Indicator 2 remains unchanged, since it is reasonable to believe that an increase inthe preprimary enrollment o f the poorest quintile i s attributable to the project, given its use o f a supply and demand study to target high-poverty areas for construction and rehabilitation. 14 Reallocation of funds among expenditure categories. The Government should be permitted flexibility in reallocating funds between expenditure categories in order to reach the project's goals. The increased costs incivil works require reallocating a portion o f the project's unspent funds from consulting to civil works. Similarly, a portion o f its unspent funds from consulting will be also reallocated to teacher training, which requires additional fundingnot initially forecasted. See Annex F for more details. Aggregate limits. There i s a need to make bidding more efficient by eliminating the unnecessary constraint imposed by aggregate limits for the use o f various procurement methods and the selection o f consultants. In using I C B for bids that would otherwise require NCB, solely due to having reached the aggregate limit on the latter, the Government invests more time and resources than i s necessary. The aggregate limits for the use o f various procurement methods and the selection o f consultants should therefore be eliminated, given that it is no longer standard practice to include them in a Loan Agreement. Single-source Selection of consultants. The Bank's Guidelines for the "Selection and Employment o f Consultants" allows resorting to single-source selection o f consultants, including firms and organizations, whenever "only one firm i s qualified or has experience o f exceptional worth for the assignment" (Section 111, Paragraph. 3.10, letter d). This provision applies to the Instituto Salome` Urefia,the only teacher training institution inthe Dominican Republic that has developed the kind o f training sought by the project with sufficient quality. This institution provides unique and exceptional services that are critical to Project implementation, which justifies the use o f single-source selection. The Bank i s satisfied with the supportive evidence submitted by the client (see Annex C for thejustification o f single-source selection). However, the 2002 Loan Agreement between the Dominican Republic and the International Bank for Reconstruction and Development (Loan 7144-DO), Schedule 4 (Procurement), Section 11, EmpIoyment o f Consultants, does not list single-source selection o f consultants and excludes any reference to paragraphs 3.9 to 3.13 o f Section 111.Hence it is necessary to amend the Loan Agreement in order to allow for the single-source selection of Instituto Salome` Urefia. Schedule 4 (Procurement), Section 11, Employment o f Consultants, Part C, Other Procedures for the Selection o f Consultants, will be modified accordingly (see below). The following amendment includes the modification o f PDO outcome and output indicators, the introduction o f a new subcomponent, an updated table with the reallocation o f funds among categories, the elimination o f the aggregate amounts, and the incorporation o f single-source selection as a procurement method. 15 Proposedamendmentto the loan agreement September 12,2008 HisExcellency Lic. Vicente Bengoa Secretario de Estado de Hacienda Secretaria de Estado de Hacienda Avenida MCxico No. 45 Santo Domingo, Rep~blicaDominicana Re: Loan No.7144-DO (Early Childhood Education Project) Amendment to the Loan Agreement Excellency: Please refer to the Loan Agreement between the Dominican Republic (the Borrower) and the International Bank for Reconstruction and Development (the Bank) dated December 6, 2002 with regard to the above-captioned Loan (the Loan Agreement). We are pleased to inform you that, pursuant to your letter of request dated February 13, 2008 as well as our recent discussions on the subject, the Bank hereby agrees to amend the Loan Agreement so as to: (a) modify the indicators set forth in the Annex to the Implementation Letter; (b) modify the table in Schedule 1 (Disbursement) to the Loan Agreement by reallocating funds among Categories; (c) add a new subcomponent under Part B o f the Project; and (d) replace Schedule 4 (Procurement) to the Loan Agreement. Consequently, the Loan Agreement i s hereby amended as follows: 1. The indicators included in the Annex to the Implementation Letter are hereby modified to read as set forth in Attachment 1 to this amendment letter. 2. The table in paragraph 1 o f Schedule 1 to the Loan Agreement i s hereby amended and replaced to read inits entirety as set forth in Attachment 2 to this amendment letter. 3. Paragraph 3(a) o f Part A o f Schedule 2 o f the Loan Agreement i s hereby amended and replaced in its entirety to read as follows: " 3 . (a) Construction o f about 258 new classrooms in existing schools and about 18 regional model centers comprising about 52 new classrooms for Preprimary Education in areas selected by the Borrower in accordance with criteria set forth in the Operational Manual, including the acquisition and utilization o f pedagogical materials and school furniture for each classroom; and (b) employment o f teachers for said classrooms." 4. Paragraph 4 o f Part B o f Schedule 2 o f the Loan Agreement is hereby amended and replaced in its entirety to read as follows: 16 "4. Renovatiodremodeling o f about 425 Preprimary Education classrooms in existing schools and about 18 classrooms in regional model centers (which renovation/remodeling may consist o f the installation o f an appropriate ventilation, lighting and sanitary facilities) selected by `the Borrower in accordance with the criteria set forth inthe Operational Manual." 5. A new paragraph 7 is introduced on Part B o f Schedule 2 to the Loan Agreement, to read as follows: "7. Incorporating/Introducing information and communication technologies (ICTs) at the preprimary education level to provide children with a head start in ICTs at an early age and support the application o f the early childhood education pedagogical model." 6. Schedule 4 to the Loan Agreement i s hereby amended and replaced to read in its entirety as set forth in Attachment 3 to this amendment letter. Please confirm your agreement with the foregoing amendment by signing and dating this letter in the spaces provided below. Capitalized terms used in this amendment letter and not defined herein have the meaning ascribed to them in the Loan Agreement. Thenceforward, all other provisions o f the Loan Agreement, except as amended through this letter shall remain in full force and effect. This amendment letter shall be executed in two counterparts each o f which shall be an original. Upon confirmation, please return one fully executed original to us. The provisions set forth in this amendment letter shall become effective as o f the date o f the countersignature. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTIONAND DEVELOPMENT Yvonee Tsikata Director Caribbean Country Management Unit Latin America and the Caribbean Region AGREED: DOMINICANREPUBLIC BY Authorized Representative Name: Title: Date: 17 Attachment 1 ANNEX MONITORING INDICATORS PDO Component Intermediate Outcome (PDO Baseline (PDO outcomes (outputs) Indicators) Indicators) 1, To increase 1. Expanding About 18,600 new Indicator 2: Net 5 1.O% (2002) access to early Preprimary places for pre- enrollment pre- childhood Education Services school education, as school enrollment development a result o f rate o f poorest services for all 3 Institutional construction o f increases to 86% by childrenages zero Strengthening inthe about 258 new end ofproject. to five Education Sector classrooms and about 18 regional 4. Project model centers. Administration and Indicator 3: Carry None Monitoring About 26,580 out initiatives improved places for involving cross- pre-school sectoral and public- education, as a private collaboration result o f inthe provision of rehabilitation o f early childhood about 425 existing services, benefiting classrooms and 50,000 children about 18 classrooms directly and 100,000 inregionalmodel indirectly. centers. 2. To strengthen 2. Increasing ECD Inall Model Pre- Indicator 4: 3.0 (2005) the quality o f early Education Quality Schools and in50% Increase capacities in childhood o f pre-schools communication and education that i s 3. Institutional nationwide are socio-emotional available to Strengthening inthe functioning Parent development o f pre- children ages zero Education Sector Committees school childrenas to five measuredby the 4. Project EYEinstrument Administration and from 3.O to 3.4 Monitoring among the children benefiting from the project. Indicator 5: Achieve a difference o f at least 3 None percentage points in grade repetition in grades 3 and 4 for children that benefited from the project as compared to those rates for the total population in grades 3 and 4. 18 Attachment 2 SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories o f items to be financed out o f the proceeds of the Loan, the allocation o f the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed ineach Category: Amount o f the Loan Allocated % o f (Expressed in Expenditures Category Dollars to be Financed (1) Works under Parts 20,497,000 100% A.1,A.3 (a) and B.4of the Project (2) Goods (excluding 8,900,000 100% o f foreign goods under Early Childhood expenditures; 100%of Education Subprojects) local expenditures (ex-factory cost); and 80% o f local expenditures for other items procured locally (3) Consultants' services 2,657,000 38% (excluding consultants ' services under Early Childhood Education Subprojects) (4) Training (excluding training 3,825,999 84% under Early Childhood Education Subprojects) (5) Works, goods, 5,100,000 80% consultants' services.m d o r training, as the case may be, under Early ChildhoodEducation Subprojects (6) Operating Costs 600,000 80% 19 Amount o f the Loan Allocated % o f (Expressed in Expenditures Cateaorv Dollars to be Financed (7) Front-end fee 420,000 Amount due under Section 2.04 o f this Agreement (8) Premia for Interest Rate 0 Amount due under Caps and Interest Rate Section 2.09 (c) of Collars this Agreement TOTAL 42.000.000 20 Attachment 3 SCHEDULE4 Procurement Section I. Procurementof Goods and Works -- Part A: General Goods and works shall be procuredin accordance with the provisions o f Section Iof the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in January 1995 and revised in January and August 1996, September 1997 and January 1999 (the Guidelines)and the following provisionsof Section Iof this Schedule. Part B: International CompetitiveBidding 1. Except as otherwise provided in Part C of this Section, goods and works shall be procured under contracts awarded in accordance with the provisions of Section I1 of the Guidelinesandparagraph5 o f Appendix 1thereto. 2. The following provisions shall apply to goods and works to be procured under contracts awarded inaccordance with the provisions of paragraph 1 of this Part B. (a) Grouping;o f Contracts To the extent practicable, contracts for goods and works shall be grouped in bidpackages estimated to cost $250,000 equivalent or more and $3,000,000 equivalent or more, respectively. (b) Preference for DomesticallyManufacturedGoods The provisions of paragraphs 2.54 and 2.55 of the Guidelines and Appendix 2 thereto shall apply to goods manufacturedinthe territory o f the Borrower. Part C: Other ProcurementProcedures 1. National Competitive Bidding (a) Goods estimated to cost less than $250,000 equivalent per contract may be procuredunder contracts awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines. (b) Works estimated to cost less than $3,000,000 equivalent per contract may be procuredunder contracts awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines. 21 standard(c) Procurement o f goods and works under this Part shall be carried out using biddingdocuments acceptable to the Bank. 2. Shopping Goods estimated to cost less than $50,000 equivalent per contract may be procured under contracts awarded on the basis o f international or national shopping procedures, at the Borrower or the Eligible Entity's option, as the case may be, in accordance with the provisions o f paragraphs 3.5 and 3.6 o f the Guidelines. 3. Direct Contracting Goods under Early Childhood Education Subprojects which should be procured as an extension o f an existing contract and costing $2,000 equivalent or less in the aggregate under each Early Childhood Education Subproject, may, with the Bank's prior agreement, be procured inaccordance with the provisions o fparagraph 3.7 (a) o f the Guidelines. 4. Procurement o f Small Works Works estimated to cost less than $250,000 equivalent per contract may be procured under lump-sum,fixed-price contracts awarded on the basis o f quotations obtained from three (3) qualified domestic contractors in response to a written invitation. The invitation shall include a detailed description o f the works, including basic specifications, the required completion date, a basic form o f agreemeni acceptable to the Bank, and relevant drawings, where applicable. The award shall be made to the contractor who offers the lowest price quotation for the required work, and who has the experience and resources to complete the contract successfully. 22 Part D: Review by the Bank o f Procurement Decisions 1. Procurement Planning Prior to the issuance o f any invitations to ,bid for contracts, the proposed procurement plan for the Project shall be furnished to the Bank for its review and approval, in accordance with the provisions o f paragraph 1 o f Appendix 1 to the Guidelines. Procurement o f all goods and works shall be undertaken in accordance with such procurement plan as shall have been approved by the Bank and as provided in Section 3.10 o f this Agreement, and with the provisions o f said paragraph 1. 2. Prior Review B of this(a) With respect to: (i)each contract for goods and works to be awarded under Part Section; and (ii)the first two contracts for goods and works to be awarded each calendar year during Project implementation under Part C.l (a) and (b) o f this Section, respectively, the procedures set forth inparagraphs 2 and 3 o f Appendix 1 to the Guidelines shall apply. (b) With respect to the first two contracts for goods and works to be awarded each calendar year duringProject implementation under Parts C.2 and C.4 o f this Section, respectively, the following procedures shall apply: (i) prior to the selection o f any supplier or contractor under said Parts, the Borrower shall provide to, the Bank a report on the comparison and evaluation o f the quotations received; (ii) prior to the execution o f any contract under said Parts, the Borrower shall provide to the Bank a copy o f the specifications and the draft contract; and (iii) the procedures set forth in paragraphs 2 (f), 2 (g) and 3 o f Appendix 1 to the Guidelines shall apply. (c) With respect to all contracts for goods under Part C.3 of this Section, the following procedures shall apply: (i) prior to the execution o f any contract under said Part, the Borrower shall provide to the Bank a copy o f the specifications and the draft contract; and (ii) the procedures set forth in paragraphs 2 (f), 2 (g) and 3 o f Appendix 1 to the Guidelines shall apply. 3. Post Review With respect to each contract not governed by paragraph2 o f this Part, the procedures set forth inparagraph 4 o f Appendix 1 to the Guidelines shall apply. 23 Section 11. Employment o f Consultants -- Part A : General Consultants' services shall be procured in accordance with the provisions o f Sections I and IV o f the "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers" published by the Bank in January 1997 and revised in September 1997, January 1999 and M a y 2002 (the Consultant Guidelines), paragraph 1 o f Appendix 1 thereto, Appendix 2 thereto, and the following provisions o f Section I1o f this Schedule. Part B : Qualitv- and Cost-based Selection Except as otherwise provided in Part C o f this Section, consultants' services shall be procured under contracts awarded in accordance with the provisions o f Section I1 o f the Consultant Guidelines, and the provisions o f paragraphs 3.13 through 3.18 thereof applicable to quality- and cost-based selection o f consultants. Part C: Other Procedures for the Selection o f Consultants 1. Least-cost Selection Consultants' services estimated to cost less than $100,000 equivalent per contract may be procured under contracts awarded in accordance with the provisions o f paragraphs 3.1 and 3.6 o f the Consultant Guidelines. 2. Selection Based on Consultants' Qualifications Consultants' services estimated to cost less than $100,000 equivalent per contract may be procured under contracts awarded in accordance with the provisions o f paragraphs 3.1 and 3.7 o f the Consultant Guidelines. 3. Single-Source Selection Specialized training activities may, with the Bank's prior agreement, be procured in accordance with the provisions o f paragraph 3.8 through 3.11 o f the Consultant Guidelines 4. Individual Consultants Consultants' services for specialized Project activities, as approved by the Bank, and tasks that meet the requirements set forth in paragraph 5.1 o f the Consultant Guidelines shall be procured under contracts awarded to individual consultants in accordance with the provisions of paragraphs 5.1 through 5.3 o f the Consultant Guidelines. Part D: Review by the Bank of the Selection of Consultants 1. Selection Planning 24 A plan for the selection o f consultants, which shall include contract cost estimates, contract packaging, and applicable selection criteria and procedures, shall be furnished to the Bank, for its review and approval, prior to the issuance to consultants of any requests for proposals. Selection of all consultants' services shall be undertaken in accordance with such selection plan (as updated from time to time as referred to in Section 3.10 of this Agreement). 2. Prior Review (a) With respect to each contract for the employment o f consulting firms estimated to cost the equivalent o f $75,000 or more, the procedures set forth in paragraphs 2, 3 and 5 o f Appendix 1 to the Consultant Guidelines shall apply. (b) With respect to: (i)each contract for the employment o f individual consultants estimated to cost the equivalent o f $50,000 or more; and (ii) each contract for the employment o f key staff for the P C U (as determined by the Bank), the report on the comparison o f qualifications and experience o f candidates and the terms o f reference and terms o f employment o f the consultants shall be furnished to the Bank for its prior review and approval. The contract shall be awarded only after the said approval shall have been given. The provisions o f paragraph 3 of Appendix 1 to the Consultant Guidelines shall also apply to such contracts. (c) With respect to each contract for the employment o f individual consultants estimated to cost less than $50,000 equivalent (with the exception o f each contract for the employment o f key staff for the PCU as provided inparagraph (b) above), the terms o f reference o f the consultants shall be furnished to the Bank for its prior review and approval. The contract shall be awarded only after the said approval shall have been given. 3. Post Review With respect to each contract not governedby paragraph 2 of this Part, the procedures set forth inparagraph 4 o f Appendix 1 to the Consultant Guidelines shall apply. 25 INSTITUTO SALOME URENA ANNEX C: JUSTIFICATION OF SINGLE-SOURCE SELECTION OF Santa Damingn l3 N 10 de jtinio del 2.005 Seiiora Raja Bentaauet Kattan Gerente del Proyecto Departamento de Desarrotlo Hurnano Banco Mundiai Su Despacho Estimada sefiora Kattan: Reciba un cordial saludo al tiempo que le salicitarnos, nueva vez, la autorizacion para la contratacibn del lnstituto Superior de Formacion Docente Salomk Ureria para irnpartir 10s cuatro Oiplamados y la Especialidad que se han Diseiiado para las educadoras y educadores del Nwel Inicial. Esta accibn se enmarca en el Proyectha para el Fortalecirnientode la EducaciGn lrlicial en la RepQblica Domrnicana, dentra del Component@2 Mojoremrcnto de la Galrdad del Grado Pre-primario, curno park de las acciones de capacitacr6n a las educadorasks de dicho Grado, contempladas en el POA 2008 Esta soiicitud, la cual farma parte de [a Enmienda ai Acuerdo de Prtilstamo BIRF- 7144 , se hace tonmdo en consideracibn las sigutentes aspectos, y/o fortalezas, con que cuenta el lnstituto Superior de Formacirjn Dcrcentc, 10s ctdalos qwssi&arnos que fuesen ponderados nuevatnente por Usted. Estcls aspectos son El lnstituto Superror de Formacibn Docente Salome UreAa (ISFODOSU) constitirye la instancra de soporte academic0 de la Secretaria de Estado de Education {SEE) La base legal del ISFOUOSU est5 sustentada en ]as disposicioncs quo se especrfican a continuacion- e Ley 66'97, en 10s Articulos 103 y 222 que estahlecen, por kin lado, que la SEE "desmntralizara la ejecuciCtr7 de funciones servicios. programas proyectos detrnidos en el marco de la Ley y sus Reglarnentos" y, poi- atra 26 parte, "que Ias Escuelas Normaies y la Escuela Nacmnai de EdLicacrbn Fisica Escolar pasan a ser tnstituciones de educacibn superior" Decreta 517'03, y Decreta No 427'00, el cuai dispone que las Escuelas Normales pasen a ser deqorninacfas lnstitutos Ilniversblarios de Forrnacibn Docente 0rdr;nanza 1'02, def Cor-~sejoNacional de Educactbn, que estabtece el Estatutv Organic0 del lnstitutcl Superior de Formacidn Docente, en el CUal SB define la naturalera, prtneipios y fines de la Enstitucibn, asi coma la estructura aca&mica y administratrva, inctirjdas 6as de 10s respectivos RecinK~sdel Instewto. Ei fnstituto se rige apqado a la ley 139-01 capitdo 111, artkiilo 24, q l ~ e reza: 'Los lnstitutos Especializados de Estudtos Superiores: son aquellos centros autorrzados para inlpartir cafreras y otorgar titubs a nivd de qrados y postgrados en &reas de especialidad, previarnenle aprobadas por el CONESCT' A diferencia de cstras rnstituctones, el lnstituto Saiom& Urefia dispone de una infraestructura 6ptima para la docencia en drferentes regrones geograficas del pais, en correspondencia con la poblacion de educadores/as n la que querernas alcanzar desde el Proyecto a nlvel nacranal. Est5 rntegrado lpof seis Recintos lo$ cuales cornparten un mistno modelo pedagbgico. El tristiluto ha desarrclllado programas de capacrtactbn dmgidos a la rdttcadorasles il4 Nivel Bnicial, especificamente. dos capacitaciones de Vemnv (aiio 2003 y aAo 2005) das Diplomado, uno en Lengiiaje y Comunicacrljn y otra en Gurriculo, Planificacibn y Evaluacibn llevado Gab0 HI 10s ariOs 21306 y 2007 Durante la ~jecuci6nde dichos programas. et Institute ha odrecido un servicio de calidad, evidenci&ndose la prabada experiericia del nismo para desarroltar la formacion dernandada a1 contar con un cuerpo docente competente, a1 diseilar una propuesta tecnrca y docencra con contenidos, estrategias y actividades pertincntes a! N I Q ~ , a la vez que ha mostrada una organizacion adecuada y apeyada a los reyuerimieritus establecidos. El Institute cuenta can una planta profesional de cisnto sesenta y cinw (l65) grofesores para el desarrolb de 10s programas, dtstribuidos en todos sus ReCmtGS, con diferentes modalidadesde contratacidn El lnstituto ,por su naturaleza y su participacirjn en las accioncs de la Secretaria de Estado de Educaciiin conoce a cabalrefad, el Curriculo del Nlvel Inlceal, el Perfll delita Doc;erik d que aspira e6 Srstcma Educatrvo Donainicano,asi corn0 las priorr'dadesestablecrdas pur diferentes yestiones gubernamentales Es este sentido, el lnstituto es un ccmocedor rfr? ias riecesidades reales de formacidri de loslas docentes, tenierxb de estt? 27 modo la expeaiencia necesaria en la irnplernentacicln de planes [le forrnacibn pei-tinentes y adccuados para las educadaras del sector educative A 10s aspectos planteados mas arnba se le agrega el interes die la Secretaria de Estado de Educaciljn de que el Proyecto para el Fartalecimiento de la Educacrdn Inicial, en el rnarco de sus acciories de forrnacidn continua a !as edwadorasles, deje una capacidad instalada en el lnstituto de Formacidn Superior Salorne WreiSa ,corn0 instttucion oficial responsable de la formaci6n docente requeridos par el Sistema Educativo Dorninicana, ~o~struyendo al proceso de consolidackm de una entidad asi sblida que pueda ser la principal forrnadora y capacitadora del personal docenk presente y futuro en las cuestlrones relacionados con el Nivei knE C II ~ Es por Iu antes descrito que, carno parte de 10s ajustes al Convcnio de Prkstama, solicitarnos at Banco Mundial su no objecion a la conlrataceon del lnstituto para llevar a cabo 10s Diplomados y la Especialidad dirigidos a bas educadaras r'es del Niwl lnicial para 10s aAos de vida que le restan al Proyecto Sin otro particular, y agradeciendo la atencion que puedan preslar a nuestra sokftucf, se rlespide Oficina de Coope 28 ANNEX D: UPDATEDRESULTSFRAMEWORK PDO Component Intermediate Outcome (PDO Baseline (PDO outcomes (outputs) Indicators) Indicators) 1. To increase 1. Expanding About 18,600 new Indicator 2: Net 5 1.O% (2002) access to early Preprimary places for pre- enrollment pre- childhood Education school education, as school enrollment development Services a result o f rate o f poorest services for all construction o f increases to 86% childrenages zero 3 Institutional about 258 new by end o f project. to five Strengthening in classrooms and the Education about 18 regional Sector model centers. Indicator 3: 4. Project About 26,580 Carry out None Administration improvedplaces for initiatives and Monitoring pre-school involving cross- education, as a sectoral and result o f public-private rehabilitation o f collaboration in about 425 existing the provision o f classrooms and early childhood about 18 classrooms services, inregional model benefiting 50,000 centers. children directly and 100,000 indirectly. 2. To strengthen 2. Increasing ECD Inall Model Pre- Indicator 4: 3.0 (2005) the quality of early Education Quality Schools and in 50% Increase capacities childhood o f pre-schools incommunication education that is 3. Institutional nationwide are and socio- available to Strengthening in fimctioning Parent emotional children ages zero the Education Committees development o f to five Sector pre-school children as 4. Project measured by the Administration EYEinstrument and Monitoring from 3.0 to 3.4 among the children benefiting from the project. Indicator 5: None Achieve a difference o f at least 3 percentage points in grade repetition in grades 3 and 4 for childrenthat benefited from the project as compared to those rates for the total population in grades 3 and 4. 29 ANNEX E: PERFORMANCE TO DATE ON RESTRUCTURED INDICATORS rable El: RestructuredPDO OutcomeIndicators Restructured Indicators PDO Indicator 2: Net enrollment pre-school enrollment rate o f poorest increases to 86% by end of project. PDO Indicator 3: Carry out initiatives involving cross-sectoral and public-private collaboration in the provision o f early childhood services, benefiting 50,000 children directly and 100,000 indirectly. PDO Indicator 4: Increase capacities in communication and socio-emotional development o f pre-school children as measured by the EYE instrument from 3.0 to 3.4 among the children benefiting from the project by the end o f the project. PDO Indicator 5: Achieve a difference o f at least three,percentage points in grade repetition in grades 3 and 4 for children that benefited from the project as compared to those rates for the total population in grades 3 and 4 by the end o f the project. Performance to Date (Spring 2008) PDO Indicator 2: Net enrollment pre-school enrollment rate o f poorest increased to 73.4%. PDO Indicator 3: 60 initiatives involving cross-sectoral and public-private collaboration in the provision o f early childhood services have been carried out, benefiting 52,011 directly and 105,726 indirectly. PDO Indicator 4: Capacities in communication and socio-emotional development o f pre-school children as measured by the EYE instrument increased from 3.0 in 2005 to 3.85 in 2007 among the children benefiting from the project. PDO Indicator 5: The repetition rate in grades 3 and 4 for children that benefited from the project was 6.5% compared to 10.5% for the total population ingrades 3 and 4 in2005l2006 ources: 2007 Mid-TermReview, 2008 consultancy studies, June 2008 supervision mission Table E2: RestructuredPDO Output Indicators Restructured Indicators About 18,600 new places for pre-school education, as a result o f construction o f about 258 new classrooms and about 18 regional model centers. About 26,580 improved places for pre-school education, as a result o f rehabilitation o f about 425 existing classroom and about 18 classrooms inregional model centers. Inall Model Pre-Schools and in50% ofpre-schools nationwide are functioning Parent Committees Performance to Date (Spring 2008) 6,060 new places for pre-school education, as a result of construction o f 81 new classrooms and 5 model pre-schools. 5,520 improved places for pre-school education, as a result o f rehabilitation o f 92 existing classroom. 39% of pre-schools have functioning Parent Committees Source: June 2008 supervision mission 30 ANNEX F: UPDATED PROJECT COSTS (LOAN PROCEEDS) /DISBURSEMENTS ARRANGEMENTS The table below presents the updated project costs per category for the remaining (undisbursed) US$26.51million as o f March 31, 2008: Expense Category PAD (2002) Disbursed Remaining (US$ million) (US$million) (US$million) (US$million) Goods and works 23.5 10.34 13.16 Consulting 4.96 1.56 3.40 Training 3.15 1.29 1.86 Subtxoiects 5.1 2.17 2.93 Operational costs 0.6 0.128 0.472 Total baseline cost 37.31 15.48 21.82 NonAllocated 4.27 0.00 4.27 Front-End Fee 0.42 0.42 0.42 Total 42.00 15.90 26.5 1 Source: PAD, Project Financial Reports, Operations Portal. The following table summarizes the proposed reallocation o f funds among categories o f expenditure (In $US). The last column (Total Budget) corresponds to the amounts to be reflected inthe amendment to the Loan Agreement (see Schedule 1 inAnnex B): AVAILABLE BUDGET TOTAL CATEGORY BUDGET DISBURSED % UNSPENT REALLOCATION BUDGET Civil Works 14,600,000.00 5,252,252.05 35.97 9,347,747.95 +5,897,000.00 15,244,747.95 20,497,000.00 Goods 8,900,000.40 6,604,217.87 74.20 2,295,782.53 0.00 2,295,782.53 8,900,000.40 Consulting 4,980,000 00 1,756,910.27 35.28 3,223,089.73 -7.323,ooo 00 900,089 73 2,657,000.00 TrainIng 3,129,999.60 1,326,084.17 42.37 1,803,915.43 +69h,OO~J00 2,499,9 15.43 3,825,999.60 Subprojects 5,100,000.00 2,469,337.53 48.42 2,630,662.47 0.00 2,630,662.47 5,100,000.00 Operational 1 I I costs 6oo'ooo'oo 121,199.94 20.20 478,800.06 0.00 478,800.06 600,000.00 Loan fees 1I 420,000.00 1I 420,000.00 1I100.00 1I 0.00 1I 0.00 0.00 420,000.00 1Unallocated 1 4,270,000.00 1 1 0.00 1 4,270,000.00 1 -4,270,000.00 1 0 1 0.00 I Source: OJcina de Cooperacidn Internacional 31 It is proposed that all o f the loan's unallocated finds (US$4,270,000.00) and a portion of its funds allocated to consulting (US$ 1,627,000.00) be redirected to civil works. These funds will be used to offset the increased costs o f construction and rehabilitation. In addition, a portion o f the loan's funds allocated to consulting (US$ 696,000.00) will be redirected to training to augment teacher education. 32 ANNEX G:LIST OF SUPPORTINGDOCUMENTS 1. Project Appraisal Document, July 31,2002. 2. No-objection on Rincones Tecnolbgicos, December 5,2005. 3. Evaluacion de Medio Termino (Mid-Term Review), July 2007. 4. Letter Requesting Amendment to the Loan Agreement, February 13,2008. 5. Financial Management Report, March 3 1,2008. 6. Implementation Status Report #16, June 30,2008. 7. Letter on Justification of Single-Source Selection ofInstitute Sulome' UreGa, June 10, 2008. 33