Strengthening Reform Management in Jordan (P171965) Aide Memoire Pre-Appraisal Mission for Additional Financing August 4-8, 2024 The World Bank conducted a pre-appraisal mission from August 4 to 8, 2024, for additional financing for the “Strengthening Reform Management Project”. The main objectives of the mission were to agree on (a) project objectives, design, components, and results framework and (b) project implementation arrangements, including fiduciary arrangements and environment and social safeguards arrangements. The World Bank team would like to sincerely thank the Ministry of Planning and International Cooperation (MOPIC), represented by the Reform Secretariat, for supporting the mission and coordinating meetings with stakeholders. A list of participants is provided in Annex One. Key Project Data & Ratings Table 1. Key Project Data Key Dates Signing Date Dec. 7, 2019 Current Closing Date June 30, 2025 Original Project Amount US$6.5 million Approved First Additional Financing US$9.3 million Total Amount Disbursed US$8.5 million Proposed Second Additional Financing US$7.5 million Proposed Revised Closing Date June 30, 2028 Table 2: Key Project Ratings March 2024 Project Performance Ratings Achievement of Project Development Satisfactory Objective Implementation Progress Satisfactory Component 1 Satisfactory Component 2 Moderately Satisfactory Component 3 Moderately Satisfactory Project Management Satisfactory Financial Management Satisfactory Procurement Satisfactory Monitoring and Evaluation Satisfactory SUMMARY OF IMPLEMENTATION PROGRESS Progress toward achieving the Project Development Objective (PDO) is rated as "satisfactory." The overall implementation progress, project management, procurement, financial management, and monitoring and evaluation are also rated “satisfactory”. The achievement of the PDO is assessed by four PDO-level indicators and eleven Intermediate-level Results indicators (IRIs). Two PDO-level indicators ( the number of policy reforms completed, including the sub-indicator on the number of women who benefited from those reforms and the number of policy reforms that integrated stakeholders) have achieved their end targets, and the remaining two PDO-level indicators (percentage of Public Investment Projects (PIP) registered in the National Registry for Investment projects (NRIP) system are included in the national budget and adoption of sustainable procurement policy on green procurement and SMEs) are likely to achieve the end-of-project target. The project is progressing toward the end targets of Intermediate Level Results Indicators (IRIs). As of today, the project has reached four out of eleven IRI end targets. The project disbursements stand at US$8.5 million, equivalent to 54 percent of the total project allocation of US$15.8 million. The Project allocation has been fully committed to financing the reform activities embedded in the Annual Work Plan. Component 1. Enhancing Reform Management by the Reform Secretariat (US$3.1 million). The Reform Secretariat has been effectively coordinating with the Reform-Implementing Ministries, Departments, and Agencies (MDAs) on policy reform formulation and strongly supporting the implementation of these reforms. The Reform Secretariat built its institutional capacity with a team of professionals in different fields to carry out its dual responsibilities for day-to-day reform coordination with reform-implementing MDAs and project management. The Secretariat also has been responsible for coordinating various World Bank-financed projects and activities and promoting the implementation of the government's economic reform agenda. The Reform Secretariat needs to continue improving the M&E of policy reform implementation. The Secretariat has recently hired a full-time experienced M&E Specialist who is expected to develop performance indicators, liaise with the respective reform-implementing MDAs to monitor the performance of the reform implementation, and produce semiannual progress reports. Component 2. Supporting Reform-Implementing MDAs through the Reform Support Fund (US$8.5 million). The Reform Secretariat used the Reform Support Fund (RSF) resources to provide technical assistance for reform-implementing MDAs. Furthermore, the RSF supported the reform-implementing MDAs in undertaking specific policy reforms under the updated Reform Matrix by financing operational costs for training, IT equipment, goods and services, office supplies, professional and consulting services, and operational travel. As per the Reform Matrix 2018-2024, there are 403 reform actions over 12 pillars, of which 290 have been completed (a completion rate of 72 percent), 136 of which were completed with the support of the RSF. Furthermore, 35 of these policy reforms predominantly benefit women, meeting the target. Around 80 stakeholder engagement consultations were completed, covering 35 different reforms, and over 20 reform-implementing MDAs benefited from the project's technical assistance. Component 3. Strengthening the PIM-PPP and Public Procurement Framework and Function (US$4.2 million). The Parent Project and its additional financing have bolstered the institutional capacities of the Public Investment Management (PIM) Unit at MOPIC, the Public Private Partnership (PPP) Unit at the Ministry of Investment (MOI), and the Fiscal Commitment Unit (FCU) at the Ministry of Finance (MOF) leading to improved management of daily operations. Notable achievements include enforcing the PPP Law (2020) and regulations, establishing an inter-ministerial High Committee for PPPs (2021), and operationalizing the National Registry for Investment Project (NRIP). Further, the 2023 PIM-PPP law mandates MDAs to submit project concept notes to the PIM and PPP Units for approval. Additionally, a Technical Committee for Fiscal Commitments (TCFC) has been established under the MOF to advise on fiscal affordability. A Project Development Account (PDA) has been created to aid project assessments and advisory work. Despite significant progress, implementing the legal, policy, and institutional framework faces challenges. Enhancing the governance of the PIM-PPP-FCU requires more involvement from the High Committee. Increasing the frequency of Committee meetings and strengthening accountability for timely project delivery by the implementation units, MDAs, and municipalities is necessary. Prompt staffing in the PIM, PPP, and FCU units is also essential to support line ministries effectively. Moreover, the MOF must expedite decisions on fiscal commitments and contingent liabilities and streamline these processes. The capacity for project preparation within line ministries and agencies needs to be further strengthened. The PIM Unit faces two main challenges: (i) staff turnover and ii) public investment projects processed outside the PIM framework. 50 percent of new public investment projects (excluding military) above JDs 10 million followed the PIM framework and were included in the 2024 budget. In contrast, only 5% of public investment projects between JD 1 million and JD 10 million followed the framework. Excellent progress has been made in the roll-out and utilization of JONEPS for processing public procurements. As for the current status of the deployment, out of 102 agencies: (a) 25 percent of MDAs are using JONEPS, (b) 43 percent of MDAs were trained on JONEPS, (c) the total number of active Users increased to 5,706 from 191 procuring agencies and 3,828 private sector firms, International bidders are currently registered in JONEPS, (d) JONEPS launched 460 bidding at 404MJOD (Dec 2023) and 193 bidding at 150M JOD (June 2024), and (e) a circular was issued on August 2023 by the Council of Ministers' mandating the usage of JONEPS by all MDAs. Procured Goods and Works using JONEPS represented approximately 70 percent of government Budget allocation in 2023. On another note, the Public Procurement Committee (PPC) should demonstrate the economic benefits of JONEPS (saving in transaction cycle and cost, performance improvement) and encourage the enrolment of public hospitals, schools, etc. The public procurement policy for SMEs was developed and subjected to consultation of various stakeholders, including private sector representatives, and will be presented to the Public Procurement Committee for endorsement (December 2024). SCOPE OF ADDITIONAL FINANCING The original project is a grant financed by the Jordan Inclusive Growth and Economic Opportunities Multi- Donor Trust Fund (Growth MDTF). The original project was approved on November 27, 2019, and declared effective on December 7, 2019, with a closing date of December 31, 2022. In 2023, the first additional financing for US$9.3 million, on top of the original US$6.5 million, was approved, increasing the Project's total allocation to US$15.8 million. The first additional financing extended the Project closing date to June 30, 2025. The MoPIC has requested the Growth MDTF to provide additional financing of US$7.5 million in addition to the US$15.8 million and extend the project's closing date by three years. This will enable the Reform Secretariat, housed at the MoPIC, to continue supporting the coordination and implementation of the reform actions outlined in the draft Reform Matrix 2.0. At its thirteenth meeting on Thursday, May 23, 2024, the Growth MDTF Steering Committee approved an additional $7.5 million in financing for the Project, bringing the total allocation to $23.3 million. The mission reached agreements on the following: • The current Project Development Objective (PDO) remains relevant and will not be changed: “to strengthen coordination and delivery of policy reforms in Jordan with a focus on the updated Reform Matrix.” • The proposed second additional financing will maintain the same project design, components, activities, and implementation arrangements, including fiduciary, environmental, and social arrangements. • The timeline and scope of the project will be extended to match those of the updated Reform Matrix 2.0. Therefore, the Project’s current closing date of 31, 2025 will be extended to June 30, 2028, to match the timeline of the updated RM 2.0, with an additional year to enable the Reform Secretariat to support the World Bank's ongoing operations. • The results framework will be adjusted to better measure progress towards the PDO's achievement and redefine intermediate and end target values. Tentatively, the adjustments will be made to Intermediate-Level Results Indicators related to the number of MDAs supported by the RSF, the PPP pipeline of projects, and Public Procurement related to the number of businesses registered in JONEPS. The Results framework will be finalized during Project appraisal. • The Reform Secretariat needs to continue strengthening its M&E function by setting a robust monitoring framework and reporting on its own activities and value-added activities and the impact of the Reform Matrix implementation. • The maintenance and development contract management of the e-procurement system (JONEPS) will be moved to the Ministry of Digital Economy and Entrepreneurs (MoDEE), along with other relevant activities. • To complement and enhance existing initiatives, the World Bank team will work with the Reform Secretariat to prepare a Bank Executed Trust Fund project to bolster the ongoing PIM and PPP reform activities. • Improving Reform Secretariat communication capacity at the government level for better visibility of results and achievements. • The updated Environmental and Social Commitment Plan (ESCP) and the Stakeholder Engagement Plan (SEP) will be finalized by August 30, 2024. • The Project Procurement Strategy for Development with the Procurement Plan will be finalized by August 30, 2024. • The PIM Unit's institutional capacity needs strengthening with experts in different sectors. • Concerning PPP reforms, i) the PPP Unit and the FCU Unit will need to update their guidelines and manuals to reflect the procedural provisions under the new PPP Law, as well as prepare a procedural flowchart that incorporates the role of the PIM Unit, ii) The PPP and FCU Unit use the NRIP for all their inputs/updates, iii) Organize joint training events for contracting authorities to familiarize them with the new PPP Law and its requirements, and (v) proactively work with contracting authorities to identify a potential pipeline of PPP projects. Next steps The mission agreed with the Reform Secretariat that the appraisal mission and negotiations would take place mid-October 2024. Annex 1: List of officials met and composition of WB team World Bank Team Jad Mazahreh, Senior Governance Specialist and Project Task Team Leader. Junglim Hahm, Senior Infrastructure Specialist. Ghada Shaqour, Social Development Specialist. Samira Al-Harithi, Procurement Specialist. Majdi Salameh, Environmental Specialist. Mohammad Ali Jaber, Financial Management Specialist. Lina Fares, Senior Procurement Specialist, completed the Public Procurement discussion in July 2024. Rania Al-Sabbagh, Program Assistant. Government of Jordan Officials Prime Ministry's Office H.E. Prof. Fayyad Al Qudah, Chief of Legislation and Opinion Bureau and Head of Procurement Complaint Committee. Dr. Zain Arabyat - Head of the Unit - Public Procurement Policies and Procurement Complaint Committees. Ministry of Public Works and Housing H.E. Eng. Mahmoud Khleifat, General Director of the Government Tenders Department (GTD). Ministry of Planning and International Cooperation Mr. Ahmad Hwyan - Head of the PIM Unit. Ministry of Investment Mr. Ala’a Beano- PPP Unit Director. Ministry of Finance H.E. Hanadi Nabulsi, General Director of Government Procurement Department (GPD). Mr. Osamah Suliman - Director of Fiscal Commitment and Contingent Liabilities for PPP Projects (FCCL/PPP) Unit. Ministry of Digital Economy and Entrepreneurs Mr. Ramy Al Rawashdeh, Head of Digital Transformation. Mr. Bilal Bani Hani, Head of Business Development.