FOR OFFICIAL USE ONLY

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT INDONESIA Report No PUBLIC WORKS INSTITUTIONAL DEVELOPMENT AND TRAINING PROJECT Population and Human Resources Division Country Department III East Asia and Pacific Regional Office (LOAN NO IND) May 23, 1997 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

2 CURRENCY EQUIVALENT Currency Unit = Indonesian Rupiah At Appraisal in 1989 Rp.1700 = US$1.00 Rp.1 million= US$588 Annual Average ,843 1,950 2,030 2,080 2,160 2,237 2,372 FISCAL YEAR OF BORROWER April 1 - March 31 ABBREVIATIONS AND ACRONYMS BAPPEDA - Provincial Development Planning Agency BAPPENAS - National Development Planning Agency DG - Directorates General DINAS PUP - Provincial (Level 1) Public Works Department IDTP - Public Works Institutional Developmcnt and Training Project IOE - In-Office Expert KANWIL - Kantor Wilayah (provincial office of Central Government Ministries) MIS - Management Information System MPW - Ministry of Public Works MDP - Manpower Development Project PIU - Project Implementation Unit PMU - Project Management Unit PP - Peraturan Pemerintab (Government Regulation) PUSDATA - Center for Data Processing, Ministry of Public Works PUSDIKLAT - Center for Staff Training, Ministry of Public Works RTC - Regional Training Center SG - Secretary General SAR - Staff Appraisal Report TA Technical Assistance Vice President: Jean-Michel Severino, EAP Director: Marianne Haug, EA3 Division Chief: Samuel Lieberman, EA3PH Staff: Brigitte Duces. EA3PH

3 FOR OFFICIAL USE ONLY Table of Contents Preface Evaluation Summary Page No. i ii Part I: Project Implementation Assessment A. Statement/Evaluation of Objectives 1 B. Achievement of Objectives 2 C. Major Factors Affecting the Project 7 D. Project Sustainability 7 E. Bank Performance 8 F. Borrower Performance 8 G. Assessment of Outcome 8 H. Future Operations 9 I. Key Lessons Learned 9 Part II: Statistical Tables Table 1 Summary of Assessments 11 Table 2 Related Bank Loans 13 Table 3 Project Timetable 14 Table 4 Loan Disbursements 14 Table SA Key Performance Indicators 15 Table SB List of Overseas Training Courses of IDTP 16 Table SC Allocation of Priority Staff Training Program 17 Table 6 Studies included in Project 18 Table 7A Project Costs 19 Table 7B Project Financing 20 Table 8 Status of Legal Covenants 21 Table 9 Bank Resources: Staff Inputs 23 Table 10 Bank Resources: Missions 24 Annex 1 Status of Decrees 25 Annex 2 Numbers of graduates in Kanwils 27 Annex 3 Key Documents produced under the Project 28 Annex 4 Summary Status of Technical Assistance 30 Appendix A: Borrower Contribution to the ICR including the Operational Plan 32 MapNo. IBRD This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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5 - i - IMPLEMENTATION COMPLETION REPORT INDONESIA PUBLIC WORKS INSTITUTIONAL DEVELOPMENT AND TRAINING PROJECT (Loan No IND) Preface This is the Implementation Completion Report (ICR) for the Public Works Institutional Development and Training Project in Indonesia, for which Loan No IND in the amount of US$36.1 million equivalent was approved on July 25, 1989 and made effective on November 15, The loan closed on December 31, 1996, a year later than the original closing date of December 31, By April 30, 1997, 98% of the loan was disbursed. The ICR was prepared by Ms. Rozany Deen of the Population and Human Resource Division, Country Department 111 of the East Asia and Pacific Region. It was reviewed by Mr. Samuel Lieberman, Chief, Population and Human Resources Operations Division and Mr. Oscar de Bruyn Kops, Acting Operations Advisor, Country Department m. The Borrower has reviewed the document. Preparation of this ICR was begun during the Bank's completion mission in October Preparation was based on material in the project files, field visits and reports received from the Project Management Unit. The Borrower's evaluation of the project and its Operational Plan for the future is attached as Appendix A.

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7 - ii - IMPLEMENTATION COMPLETION REPORT INDONESIA PUBLIC WORKS INSTITUTIONAL DEVELOPMENT AND TRAINING PROJECT (LOAN NO IND) Introduction Evaluation Summary i. The Public Works Institutional Development and Training Project (IDTP) was developed to support the Ministry of Public Works (MPW's) nascent efforts at deconcentration 1 and decentralization 2 in the late 1980's. MPW's intent was to improve efficiency and effectiveness in the public works sector by transferring increased responsibilities for planning, design, budgeting, and implementation of public works programs from central government to the provincial and local governments. The central government retained responsibility for national policies and projects and technical supervision and control. The national framework for decentralization was laid down in Law No. 5 of The impetus and basis for IDTP was PP14/87, a regulation which outlined a broad range of public works responsibilities to be transferred from the central to the other levels, and PP6/88 which required the central and local agencies to coordinate their efforts through the provincial level. The project also built on investments for the development and management of training programs and facilities financed under the Public Works Manpower Development Project (MDP - Loan No IND), its predecessor. Project Objectives ii. The project's objectives were: (a) to improve the coordination of planning and the implementation of public works activities by staff development and improved management information and other systems; and (b) assist the Government of Indonesia (GOI) in the implementation of policies for deconcentration and decentralization of responsibilities for public works. The project had three components to support the objectives: (1) Staff and Institutional Development; (2) Improvement of Management Systems and Procedures; and (3) Improvement of the Quality Control of Construction. The major focus of the assistance was the provincial level public works departments (Kanwil and Dinas PUP). Support for the local governments was envisaged under another project, for which preparatory funds were included in IDTP. "Deconcentration" is defined as the delegation of authority for services from the central MPW to its representatives the provincialevel (Kanwil). 2 "Decentralization" is defined as the transfer of responsibilities for services from the central or provincial MPW offices to the local governments (districts/municipalities).

8 - 1ii - Project Implementation and Outcomes iii. The project is rated as satisfactory. It was successful in achieving its objective of improving the coordination of planning and programming of public works activities. It was largely successful, although there are shortcomings, in addressing the organizational, technical and staffing problems related to MPW in its efforts to deconcentrate. The main shortcomings related to the underutilization of laboratories and non-completion of activities under the training component. When the project began, MPW was a highly centralized organization, with inadequate cooperation and coordination amongst the three major Directorates General (Highways, Water Resources and Human Settlements) and between the Directorates General and key Bureaus under the Secretary General (SG). There were many weaknesses in staffing and personnel systems; lack of trained staff in the provinces; poor training programs; inadequate and incompatible information systems; and limited facilities for quality assurance. At the end of the project, many of these issues had been addressed and all key changes introduced were institutionalized as national policies. iv. The project successfully met many of its objectives for developing and implementing policies for deconcentration and providing staff development and support systems. The most significant success in the staff and institutional development component was that the role and functions of the Kanwil were defined, with the coordination of planning and programming of public works activities in the provinces deconcentrated to a strengthened Kanwil. The Kanwil was also given authority for the overall technical supervision, control and guidance of all public works activities at this level. In addition, staff planning, career development, job analyses and performance appraisal systems were developed following the establishment of a comprehensive personnel information system. The Kanwil was also substantially staffed with people of a higher technical and administrative capability to fulfill its new duties. v. A number of management systems and procedures were designed and developed under the project. A major new system called the Decision Support System/Analytical Hierarchy Process (AHP) was introduced for planning annual public works programs and projects. This system assigns priorities and ranking for projects according to agreed provincial and national weights and criteria. This system is implemented by the Kanwil at the provincial level and by the Bureau of Planning at the national level. The result of the AHP process is a coordinated prograrn of public works activities with a single body responsible for financial negotiations on the investment program. As the AHP has been gradually introduced nationally, and involves fundamental behavioral and attitudinal changes in its implementation, it may not be fully operational and effective as yet at the provincial levels. However, the introduction of the AHP is a major improvement relative to the previous lack of a cohesive national system. It went far beyond the project objective, which was the development of a manual. vi. Additionally, a standardized and core Management Information System (MIS), supporting the personnel and planning processes, a national financial accounting system, and a project monitoring and evaluation system were also introduced. Improved systems for foreign aid coordination, project and performance audits, legal data bases, better library and archive facilities, greater efficiency in procurement and improved public relations also resulted from project activities. vii. The concentration on the Kanwil meant that much more limited support was provided to the Dinas PUP under the project, which was a major change in project scope. The role of the Dinas PUP

9 - iv - still appears to be evolving, but there has clearly been a diminution of functions as their district offices have been abolished with staff and equipment expected to be absorbed into the local governments. viii. A objective of improving the quality assurance system for provincial laboratories for the testing of soil, water, and materials, as needed for construction works projects, was implemented under IDTP. This was done through the construction of laboratories, provision of equipment and training of personnel. An accreditation system to ensure that each laboratory is maintained at set standards was developed and applied. However, this component has shortcomings. The utilization of the laboratories is only about 40%-50%, maintenance appeared inadequate in facilities visited, and although the laboratories were expected to provide testing for public and private clients, the latter has only been implemented to a very limited extent due to lack of marketing. xi. The training management component 3 objectives of upgrading training, improving its management and effectiveness, and coordinating and integrating all public works training programs were only partially met. The project successfully restructured the Center for Training (PUSDIKLAT), improved the coordination of all public works training, developed curricula and training methods, and a set of specialist instructors. However, a fully integrated training program for staff at all levels, the development of a training management information system for analyzing outcomes, costs and budgets, greater utilization of training centers and the implementation of distance learning programs are still to be achieved. The Borrower's Operational Plan indicates that work to complete this component as well as to improve the utilization of laboratories will be continued after project closing. x. The only performance indicator outlined in the SAR to measure outcomes was the numbers of staff trained. This has exceeded SAR targets but the effectiveness of training programs, expected to be undertaken by PUSDIKLAT above, remain to be assessed. Nevertheless, as discussed in the above paragraphs, it is clear that there has been substantial progress in meeting other project development objectives. xi. Bank performance was satisfactory and Borrower Performance highly satisfactory during project implementation. The major procurement issue was related to negotiations on costs of consultancy contracts which delayed implementation by a year. Project innovations appear sustainable. Many of the interventions have been institutionalized through Ministerial and other Decrees, and the Borrower's Operational Plan contains provisions to maintain, upgrade, and finance most of the systemwide investment program supported by IDTP. The Operational Plan also indicates MPW's intent to extend the systems, as appropriate, to support more recent decentralization policies which transfer major implementation responsibilities, including finance, to the local governments. These developments should be monitored as indicators of sustainability. It should be noted that although the systems are in place and largely operational, the full impact of IDTP in terms of effectiveness, efficiency and increased productivity in public works activities cannot be fully assessed now. It should be reviewed and supported through other Bank-financed MPW projects under implementation, and a comprehensive assessment made in a few years' time. is part of the Staff and Institutional Development group of components but is discussed separately given its importance to the project. 3Training

10 - v - Future Operations and Key Lessons Learned xii. The project has continued a process, begun under MDTP, that is long-term. The project did provide for studies and the preparation of future local government institutional and staff development projects to support the further devolution of activities to the local governnent level. The latter projects did not eventuate due to lack of broad-based Government support. Currently, there is no follow-up project for IDTP, although sector work on capacity building to support the accelerated decentralization policies is planned. xiii. The project provides the Bank and Borrower with a number of lessons. Among them the following are emphasized: (a) support for major institutional processes such as deconcentration and decentralization requires a vision of a final outcome, and a phased set of projects to reach this objective. Each individual project and its impact can only be measured as part of this process. MDP, IDTP and the proposed local government projects comprised such a long-term program. In hindsight, it is regrettable that the program did not eventuate since, if it had, the local governments would have been more ready to undertake activities as increasing responsibilities were decentralized to their level over time; (b) the need for flexibility and adaptation as national changes overtake the more focused sectoral changes that are generally built into a project; (c) the importance of strong, effective and committed project management for effective implementation; (d) the need for clear project performance indicators to measure progress and outcomes, particularly measures for assessing the effectiveness of large TA components, as well as independent impact assessments, including tracer studies, for the training programs; and (e) the need for greater dissemination of individual sector experiences in decentralization, both in the Bank and GOI, to guide future work as decentralization policies continue to evolve in Indonesia.

11 IMPLEMENTATION COMPLETION REPORT INDONESIA PUBLIC WORKS INSTITUTIONAL DEVELOPMENT AND TRAINING PROJECT (Ln IND) PART 1: PROJECT IMPLEMENTATION ASSESSMENT PROJECT REVIEW A. Statement/Evaluation of Objectives 1. The objectives of the Public Works Institutional Development and Training Project (IDTP) were: (a) to improve the coordination of planning and implementation of public works activities by staff development and improved management information and other systems; and (b) assist the Government of Indonesia (GOI) in the implementation of policies for deconcentration and decentralization of responsibilities for public works to provincial and local government levels. It was felt that successful implementation of GOI's decentralization plans were important for the preservation of the existing stock of public infrastructure assets and for the effectiveness of future development plans in the sector. 2. The project objectives were placed within the context of the nascent efforts at deconcentration and decentralization and the changed functions of the Ministry of Public Works (MPW) that were emerging during the late 1980's. The major focus of the assistance was the provincial (Level 1) public works departments. Support for the local governments (Level II) was envisaged under another project, for which preparatory funds were included in IDTP. 3. The project had three components: a) Staff and Institutional Development through strengthening the Provincial Offices of Central Government Ministries (Kanwil) and the Provincial Public Works Department (Dinas PUP) by implementing: (i) improved systems for staff planning, personnel information, career development, job analysis and performance appraisal, (iii) strengthening staff to facilitate the transfer of responsibilities; and (iii) upgrading staff training including the coordination of the total program of public works training; b) Improvement of Management Systems and Procedures including: (i) use of a standardized core management information system; (ii) improved coordination of planning and programming of public works activities and uniform reporting; and (iii) improved foreign aid collaboration; financial planning and management; control and performance audits; procurement; legal functions; libraries; archives and public information activities; and c) Improvement of the Quality Control of Construction through upgrading of 184 provincial laboratories testing facilities, and the establishment of accreditation systems to ensure laboratory standards. 4 The upgrading of the remaining 9 provinces was undertaken under the Irrigation Subsector Project (Ln.2880-IND)

12 The objectives and content of the project were consistent with the Government's strategy at the time to transfer broad responsibilities for planning, design, budgeting, and implementation of projects from central to provincial and local governments. The central government retained the responsibility for national policies and projects and for technical guidance and supervision. The national framework for decentralization was laid down in Law No. 5 of 1974, while the sectoral policies were laid down in subsequent ministerial decrees and regulations. The impetus and basis for ldtp was PP 14/87, a government regulation specifying the transfer of a broad range of public works responsibilities from central to the lower levels, and PP 6/88 which placed the responsibility for preparation of an integrated program of infrastructure and service development with the provincial governors, and required central and local agencies to coordinate their efforts through the provincial level. 5. Although the pace and specifics of the decentralization process had not been fully formulated and developed, Bank dialogue and projects in the public works sector such as the Integrated Urban Infrastructure Development Programs (Loan No IND) approved in FY87, had been important tools in the evolution of the strategies. IDTP was designed as a complementary measure to improve human resource capacity as well as establish the systems and procedures to enable MPW and the provincial staff to effectively manage and integrate public works activities in line with the above regulations. It was also responding to major themes in Project Completion Reports and Project Performance Audit Reports for Bank financed public works projects, which had highlighted many staffing and institutional weaknesses that had hampered public works activities and delayed project implementation. The project was also building on investments for the development of staff training programs, systems and procedures developed under the Public Works Manpower Development Project (MDP - Loan 2258-IND), its predecessor. Additionally, recognizing that decentralization is a longterm process, IDTP had provided support for the continuing devolution of responsibilities through provision of funds for the development offuture projects to support the institutional development of local government staff 6. The project was appraised in November 1988 and became effective in November The continuing GOI decrees and regulations being issued on decentralization had a major impact on the project objectives. The SAR had indicated that the decrees and regulations, which were in draft or still under preparation at the commencement of the project, would introduce a degree of uncertainty pending their finalization and could necessitate adjustments to project activities and timing. This did occur during implementation. As it became evident that GOI was devolving increasing responsibilities to the local governments for planning and implementing public works, particularly with the issuance of the government regulation PP45/92, the project objectives and focus changed. First, assistance was concentrated on the Kanwil with much more limited support than envisaged in the SAR being provided to the Dinas PUP (para. 16). Additionally, components such as the management information system and assistance for the coordination of programming and planning, were expanded from the original minimum core nine provinces to become national interventions to support the policy changes. The project also required a year's extension of the Closing Date from December 31, 1995 to end December 1996 due to a delayed start in two consultancy packages. B. Achievement of Objectives 7. IDTP was successful in achieving its objective of improving the coordination of planning and programming of public works activities. It was largely successful, although there are shortcomings, in addressing the organizational, technical and staffing problems related to MPW in its efforts to deconcentrate and transfer functions and responsibilities from the central MPW to the Kanwil. Further,

13 although not explicitly indicated as a project objective, the project also strengthened the office of the Secretary General (SG) and its Bureaus at the center. Nearly all the key changes introduced under the project are now institutionalized national policies (Annex 1). 8. MPW activities are the responsibility of three separate Directorates General (DG's), each reporting directly to the Minister. These are: (a) Bina Marga (highways); (b) Pengairan (water resources) and (c) Cipta Karya (human settlements). There are also several Bureaus reporting to the SG. They are responsible for Personnel, Planning, Finance, Foreign Aid Coordination, Legal Support, Logistics, General Affairs as well as the Center for Training (PUSDIKLAT), Management Information Systems (PUSDATA) and the Inspectorate General. 9. When the project began, MPW was a highly centralized organization, with project work being planned, budgeted, managed and supervised from each of the DG's offices. There was inadequate cooperation and coordination amongst the individual DG's and between the DG's and Bureaus; many weaknesses in staffing and personnel systems; lack of trained staff in the provinces; poor training programs; inadequate and incompatible information systems; limited facilities for quality assurance; and in many provinces the Kanwils and Dinas PUP were weak. 10. The project dealt with all these issues and, thus, was complex. There were multiple activities and the classification system developed during implementation identified 13 components including project management. The components were as follows: a) Personnel (Component 1); b) Strengthening of Kanwil and Dinas (Component 2); c) Management of Training (Component 3); d) Management Information System (Component 4); e) Programming and Planning (Component 5); 1) Foreign Aid Coordination (Component 6 ); g) Finance (Component 7 ); h) Audits (Component 8); i) Legal (Component 9); j) Logistics (Component 10 ); k) Libraries, Archives and Public Information (Component 11); 1) Laboratories (Component 12 ; and m) Project Management (Component 13). 11. The following evaluation discusses the separate components largely under the broad groupings of the SAR: (i) Staff and Institutional Development (Components 1 and 2); (ii) Management Systems and Procedures (Components 4-11); (iii) Quality Control of Construction (Component 12); and (iv) Management of Training (Component 3). Staff and Institutional Development 12. The project was successful in meeting the major objectives of implementing policies for deconcentration and providing staff development and support systems. The most significant success was that the role and functions of the Kanwil were defined with the coordination of planning and programming of public works activities in the provinces deconcentrated to a strengthened Kanwil. The Kanwil was also given authority for the overall technical supervision and control ("wastek") and guidance ("bintek") of all public works activities at this level. All necessary Ministerial regulations to institutionalize the Kanwils new responsibilities were implemented. 13. The Kanwils were substantially staffed to meet their needs in fulfilling the new duties. Staff of higher technical and administrative competence were appointed, including staff reallocated from the center. Although the project had proposed that 650 technical and administrative staff be transferred from the central to the provincial offices over the life of the project, only about 110 staff were actually transferred. However, the numbers of graduates at the Kanwil were increased from 488 in 1992 to 1050 in 1996, an increase of 562 or 115% (Annex 2). This was not incompatible with the SAR, which

14 - 4 - had also indicated that relocation of central staff would only take place if training of local staff would be inadequate to raise their expertise to the required level. 14. The improvement of staff management was also achieved. A comprehensive personnel information system covering all MPW professional, technical and administrative staff engaged in public works activities was established and is now operational. The system supports career development, job analysis and performance appraisal, all of which are now in routine use. The Kanwil administers this system for the province and district level in coordination with the center. Functional jobs for career streams such as engineering, architecture and surveying which were developed together with the Ministry of Administrative Reform are pending approval, while others have been implemented, for example, in the office of the Inspectorate General. 15. Supervision reports and field visits indicated more motivated and professional staff in the Kanwil. In some cases, the Kanwils are already operating as the focal point for all public works in the provinces. These achievements need to be contrasted with the Kanwil conditions before the project started, when they were largely pro-forma regional representatives of the central office, badly staffed and with little real authority or decision making responsibility. Further, the delineation of the functions of the Kanwil, including the fact that they are no longer responsible for implementation, has facilitated the transfer of such responsibilities to the local governments. 16. Whilst the Kanwil was strengthened, the decreased attention on the Dinas PUP followed the issuance of PP45/92, a government regulation which further devolved public works responsibilities to the local governments. The role of the Dinas PUP still appears to be evolving, but there has clearly been a diminution of their staffing and functions as their district offices (Cabang Dinas) have now been abolished and much of their staff and equipment will be absorbed into the local governments. At the time of PP45/92, it was also expected that another Bank financed project would assist GOI to develop the human resources and institutional capabilities of all Dinas staff. This was the proposed Local Government Institutional and Staff Development Project which, however, did not eventuate due to lack of broad-based GOI support. 5 Management Systems and Procedures 17. Many management systems and procedures were introduced to improve the efficiency of public works programs, provide for a more coordinated system between center and the Kanwil, and support the changed functions of the latter. Some of these systems were developed under MDP and were adapted and expanded under the project. 18. The major project objective of improving the planning and coordination of public work activities is being implemented through the introduction of the Decision Support SystemlAnalytical Hierarchical Process (AHP). Currently the AHP represents a systematic approach for prioritization and coordination of public works programs financed by the central budget with local budgets expected to be incorporated in the future. Initially, sub-sectoral programs are analyzed using systems like IRMS (Interurban Road Management System) or KREEM (Kabupaten Roads Economic Evaluation Module). They are then ranked at the provincial and national levels using AHP and taking into account criteria and weights agreed by teams including the Kanwil, Dinas, and planning offices (BAPPEDAS). A final investment program is then determined, with the Bureau of Planning responsible for negotiations with BAPPENAS and the Ministiy of Finance. The ABP has proved an important tool for constructive study and development of future local government projects is specified in the Loan Agreement (Schedule 2, Part A,4) but not clearly identified in the SAR. 5The

15 - 5 - participation at many levels, a synchronized program rather than past vertical programs of individual DG's, and a single body representing MPW in key negotiations on the program. The scope of the AHP was also expanded from the original nine provinces to a national intervention. As the AHP has been gradually introduced nationally, and its implementation involves fundamental behavioral and attitudinal changes, it may not be fully operational and effective as yet in all provinces. However, AHP went far beyond the objective for this component, which was the production of a manual to deal with coordination linkages within the public works program. 19. Improvements were also introduced in other systems. The Management Information System (MIS) was completely overhauled during the project period, a standard core system developed in place of the multiple systems previously in use, and the system extended from the center to the provinces. 6 The MIS included a number of sub-systems which were developed and then integrated into the core system. This included an integrated financial management and information system, using the new national accounting system, to enable the Kanwils to monitor and report on the use of development budgets; a project monitoring and evaluation system, which provides feedback to the ABP; and legal data bases for the central as well as provincial and local governments. It also included bibliographical data bases and improved library networks; and better systems for foreign aid coordination through the efficient monitoring of the status of on-going programs and projects assisted by foreign loans or grants. PUSDATA has also developed PU-Net, which includes the MPW home page on the World Wide Web, facilities and INTERNET access for Kanwil staff. All MIS systems are operational and were being utilized during field visits. But there is a need for more rationalization and improvements to the MIS, since there appears to be duplication in some areas and greater integration is required with the DG's systems. In addition some of the system development, such as the establishment of the legal data bases, will still require a substantial amount of work following loan closure. It is, however, clear that the development of a standardized national MIS system, with compatible hardware and software and links between the center and the Kanwil, has been an important project achievement. 20. Other improvements introduced under the project included the implementation of performance and program audits in selected MPW projects since FY95/96; the upgrading and development of the archive system and improved public information and publication activities. The objective of the logistics component was the development of standard International and Local Competitive Bidding documents, acceptable to all funding agencies. The objective was met and MPW now provides the national standards for procurement procedures and bidding and contract documents. However, MPW's work was made void twice (1993 and 1995) by the Bank issuing new standard documents, subsequent to MPW completing its own drafts based on previous reviews and discussions with the Bank. 21. A substantial amount of project related training was provided with the overall man-months total for the components exceeding the SAR targets (Table 5). Besides training for staff from the center and the Kanwil, the training included some support for the Dinas PUP staff and, in line with the SAR, limited training was provided to staff from the local governments. Although much of the training appears to have been responsive to needs as it is very component specific, the quality and costeffectiveness of the training remains to be evaluated by PUSDIKLAT as part of its activities financed under the project (para 24 below). A substantial number of manuals (169) were also produced under the project. They included guidelines, handbooks and training manuals to ensure continuous operations 6 Funding for computers and associated equipment was also provided under the Highway Sector Loan (Loan No IND)

16 - 6 - support and future sustainability of the separate components. A summary list of some key manuals for individual components are outlined in Annex 3. It should be noted that as nearly all of the management support systems discussed above are computer based and technology driven, they would require continuous updating and maintenance, which is indicated in the Borrower's Operational Plan. Quality Control of Construction 22. The project objective of improved quality assurance in construction was to be provided through the provision of Kanwil laboratories for the testing of construction material. The construction of laboratories, provision of equipment and training of personnel, were implemented in all provinces under the project. The laboratories are carrying out tests in soil, water and basic construction materials and, in many provinces, are the only locations where testing of reasonable quality can be carried out. An accreditation system, to ensure that each laboratory is maintained at set standards has been designed, and nearly all laboratories accredited to carry out a standard range of tests. 23. Nevertheless, there are shortcomings in this component. The utilization of the laboratories is currently estimated at about 40%-50% only, as many tests called for in project specifications and standards do not appear to be carried out due to lack of enforcement. Maintenance of the laboratories is already a cause for concern, since buildings visited are deteriorating and funds for provision of equipment maintenance seemed to be inadequate. Further, although the SAR envisaged cost-recovery through these laboratories providing services to MPW projects but also other private clients on a fee paying basis, this has only been achieved to a limited extent due to the lack of active marketing of services. Management of TrainingR 24. The objectives of upgrading staff training and coordinating the local public works training program were only partially met and is a major shortcoming of the project. PUSDIKLAT was restructured during the project and the calibre of key and supporting staff significantly improved. Through the establishment of a work unit (balai), which is responsible for all project related and other training needs emanating from the DG's, the project achieved its objective of coordinating all public works training. Success was also achieved in improving curricula, the development of training techniques, undertaking priority training programs and the establishment of a group of competent specialist instructors. But other key objectives were not achieved. The implementation of a fully integrated training program for central MPW, Kanwil and Dinas staff was not met. The development of a training management information system and a comprehensive system for the evaluation of training, including analyzing costs, outcomes and budgets, has still to be completed, as has the proposed programs of distance learning. The six Regional Training Centers (RTC's) were expected to be provincial centers for training, with annual programs and plans largely decided by the Kanwils. These changes have yet to be implemented and the training centers remain underutilized (usage is between 40%-60%).' These issues were raised by the supervision missions, and recommendations and action plans formulated and agreed but only partially implemented. The Operational Plan indicates that work to complete this component, as well as to improve the utilization of laboratories, will be continued after project closing. 7 These results are consistent with other findings. The recent report "Training and the Labor Market in Indonesia: Productivity Gains and Employment Growth" (Green Cover Report No IND, dated June 7, 1996) also reports that capacity utilization of in-houseducational and training institutions for civil servants remains low.

17 Factors generally subject to government control C. Major Factors Affecting the Project 25. GOI policies on decentralization continued to evolve during project implementation with significant impact on the project objectives and scope. The two most significant changes were the concentration on strengthening the Kanwil (para. 12) and the broadening of project innovations such as the AHP to make them national in scope (para 18). These activities involved attitudinal and behavioral change which needed the cooperation and support of all involved, and particularly at the provincial level. It would not have been successful without the announced policy support of the highest levels at MPW. Although MPW gave the strongest support to the institutional changes under the project, the lack of GOI support for the proposed Local Government Institutional and Staff Development Project is, in hindsight, regrettable (para 16). IDTP had specifically provided support for the continued devolution of responsibilities to the local governments through such projects. If the project/s had eventuated, it would have provided the complementary measures to strengthening public works (as well as other sector) staff at the local govermments, while IDTP strengthened the Kanwil. Factors generally subject to implementing agency control 26. The appointment of a full-time Project Management Unit (PMU), the establishment of Project Implementation Units (PmT's) for each of the sub-components and assignment of qualified and dedicated key counterpart staff greatly assisted successful project implementation. There was substantial use of foreign and local Technical Assistance (TA) (about 32% of the total project cost), since they were used to design and support implementation of all components. They were assisted at all times by counterparts or In-Office Experts (IOE's). The IOE's were able to interact with the consultants on a daily basis, and this provided an effective system for the transfer of knowledge and expertise from the TAs. The major procurement issue was related to negotiations on costs of consultancy contracts which delayed implementation by a year. Strict control was also maintained on TA performance with unsatisfactory consultants being removed from the project. In the absence of objective standards, it is difficult to judge whether the work could have been done with less use of TA, but there has been a substantial decrease over time in the use of international consultants and increasing use of local consultants. The summary of TA, their contribution and costs is seen in Annex 4. On the training component, although sustained efforts were made in trying to resolve issues PUSDIKLAT focused on a range of tasks beyond the project scope. The net result was that progress on IDTP activities stalled, and by project completion there was insufficient time to meet the SAR objectives for the component. D. Project Sustainability 27. Project achievements are likely to be sustained since all necessary Ministerial and other decrees and regulations for IDTP, which are required for institutionalizing systems and procedures, have been issued and are operational. MPW is also committed to sustaining the existing changes through the provision of routine budgets for the Kanwil and seeking self-financing status for the provincial testing laboratories and RTC's. As indicated in their Operational Plan, MPW have also stated their intent to modify, expand and incorporate additional improvements to the existing IDTP systems. MPW is seeking additional financing from donors for capacity building to complete and continue the IDTP innovations but also extend them, as appropriate, to the local governments. These developments should be monitored as indicators of sustainability.

18 - 8 - E. Bank Performance 28. Bank performance was satisfactory. During project preparation, it was timely in supporting changes that were only beginning to be formulated as GOI policies on deconcentration and decentralization evolved. Although at the beginning of project implementation there was a brief change in Task Managers, an element of continuity was maintained throughout project supervision, since the staff responsible for project design continued through to completion. Sufficient flexibility was exhibited in supporting needed modifications as the decentralization processes accelerated. However, a regular schedule of supervisions was not maintained and there was a gap of over an year between the last fill supervision and the completion mission. It would have also been useful if staff from the Infrastructure Division, and Agriculture Division working on irrigation institutions, who would have a greater opportunity to assess the impact of the project innovations on a day to day basis, had been involved in supervision. More generally, supervision staff would have benefited from the establishment of some clearly defined performance indicators to measure progress and outcomes, particularly measures for assessing the effectiveness of the large TA component as well as independent impact assessments, including tracer studies, for the training programs. F. Borrower Performance 29. Borrower performance was highly satisfactory; the major exception being the limited success on the training component. Supervision reports frequently cited the excellent management and implementation of the project. This was due to the strong commitment of the Minister and S G throughout project implementation, together with a highly effective PMU. The continuity of PMU staff, their full-time attention to the project, and access to the highest levels to resolve issues were key factors in implementation. The active involvement of the central Bureaus in the implementation of specific components strengthened the central/kanwil links and provided a more integrated and cohesive approach to the project. The success of individual components was also directly linked to the effectiveness of the Bureau Directors, and their sense of ownership of the respective components. The motivation and commitment of the Kanwil staff was also contributory to project achievements. The Borrower also established effective relationships with other Government agencies such as the provincial planning offices (BAPPEDAS), particularly for the use of the AlP, during the course of the project. Project reporting was comprehensive and timely and covenant compliance, although somewhat delayed, was generally satisfactory. G. Assessment of Outcome 30. Overall, the project is rated as satisfactory. A rate of return was not calculated, since it would be extremely difficult to quantify with direct monetary measures the benefits (discussed below), of the highly varied and complex project components. 31. There were no explicit performance indicators to measure project outcomes outlined in the SAR. There were only output indicators, e.g. numbers of staff trained, which exceeded SAR targets. Nevertheless, many of the benefits expected from the project have been met with substantial MPW institutional improvements at the center and the Kanwil. Public works activities have been deconcentrated to a strengthened Kanwil, which has been provided with the systems and procedures to enable it to perform its new functions. It has been staffed with qualified and experienced personnel. Responses to a brief and rapid survey on Kanwil attitudes to IDTP, if taken to illustrate behavioral indicators, showed average scores for satisfaction on individual project interventions varying between

19 86% for the project related training to 92% for further continuation of the IDTP processes. The central Bureaus were also strengthened and the linkages between the center and Kanwil considerably improved. The institutional development is also illustrated in the decreased use of foreign consultants as implementation was increasingly undertaken by local consultants, the IOE's and Ministry staff. The introduction of the ABP system has meant that the public works program are beginning to be prioritized, coordinated and with a single interface between MPW and the other key Ministries on negotiations on the investment program. This is a major project achievement. Finally, key Ministerial and other Decrees and regulations that have been used to legalize systems and procedures reflect institutional indicators of successful outcomes. IDTP also improved systems introduced under MDP and, thus, ensured the sustainability of previous project investments 32. However, the project only partially met the benefits expected from the training component, which is an important area of human resource development. Substantially more work is also required in improving the utilization of the laboratories, which represent a major project investment. 33. Although the policies have been implemented and the support systems are in place and operational, it is too early to assess the full impact of the project in terms of increased effectiveness, efficiency and productivity of public works activities. There are many assessments still required, for example, to what extent are the Kanwils actually performing their technical guidance and supervision role? How effectively has the AHP been used for prioritizing public works programs? How applicable are the IDTP systems to local governments and how can MPW provide such support? The answers to these questions, and the full achievement of project interventions will require time but the interventions should be monitored and supported through other Bank-financed MPW projects under implementation, and a comprehensive assessment made in a few years' time. H. Future Operation 34. The project has continued a process, begun under the Urban and Irrigation Sector Loans and MDP that is long-term. Recent policy changes announced by MPW indicate that the next stages in the decentralization process, the full transfer of responsibilities for public works activities, including budgets, to the local governments is underway. MPW is seeking assistance for further capacity building with the emphasis on continuing and sustaining the current IDTP investments and extending them to the next level as indicated in its Operational Plan. Currently, there is no follow-up project for IDTP although sector work on capacity building to support decentralization is planned. The Asian Development Bank, however, includes an IDTP-type project to support local government in its lending program. I. Key Lessons Learned 35. The project provides the Bank and Borrower with a number of lessons. These include: (a) Support for major institutional processes such as deconcentration and decentralization requires a long-term perspective, a vision of a final outcome and a phased set of projects to reach this objective. Together with projects such as the Urban and Irrigation Sector Loans, MDP, IDTP and the proposed Local Government Institutional and Staff Development projects represented such a vision and an incremental long-term program. In hindsight, it is regrettable that the latter projects did not eventuate, since the local

20 - 10- governments would have been more ready to undertake increasing responsibilities as more activities were decentralized to them over time (paras. 25 and 34); (b) (c) (d) (e) (f) (g) the lidtp process would necessarily be slow and, perhaps, incomplete at project closing since it requires major institutional and attitudinal changes. An ICR is too early to capture the full impact of these changes and may not provide a full measure of the success or failure of project efforts. The effects of IDTP should be further monitored and assessed by reviewing its impact on other Bank-financed MPW projects under implementation (para. 33); IDTP illustrates the need for flexibility and adaptation required as national policies overtake and, possibly, make redundant, the more focused sectoral changes that are generally built into a project (paras. 6 and 25); the need for sufficient continuity in Bank and Borrower staff is important. IDTP also shows that it would be useful to involve staff from other Divisions in supervisions, if their sectors would also be affected directly by the project interventions (paras.28 and 29); IDTP has clearly illustrated that strong, effective and committed project management, with the involvement of all the concemed agencies, and support at the highest level is particularly beneficial to effective implementation. It also shows the importance of the ownership of project components to ensure their success (para. 29); the need for clear project performance indicators to measure progress and outcomes, particularly measures for assessing the effectiveness of large TA components, as well as independent impact assessments, including tracer studies, for training programs (para. 28); and as a more general point, the need for greater dissemination of individual sector experiences on decentralization, both in the Bank and GOI, to guide future work as decentralization policies continue to evolve in Indonesia

21 IMPLEMENTATION COMPLETION REPORT INDONESIA PUBLIC WORKS INSTITUTIONAL DEVELOPMENT AND TRAINING PROJECT (Ln IND) PART HI. STATISTICAL TABLES Table 1: Summary of Assessments A. Achievement of Objectives Substantial Partial Negliaible Not applicable (/) (1) V) (V) Macro Policies 0 x 0 0 Sector Policies [x Financial Objectives Q Q [ 0 Institutional Development El Physical Objectives [ Poverty Reduction Q DJ a Gender Issues Q l0] Other Social Objectives a a o x Environmental Objectives Q a a ] Public Sector Management 0 0 Private Sector Development D Other (specify) Q Q a B. Proiect Sustainabilitv Likelv Unlikelv Uncertain (V) V) (V)

22 Table 1: Summary of Assessments (continued) Highly C. Bank Performance satisfactorv Satisfactorv Deficient (1) (1) (v) Identification E I 0 Preparation Assistance [l 0 Appraisal l [x E Supervision 0 I3 E Hiel D. Borrower Performance satisfactorv Satisfactory Deficient (/) (1) (1) Preparation E E E Implementation I E E Covenant Compliance El lx El Operation (if applicable) C E E -highly Hfighlv E. Assessment of Outcome satisfactorv Satisfactory Unsatisfactory unsatisfactory El) [EJ El) El

23 Table 2: Related Bank Loans/Credits Loan/credit title Purpose Year of Status approval Preceding operations 1. Public Works To upgrade Ministry of Public Works 1983 Completed Manpower Development (MPW) Staff and to provide Project (Ln IND) experimental training for contractors; and to improve MPW's planning and programming. 2. Highway Betterment Highway rehabilitation and 1984 Completed Project (Ln lND) institutional strengthening. 3. Irrigation Subsector To improve operations and 1987 Completed (Ln IND) maintenance of all irrigation systems and to support policy reforms and institutional strengthening. 4. Urban Sector Loan To sustain the momentum in the 1987 Completed (Ln IND) sector and to strengthen sector institutions 5. Jabotabek Urban Road rehabilitation and maintenance 1988 Under Development and institutional and policy implementation (Ln IND) development Following operations 1. Highway Sector Project To develop technical capacity of the 1989 Completed (Ln IND) road agencies at the central and regional level as well as strengthening the capacity of the road sector policy formulation. 2. Second Highway Sector Highway rehabilitation and 1994 Under Loan (Ln IND) institutional strengthening of the implementation highway agencies at central and provincial levels including human resource development Note: The list includeselected loans from the infrastructure sector that either influenced the design of the project or directly supported it.

24 -14 - Table 3: Project Timetable Steps in Project Cycle Date Planned Date Actual/ Latest Estimate Identification (Executive Project Summary) 01/88 01/15/88 Preparation Appraisal 01/89 11/05/88 Negotiations 05/89 06/05/89 Board Presentation 07/89 07/25/89 Signing 08/89 08/24/89 Effectiveness 11/89 11/15/89 Midterm review (if applicable) 10/91 06/92 Project Completion 03/31/95 12/31/96 Loan Closing 12/31/95 12/31/96 Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual (US$ millions) FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 Appraisal Estimate Actual Actualas%of Estimate Date of Final Disbursement - April 30, 1997 Note: As of 04/30/97 the balance in the special account was $692,832.22

25 Table 5A: Key Performance Indicators Co_ oa D. t 1989/ / / / / / / /97 (hand Fro n Man- Man- Man- Man- Maw Man- Man- Man- ToWa months nonths nxxths months months months months months Manmonth I Paome SAR S Actul ,0S1 Vasiance 3 44) (81) _ LoaCl TrauinngProganuns SAR 400 1,675 1,780 1,430 1, ,710 Actual 503 1,511 2,058 2, ,281 _ Variance 108 (164) (1.024) Managancatnmuatmion Sydtm SAR I3 Actual S3 Variance 3 (36) (319) (16) (236) 4 Progranuning and Plannink SAR ,100 Actual S1 Variance 0 22 (200) (160) (220) (186) 125 (620) 5 Foreign Aid Coordination SAR Actual Variance 23 (5) (33) _ Financc SAR Actual ,422 Variance 0 (56) ,263 7 Audita SAR Actual S Variance 0. 90) (16) (67) _ U683 3 Logwiaicu SAR Actual Variance 0 (59) (140) (183) (15) (238) 9 Legal SAR Actual 4 1S Variance 0 (36) (22)) / Library, Arduvi nd Pubh SABR Inlonnation Actual S Variaxce 0 87 (14) Laboratories SAR ,050 Actual ,729 Variance 0 (265) 11 (22) Touls in Year SAR 464 2,878 3,403 2,804 2, ,237 Actual 554 2,279 2,966 3,795 2,758 1,006 I,375 14,733 Variance Cuintl tive TcoAi SAR ,750 9,554 11,962 12,237 12, , ,594 12,352 13,353 14,733 O Varianoe 90 (509) (951) ,

26 Table 5B: List of Overseas Training Courses of IDTP No. Course Title Start Finish Number of Participants Staff Location Remarks Date Date Pusat Daerah Total month 1. New Town Development and 20-Mar Sep ENTRE LYONS Contract Management FRANCE Number: HK.03.o7.Bp.P3/lo March 25, 1991 FF Study Visit to United Kingdeno 25-Jul Aug United Kingdom Contract Number: 001/PSPTKP/1990 July 11, 1990 Rp atau USS New Information Technologies and 31 -Aug Nov AIT, Bangkok Contarct Computenised Library Services Number: KU BPPSKAI August 11, 1992 Rp Personnel Management 16-Sep Dec UNSW, Australia Contract Number: HK BP.P31J03 5. Coordination of Planning and 16-Sep Dec IJNSW, Australia -August 14, 1992 Programming AS Financial Management 16-Sep Dec UNSW, Australia 7. Training Managernent 02-May Jun UNSW, Australia and Malaysia 8. Management Infonnation System 02-May Jun UNSW, Australia and Malaysia Contract Number: HK Bp.P31AI) 9. Legal Matters 09-Jun Aug-93 I UNSW, Australia -August 13, 1993 and Malaysia AS Resources Informtion Management 09-Jun Aug UNSW, Australia and Malaysia Total

27 Table SC: Allocation of Priority Staff Training Program (Staff-months) PROGRAM 1969/S 1990/91 11/ / / / /97 TOTAL SAR Actual SAR Actual SAd Atua SAR Actual SAR Actual SAR Actual SAR ActuaI SAR Actual SAR Actual Pusdikint Management Prijectmnunzgmn-A S Shatdpeciaiat , ,025.0 Technical Survey Specialist upgadig Training TrainigMethods Training Maaement , ,665 7 Sub-Total , , , ,2635 Dlikit Pencalran (Water Reseures) ProjectMangament Tednical Upgrading , oqm _ 6S Sub-Total , Olklat Bhes Mamts (HIghwys) Project Manganent Techmical Updig oem S a_ Sub-Total Diklit Cipt Karva (Hunma itlimnta) Project Managment S Techi calupgading OkM Sub-Total S TOTAL , , , , , , , ,000 4 Note: The bulk o the staff-months was reallocated to Pusdikiat for management and training as these wmre considered pdriorty. In addition, the Individual Direcorate General provided the necesary training for hoe staff, utifizing heir own funds.

28 Table 6: Studies Included in Project Purpose as Defined Study at Appraisal/Redefined Status Impact of Study 1. Capacity Building for Studying and prepanng A number of studies The studies were local governments.a/ future local government were done between used as the basis of institutional and by the proposed Local manpower development Hasfarm/DHV. The Governnent projects. studies were Institutional and Staff implemented by the Development Project Ministry of Home prepared in Affairs, although they The project, however, were financed from was not processed. the IDTP project. a/ This study is included in the Loan Agreement, Schedule 2. para. 4, but there is no description of the study in the SAR. However, Annex 13 includes 60 manmonths of domestic and 20 staff-months of international consultant services for assistance in the preparation of a local government institutional and manpower development project.

29 Table 7A: Project Costs Appraisal Estimate (USSM) Actual/Latest Estimate(USSM) Local Foreign Total Local Foreign Total Item Costs Costs Costs Costs Land Civil Works Equipment, Furniture and Materials: Laboratory Equipment Training/Office equipment & Furniture Books and Library Material Consultancv Services: International Consultants Domestic Consultants Training: Overseas Training Local Training Incremental Costs Total Base Costs Physical Contingencies Price Contingencies Total Costs Irrigation Subsector Project (Loan No IND) Civil Works (Comp-12) Laboratory Equipment (Comp-12) Highway Sector Project (Loan No IND) Computer Equipment (Comp-4) Laboratory Equipment (Comp-12) Total Other Loans:

30 Table 7B: Project Financing a/ Appraisal Estimate (US$M) ActualULatest Estimate (US$M) Local Foreign Total Local Foreign Total Source Costs Costs Costs Costs IBRD/IDA Domestic Contribution TOTAL a/ Additional funding of USS3.2 million for the laboratories and equipment (Component 12) was received from the Irrigation Subsector Project (Ln IND) as proposed in the SAR; and S2.0 million for computers and laboratory equipment (Components 4 and 12) from the Highway Sector Project (Ln IND).

31 Table 8: Status of Legal Covenants INDONESIA Agreement Section Covenan Present Original Revised Description of Comments t type status fulfillment fulfillment covenant date date LOAN Sch. 5 para 1 5 C 11/30/89 03/30/90 Establish not later than November 30, 1989 an inter-ministerial advisory board Sch.5 para 2 5 C 11/30/89 03/30190 Establish not later than November 30, 1989 a Technical Committee Sch. 5 para. 3 5 C 11/30/89 03/30/90 Establish not later than November 30, 1989 a Project Management Unit Sch. 5 para C 02/28/90 12/14/90 Appoint by February 28, 1990, consultants to provide services for (a) improved coordination of progranuning and planning; (b) improved financial management; (c) management information systems; and (d) improved foreign aid collaboration Sch. 5 para. 5 5 C 12/31/89 03/30/90 Establish by December 31, 1989, an informatics policy working group Sch. 5 para C 01/31/92 Carry out project in accordance with an annual action plan satisfactory to the Bank Sch. 5 para C 03/31/90 12/14/92 Appoint by March 31, 1990, MPW staff as task managers and counterparts to consultants Sch. 5 para. 8 9 C 10/31/91 07/23/92 By October 31, 1991, carry Regular reports were out through the project provided on project management unit, a progress. detailed evaluation of project implementation and furnish copy to the Bank for review Sch. 5 para C 10/31/092 03/07/94 By October 31, 1992, The appointments appoint technical and adm, were delayed to early staff in the Kanwil and 1994 and the MIS Dinas PUP; and implement was implemented the MPW info. system for nationally Kanwil and Dinas PUP in N.&S. Sumatra, W. Java, C. Java and E. Java in DKI Jakarta, Yogyakarta, Bali and South Sulawesi.

32 Covernnt types: 1. = ArcounWaudits S. = Idigenous people 2. = Finmna performance/revenue generation fiom 9. = Monitoring, review, and reporting beneficiaries 10. = Project impleenwtaion not covered by categories = Flow and utilization of project funds 11. = Sectoral or cross-sectorw budgetary or other resource 4. = Counterpart funding allocation 5. = Manageent aspects of the project or executing 12. = Secorl or crosa-ectoi policy/ regulatcxy/institujional agency action 6. = Environmental covenants 13. = Other 7. = Involuntary resettlenent S. Present Status: C = covenant complied with CD = conplied with after delay CP = conplied with partially NC = not complied with

33 Table 9: Bank Resources: Staff Inputs a/ Stage of Planned Revised Actual Project Cycle Weeks US$ ('000) Weeks USS('000) Weeks USS ('000) Through Appraisal Appraisal-Board Board-Effectiveness Supervision Completion TOTAL a/ Data on "planned" and "revised" except for completion are not provided by the MIS.

34 Table 10: Bank Resources: Missions Number Specialized Stge of Month/ of Days in Staff Skills Performance Rating Project Cycle Year Persons Field Represented Through Appraisl 03/87 4 Edzc. Spec. Opertion Officer Info. Specialist Urban Specialist Iniplemen. Developtation ment Types of Status Objectives Problem 04/ Educ. Spec. Hum. Res. spec. Systems Analst Info. Anaivst Appraisal through 11/ Educ. Spec. Boad Approval Hum Res. Spec. InsL Dev. Spec. ODerations Assist Board Approval Educ. Spec. through Effectiveness Human Res. Spec. Inst Dev. Spec. Operations Assist. Supervision 09/ Sr. Oper. Officer Oper. Officer 02/ Sr. Oper. Officer 2 1 Hiring of consultants Info. Specialist Oper. Officer 11/ Sr. Oper. Officer 2 1 Strengthening the TrnB Specialist Bureau of Planning Oper. Officer 02/91 3 Sr. Oper. Officer 2 1 Currency Info. Specialist Depreciation Tech. Edu. Spec. 11/ Physical Planner 2 1 Coordination between Tech Educ. Spec. components Info. Specialist Techn. Educ. Spec. 04/92 2 Physical Planner 2 1 Preparation of Kanwil Oper. Officer Staff 01/ Physical Planner 1 1 Nomnajor issues Oper. Officer Tech. Educ. Spec. GCeater integration 01/ Oper. Officer I I required in sysem Trng Specialist modules Underutilization of Training Centers 01/ Oper. Officer HS HS Substantial progen Trng. Specailist 08/ Oper. Officer S S Delay in activities and TmB. Specialist outputs from training Economist conm4p nt Completion 09/ Snr. Proj. Eon Tr Specialistroj

35 Annex I Page 1 of 2 IMPLEMENTATION COMPLETION REPORT INDONESIA PUBLIC WORKS INSTITUTIONAL DEVELOPMENT AND TRAINING PROJECT (LOAN NO IND) A Summary List of Decrees Issued under the Project Component Decree Number/Date I Personnel Decree for the use of the Personnel No. O1/SE/KP/ March 1996 Information system, including staff planning, appraisal, job analyses and performance assessment. 2 Strengthening Kanwil and Ministerial Decree for MPW No. 211I/M/ June 1994 Dinas organization. 3 Management of Training Draft decree for training NA management under preparation. 4 Management Information Decree from the Secretary General No. UM SJ/ May 1995 System (MIS) on the use of PU-Net. 5 Programming and Planning Decree from the Secretary General No. PR SJ April 1996 on planning/programming using the AHP for public works activities. 6 Foreign Aid Coordination Decree on the establishment and No. 62/KPTS/SN Sept use of the for Foreign Aid MIS. Ministerial Decree on establishment No.239/KPTS/ July 1994 of project managementeams at the Kanwil. 7. Finance Ministerial Decrees on all aspects No. 16/KPTS/ March 1993 of finance including, inter alia, No. 118/KPTS/ March 1993 implementation of accounting No. 258/KPTS/ August 1993 systems, guidelines for self-funding No. 259/KPTS/ August 1993 units, verification and No. 260/KPTS/ August 1993 accountability of public budgets, No. 261/KPTS/ August 1993 cash inspection, and the use of No. 262/KPTS/ August 1993 financial information systems for No. 128/KPTS/ April 1995 monitoring of routine and No. 129/KPTS/ April 1995 development budgets. No. 07/KPTS/ January Audits Ministerial decrees on the use of No. 90/KPTS/ February 1993 performance and program audits. No. 414/KPTS/ Sept. 1993

36 Annex I Page 2 of 2 Component Decree Number/Date 9 Logistics Ministerial Decree on procurement, No. 172/KPTS/ April 1993 including use of Standard Bidding Documents. 10 Legal Decree on the establishment of the No. 01/SE/Sh/III/ March Legal Information System Libraries, Archives and Ministerial Decrees issued on No. 362/KPTS/ April 1992 Public Information establishment of library networks, No. 342/KPTS/ May 1993 archive policies and management of No. 12/KPTS/ January public relations activities. 12 Laboratories (Research and Ministerial Decrees on laboratory No. 395/KPTS/ Sept Development) standards and accreditation. No. 448/KPTS/ Nov. 1995

37 IMPLEMENTATION COMPLETION REPORT INDONESIA PUBLIC WORKS INSTITUTIONAL DEVELOPMENT AND TRAINING PROJECT (Ln IND) Numbers of Graduates in Kanwils T _eetical Non-technical Total Numbet ofoasdua& _ March 1992 Augst 1996 March 1992 August 1996 March 1992 August 1996 All iligha lnadw3js Toal I_ ligher la.hlw's llal _jr_ 3li lladicld,s 'oial Graduates Deree Deree Graduatcs ChanSe All Graduates Degee Degree (;raduates Chtuge All Graduates tegree 1),egree (adate, Change % Chunge Arch II Sumater Utacs is Sumaters Barak , Riau Jambi I I Sumatra Sclatan I I t asngkulu Laqung DKI Jakana Jaw& Rant I8 I t l33 JawaTengah Of Yoyakatta JawaTimur KaltintanBaramt KalimantanTengah S KalimantantnSelut I I Kalimanta ntimur SulaweSi UtArA I a SulawesiTengah a SulawesiSehatan Sulawesi Tenggpra i IIY Nlaluku Bali 13 3 I I Num Tensggaa iafat I a Nus tetnggaratismu Irian Jtya I a Timor Timur I I TOITAI.S 33l KS

38 Annex 3 IMPLEMENTATION COMPLETION REPORT INDONESIA PUBLIC WORKS INSTITUTIONAL DEVELOPMENT AND TRAINING PROJECT (LOAN NO IND) A Summary List of Key Documents Produced under the Project Management and Training Guidelines and Handbooks by Component A. Personnel (Component 1) 1. Personnel Planning Guidelines 2. Job Analysis Guidelines 3. Performance Assessment Guidelines 4. Personnel Management Infonuation System (MIS) Guidelines B. Strengthening Kanwil and Dinas (Component 2) 1. Ministry of Public Works Organization C. Management of Training (Component 3) 1. Planning for Provincial Training 2. Training Management Information System 3. Curriculum Development 4. Instructional Techniques D. Management Information System (Component 4) 1. Ministry of Public Works Data Communication and Executive Information System 2. Geographical Information System (GIS) and MIS Integration Manual 3. Manual on MIS Installation in Kanwil PU E. Programming and Planning (Component 5) 1. DSS/AHP System on Public Work Infiastructure Synchronization Program 2. Manual on AHP Model Preparation (using Expert Choice) 3. Group Weighting on DSS Hierarchical Criteria in Public Works Infrastructure Program 4. Procedures in Preparing Program Synchronization using the AHP Methodology in Kanwil PU 5. Technical and Operational Manual on Planning Information Systems

39 Annex 3 F. Foreign Aid Coordination (Component 6) MIS on Foreign Aid Cooperation G. Finance (Component 7) 1. Guidelines for the Withdrawal of Proceeds of Foreign Loans/Grants within the Ministry of Public Works. 2. Guidelines on Cash Audits 3. Guidelines on Book Keeping and Preparation of Financial Reports for Projects 4. Guidelines on Self-Financing Units (Unit Swadana) 5. Guidelines on Verification of Budget Accountability 6. Guidelines on Financial Administration. H. Audits (Component 8) 1. Guidelines and Standard Operating Procedures on Performance Assessment 2. Guidelines on Construction Control 3. Guidelines on Program Assessment I. Logistics (Component 9) 1. Standard Bidding Documents on Goods and Services Procurement (ICB, LCB) 2. Guidelines on Bid Evaluation 3. Guidelines and Standard Operating Procedures for Goods and Services Procurement 4. Guidelines for Contracting based on Unit Cost 5. Guidelines on Post-Audits for Goods and Services Procurement J. Legal (Component 10) 1. Guidelines on the Legal Information System 2. Guidelines on CDS/ISIS Operation Program K. Libraries, Archives and Public Information (Component 11) 1. Guidelines on Manpower Development in Libraries 2. Guidelines on Library Services 3. Guidelines on Archive-Retention 4. Guidelines on Public Information Activities in Kanwil PU L. Laboratories (Component 12) 1. Laboratory Classification and Accreditation in the Public Works Sector 2. Guidelines on the Effective and Efficient use of the Laboratories of the Kanwil PU

40 IMPLEMENTATION COMPLETION REPORT INDONESIA PUBLIC WORKS INSTITUTIONAL DEVELOPMENT AND TRAINING PROJECT (Ln IND) Status of Technical Assistance ACTUAL MAN WIONTHS NO D-*i- SBAR 1909l10 I0 1 Y l Y I / TOW Not. _ [ood Local Fowie Local F.W Loca Fmcs Local Fom Local _in Local For Local Fow Loca Fl Local I C fel S ") ')1a.ad 2 Conponit , , '') ) C _mp..d C 3 Co.ogdin.IcPact I I S Conyonu , *1I.. om l d 5 Cmpompg C _insol 13 6 Cowpmom Componn s c ruaw Packet M ComPonm Cmapcan *) ') ) I II CadonatlO ^-) cospoad II A CaInp.09I IB C _mp IC (I ti2(boidmvdw md uq wvinw) C-apmt 2B MOIHA) A No dohd W.medom 17 C_ i 2A (Og_m," Sii b*) *) ' Ca p.g'a 2C (C,-wdiii of a implm 1) Co.p.t 2 DIKanwl buildi) Co C4 13 (I st aion) Componlt 13 (2nd a ionu) TOTAL I , ,26.4 Man-months of consultancy eo S V /1M / / "19%

41 IMPLEMENTATION COMPLETION INDONESIA REPORT PUBLIC WORKS INSTITUTIONAL DEVELOPMENT AND TRAINING PROJECT (LOAN NO IND) Lbt orcultant Contrwts Total Component Conrutant Man Month cost Output Remas Forign Local USS I&3 Mott Mc. Donald ,998 a. Peronnel Admnitrain (Parsonnel Infomation ystman nng Complted b. Traininr Administrtion (Trang M g, Info. Systen) (Cer devlopmt *udr pres) 2-A 9 BCEO Rewew of MPW Organstaon Compltd 2-B Hasfarm Dian Study on Loa Govennnt Institution Conmltd (done by MOHA Consultant) _(Minitry ofhome Affair) 2-C Bina Kasys ,557 Implcmentation monitoring/assistanc to 27 Kanwil PU Compleed Packae.111 Kmpa 4,5,6,7 _ ,323 a. MIS (Inforanfion, Communication, Hardwarc, Software, Competd ( scroniato syst Training Coordination) enhacd in F. Y. 97/9S) lb. PPBS (Synchrmnization system, Monitoing and Evaluation Program Trainig) _ c. Forign Loan/Grant Administration and Monitoring Infonrmton sy m, Training d. Fmancing sdrinistration & Accointing, Tra g 3 LMUI 1/ Control & Audit Completed 9 Virama Karys Procureinent Adninistration/(MONEV, ICB, LCB/Training Competed 10 Virama Karya S Lcgal Traininal Infornation system Completed 11-A PD1I LIPI Libray administration and Infonnation system (Training) Completed II-B LAN 2/ Archive administration (Training) Completd I-C LAN Public Information ytem (Hardware and software trainig) Completed 12 Viranu Krya Design & Supervision on Laboratoitun Building Completed 13 Bina Karya ,920 Assince to PMU Comptidc (Contract Prepation, reort writing, monitoring and evaluation) TOTAL , ,771 0) X 1/ IMUI - Langg Maunse t UnMeamity 1nonesia 2/ LAN - Lembagp Adminitrasi Negara

42 APPENDIX A IMPLEMENTATION COMPLETION REPORT INDONESIA PUBLIC WORKS INSTITUTIONAL DEVELOPMENT AND TRAINING PROJECT (LOAN NO IND) BORROWER'S CONTRIBUTION 1. SUMMARY Following upon the Manpower Development Project, which provided some systems for the Ministry, but which did not provide for sufficient strengthening of staff, the IDTP, which ran from 15th November 1989 until 31st December 1996, has been successful in: - providing the basis for the new organisation structure of the Ministry that strengthens the centre and the Kanwils (defined in Kepmen 211/94) to enable it to support decentralisation of public works better. - strengthening Kanwils by adding functions to their organisation structure and by improving the capabilities of staff so that they can provide the services that are required of them under PP 6/88 for the provincial organisations. - assisting in up-grading staff and equipment and in changing attitudes to give a significantly more professional approach to management within the Bureaus, Pusdata and Pusdiklat. - providing an advanced decision support system that gives the Kanwils and in turn the Provincial Works Offices a consistent method of recommending priorities of potential projects from a Provincial viewpoint and which also allows the Centre to re-evaluate the priorities to take into account National objectives. soils and building materials testing laboratories that were equipped to a standard to provide for basic testing and by providing the Inspector General with the tools to audit the construction supervision process. - providing supporting systems for: - personnel, - the determination of training needs and management of training, - preparation of training materials, - an advanced data processing network at the centre, - local area networks in the Kanwils all linked through PU-net and - new accounting systems that meet the latest financial regulations and which take advantage of up-to-date computer technology. In addition the project has: - improved staff and management systems in the Bureau KLN. - strengthened the Inspectorate General and provided new systems for performance and programme audit supported by appropriate training. - provided standard bidding and contract documents for ICB and LCB for works and goods and the procurement of consultancy services.

43 improved the Ministry's legal service by training both lawyers and non-lawyers in legal matters and by the provision at both the centre and the provinces of a comprehensive list of laws and regulations that are appropriate to public works. improved handling of archives, the management of the Ministry's libraries and arrangements for relationships with the public in the provinces. The implementation of these results has meant that the Ministry was able to respond to the management demands placed upon it by regulations that came into force at the beginning of Repelita VI. The Project has reached its goals under the direction of the top management of the Ministry of Public Works, (especially the Minister of Public Works, the Secretary General as Project Director and the Minister's special expert on manpower development as the Head of the Technical and Inter- Ministerial co-ordination teams). The Project was executed by a team consisting of a strong central PMU and a PIU for each component, each PIU covered the work of one Bureau or other organisational unit at the centre, and the Heads of the Kanwils who implemented the Project in the Provinces The Ministry was supported by teams of consultants, who were controlled and assisted by the PMU consultants. A particular feature of the consultancy was that, whereas at the beginning of the Project much of the work was done and controlled by foreign consultants; towards the end local consultants were carrying out virtually all of the consultancy work. The Ministry is satisfied that the objectives of the SAR have been achieved and is looking to build upon the success of the Project and further develop the institution to enable it to meet challenges that are foreseen in the changing style of Government. In line with this, considerable work is required to meet all of the requirements of PP 45/92 which provides for the Dinas level II to become the centre of implementation in all sectors. In the case of public works this means the District Public Works Office. This work would need to centre on improving the capability of PU staff through improved education and training and on extending the Institutional Development and Training Project systems from the Kanwil/Provincial Public Works Office to the District Public Works Offices. An additional loan is being sought to fund the greater part of the programme outlined above. 2. BACKGROUND The Institutional Development and Training Project followed on from the Manpower Development Project which was completed in That project had prepared the ground for the Institutional Development and Training Project and had installed some systems and procedures. However, because it took place before decentralisation it did not fully meet the needs of Government in decentralising and accordingly it was not fully implemented. The objective of the Institutional Development and Training Project as defined in the World Bank's Staff Appraisal Report is: t to improve the co-ordination ofplanning and to contribute to the improvement of the implementation ofpublic works activities, and to assist in implementation of the Borrower's policies for deconcentration and decentralisation." Government policy preparing the Ministry of Public Works for decentralisation of public works to the provincial and District Public Works Offices is defined in PP 14/87 and confirmed in PP 45/92, which covers the subject of regional autonomy and which specifically nominates kabupaten/kotamadya (District) government as the centre of all decentralised activity. PP 6/88 is the legislation defining the role of Kanwils in deconcentrated Government.

44 The loan agreement for the Institutional Development and Training Project was signed on 24th August 1989 and it became effective on 15th November The closing date of the loan was 31st December The first consultancy contracts were signed on 7th June 1990 and the two major consultancy packages, Packages I and m were signed on 31st January 1991 and 3rd December 1990 respectively. Implementation started late in 1991 with trials in Yogyakarta, East Java and West Java and by the end of 1993 was largely complete across the project. However some aspects could not be completed on time because of the delayed start of the two main consultancy packages and the Bank agreed to an extension of loan closing date by one year to 31 st December POSITION BEFORE THE IDTP Before the IDTP the Ministry developed public works largely through the Directors General. None of the Secretariat General and its Bureaus as well as Pusdata and Pusdiklat was equipped with any of, strong management, suitable staff, sufficient equipment in the form of computers or suitable systems. The results of MDP 1 were not fully implemented because they were not entirely suitable and also because insufficient attention had been given to ensuring that they were sustainable. The result was that the three Directorates General were acting to a great extent as three separate entities, each going its own way and each with its own systems and each presenting a different face to Government, lending agencies and other outside parties. The Kanwils were weak and generally not capable of assuming any of the roles placed upon them by PP 6/88. Although computers were widely used in the Ministry, each Directorate General followed its own purchasing policy and they had all chosen different makes of machine running different operating systems. The result was that it was not easy and often not possible to transfer data rapidly and reliably between the different systems, although Pusdata had made some progress in centralising data on its IBM mainframe. With no central planning or management information, the Minister was not able to receive prompt and accurate management information. Without the Institutional Development and Training Project, it would have been extremely difficult for the Ministry to assume any of the management roles placed upon it by the requirements of Repelita VI, nor could it have managed the change to decentralised implementation of public works through an organisation deconcentrated to the Kanwils. 4. RESULTS The main changes in management of the Ministry that has taken place during the Institutional Development and Training Project are: * The centre is organised regionally within the technical Directorates General. This is an adaptation of one of the recommendations contained in the Institutional Development and Training Project's report on the organisation of the Ministry, which recommended that the Directors General's offices themselves should become regional offices, with Technical Directors for each of Water Resources, Roads and Human Settlements. * The Ministry now operates more as a single entity with central co-ordination of planning and there is also an information system that allows the Minister to request and to receive the top-level management information that he needs to have effective control of public works development.

45 In addition to these changes in organisation structure and management style, the Institutional Development and Training Project has produced results at the centre and in the provinces as detailed below. 4.1 Main tasks With responsibility for implementation of public works being decentralised to Provincial and District Public Works Offices, the Central Ministry of Public Works has also had to deconcentrate its control and assistance roles to the Kanwils in order for these roles to be effective. The main tasks carried out by the Institutional Development and Training Project were: to strengthen the organisation of the Kanwils. This was done by; redefining the organisation of the Kanwils to provide better support to public works in the provinces. Specifically sections were added to give the Kanwils a capability in legal matters and to improve their management of archives and public relations. extending central systems to the Kanwils. The systems for management of training, personnel management, planning, programming and reporting, accounting and financial reporting, and foreign aid relationships are now extended from the centre to the Kanwils. o increasing the number of qualified personnel in the Kanwils, o changing some key staff to more suitable people, who were usually promoted from within or transferred from projects, o o training all Kanwil staff and providing them with the equipment that is needed to carry out their responsibilities. It was also necessary to provide some training for staff at Dinas level 1 as part of preparing for decentralisation. - the primary tool provided for the Kanwils was a decision support system and its associated management information. The decision support system provides for assigning a range of priorities and weights against different factors affecting the decision whether and when to implement a particular project. The provincial results are then co-ordinated at the Centre by the Bureau of Planning. This system has been implemented at all Kanwils and in the Centre and has been used for establishing the programme for financial year 1997/98. * the second key tool provided for the Kanwils was a total of twenty seven soils, building materials and water testing laboratories, of which eighteen were financed through the Institutional Development and Training Project. Construction took place between 5 January 1990, when the first construction contract was awarded and mid The laboratories were completely equipped under five supply contracts that were awarded between 20th September 1990 and 5th November Staff were trained in testing procedures and management in the operation of such laboratories. The Ministry defined three classes of testing laboratory as follows: Class A Class B Class C which are capable of supporting a full range of design and field supervision of construction of buildings and highways and of monitoring water quality. which are capable of giving limited support to design and field supervision and monitoring water quality. to give limited support to field supervision and monitoring water quality.

46 By the end of financial year 1996/97 all provincial testing laboratories were fully accredited to Qualification C in testing water samples, construction materials and soils. This improved ability to test construction materials was further supported by implementing within the Inspectorate General a system for auditing the construction supervision activities that are carried out on projects Supporting systems The above main tasks were directly supported by the following: * a new personnel administration system covering: a revised and updated personnel data base that lists all staff with Ministry of Public Works employment numbers wherever they are working, together with all other staff working at the central Ministry and its Kanwils, a staff planning system and a career development and performance appraisal system and a personnel information system. * Pusdiklat has developed the structure of an education system for MPW employees that is aimed at upgrading staff from largely High School graduates to bachelor's degrees. * a new system for determining training needs from personal appraisals and for co-ordinating training throughout the Ministry. This co-ordination includes standardised formats for training materials no matter which department within the Ministry prepares them and the provision of a list of courses that are available within the Ministry. There is also a training management system which is co-ordinated with the personnel system and a new system for analysing the cost of training. * the Ministry's management of computerised systems has been made more professional and the systems have been completely overhauled during the Project and there is now a Local Area Network in the Centre and one in each Kanwil. Communication is possible between the Centre and all of the Kanwils through the Ministry's own country-wide network. Subject to security restrictions data can be shared between all Central units and with the Kanwils. There are staff in all Kanwils who are capable of managing local area networks and operating staff have been trained in appropriate systems. * systems for accounting in both the Kanwils and in the Centre. These systems run on the local area networks and data is transmitted by and received from Kanwils over the country-wide network Ancillary work In addition to the above supporting work, the following ancillary work was carried out. This work was aimed at improving the professionalism and effectiveness of the Ministry, particularly in the provinces and included a review of the Ministry's organisation to define how it should be better organised to enable it to respond better to its responsibilities after decentralisation and deconcentration: * the decentralisation study led to the realisation that key Bureaus as well as Pusdata and Pusdiklat needed to be considerably strengthened and this has been done by transferring new staff into key positions in the Bureau of Planning and into both Pusdata and Pusdiklat. The result of this has been to transform these departments into strong organisations that are capable of providing management and leadership both at the centre and in the provinces. * improvements to staff and management systems in the Bureau of Foreign Co-operation. This provides for better tracking of progress of foreign loans and grants, from inception of the loan through to completion of procurement of all goods, services and works. The system has been

47 installed in both the centre and in the Kanwils and uses common data with the planming system being operated by the Bureau of Planniing and the accounting system being run by the Bureau of Finance. * the role of the Inspectorate General was strengthened through provision of audit systems for performance and programme audit. The systems were documented and training material provided. Audit staff were trained. Most Inspectorate staff were converted from structural staff to functional staff on 1st October The change is aimed at making audit staff more professional. * three sets of new bidding and contract documents were prepared during the Project, the first set was based upon the original briefing and the second set was prepared when the IBRD prepared a new standard General Conditions of Contract that they require to be used on all projects, but which could not be used as they stood as they conflicted in some respects with Indonesian law. At approximately the same time, the GoI published new financial regulations and the two sets of changes were incorporated in the Ministry's standard documents. It was then discovered that the Bank had changed its standards once more in 1995 and the latest set of documents reflect 1BRD Guidelines for Procurement Bidding and contract documents are provided for each of Goods, Works and Consultancy Services. * a procurement tracking system has been installed which is based upon independent systems from the three Directors General. * the Ministry's legal capability has been upgraded through the establishment of new legal functions at each Kanwil, through training of lawyers in specialist legal subjects and nonlawyers to improve their awareness of the legal impact of their work. Lawyers are assisted in their work through provision of a legal database that lists all legislation that affects public works at all levels. This list has key words inserted in it and is available at all Kanwils. * the Ministry's central archives at Citeurup have been improved and much superfluous material has been weeded. At least one librarian has been fully trained in each library and there is a more professional approach to their operation. The Ministry's public awareness programme has been enhanced and information centres in each provincial capital are being improved. There are now embryonic libraries in each Kanwil. 5. METHOD OF ACHIEVING THE RESULTS The Project has achieved its results through the following methods:. A strong Project Management Unit was established, with Project Implementation Units comprising Ministry staff from the controlling sections of the Ministry. The Head of the PMU answered directly to the Secretary General and the Heads of the PIUs in turn answered to the Head of the PMU. The allocation of budgets followed this organisation structure. Each component was placed under the control of one section of the Ministry's organisation, the implementing unit. These were the seven Bureaus in the Secretariat General, Baiitbang, the Inspectorate General, Pusdata and Pusdiklat. * Consultants were appointed for design and implementation of the work. The consultants were assisted at all times by In-Office Experts from the implementing units and were controlled by the respective PIUs. * Each system was well supported with legislation in the form of Ministerial decrees, system documentation, training materials and guidelines. * The products of the Components were applied initially at the Centre and then in trials in selected provinces, followed by general application in all 27 Provinces. In each Province an

48 Implementation Team was established to ensure proper involvement of all concerned at both Kanwil and Dinas. Implementation was carried out by joint teams led by the PIU with the assistance of the Component consultant, and assisted by the following: o Local, on-the-job training, which accounted for approximately 50% of all of the training funded by the Institutional Development and Training Project o Diklat, using all six Diklatwils o Diklat at the Centre 6. IMPLEMENTATION 6.1. Organisation The organisation that was established from the outset was continued through the duration of the project with only minor changes in personnel and it achieved the main objectives of the Project. This organisation was able to overcome difficulties as they arose while at the same time maintaining control over progress and quality of the work that was done. An example of the kind of problem that arose and was resolved occurred at the beginning of the Project, when Bappenas needed additional data on the lump sum items of consultancy that were incorporated in the contracts for the two main components. By the time that the problem had resolved, the consultants had been unable to keep all of the staff originally proposed and replacement staff had to be reviewed and on occasion turned down as being unsuitable. Resolution of these two problems resulted in the two major consultancy contracts being awarded nearly a year late. In spite of this delay, the Project was ready and in a position to provide the Ministry with the organisation, personnel and systems that were needed to implement Government's policy for decentralisation in Repelita VI Staffing of consultancies Although the initial consultancy packages were heavily staffed with foreign consultants during the design and initial implementation stages, the bulk of implementation was carried out initially by Indonesian consultants and latterly by Ministry staff, often the IOEs assisted by trained staff from the Kanwils. Towards the end of the Project only three individual foreign consultants were involved Factors for success It is the Ministry's view that the success of the project was due to the following factors: 1. The direction of the top management of the Ministry of Public Works, (especially the Minister of Public Works, the Secretary General as Project Director and the Special Assistant to the Minister on Human Resource Development as the Head of the Technical and Inter-Ministerial co-ordination teams). 2. Establishment of a strong system of project management, with a relatively small PMU providing central control and co-ordination. 3. The award of consultancy contracts that followed work unit responsibility, for example, a contract for improvement of the work of the Bureau of Law. This was such a key aspect of achieving results that project management packaged components together as noted in point 5 below rather than to combine consultancy on related subjects under one or other of the controlling departments, for example there might have been a temptation to group the relatively small contracts for work for the Bureaus of Law, General Affairs and Logistics under one management unit in say the Bureau of General Affairs in order to reduce the number of PIUJs answering to the PMU. This temptation was resisted and as a result the lines of responsibility were clear and the priorities of the controlling departments were solely to implement their departments' work.

49 Replacing key staff in the Bureaus, notably the Bureau of Planning, Pusdiklat and Pusdata with individuals who are capable, motivated to succeed and professional. 5. Packaged contracts where the work of two components impinged one on the other, for example personnel and training were grouped in one package. This arrangement made coordination easier. 6. Day-to-day control through PlUs formed of personnel from the relevant work unit in the Ministry. 7. The active support of the project by the Kanwils, who were active in implementing the project in the provinces 8. The use of foreign expertise during the design stage when new ideas and techniques are to be tested. 9. Involving Indonesian consultants and the IOEs from the Ministry throughout the design stage and then making them responsible for continued implementation. 10. Using the IOEs and the PIUs for institutionalising the changes that were made. 11. Pressing forward on the issuing of various Ministerial Decrees that make it mandatoty for departments at the centre and the Kanwils to use the results of the Institutional Development and Training Project. IBRD staff also made a significant contribution to the success of the Project, the details of which are contained in the following section. 7. THE ROLE OF THE BANK The IBRD impacted on the Project in three ways: * through missions, which were sometimes annual and sometimes twice yearly. * both formally and informally through RSI * formally with Washington 7.1. Missions The missions were most useful, initially in establishing the Project, but more significantly during design and implementation, when their presence served at least four purposes: * a review of Project progress for assuring Washington that progress was satisfactory * this same review would re-assure Project Management that they were progressing satisfactorily and in the right direction. * assisting Project management with obtaining high-level Ministry decisions or action when necessary. * they were able to review the real position on the ground and from time-to-time were able to agree when conditions described in the SAR were no longer pertinent and they could then agree to modify the original detailed Terms of Reference with a minimum of explanation in writing and consequent delay. It would have been helpful if the Bank could have maintained a more regular schedule of a mission every six months to coincide with the publishing of the Half-Yearly Report and it is the recommendation of the Ministry that the Bank should attempt such a schedule on all future projects. It would also have been helpful if one of the twice yearly missions could take place during preparation of the development budget (DIP) for the following year,

50 Resident Staff in Indonesia Formal and informal contact with RSI was infrequent but RSI was particularly useful when giving advice on Bank procedures or requirements and it was possible to obtain action through RSI that could not be achieved in other ways. 7.3 Washington Communications with Washington were almost always, by their nature, formal. The bulk of correspondence was related to obtaining no objection letters for the various stages of the procurement process. The Bank was not always able to respond to requests for NOLs as quickly as the Ministry would have liked and it would be helpful if the issuing of certain NOLs could be delegated from Washington to RSI. An example is the NOL in respect of contract addenda which change the contract sum by less than 10%, which is not required by Washington, but which is needed by the GOI before payment can be made against a contract. 7.4 Standard Procurement Documents As recorded in paragraph 4.3, the Ministry has prepared three separate sets of procurement documents at different times. The last two of these have been largely prompted by the IBRD issuing mandatory standards, one in 1992 and one in Neither of these mandatory standards was well thought out, that issued in 1992 requires considerable editorial changes within the body of the General Conditions and is difficult to use as it requires a command of English that is not generally available in the Ministry. The second is FIDIC 1993, which has several matters of principle that are not suited to the Indonesian environment. Notably these are: a) nominated sub-contractors, b) dayworks and c) remeasured contracts. 8. CONTINUING INSTITUTIONAL DEVELOPMENT The Institutional Development and Training Project loan closed on the 31st December 1996 securing the results described in the previous paragraphs. However, additional work is needed on institutional development within the public works as defined in the operational plan, which is appended to this note.

51 THE OPERATIONAL PLAN 1. CONTINUING INSTITUTIONAL DEVELOPMENT The Ministry will sustain existing systems and, where appropivate continue to expand and to extend the work done in the IDTP after loan 3112-IND has closed in order to o o o o maintain existing systems, this will be needed as Government Regulations and Directives and other external factors change. upgrade existing systems in line with new technology when it can give an improvement in the operation of systems. add components to systems that were not included in the outputs for the Institutional Development and Training Project. modify systems, particularly reports and other management information coming from systems, as managers become more familiar with them and demand more information or information presented in a different format. The above can be classified as being the continuing and normal development of systems and procedures. In addition, the Ministry has the major task of: o Helping the Kabupaten/Kotamadya Public Works in the scheme of decentralisation of Public Works, to: - Train the technical staff - Solve financial problems - Solve equipment needs Government has chosen 26 Kabupatens (outside Jakarta which has no Kabupatens) for pilot testing the decentralisation process for all ministries. The selection was based upon their management ability and the trying out ability to fund the maintenance of installed systems and procedures. It would be necessary to adapt existing systems to make them suitable for operating by District Public Works Offices, to install them in the pilot Kabupatens together with any equipment needed and the selection and training of suitable staff. The Ministry is aware that other areas of its operation need additional development if it is to continue to develop its role as adviser and controller of public works and to adapt to thx new role that it will play under decentralisation of public works development to the level of Kabupaten IKotamadya and it is prepared to meet the challenge of making the necessary changes in its organisation, staff, systems and methods. 2. FUTURE PROGRAMME OF WORK The IDTP system are flexible and adaptable, therefere the Ministry will countinue to enhance their effectivities and institutionalisation after the closure of loan 3112-IND, in order to: * maintain systems, procedures and equipment that were designed and installed under the Project and keep both operating staff and management up-to-date in the systems. * prepare systems, equipment and staff for the initial implementation of PP45/92 in the public works sector in the twenty six selected Level II organisations and carry out full implementation in those organisations. * prepare for a wider implementation of systems to the remaining2,7kk8,upens and Kotamadyas.

52 * continue to enhance the capability of staff involved in public works throughout the country. * ensure that all of the above is fully documented and is made a legal requirement by legislation of both the Ministry of Public Works and other Departments, primarily the Ministry of Home Affairs, as appropriate. Maintenance and trial installation of systems in the District Public Works Offices will be financed by the routine budget. Extensions to systems and other improvements will be funded by eduentcad,s ation and tr,ininf staff and the full extension of systems to the 26 selected level II organisations will be financed through new loans. The area of focus that each Bureau will address in their ongoing application of the Institutional Development and Training Program are Personnel Svstems (Bureau Personnel) a). Improve system and procedures, organisation and tasks and functions b).establish career development system c). Establish Functional Jobs d). Non-structural job lassification e). Staff needed to support development (Personnel Planning) f). Improve skill in the Kanwils g). Develop personnel management system for decentralised operations h). Personnel administration Traininz manafement systems (Pusdiklat) a). Install training management information system b). Install training costing system c). Integrate training programmes (incl. Dinas PU Kabupaten) d). Maximizing RTC utilization Data processing systems (Pusdata) a). Maintain and upgrade existing systems b). Maintain and upgrade existing hardware and sofware c). Training Plannin! and Proaramminf (Bureau of Planninf) a). Develop systems for Repelita VII b). Development of database for applications of programme c). Synchronisation of programmed). Development of Performance indicators for control e). staff development f). Develop the central AHP/DSS g). Maintain AHP/DSS Kanwil PU h). Budgeting, monitoring and evaluation i). Develop the information systems necessary for management and control of the development programme. Foreig aid co-ordination (Bureau of K_LN) a). Countinued dissemination of IDTP results b). Upgrading the system for monitoring forign aid in the provinces c). Development of reporting system for foreign aid co-operation Accounts and finance (Bureau of Bud_et) a). Maintain existing systems b). Implement cost accounting system in all provinces c). Implement the Government accounting system in all provinces d). Develop a consolidated balance sheet for MPW e). Training in financial management in all provinces f). To look for clarification to the Ministry of Finance concerning the status of swadana proposal for the laboratories and RTC InspeCtionand control (Insporate General) a). Start and countinue annual audit programme b). Prepare programme audit guidelines from existing manual c). Modify programme audit guidelines to suit A,B,C