Document of The World Bank Report No: -TU 66136 v1 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SECONDARY EDUCATION PROJECT LOAN NO. 4767 TU APPROVED BY THE BOARD ON MARCH 15, 2005 IN THE AMOUNT OF EUR 80 MILLION (US$ 104 MILLION EQUIVALENT) TO THE REPUBLIC OF TURKEY December 20, 2011 Human Development Sector Unit Turkey Country Unit Europe and Central Asia Region Regional Vice President: Philippe H. Le Houerou Country Director: Ulrich Zachau Sector Director: Ana Revenga Sector Manager: Alberto Rodriguez Task Team Leader: Naveed Hassan Naqvi 2 TABLE OF CONTENTS A SUMMARY…………………………………………………………………. 4 B PROJECT STATUS………………………………………………………... 5 C PROPOSED CHANGES…………………………………………………... 7 3 TURKEY SECONDARY EDUCATION PROJECT (LOAN NO. 4767-TU) RESTRUCTURING PAPER SUMMARY The purpose of this Restructuring Paper is to seek approval by the Country Director for the extension of the closing date for the Turkey’s Secondary Education Project (SEP), from December 31, 2011 to April 30, 2012, and the reallocation of Euro 1.35 million out of a total loan of Euro 80 million funds among the existing categories under the project. SEP, financed by an IBRD loan in the amount of Euro 80 million, supports improvements of conditions for student learning in secondary education and in schools in sub-provinces with low enrollment rates. It comprises the following components: Component 1: Secondary Education Reform (Euro 38.39 million). This component supports: (i) Implementation of new general education and vocational education curriculum programs to provide students with core skills to compete in the knowledge economy; and (ii) Information and Communications Technology (ICT) training and Career Guidance and Counseling. Component 2: Quality Assessment (Euro 4.26 million). This component supports: (i) Student Assessment and Evaluation, aimed at improving the quality and outcomes of secondary education by developing systems to collect and disseminate information on student learning and outcomes, and on the performance of the education system staff and institutions; and (ii) Improving the performance and outcomes, educational achievement, and quality in education of secondary schools staff, parents, and students through school development activities. Component 3: School Grants (Euro 33.52 million). This component supports: (i) Vocational training competitive grants designed to improve the skills and qualifications of vocational teachers and the quality of vocational training institutions; (ii) A School Development Program (SDP) to provide grants to schools in sub-provinces with low enrollment rates and in areas likely to have been more adversely affected by the global economic crisis. Component 4: Project Management, Monitoring and Evaluation (Euro 3.82 million). This component supports: (i) Project administration and coordination; and (ii) Regular monitoring of the project, evaluation of project sub-components, and evaluation of the overall impact of the project. PROJECT STATUS 4 SEP was approved in March 2005, and became effective in May 2006. The Project had a slow start and underwent two Level I restructurings, in February 2008 and March 2010 respectively, which resulted in the modification of its development objectives as well as some of its components. A Level II restructuring of the project was approved in June, 2011 and was used to expand SDP coverage. Project implementation and overall performance have markedly improved since 2010, and this is reflected in accelerated disbursements, which increased from Euro 18.9 million (24 percent of loan proceeds) in November, 2010 to Euro 49.7 million (62 percent of loan proceeds) as of December 1, 2011. Given the positive progress and in order to fully achieve the project development objective of improving secondary education learning conditions, and allow for the greater coverage of the highly successful SDP component, the Government of Turkey has sent a formal request for extending the project end date to April 30, 2012. Key achievements and outputs under the Project are summarized below: The SDP is under implementation in all sub-provinces. As of end-April, 2011, Euro 11.8 million were contracted under the SDP sub-component. Of these, Euro 4.5 million were disbursed; The curricula revisions for 65 programs for General Secondary Education were completed – initial target was 64 programs; 1,160 modules for vocational education were completed – initial target was 1,000 modules; The national Career Information System (CIS) has been active since April 2010. The system is well functioning, integrated and easily accessible to all internet users. The CIS is part of a broader, integrated approach towards career guidance and counseling, which involves several Turkish institutions, such as ISKUR and Ministry of Development. The site (http://mbs.meb.gov.tr) has 1,213,463 registered users and an estimated significantly larger number of non registered users; School Development Management Teams were formed in all secondary education schools, and over 2,500 primary schools. 15,000 educational staff were trained in school plan preparation; and Vocational Training Initiatives (VTIs) in all 46 targeted vocational schools were successfully completed, including teacher training, school grants, and implementation of new technology-based training methods. Initial results from site visits show that schools are satisfied with the VTIs and school grants. Progress towards SEP’s development objective continues to be assessed as Moderately Satisfactory. Implementation progress has been slow since August 2011; the key reason behind such delays is the deep and ongoing restructuring of Ministry of National Education (MONE), and a pre-occupation with the recovery efforts in the earthquake- affected Van province. The team expects implementation progress to improve over the next few weeks as changes to project related staff in MONE have been finalized by the end of November, 2011, and the bulk of activities for early response to the earthquake in VAN are over. With continued concerted efforts to ensure that ongoing activities 5 progress on a timely schedule, the Project is likely to achieve most of its objectives if an extension is granted. The annual Project financial statements are audited by the Treasury Controllers in accordance with the International Standards on Auditing (ISA) based on the terms of reference agreed with the Bank. There are no overdue audit reports for the Project, and no outstanding issues from the Project’s previous audits. PROPOSED CHANGES Extension of the Project Closing Date: The Government seeks an extension of the closing date of the project from December 31, 2011 to April 30, 2012 in order to: a. Complete Activities in the School Development Program (SDP): An extension of the Project end date is necessary to allow schools to complete all activities under the SDP program and fully utilize their grants. b. Complete Activities related to Secondary Education Reform: An extension will allow MONE to complete activities under Secondary Education Reform, in particular by taking delivery of goods and equipment needed for training associated with extensive curricula reform under the project. Reallocation of Project Funds to SDP: SDP has shown rapid success and the Government wants to reallocate Euro 1.385 million, to expand SDP to four additional sub-provinces. The details are summarized below and included in Table 1: Funds totaling Euro 1.385 million have become available for reallocation under the project from: a. A reduction and reorganization of activities under Training and In-service Training Category resulting in savings of Euro 1.25 million; and b. Cost savings of Euro 0.135 million under Incremental Operating Cost category. The freed-up funds of Euro 1.385 million are proposed to be used for additional allocations to the following activities: i. An additional allocation in the amount of Euro 1.35 million to support the expansion of the SDP: Activities under the SDP have progressed well, resulting in a significant increase in disbursement of loan proceeds. As a result, the Borrower has made a request to further expand the Program to include an 6 additional 170 schools in four new sub-provinces. These new sub-provinces are located in provinces which are already implementing SDP grants in neighboring sub-provinces, and this is likely to ensure speedy implementation. ii. An additional allocation in the amount of Euro 0.035 million to Consultant Services category to provide additional support for project implementation. Table 1: Current and Proposed Allocations by Project Categories (Euro) Category Amount of the Amount of the Proposed Loan Loan Increase / Allocated Allocated (Decrease) (Euro million) (Euro million) Current Proposed (1) Goods 24,970,000 24,970,000 0 (2) Consultants’ Services 3,851,000 3,886,000 35,000 (3) Training and in-service training 17,204,000 15,954,000 (1,250,000) (4) Incremental operating costs 450,000 315,000 (135,000) (5) Unallocated 0 0 0 (6) Grants under Part C.2 of the Project 2,755,000 2,755,000 0 (7) Grants under Part C.3 of the Project 30,770,000 32,120,000 1,350,000 TOTAL 80,000,000 80,000,000 0 7