Document of The World Bank FOR OFFICIAL USE ONLY Report No: RES22001 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF GUANGDONG SOCIAL SECURITY INTEGRATION AND RURAL WORKER TRAINING PROJECT LOAN NO. 8268-CN JUNE 20, 2013 TO THE PEOPLE’S REPUBLIC OF CHINA JUNE 13, 2017 SOCIAL PROTECTION AND LABOR GLOBAL PRACTICE EAST ASIA AND PACIFIC REGION 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. ABBREVIATIONS AND ACRONYMS CBT Curriculum-based Training DHRSS Department for Human Resources and Social Security LA Loan Agreement MIS Management Information System MOF Ministry of Finance MTR Midterm Review PDO Project Development Objective TVET Technical and Vocational Education and Training Regional Vice President: Victoria Kwakwa Country Director: Bert Hofman Senior Global Practice Director: Michal J. Rutkowski Practice Manager/Manager: Jehan Arulpragasam Task Team Leader: Dewen Wang, Lansong Zhang 2 CHINA Guangdong Social Security Integration and Rural Worker Training Project CONTENTS A. SUMMARY ................................................................................................................... 5 B. PROJECT STATUS ....................................................................................................... 6 C. PROPOSED CHANGES ............................................................................................... 7 ANNEX 1: RESULTS FRAMEWORK AND MONITORING....................................... 11 3 DATA SHEET China China: Guangdong Social Security Integration and Rural Worker Training (P117596) EAST ASIA AND PACIFIC Social Protection & Labor Report No: RES22001 . Basic Information Project ID: P117596 Lending Instrument: Specific Investment Loan Regional Vice President: Victoria Kwakwa Original EA Category: Partial Assessment (B) Country Director: Bert Hofman Current EA Category: Partial Assessment (B) Senior Global Practice Michal J. Rutkowski Original Approval Date: 20-Jun-2013 Director: Practice Jehan Arulpragasam Current Closing Date: 31-Dec-2018 Manager/Manager: Dewen Wang, Lansong Team Leader(s): Zhang . Borrower: People’s Republic of China Responsible Department of Human Resources and Social Security Agency: . Restructuring Type Form Type: Full Restructuring Paper Decision Authority: Board Restructuring Level: Level 1 /AOB Decision . Financing (as of 20-Mar-2017) Key Dates Approval Effectiveness Original Revised Project Ln/Cr/TF Status Signing Date Date Date Closing Date Closing Date P11759 IBRD- Effective 20-Jun-2013 22-Jul-2013 12-Sep-2013 31-Dec-2018 31-Dec-2018 6 82680 Disbursements (in Millions) % Cancelle Disburse Undisburse Project Ln/Cr/TF Status Currency Original Revised Disburse d d d d 4 P11759 IBRD- Effective US$D 80.00 80.00 0.00 32.75 47.25 41 6 82680 . Policy Waivers Does the project depart from the CAS/CPF in content or in other significant Yes [ ] No [ X ] respects? Does the project require any policy waiver(s)? Yes [ ] No [ X ] . A. Summary of Proposed Changes The Ministry of Finance (MOF) of China, in the letter dated April 18, 2017, requested the World Bank to restructure the project. The proposed restructuring will entail a change in the Project Development Objective (PDO), the modifications of indicators in the Results Framework and other certain amendments in the Legal Agreement and the Project Agreement. The detailed proposal for restructuring was discussed and agreed with the provincial Department of Human Resources and Social Security (DHRSS) of Guangdong, the project implementation agency in consultation with the provincial Department of Finance (DoF), and the provincial Development and Reform Commission (DRC) of Guangdong during the Midterm Review (MTR) in April 2016. It was subsequently revised to reflect the comments from relevant authorities. Specifically, the proposed changes are the following: (a) PDO. The original PDO, “to enhance portability of social security data and beneficiary entitlements, and to strengthen the skills base and employment prospects of rural hukou workers in Guangdong,” is proposed to be replaced with the new PDO, “to enhance portability of social security data and beneficiary entitlements, and to strengthen the skills base and employment prospects of urban and rural workers in Guangdong.” The beneficiary under the Rural Worker Training component will be expanded accordingly to cover both rural and urban workers rather than “all of them with rural hukou.” (b) Results Framework. The names and definitions of fourteen indicators/sub-indicators will be modified or more realistic target values will be set. (c) Disbursement Estimates. The disbursements are estimated to reflect the pace of the project implementation. (d) Component 2 Rural Worker Training. The name of component 2 will be replaced with Urban and Rural Worker Training. (e) Institutional and implementation arrangements. The Project Management Office at the provincial level housed in the DHRSS provides guidance to the project schools. Accordingly, the project management subunit in the Technical Education Division of the DHRSS is no longer needed. (f) Others. (i) The Social Security Integration component will carry out evaluation rather than the impact evaluation, and (ii) the eligibility to overtime allowances will be extended to all contributing staff in the project schools in addition to the teachers in the development of curricula. 5 The National Development and Reform Commission (NDRC) and the MOF jointly proposed that there would be no change to the project name as it was formally registered in the State Council’s document and communicated with the World Bank task team before sending the official request to the World Bank. The proposed restructuring will not trigger any new safeguard policy and the change the category of the EA. No new/additional/supplemental safeguard instruments are needed to be prepared since no safeguard related issues or changes are involved. It will not require extension of the closing date. Change in Implementing Agency Yes [ ] No [ X ] Change in Project's Development Objectives Yes [ X ] No [ ] Change in Results Framework Yes [ X ] No [ ] Change in Safeguard Policies Triggered Yes [ ] No [ X ] Change of EA category Yes [ ] No [ X ] Other Changes to Safeguards Yes [ ] No [ X ] Change in Legal Covenants Yes [ ] No [ X ] Change in Loan Closing Date(s) Yes [ ] No [ X ] Cancellations Proposed Yes [ ] No [ X ] Change to Financing Plan Yes [ ] No [ X ] Change in Disbursement Arrangements Yes [ ] No [ X ] Reallocation between Disbursement Categories Yes [ ] No [ X ] Change in Disbursement Estimates Yes [ X ] No [ ] Change to Components and Cost Yes [ X ] No [ ] Change in Institutional Arrangements Yes [ X ] No [ ] Change in Financial Management Yes [ ] No [ X ] Change in Procurement Yes [ ] No [ X ] Change in Implementation Schedule Yes [ ] No [ X ] Other Change(s) Yes [ X ] No [ ] Appraisal Summary Change in Economic and Financial Analysis Yes [ ] No [ X ] Appraisal Summary Change in Technical Analysis Yes [ ] No [ X ] Appraisal Summary Change in Social Analysis Yes [ ] No [ X ] Appraisal Summary Change in Environmental Analysis Yes [ ] No [ X ] Appraisal Summary Change in Risk Assessment Yes [ ] No [ X ] . B. Project Status The PDO will be achieved through two channels: (a) establishment of an integrated provincial management information system (MIS) to enhance administration of social insurance and labor market programs and (b) improving the quality, relevance, and access to Technical and Vocational Education and Training (TVET) in project schools and the efficiency of its delivery for rural workers, with particular emphasis on short-term training. Accordingly, two components are built into the project: Social Security 6 Integration (US$45 million IBRD financing) and Rural Worker Training (US$35 million IBRD financing). The project is implemented by the DHRSS of Guangdong. The project has been moving toward its development objective since it became effective in September 2013. The overall project implementation has made significant progress since the MTR in April 2016. The disbursement at the end of April 2017 reached US$33 million, accounting for 41 percent of the total loan commitment. The completed procurement of goods, civil works, and consulting services has cumulatively reached about US$45 million. Under the Social Security Integration component, the overall design of the integrated provincial social security system and the software development have been completed. Both the individual applications and the integrated system have successfully passed various tests. The hardware for IT infrastructure phase I has been delivered and installed. All the prefectures/municipalities have started the data cleaning in the current systems to adopt the provincial standards. The data cleaning is expected to be completed by the end of May 2017 and then the live pilots of the integrated provincial social security system in two cities— Zhuhai and Qingyuan—will be launched immediately. The rollout of the system will start in July 2017 based on the experience from the pilots. Under the Rural Worker Training component, the project schools have strengthened their teaching and training capacity by carrying out a number of school-level ‘soft activities’ on school reforms, teachers’ training, curriculum development, and school-industry partnership. The project has also supported the upgrade of facilities, equipment, and information services. The purchased equipment in various technical areas have provided more practice opportunities for the school students and trainees. The school building of the Guangdong Advanced Technical School of Light Industry at its new campus is an integral part of the Guangdong TVET demonstration base. The new building together with all the other facilities will be in operation at the fall semester of 2017. The Guangzhou Industry and Trade College has completed the civil works. The Yunfu Advanced Technical School selected a construction company to work on the school buildings in late April 2017 and the construction and interior decoration will be completed in a year. The project schools are accelerating the implementation of consultant services, the results of which will be delivered in 15 months. The Government counterparts and the project implementation units have confirmed that they will carry out the activities as planned and maintain the current loan allocation and the time frame. With the experiences and lessons learned from the pilots in two cities, the integrated provincial social security system will be scaled up for the other 19 prefectures/cities in 2017-2018, with an aggressive timeline. With the strengthened capacity in project management, the project schools will complete the teaching facilities, upgrade the practice training equipment, and improve the quality and relevance of training activities before the project closing. Implementation of social and environmental safeguards is in compliance with World Bank policy. The environmental and social safeguards specialists supervised the project regularly during the implementation and concluded that the ECOP was generally well implemented, monitoring and evaluation were done with reports and show no resettlement legacy issue and no new land acquisition or resettlement needed. The proposed project restructuring will not trigger any new safeguard policies and the environmental and social performance of the project are satisfactory. The updated ISDS of the project restructuring was disclosed at the World Bank’s external website on May 31, 2017. There are no overdue financial audits. . C. Proposed Changes . 7 Development Objectives/Results Project Development Objectives Original PDO The Project Development Objectives are to enhance portability of social security data and beneficiary entitlements, and to strengthen the skills base and employment prospects of rural hukou workers in Guangdong. Change in Project’s Development Objectives Explanation The underlying reasons for restructuring the PDO are the reforms of the hukou system (residence permit linked to place of birth rather than residence) and changes in the provincial training policies. Following the national guidelines, in 2015, Guangdong has unified the household registration and no longer distinguishes between rural and urban hukou. In the meantime, Guangdong is experiencing industrial restructuring to move up the value chain. As a result, the demand for skilled workers has intensified. To address the gaps of skilled workers, Guangdong has changed its training policies and expanded the coverage to rural and urban migrants within the province and to migrant workers from other provinces. These institutional and policy changes have allowed both urban and rural workers, regardless of their hukou status, to benefit from the training activities under the Rural Worker Training component. Therefore, the change in the target group is expected to allow more workers to have access to upgrade their technical and employment skills. The Government therefore requested to replace “strengthen the skills base and employment prospects of rural hukou workers in Guangdong” in Schedule 1 - Project Description of the Loan Agreement (LA) with “strengthen the skills base and employment prospects of urban and rural workers in Guangdong.” Proposed New PDO The objective of the Project is to enhance portability of social security data and beneficiary entitlements, and to strengthen the skills base and employment prospects of urban and rural workers in Guangdong. Change in Results Framework Explanation: Under the current Rural Worker Training component, considering that the scope of student/trainee is expanded from those with rural hukou to urban and rural workers, the definition and value of five indicators under Component 2 will be changed accordingly. They are (a) percentage of trainees who pass skill assessment; (b) percentage of graduates finding initial employment; (c) number of short-term trainees; (d) students’ satisfaction to school’s teaching and management; and (e) percentage of students enrolled in modular, Curriculum-based Training (CBT) curricula. These indicators will adopt data by the end of 2015 as the baseline. Those changes are to (a) capture the change in the scope of the target group for training to better monitor the number of the beneficiaries and (b) reflect the changing structure of training that shifts emphasis more on short-term training, on-the-job training (one new indicator), and the quality of training. The project schools also proposed the increase of the end targets of some other indicators in the field of school-enterprise partnership and graduates/trainee satisfaction. Under the Social Security MIS component, changes are proposed to capture the development in the technical specification during the overall design and the system development. Specifically, “the standard master database” in PDO indicator 1, will be replaced with “All-in-One database” that is a centralized provincial database with records of each participant of the social insurance program. “Common minimum dataset, standard data dictionary” in the Intermediate Result Indicator 1 will be replaced with “provincial 8 standards,” which contains the standards of data, interface, network, and security. It is proposed to modify the names and definition of five indicators and set new target values for two indicators. The proposed changes for each indicator are given in the Results Framework as part of the restructuring paper. . Financing Disbursement Estimates Change in Disbursement Estimates Explanation: The disbursements are estimated to reflect the pace of the implementation. Fiscal Year Current (US$) Proposed (US$) 2013 0.00 0.00 2014 2,000,000.00 2,000,000.00 2015 6,000,000.00 6,000,000.00 2016 2,296,116.67 2,296,116.67 2017 20,703,883.33 21,000,000.00 2018 30,000,000.00 34,000,000.00 2019 19,000,000.00 14,703,883.33 Total 80,000,000.00 80,000,000.00 . Components Change to Components and Cost Explanation: The name of component 2 will be replaced with Urban and Rural Worker Training. The project schools will extend the coverage of the training programs to all, regardless of hukou status. Accordingly, the references to rural/migrant worker in component 2 in the project documents will refer to both urban and rural worker, and, specifically, in the LA, the changes are as following: (a) The heading of Part 2 of the Project in Schedule 1, is changed to “Part 2. Urban and Rural Worker Training” (b) Part 2.3(b) of Schedule 1 is changed to “(b) establishment of a database of training programs for urban and rural workers including teaching and learning materials and employer information; and” (c) Part 2.5(c) of Schedule 1 is changed to “(c) carrying out of policy studies to guide the design and implementation of skills enhancement programs for urban and rural workers.” Current Component Proposed Component Current Cost Proposed Action Name Name (US$M) Cost (US$M) Social Security MIS Social Security MIS 45.00 45.00 Urban and Rural Worker Rural Worker Training 35.00 35.00 Revised Training 9 Total: 80.00 80.00 . Other Change(s) Change in Institutional Arrangements Explanation: The Project Management Office at the provincial level, housed in the DHRSS, provides guidance to the project schools and works with the project schools on day-to-day coordination for Component 2. Accordingly, the project management subunit in the Technical Education Division of the DHRSS is no longer needed for day-to-day coordination of Part 2 of the project. The Government has proposed to delete item (d) of Section I A. Institutional Arrangements in Schedule 2 - Project Execution of the Project Agreement and alter the sequence number of item (e) to (d). Other Change(s) Explanation: (a) Replacing “monitoring of Project results, including carrying out an impact evaluation” to “carry out evaluation of activities under Part 1 of the Project” (i.e. Social Security MIS Component) in Part 1.3 (b) of Schedule 1 - Project Description in the LA. The impact evaluation was recommended at the project preparation and mentioned in the Project Appraisal Document and the LA. However, during the project implementation, it was difficult to identify an appropriate method for the impact evaluation and it was not easy to collect reliable data. (b) Changing the definition of “Overtime allowances” in the Appendix of the LA to “allowances paid to teachers and other contributing staff of the Project Schools for time spent over and above their regular working hours in the development of curricula under Part 2 of the Project.” 10 ANNEX 1: RESULTS FRAMEWORK AND MONITORING Project China: Guangdong Social Security Integration and Rural Project Restructuring Status: DRAFT Name: Worker Training (P117596) Stage: Team Dewen Wang Requesting Unit: EACCF Created by: Lansong Zhang on 09-Dec-2015 Leader(s): Product Responsible IBRD/IDA GSP02 Modified by: Lansong Zhang on 31-May-2017 Line: Unit: Country: China Approval FY: 2013 Financing Region: EAST ASIA AND PACIFIC Specific Investment Loan Instrument: . Project Development Objectives Original Project Development Objective: The PDOs are to enhance portability of social security data and beneficiary entitlements, and to strengthen the skills base and employment prospects of rural hukou workers in Guangdong. Proposed Project Development Objective (from Restructuring Paper): The objective of the Project is to enhance portability of social security data and beneficiary entitlements, and to strengthen the skills base and employment prospects of urban and rural workers in Guangdong. Results Core sector indicators are considered: Yes Results reporting level: Project Level . Project Development Objective Indicators Status Indicator Name Corporate Unit of Measure Baseline Actual (Current) End Target Revised Percentage of social insurance Percentage Value 0.00 0.00 90.00 beneficiaries whose records Date 05-Feb-2013 30-Dec-2016 28-Dec-2018 are uploaded into the centralized provincial All-in- Comment The original One database “standard master 11 database” is replaced by “All- in-One database” that contains all transaction records pertaining to each beneficiary who has participated in social insurance programs. Revised Volume of health insurance Number Value 0.00 3.00 3.80 transactions serviced across Date 05-Feb-2013 30-Dec-2016 28-Dec-2018 prefectures through the provincial clearinghouse Comment The unit is End target is platform (10 thousand) changed from reduced. million (a translation error) to 10 thousand. Revised Total business processing Number Value 0.00 0.00 6,000.00 volume through the provincial Date 05-Feb-2013 30-Dec-2016 28-Dec-2018 integrated MIS per operator (number of individual cases Comment Change in the processed per operator) indicator name. It is measured by individual cases rather than households. No Change Percentage of graduates who Percentage Value 60.00 83.37 85.00 pass skill assessment tests Date 04-Feb-2013 30-Dec-2016 28-Dec-2018 (degree course) Comment Revised Text Value Light Industry: Light Industry: Light Industry: 75% 78.14% 82% 12 Percentage of graduates who Industry and Industry and Industry and pass skill assessment tests Trade: 81% Trade: 89.81% Trade: 91% (short-term training) Yunfu: 30% Yunfu: 86% Yunfu: 88% Date 31-Dec-2015 30-Dec-2016 28-Dec-2018 Comment The scope of trainees is expanded from those with rural hukou to all, regardless of hukou status; The 2015 baseline is adopted. Revised Percentage of graduates Text Value Light Industry: Light Industry: Light finding initial employment 92% 98.3% Industry:95% (degree course) Industry and Industry and Industry and Trade:98.4%; Trade 98.51%; Trade: 98.5% Yunfu:75% Yunfu:96.79% Yunfu: 97.5% Date 31-Dec-2015 30-Dec-2016 28-Dec-2018 Comment The scope of graduates is expanded from those with rural hukou to all, regardless of hukou registry. The new baseline of 2015 is adopted. The indicator values of degree graduates for two 13 schools are added. Revised Percentage of graduates Text Value Light Industry: Light Industry: Light Industry: finding initial employment 18% 24%; Industry 30% (short-term training) Industry and and Trade: Industry and Trade: 26% 53.37% Trade: 53.5% Yunfu: 0% Yunfu: 0% Yunfu: 50% Date 31-Dec-2015 30-Dec-2016 28-Dec-2018 Comment For short-term training, the indicator includes in- school students. The new baseline of 2015 is adopted. Intermediate Results Indicators Status Indicator Name Corporate Unit of Measure Baseline Actual (Current) End Target Revised Percentage of provincial Percentage Value 0.00 50.00 80.00 standards which have been Date 05-Feb-2013 30-Dec-2016 28-Dec-2018 adopted by prefectures Comment Modification in indicator name. There are 4 types of provincial standards: data, interface, network, and security. No Change Percentage Value 0.00 20.00 70.00 Date 05-Feb-2013 30-Dec-2016 28-Dec-2017 14 Percentage of prefectures Comment using the new provincial system (of 21 prefectures) No Change Percentage of SI system Percentage Value 0.00 100.00 100.00 development (of five SI Date 05-Feb-2013 30-Dec-2016 28-Dec-2018 business lines) Comment Revised Number of provincial and Number Value 0.00 670.00 8,000.00 prefectural staff involved in Date 05-Feb-2013 30-Dec-2016 28-Dec-2018 development and operation of MIS who are trained relevant Comment Modification in End target is to this project indicator name. significantly The training is increased. not limited to those operating the system but also includes those involved in the system development. No Change Satisfaction of staff and Percentage Value 0.00 0.00 80.00 beneficiaries using the new Date 05-Feb-2013 30-Dec-2016 28-Dec-2018 provincial system Comment Revised Number of trainees (training Text Value Light Industry: Light Industry: Light Industry: time more than three days) 3,000 3,657 4,800 Industry and Industry and Industry and Trade: 2,000 Trade: 2,415 Trade: 3,700 Yunfu: 21 Yunfu: 299 Yunfu: 600 Date 31-Dec-2015 30-Dec-2016 28-Dec-2018 Comment The scope of trainees is expanded from rural workers to 15 rural and urban workers. Minimum training time for short-term training is reduced from 5 to 3 days. The 2015 baseline is adopted. New Number of trainees for on-the- Text Value Light Industry: Light Industry: Light Industry: job training 800 1,180 1,500 Industry and Industry and Industry and Trade: 1,000 Trade: 2,338 Trade: 3,200 Yunfu: 21 Yunfu: 134 Yunfu: 300 Date 31-Dec-2015 30-Dec-2016 28-Dec-2018 Comment A new indicator is defined to capture the trend of the on-the-job training. The 2015 baseline is adopted. Revised Percentages of instructors Text Value Light Industry: Light Industry: Light Industry: trained in industry attachments 15% 26.74% 25% Industry and Industry and Industry and Trade: 30% Trade: 41.92% Trade: 50% Yunfu: 0% Yunfu: 40% Yunfu: 45% Date 05-Feb-2013 30-Dec-2016 28-Dec-2018 Comment The end target of Yunfu School is increased. 16 Revised Percentages of industrial Text Value Light Industry: Light Industry: Light Industry: experts from enterprises 8% 11.62% 16% participated in teaching in Industry and Industry and Industry and schools Trade: 8% Trade: 13.4% Trade: 36% Yunfu: 0% Yunfu: 14% Yunfu: 18% Date 05-Feb-2013 30-Dec-2016 28-Dec-2018 Comment The end target of Industry and Trade School and Yunfu School are increased. Revised Graduates and/or trainees Text Value Light Industry: Light Industry: Light Industry: satisfaction to school’s 70% 83% 85% teaching and management Industry and Industry and Industry and (Degree Course) Trade: 85% Trade: 89.44% Trade: 93% Yunfu: 0% Yunfu: 91% Yunfu: 92% Date 05-Feb-2013 30-Dec-2016 28-Dec-2018 Comment The scope of The end target trainees is of Industry and expanded from Trade School those with rural and Yunfu hukou to all, School are regardless of increased. hukou status. Revised Graduate and/or trainees Text Value Light Industry: Light Industry: Light Industry: satisfaction to school’s 75% 82.33% 85% teaching and management Industry and Industry and Industry and (short-term training) Trade: 86% Trade: 87.81% Trade: 93% Yunfu: 0% Yunfu: 100% Yunfu: 95% Date 31-Dec-2015 30-Dec-2016 28-Dec-2018 Comment The scope of The end target trainees is of Industry and 17 expanded from Trade School those with rural and Yunfu hukou to all, School are regardless of increased. hukou status; 2015 baseline. Revised Percentage of students Text Value Light Industry: Light Industry: Light Industry: enrolled in modular, CBT 35% 58% 60% curricula (Degree Course) Industry and Industry and Industry and Trade: 30% Trade: 50.32% Trade: 100% Yunfu: 0% Yunfu: 25.28% Yunfu: 40% Date 05-Feb-2013 30-Dec-2016 28-Dec-2018 Comment The scope of The end target trainees is of Industry and expanded from Trade School is those with rural increased. hukou to all, regardless of hukou status. Revised Percentage of students Text Value Light Industry: Light Industry: Light Industry: enrolled in modular, CBT 40% 51.03% 60% curricula (short-term training) Industry and Industry and Industry and Trade: 40% Trade: 49.98% Trade: 65% Yunfu: 28% Yunfu: 27.42% Yunfu: 40% Date 31-Dec-2015 30-Dec-2016 28-Dec-2018 Comment The scope of trainees is expanded from those with rural hukou to all, regardless of hukou status; 18 short-term training - 2015 baseline. Revised Percentage of equipment Text Value Light Industry: Light Industry: Light Industry: utilization 0% Equipment 80% Industry and financed by the Industry and Trade: 0% World Bank loan Trade: 85% Yunfu: 0% is being installed Yunfu: 75% and tested; Industry and Trade: 83.33%; Yunfu: Equipment financed by the World Bank loan has not yet been procured. Date 05-Feb-2013 30-Dec-2016 28-Dec-2018 Comment The end target of Industry and Trade School is slightly increased and that of Yunfu School is slightly decreased. 19