The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623) REPORT NO.: RES50642 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF CHINA: GANSU TECHNICAL AND VOCATIONAL EDUCATION AND TRAINING PROJECT APPROVED ON MARCH 31, 2017 TO PEOPLE'S REPUBLIC OF CHINA EDUCATION EAST ASIA AND PACIFIC Regional Vice President: Manuela V. Ferro Acting Country Director: Alejandro Alcala Gerez Regional Director: Daniel Dulitzky Practice Manager/Manager: Tobias Linden Task Team Leader(s): Liping Xiao The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623) ABBREVIATIONS AND ACRONYMS CBT Competence-based CE Cambridge Education ESMP Environmental and Social Management Plan GRM Grievance Redress Mechanism IBRD International Bank for Reconstruction and Development IE Impact Evaluation MTR Mid-Term Review PDO Project Development Objective PIU Project Implementation Unit PMO Project Management Office RF Results Framework SABER System Approach for Better Education Results SC Skills Council SDS Sustainability Development Strategy TOR Term of Reference TVET Technical and Vocational Education and Training The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623) BASIC DATA Product Information Project ID Financing Instrument P154623 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 31-Mar-2017 30-Jun-2023 Organizations Borrower Responsible Agency People's Republic of China Project Development Objective (PDO) Original PDO The project development objective is to improve the quality and relevance of project schools in Gansu and strengthen the school andindustry linkage. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-87200 31-Mar-2017 26-Jun-2017 20-Oct-2017 30-Jun-2023 120.00 81.56 38.44 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status and Rationale for Restructuring 1. Project Status The IBRD loan of US$120 million for the Gansu Technical and Vocational Education and Training (TVET) Project was approved by the Board on March 31, 2017. The loan became effective on October 20, 2017 and has a closing date of June 30, 2023. The Project Development Objective (PDO) is to improve the quality and relevance of project schools in Gansu and strengthen the school and industry linkage. The Project consists of three components: (i) strengthen the demand driven TVET system; (ii) strengthen TVET delivery through comprehensive school reforms; and (iii) project management and monitoring and evaluation. Progress towards achievement of the PDO is rated satisfactory and has been throughout project implementation. One of the three PDO indicators surpassed its 2022 annual targets and achieved the end-of-project targets. Two indicators are on track to be achieved by project closing. The final PDO indicator is discussed further below. Overall implementation progress is rated satisfactory. Nine of thirteen intermediate indicators surpassed their 2022 annual targets and have achieved the end-of-project targets. Four indicators are on track to be achieved by project closing. This progress has been achieved despite the project schools being closed several times in the past three years due to the COVID-19 pandemic. Reforms have also taken place at the provincial level, with project-funded studies and reports informing the recently issued new provincial policy on Promoting High-quality Vocational Education Development. Component 1: Strengthen the Demand-driven TVET System.  Promote TVET coordination and management. Quarterly briefing notes were submitted to the provincial leaders and informed relevant policy making and facilitated project implementation. The PMO coordinated well with project schools and consulting teams to mitigate the negative impacts from of school lockdowns and rigid pandemic control measures. The Skills Council (SC) team developed the tools and templates for identifying skills gaps for the labor market.  Promote provincial policy development. Four planned studies and two additional System Approach for Better Education Results (SABER) studies were completed. The results of these studies have been discussed and disseminated through various ways in and outside of Gansu and China. The SABER studies were disseminated at the World Bank’s regional webinar on June 7, 2022, among the participating countries. Furthermore, the recommendations of the Gansu SABER studies on school-industry collaboration, development of a teaching resource bank, and dual-certification of teachers 1were adopted by the newly launched provincial document 1 Dual certification of teachers: teacher qualification plus technical qualification. -2- The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623) entitled “Five Measures to Promote High-quality Development of Modern Vocational Education” which serves as an implementing guideline for the Skills Gansu Strategy.  Strengthen school and industry linkages. All four project schools endeavored to strengthen their collaboration with enterprises. The number of enterprises with cooperation agreements increased by 47 during the past 6 months, which accumulated to 846 and continued to surpass its the project’s annual target. Short-term training programs for enterprises have covered 25338 trainees which also surpassed its the corresponding annual target. In the overall difficult context for graduates finding jobs this year in China, project schools made great efforts to provide various employment services to graduates such as on-campus and online job fairs, and lectures from enterprise experts. Component 2: Strengthen TVET Delivery through Comprehensive School Reforms  Improve instructor quality. All project schools prioritized capacity building for teachers. Various trainings were carried out for teachers and administrators per their annual plans. Both the PMO and PIUs organized domestic and school-based trainings, and hybrid of online and offline trainings, to mitigate the adverse impacts from of the pandemic. From December 2021 to May 2022, four project schools delivered domestic and school-based trainings for 6,584 teachers and administrators. The total number of teachers who practiced in the enterprises reached 952 which surpassed its annual target.  Promote modular and competency-based curriculum, pedagogy, and assessment reforms. The Cambridge Education (CE) team used a hybrid approach which combined on-site trainings by a national expert team with remote support from international experts to continue its technical support on curriculum, pedagogy and assessment reforms. Competency-Based Training (CBT) curriculum development moved to the pilot, refinement, and finalization stages.  Improve school management. The project schools continued to enhance the school management and institutionalize good practices from project implementation. Twelve new regulations were developed in four project schools in the first half of 2022 while 572 rules and regulations were formulated since the project launch.  Upgrade facilities and equipment. The construction of civil works that originally funded by the counterpart, is now using the remaining loan proceeds from bidding process, has started and is moving forward smoothly in the project schools. The PMO and PIUs have been making efforts to complete these civil works before the closing date (June 30, 2023). The completed facilities and procured equipment have been put into use and labeled with the project logo. Maintenance mechanisms are in place which ensure the effective use of these facility facilities and equipment. Component 3: Project Management and M&E  Project management. The PMO played an effective role in coordinating with all sides to accelerate project implementation. They coordinated well with consulting firms on speeding provincial activities, ensuring compliance with project management with technical, fiduciary, -3- The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623) social safeguard and environmental aspects requirements, and worked closely with PIUs to push accelerate implementation at the school level and evaluate key outputs from reform activities.  Project M&E. The results indicators showed that project implementation has continued to make good progress. As of May 2022, the project benefitted 223,707 students in the project and non-project schools, of which 111,074 were girls accounting for 47% and 51% of the beneficiaries in project and non-project schools, respectively. The Impact Evaluation (IE) team accepted all technical suggestions from the Bank team on final evaluation through several rounds of technical discussions. Data collection on the new comparison schools were initiated in May 2022. Financial Management and Disbursement. The project’s financial management remained Satisfactory. As of June 10, 2022, the cumulative project investment has reached CNY524 million or around 55% of budgeted total investment, and the cumulative Bank loan disbursement has reached US$81.56 million (including US$10 million advance in DA and US$300,000 Front End Fee) accounting for around 68% of the total Bank loan. The financial and disbursement progress is consistent with physical implementation progress. The FY2021 audit report was submitted to the Bank on June 22, 2022. All audit reports have been satisfactory and found no qualifications. Procurement. The performance of project procurement is rated Satisfactory. By the end of June 2022, 51 contracts had been signed and 4 contracts were under bidding. The quality of TORs of consulting services was improved with technical support from the Bank team and a few missing documents were uploaded into the STEP system by the PMO. Environmental Safeguards. The environmental safeguards rating is Satisfactory. The project’s Environmental and Social Management Plan (ESMP) has been generally followed to manage the environmental risks and impacts, although some areas for improvements were observed during external environmental monitoring, including placement of construction materials and wastes, placement of safety warning signs, and supply of first-aid equipment. There was a complaint received from teachers of GFTVC on construction noise at night, which has been solved through formal written apology by civil contractor. Social Safeguards. The social safeguards rating is Satisfactory. The external monitoring team followed up on recommendations from the previous missions to focus on equal benefits for ethnic minority and female students and teachers. Data has been collected by gender through workshops, semi- structured interviews with teachers and students, focused group discussions, and questionnaires. It was found that all ethnic minority students have language proficiency and do not require pre-class language training. All participating schools have facilities to satisfy ethnic minority students’ special dietary needs. All construction took place within schools and there was no land acquisition/resettlement. Project implementation will continue to take the COVID-19 considerations into account as required previously. Citizen Engagement. The project has established and implemented various mechanisms to ensure proactive and robust engagement with affected persons and stakeholders. The project management office (PMO) of Gansu provincial Education Department and project implementation units (PIU) of -4- The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623) project schools have a well-developed GRM to ensure timely reporting, recording and addressing of project related grievance. The GRM hotlines and websites have been disseminated widely and focal persons have been designated at the offices of PMO and PIUs. As an integrated part of project safeguards and environment documents, the GRM continues to receive feedback from students and teachers on project-funded facilities. The Project has set the citizen engagement indicator as “Teachers’ and students’ satisfaction rate on key reform activities”. The data are regularly collected by the social safeguard monitoring team through its survey. Compliance with Covenants. All the project’s legal covenants have been complied with. Risk assessment. The overall project risk remains as Low. 2. Rationale for Restructuring In 2017 the Ministry of Human Resources and Social Security started to cancel some skills tests, which makes the second PDO indicator (the percentage of graduates obtaining both skill certificates and diplomas) impossible to achieve. The government, through the PMO, has requested a restructuring to redefine this indicator, and its baseline and end-target. A Level 2 restructuring is being proposed. This would be the first restructuring for this project. II. DESCRIPTION OF PROPOSED CHANGES B. Description of Proposed Changes 1. Summary of the proposed changes: (a) Adjust the baseline and estimated target values of the second PDO indicator: the percentage of graduates obtaining both skill certificates and diplomas (by gender). This indicator measures the proportion of graduates who have obtained both diplomas and skill certificates. Since 2017, about 44% of the skill certificates have been cancelled nationwide by the Ministry of Human Resources and Social Security. As part of this nationwide cancellation by the government, about 30% of the skill certificates offered by the programs in the four project schools have been cancelled; in particular, about 35% of the skills certificates offered by some programs with high female student enrollment, such as preschool education, e-commerce and human resource management, have been cancelled. These cancellations have reduced the total number of graduates who have diplomas as well as skill certificates. Therefore, it is recommended that the 2017-2022 estimated targets of this indicator be lowered by 30%, and the estimated targets of female students be lowered by 35%. It is also recommended that the baseline value for 2016 be recalculated by removing the students in programs whose certificates have been cancelled (approximately 30% for all and 35% for female students). Thus, the baseline value for this indicator should be reduced from 54% to 38% (53% to 34% for female students). Similarly, the estimated targets value could be adjusted changed from 57% to 39% (from 57% to 35% for female -5- The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623) students) for 2017; the value could be adjusted from 57% to 40% (57% to 37% for female students) for 2018; from 60% to 41% (61% to 37% for female students) for 2019; from 62% to 43% (62% to 39% for female students) for 2020; from 63% to 44% (62% to 41% female students ) for 2021; and from 64% to 46% (64% to 44% for female students) for 2022. Please see the annex for details. This is a factual-based adjustment to reflect a related policy change of the government which will not impact the achievement of the PDO as originally intended. Results from school reforms and school- industry cooperation under component 1 and 2, and the students’ skills certificate and employment have been increasing steadily over the past years. Additional results derived from the project intervention would be thoroughly captured and carefully assessed at the ICR stage. Therefore, this adjustment will help reflect the real achievement of PDO. (b) Add three indicators for beneficiary satisfaction and number of beneficiaries. Per the request of the World Bank to add indicators for citizen engagement and corporate results, the PMO began to collect the satisfaction rates of teachers and students benefitting from the project since 2019, and the number of students benefiting from the project since May 2021. So, it is proposed that these three indicators be formally included in the project’s results framework. This change does not require a restructuring. 2. These changes were discussed during the recent implementation support missions. The PMO will be requested to revise the Project Implementation Plan to incorporate the updated results framework upon approval of this restructuring. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ -6- The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623) Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) . vii The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623) . Results framework COUNTRY: China China: Gansu Technical and Vocational Education and Training Project Project Development Objectives(s) The project development objective is to improve the quality and relevance of project schools in Gansu and strengthen the school andindustry linkage. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Quality and relevance Percentage of graduates finding initial employment within 6 Total:37 Female:32Total:36 Female:33 Total:37 Female:36 Total:39 Female:38 Total:45 Female:43 Total:48 Female:46 Total:52 Female:50 Total:52 Female:50 months in specialties in which they were trained (by gender) (Text) Percentage of graduates obtaining both skills certificate and diploma- Total:38 Female:34Total:39 Female:35 Total:40 Female:37 Total:41 Female:37 Total:43 Female:39 Total:44 Female:41 Total:46 Female:44 Total:46 Female:44 by gender (Revised target) (Text) Action: This indicator has been Revised School and industry linkage Number of graduates 3,173.00 6,361.00 9,448.00 13,289.00 18,583.00 25,050.00 31,372.00 working in enterprises viii The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 with which schools cooperated (Number) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Component 1: Strengthen the Demand-driven TVET System Number of briefing notes 0.00 1.00 2.00 4.00 6.00 8.00 9.00 9.00 (Number) Number of research 0.00 1.00 2.00 4.00 4.00 4.00 4.00 4.00 reports (Number) Number of enterprises having cooperated with 178.00 206.00 225.00 253.00 276.00 301.00 328.00 328.00 schools based on the agreement (Number) Number of trainees who participated in short- 3,898.00 5,430.00 6,670.00 8,120.00 9,640.00 11,380.00 12,980.00 12,980.00 term training programs (Number) Component 2: Strengthen TVET Delivery through Comprehensive School Reforms Number of instructors practiced in the 248.00 332.00 424.00 497.00 587.00 642.00 704.00 704.00 enterprises (Number) ix The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Percentage of students enrolled in modular and 0.00 0.00 12.00 19.00 25.00 30.00 34.00 34.00 CBT curricula (Percentage) Number of new or enhanced internal school 0.00 14.00 32.00 56.00 79.00 102.00 126.00 126.00 policies and regulations (Number) Square meter of new construction area (m2) 0.00 0.00 0.00 148,980.40 155,080.40 155,080.40 1,550,808.40 155,080.40 (Square Meter(m2)) Component 3: Project Management and Monitoring and Evaluation Number of training events organized by the 0.00 2.00 5.00 8.00 11.00 14.00 15.00 15.00 PMO (Number) Number of exchange workshops organized by 0.00 1.00 3.00 5.00 7.00 9.00 10.00 10.00 the PMO (Number) Teachers’ satisfaction rate on key reform 0.00 85.00 75.00 70.00 90.00 activities (Percentage) Students’ satisfaction rate on key reform 0.00 80.00 75.00 65.00 85.00 activities (Percentage) Students benefiting from 0.00 65,816.00 direct interventions to x The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 enhance learning (CRI, Number) Students benefiting from direct interventions to 0.00 34,053.00 enhance learning - Female (CRI, Number) IO Table SPACE xi The World Bank China: Gansu Technical and Vocational Education and Training Project (P154623)