Document of The World Bank Report No. 15388-JM STAFF APPRAISAL REPORT JAMAICA PUBLIC SECTOR MODERNIZATION PROJECT July 29, 1996 Public Sector Modernization and Private Sector Development Division Country Department III Latin America and the Caribbean Region Jonimco l'ishc Sector A fIoderpn_uion Projeec:: S.4R: 796 CURRENCY EQUIVALENTS Currenicy nit: Dollar (IS) IIS$1 = i$ 35.58 (Juie 25. 1996) J$1 = lUS$ (.281 (June 25. 1996) WEIGHTS AND MEASURES Mctric System (in transition) meter (in.) = 3.28 feet (M.) kilometer (kin.) = (0.62 mile (mi.) square kin. (sq. kn.)= 0.386 square mile (sq. mi.) kilogram (kg.) = 2.2046 pounds (lbs.) metric ton (in. tonl)= 1. I US short ton (sh. ton) liter (Ii) = 0.264178 JS galloni (gal.) FISCAL YEAR April I - March 31 ABBREVIATIONS AND ACRONYMS ARP Administrative Reforms Program CE( Chief Executive Officer ERD Eltliiency and Retorm Directorate EO European Uniyon FMIS Financiial Management Intormnation System FD Framework Documeint FP Financing Plia FPMIP Financial and Program Management Improvement Project GARP Government Administrative Reform i rogram GOJ Goverinmenit of Jaisiaicai GDP Gross Domestic Product HRN11S Human Resources Managemnenit Informatioii System IBRD Iiiterinatioiail hliak tor Reconistructioni aiid Development IMCAR liner-Miniisterial1 Committee for Administrative Reform MIND Manaogement Institute for National Development MEH Minstry of Environi nent and Ilousimg MLGW Ministry of Local Governmenit and Works MP Modcrnization Plain MOFP Ministry of finance and lPlanning Mil Ministry of llcalth NIBJ Natioin.il Investimlenit Bank ol Jamaica ODA Overseas Development Administration (IS Opzationial Informationi System (PM Otffice of thIc Prime Minister (SC t)lficc of the Services Cominmission PARP Public Administrationi Relorm Project PIIRD Policy aild Hlumanl Resources Developmenit Grant PIOJ Planninlg listitute of Jimnaica PSDAI Private Sector Development Adjustment loan PSMP Public Sectir Modernization Project PER Public Sector Expenditure Review RGD Registrar Ge neral's Department RC Registrar of Comiipanies SI Survey Depanrment SOE Statemiment ol Expetiditure TAXARP Tax Administration Reform Project TPD Town Planning D)epartmicnlt UN[)P Unlited Nations D)evelopmnent Program Jamaica Public Sector Modernization Project:: £4R: 7/96 JAMAICA PUBLIC SECTOR MODERNIZATION PROJECT TABLE OF CONTENTS LOAN AND PROJECT SUMMARY THE SECTOR 1 Macro-Economic Environment 1 The Public Sector 2 Structure of the Public Sector 2 Composition of the Public Service 2 Current Performance of the Public Sector 4 Factors Affecting Public Sector Performance 4 A. Scope of the Public Sector 4 B. Size of the Public Sector 4 C. Bureaucratic Culture 5 D. Human Resource Deficiencies 5 (i) Low Public Service Remuneration 5 (ii) Inadequate Training of Public Servants 7 E. Antiquated Business Processes 7 F. Inadequate Physical Resources 7 G. Weak Procurement, Contracting and Control Mechanisms 7 GOJ's Policy For Public Sector Modernization 8 Previous and Ongoing Initiatives to Modernize the Public Sector 9 PROJECT CONCEPT AND COMPOSITION 10 Project Objectives 10 Project Concept 11 Public Sector Modernization: Stage I 12 A. Modernization of Public Sector Entities: Executive Agencies and Ministries 12 B. Privatization 18 (i) Privatization of Water and Sewerage Sector 19 (ii) Privatization or Contracting Out of Facilities/Services 21 (iii) Institutional Strengthening of NIBJ 21 C. Government Procurement, Contracting, Internal Control and Auditing 21 (i) Procurement and Contracting 21 (ii) Internal Control 22 (iii) External Auditing 22 D. FMIS and the HRMIS 23 E. Communication Campaign 24 F. Development of Stage II of Public Sector Modernization 24 Project Components 24 Project Sustainability 25 Lessons From Previous Bank Experience 25 rbiT r:pwt~'n prupud by Memsrs./Mmoss Jit B. S. Gil {Task Manaer), Gary L.iEd Denia Gua doiA3 PS) wi:iiihJaM tn'bu: ~ Ustrci*WainrieQ(rojectCoprdmaUoit tSO; 9h4LM "1dorr (LA3PS); Wlro Rie¢ved4( LWt.J)i l iHi, idi Mai5 (CFSPS and hrla- Phar Sayoda Cu, H Sll Mi M 1 (e1i (C>mauRa4 Mr. Mike gtema and b4nA Wai ry SbMtiy lA4 lfited at i Reewenw . bid 1i Aiua and Robert Crwn waru the respsible Country DkecW, Sedar Division ChiaW Pr. Abise. r, Ivy-..- Jamaica Public Sector Modernization Project:: SAR: 7/96 TABLE OF CONTENTS (Contd.A PROJECT CONTEXT 26 Rationale For Bank Involvement 26 ENVIRONMENT 26 PROJECT COSTS AND FINANCING 26 INSTITUTIONAL ARRANGEMENTS AND PROJECT IMPLEMENTATION 28 A. Institutional Arrangements 28 B. Project Implementation 30 C. Procurement 30 D) Disbursement and Special Account 33 D. Accounting and Audits 34 PROJECT RISKS AND BENEFITS 34 SUMMARY OF RECOMMENDATIONS AND LOAN CONDITIONS 35 Agreements Reached at Negotiations 35 Loan Conditions 36 A. Conditions of Effectiveness 36 B. Conditions of Disbursement 37 Recommendation 37 DOCUMENTS IN PROJECT FILES 38 LIST OF TABLES Table 1: Comparative Pay Data For Selected Positions 6 Table 2: Estimated Project Costs 27 Table 3: Financing Plan 28 Table 4: Financing Plan By Category of Expenditure 28 Table 5: Summary of Procurement Arrangements 32 Table 6: Procurement Prior Review and SOE Thresholds 33 Table 7: Disbursement by Category of Expenditure 34 Table 8: Estimated Disbursements By Fiscal Year 34 LIST OF ANNEXES Annex 1: Key Project Performance Indicators Annex 2: Background Information on Targeted Executive Agencies and Ministries Annex 3: Performance Indicators for Targeted Executive Agencies and Ministries Annex 4: Indicative List of Facilities and Services Identified for Privatization/Contracting Out Annex 5: Project Costs By Component Annex 6: Project Implementation Schedule Annex 7: Letter of Development Policy of the Government of Jamaica Annex 8: Statement of Government on the Nature and Extent of Autonomy to be Granted Annex 9: Proposal for Decentralizing the Machinery of Government - The Establishment of Executive Agencies Jamaica Public Sector Modernization Project:: SAR: 7/96 PUBLIC SECTOR MODERNIZATION PROJECT LOAN AND PROJECT SUMMARY Borrower: Jamaica. Implementing Agencies: Cabinet Secretariat, Office of the Prime Minister, in coordination with the Ministry of Finance and Planning, Ministry of Environment and Housing, Ministry of Local Government and Works, National Investment Bank of Jamaica, the Contractor General, the Auditor General and targeted government agencies. Beneficiaries: Central Government Ministries, Departments, Agencies and Statutory Bodies. Poverty: Not Applicable. Loan Amount: US$ 28.4 million. Terms: Repayable in 17 years, including five years of grace, at the Bank's standard interest rate for LIBOR based US Dollar single currency loans. Commitment Fee: 0.75% on undisbursed loan balances, beginning 60 days after signing, less any waiver. Financing Plan:: _ _ _ _ _ _ _ _ ._ ._ . . . . o a ... . . .. . . . Governmenti 19,495 6,105 25,600 IBRD 1,850 26,550 28,400 ODA Parallel Financing 0 3,000 3,000 Total 21,345 35,655 57,000 Staff Appraisal Report: 15388 JM Project Identification Number: JM-PA-7490 Includes parallel financing of approximately USS 3.0 million expected from the European Union. Jamaica Public Sector Afodernization project:: SAR: 7/96 JAMAICA PUBLIC SECTOR MODERNIZATION PROJECT THE SECTOR Macro-Economic Environment I . Jamaica is an island country in the Caribbean, with a total area of approximately 11,000 square kilometers and a strong natural resource base. The economy is highly sensitive to international price and demand changes, primarily due to the nature of its productive base and its dependence on imported oil for commercial energy consumption. Jamaica's principal economic activities are tourism, manufacturing, bauxite/alumina mining and, in employment terms, agriculture. It has a population of approximately 2.5 million, with about 55% of the people living in urban areas. The labor force is reasonably well-educated and skilled. A per capita income of US$ 1,5601, for 1994, places Jamaica in the group of lower-middle income countries. 2. In the decade following independence in 1962, Jamaica enjoyed strong GDP growth, averaging about 5% per annum. However, from 1973 through the mid-1980s, the economy experienced sustained contraction as a result of external shocks and domestic policies. Increase in oil prices; the impact of recession in the industrialized countries on the price of sugar and alumina, the country's major exports; and high international interest rates had a negative impact on the economy. At the same time, the government started a process of expansion of the role of the state in national life. This process resulted in a bloated and inefficient public sector. The overall result was an erosion of private sector confidence, a reduction in investment and a continuous outflow of capital and human resources. 3. In the second half of the 1980s, an effort to stem the decline resulted in stabilization programs and a progressive adoption of market-oriented policy reforms. These efforts yielded some positive results, with average GDP growth being 4. 1 % per annum for the period 1986-91. In the 1990s, and particularly in the past two years, the Government accelerated the implementation of the reform agenda. The main objectives were to lower inflation, enhance international competitiveness, improve public finances, maintain adequate level of international reserves and increase per capita income. The reform program has been supported by multi-lateral institutions, including the IBRD, and the Paris Club. By mid-1995, the government had achieved significant results. A budget surplus was maintained for four consecutive years and Bank of Jamaica losses were reduced. The foreign exchange regime was liberalized. Inflation declined to 1 % per month. Import tariffs were brought within a range of 5-35% and most trade monopolies and quantitative restrictions were eliminated. Reforms in tax policy and administration were initiated. The privatization program was stepped up. The external current account balance moved from a deticit of 7.3%' of GDP in 1991 to a near balance by end-1994. Private transfers and capital inflows doubled, as compared to those in 1990, to approximately 22.9%' GDP in 1994. While external debt remains high (93.6%1 of GDP in 1994), debt rescheduling reduced debt service to more manageable levels. iSource: Planiing Iistitute of Jamaica Jamaica Public Sector Modernization Project. .SAR: 7/96 2 4. Despite these positive achievements, the macro-economic environment continues to be fragile, as events since July 1995 indicate. High inflation has returned, international reserves have been drawn down to stabilize the depreciating Jamaican Dollar, large wage awards to public servants and support to troubled financial firms have caused the budget surplus to dwindle and external imbalances have widened due to a jump in consumer imports, high interest rates and a weak financial sector. GDP growth in the period 1991-95 has remained low at 1% per annum. The Public Sector Structure of the Public Sector 5. The Government of Jamaica (GOJ) is constituted on the basis of a written Constitution, adopted in 1962. Its structure closely follows the Westminster model. The Queen is the Sovereign, represented by the Governor General. The government is made up of three independent branches. The Legislative Branch consists of the Senate and the House of Representatives. The Judicial Branch consists of the Privy Council, the Court of Appeals, the Supreme Court, the Resident Magistrate Courts, the Family Court and the Revenue Court. The Executive Branch is led by the Prime Minister who is elected by the majority party in the House of Representatives. The Prime Minister appoints Cabinet Ministers, who head Ministries dealing with specific portfolios. In some Ministries, Ministers of State and Parliamentary Secretaries are also appointed to assist the Cabinet Ministers. At the central level in each Ministry are various divisions responsible for policy formulation, monitoring of implementation, setting standards and norms and performing corporate functions, such as planning, budgeting and accounting. Each Ministry has a number of operational Departments and Agencies, that implement sectoral policies. In addition, it may have Statutory Bodies and Public Companies associated with it. In the thirty three years since independence, the scope and size of the Executive Branch has grown substantially. At present, besides the Office of the Prime Minister, there are 12 Ministries, 31 departments and agencies and more than 300 statutory bodies and public companies. Under the Constitution, certain autonomous bodies have also been created, notably the Auditor General and the Office of the Services Commission (OSC). Figure 1 indicates the overall organization of GOJ. Composition of the Public Service: 6. The regular civil service consists of approximately 30,7502 employees. In addition, 21,800 teachers, 6,800 health services workers and 11,200 security personnel, policemen and fire fighters, though not belonging to the civil service, are a part of the central establishment. There are an estimated 13,870 employees in other public sector entities. In general, employees of these entities are paid more than employees on the central establishment, but enjoy lesser security of tenure. The public sector accounted for 14% of jobs in the 1980s and, even after subsequent downsizing, it represents 7% of jobs in the economy. Expenditure on personnel is the government's largest single recurrent cost item after interest payments. The wage bill for FY 1996-97, including retroactive payments, would be J$22.72 billion, or 64%2 of non-debt recurrent expenditures. 7. The regular civil service in Jamaica is patterned on the traditional British model. Appointments are made through the OSC. The civil service serves the government of the day, regardless of which party forms the government. It is expected to provide objective and impartial 2 Source: Cabinet Office (Efficiency and Reform Directorate). Jamaica Public Secror Modernization Project:: SAR: 7/96 3 advice to the political executive, help formulate policies in accordance with the priorities of the government and, thereafter, ensure that these are efficiently implemented. The service is accountable to Parliament through the Ministers. In order to ensure its independence, the civil service has been granted considerable security of tenure. Normally, civil servants can be removed only after protracted disciplinary proceedings in which the OSC is closely involved (removal in the context of a reorganization is relatively easier). The Cabinet Secretary heads the civil service. The Financial Secretary is responsible for the administration of the Ministry of Finance and Planning. All other Ministries are headed by Permanent Secretaries at the administrative level. Figure 1: The Government of Jamaica ,-. -.... ..... . .. .. - ece+- ) -Th- -rere----Xn - fr cWfOVFf0F ades Commission iea LEG-S ---T-- .~~.....| ... ._x . l . | | ..~~~~~~~... JUl.-I; . --Y .- . . . ] | -- ............. .:. d=. . . . . . . . . . . . .. .............= ' ' l ..,...,.. ,, w~~~~~~~~~~~~~~~~.... '."''...E.... . w - .-- v | 2 2 . . ! '- ~~~~~~~~~~~~~~~~~. ...... . .. . . . . . . ''|''''''':'1- . . . . 8gg . . . . . . . . . -. i . -- : : I ~~~~~~~~~~~~~~~~............. .. I ~~~~~~~~~. . .. . . . l ~~~~~~~~. . ... . ...... .. ........ ....... ...... I . . .~~~~ ~~~~~ ... .. .... . ..... ..~~~~~~~~~~. . . . . . . . . . . . . t~~~~~~~~~~~. . . . . _ .... w . ~ ~ ~~~~~~~~~... ..... Jamaica Public Sector Alodernization Project:: s4R: 7/96 4 Current Performance of the Public Sector 8. In spite of its numerous agencies and employees, the performance of the public sector is inadequate in many critical areas. The general level of efficiency and effectiveness of public entities is very low. The quality of service to the public is poor and is characterized by cumbersome procedures, long delays, unsatisfactory resolution of problems faced by clients, high private costs of compliance with laws and regulations, discourteous behavior and indifference to the convenience of the public. Public enterprises engaged in commercial ventures are, with a few exceptions, unprofitable, badly managed and uncompetitive. They are also a recurrent fiscal burden on the exchequer. The public perception of government was summed up by the Report of the Committee of Advisors on Government Structure, also known as the Nettleford Report 3, as follows: I .. considerable concerns have been expressed about the poor quality of government in Jamaica. These largely centered around over-concentration of decision-making, which consigned the rest of the community to a largely peripheral role in the management of affairs; the low quality of the civil service; and the over-bureaucratization of its methods of work leading to a compliance rather than service orientation in its dealings with the public. In general the impression conveyed was of an over-manned, slow, lumbering bureaucracy characterized by low morale..... " Factors Affecting Public Sector Performance A. Scope of the Public Sector 9. Starting with the 1970's, government ventured into a large number of economic and commercial activities which were far removed from its core functions. This was in line with the then prevailing thinking that economic development required active involvement of the government in the productive sectors, the establishment of government owned enterprises, subsidies to the private sector and heavy protection of industries engaged in import substitutions. Some of the areas that public enterprises became involved in included: fish farming, mango orchards, distilleries, housing construction, shopping centers, hotels, hospital laundry, airlines, old-age homes, petrochemicals, garment manufacturing and so on. In most of these areas the public sector has no comparative advantage over the private sector. On the contrary, in the majority of cases, it positively lacks the skills and incentives needed to run these business enterprises efficiently. This has resulted in low efficiency and productivity in many government agencies. Since the early 1980's, GOJ has actively taken up a systematic program of privatization to reduce the scope of the public sector. However, the scope of the public sector still remains very wide. B. Size of the Public Sector 10. For a population of 2.5 million, Jamaica has about 350 public institutions including Ministries, departments, agencies, statutory bodies and public corporations. Far from contributing to efficiency, the proliferation of entities has caused a deterioration of public sector performance. With the establishment of various statutory bodies and public companies, many functions have been transferred from regular government departments to these entities. Since many of the heads of these bodies report 3 Nctitford, R. M. et al. 1992. Report of Committee of Advisors on Government Structure (Chairman Mr. R. M. Nettleford). Kingston. Jamaica Public Sector Modernization Project : SAR. 7/96 5 directly to the minister concerned, this has caused a steady erosion of the ability of the Permanent Secretary (PS), who is the administrative linchpin of a Ministry, to contribute to policy formulation and monitoring and control of activities falling within the Ministry's purview. Even where line entities report to the PS, their sheer number extends beyond her/his span of control, causing a serious breakdown in financial and operational accountability. Further, the plethora of entities has made inter- ministerial and inter-agency coordination very difficult. It has also caused duplication of functions and overlapping authority. From the administrative point of view this means wastage of resources and jurisdictional contlicts. For the citizen, it means dealing with multiple authorities for getting even simple things done. C. Bureaucratic Culture 11. The Jamaican public sector displays characteristics commonly found in most established bureaucracies. Public Sector entities are governed by rigid rules of business. Compliance with the rules takes precedence over achievement of organizational objectives. This reduces responsiveness to emerging situations and discourages innovation. Decision-making is hierarchical. Superiors are generally reluctant to delegate authority, while juniors are reluctant to use even the limited powers that are delegated to them for fear of being penalized for mistakes that may occur in the process. The result is that most decisions get pushed upwards and disposal of even routine matters takes a long time. Although a beginning has been made to shift organizational emphasis from inputs to outputs and outcomes through Program Budgeting and Corporate Planning, as yet, public sector entities are not strictly held responsible for achieving pre-determined performance targets. The security of tenure enjoyed by civil servants shields them from the worst consequences of poor performance. It also limits managers' ability to enforce high productivity standards. Finally, most bureaucrats regard themselves as policy makers, controllers or regulators, rather than facilitators. Public service orientation in day- to-day functioning is minimal. Bureaucrats are, for the most part, indifferent to the costs and inconvenience suffered by the public due to their inefficiency or unresponsiveness. D. Human Resource Deficiencies (i) Low Public Service Remuneration 12. As alluded to in the Nettleford Report, supra, the low quality of human resources is one of the major weaknesses of the public sector. The single most important factor in this regard is low remuneration. There is a wide gap between wages in many areas of the public sector and those in the labor market as a whole, especially, at managerial and technical levels. Table 1 indicates the salary differential for some key positions. Even though, parastatal bodies have a better compensation structure, in many cases they too lag behind the private sector. The situation has been worsened by severe salary erosion in recent years on account of inflation. 13. Low salaries make it extremely difficult for the public sector to recruit persons with the requisite skills, especially, for technical and managerial positions at the entry and middle levels that require tertiary education in disciplines such as applied sciences, accounting or management. Even when promising individuals join, they do not stay for long. The difficulty of making ends meet and the availability of better options soon prompt their migration to the private sector, often after they have received formal and on-the- job training at government expense. Thus, the public sector does not attract or retain the best and brightest. Barring a few high caliber people, who remain in the public Jamaica Public Sector Modernization Project:: SAR: 7/96 6 sector either due to a personal affinity for public service, or due to promising career prospects based upon their individual circumstances, for the most part, the public service is made up of persons who are content to settle down in a rut - following rules, producing a little above the minimum that is expected of them and, generally, staying out of trouble. There is a dearth of inspiring leaders, creative problem-solvers and entrepreneurial risk-takers who would aggressively seek and produce excellence. Table 1. Comparative Pay Data For Selected Positions, April 1995 (J Sr' Gr.ou.pt-- C;0:ff0ff0 0 o er ntral Matket0S CSta o h :tit;itt- 0C il;;t 7i0t: : 0t 00 0 : : :d : Salary at: 70 0 i t CEg 0t 0 f-tt- . ~f^ ; . . e t rM r SENIOR EXECUTIVE G ROtJP PERMAN ENT S ECR E'1ARY I1,253,391 2,332,385 54 % Permanent Secrtary/CEO SEG IV 784,234 1.198.943 65% Division Head/Vice President SEGIII 648,988 1,049,478 62% Senior Manager/ Asstt. VP SEG 1 529,224 627,649 84 % Ma nager/Manager PROGRAM MGMT. & ADMIN. GROUP PMA IV 271,617 611,557 44% Sr. Administrator/Manager PMA mI 217,880 464,187 47 % Professional/Credit l Controller i PMA 11 188,214 381,400 49 % Jr. Professional/ Management Trainee FINANCIAL ADMIN & ACCTS GROUP ACCOUNTANT LEVEL 2 459,624 613,897 75% Chief AccountanV/ Financial Controller ACCOUNTANT LEVEL I 328,303 504,161 65% AccountanV Accounting l ~~~~~~~~~~~~~~~~~~~~~~~~~~~~Supervisor. APPLIED SCIENCES GROUP ASG VI 766,040 855,571 90% Chief Engineer./Chief Engineer NATURAL, PHYSICAL & SOCIAL SCIENCES GROUP NPS TV 306,578 643,096 48% Sr. Professional/Qualit Assurance Manager TECHNICAL GROUP TSS GT VIII 314.243 665,910 47% Sr. Professional/Technical Services Manager Note: SEG, PMA, ASG etc. are nomenclatures for different grades in each Group. Source: Cabinet Offce (Efficiency arnd Reformn Directorate). 14. Inadequate remuneration has led to a large number of vacancies, especially, at the key and critical level. In 1993, there were about 3,200 vacancies in the central establishment, of which about 4CC USS = 3 0 33.58 (une 25, 1996). Based on 1992 Compensation Survey conducted by the Ministry of Public Service and Environment. 1994 figures derived by using a multiplier of 1.65 to account for increases in private sector salaries since the survey. Jamaica Public Sector Modernization Project:: SAR: 7/96 7 725 were in key positions. In addition to the unfilled posts, there are another 3,200 positions that are held by acting or temporary holders who, often, do not possess the skills needed for the job. The large number of vacancies have had a damaging impact on organizational performance. Either tasks that need to be done are not done at all, or they are done by unqualified or over-burdened individuals who cannot do justice to them. Consequently, efficiency and the quality of service suffer. (ii) Inadequate Training of Public Servants 15. GOJ has been attempting to bridge the skill gap caused by low remuneration and attrition through in-house training. The Management Institute for National Development (MIND) is the Government's main training institution. It was established in 1994 by the merger of four specialized training facilities viz. Administrative Staff College, Finance and Accounting College, Secretarial and Clerical College and the Mandeville Outreach Training Center. Training for revenue officers is provided by the Revenue Board and the Revenue Protection Division. Although these institutions are doing a commendable job, they face severe constraints. Curricula of many courses are old and inappropriate for the situations being faced by public servants in the field. Teaching faculty is limited and not fully trained. Training facilities are inadequate. As a result, the general skill level in the public service continues to be low contributing to inefficiency and ineffectiveness. E. Antiquated Business Processes 16. Both managerial and operational business processes in the public sector need re-engineering. Most of the current business processes were established decades ago and continue unchanged, in spite of major changes in the external environment and the role of the public sector. Many that could be conveniently completed in one step or location are fragmented between different organizations and between different sections in a given organization. This necessitates multiple hand-offs, from one official or organization to another, which serve to introduce major delays without adding much value. Also, many processes involve duplicate or infructuous work and avoidable references to higher authorities. Operations in most departments are still pre-dominantly manual and create an environment where officials have the discretion and ability to delay and, therefore, to extract rents. In effect, prevailing business processes increase administrative costs for the public sector and transactions costs for the private sector. In addition, they lead to avoidable harassment of the public. F. Inadequate Physical Resources 17. The physical infrastructure in many public sector entities fails to provide a motivating work environment. Many buildings are old and congested and lack facilities for employees. In agencies like the Registrar General, that are custodians of important records, record-keeping facilities are rudimentary. This affects the security of documents as well as their retrieval. In many departments there is a dearth of operational equipment, such as communication systems for customs agents at the airport or vehicles for agencies involved in field work. Physical resource deficiencies lower the overall level of public sector performance. G. Weak Procurement, Contracting and Control Mechanisms 18. In 1992, the Supply Division of the Ministry of Finance and Planning (MOFP) was closed down and procurement of goods was delegated to the respective Ministries, departments and entities, with the Jamaica Public Sector Alodernization Projecl:: S4R: 7196 8 Inspectorate Division of the Ministry of Finance retaining some administrative responsibilities. Contracting for civil works is the responsibility of the Ministry of Local Government and Works, although several Ministries and departments manage their own construction projects. The Contractor-General, a public statutory body, is responsible tor overseeing and investigating all aspects of contracts relating to civil works. Under the Contractor General's Act he does not have any executive authority and can only report his findings to Parliament. However, recently steps have been intitated to amend this Act and enhance the authority of the Contractor General. The procurement of services is currently done by all Ministries and departments. 19. Since the decentralization of procurement, there has been no government body officially designated to coordinate procurement policies and regulations regarding goods, works and services and to monitor their implementation. Although the Ministry of Finance has retained some responsibility with regard to the administration of procurement of goods, it does not have the required professional resources to effectively carry out this task. Also, it has no mandate to intervene in and coordinate the contracting of works and services. Most entities have failed to establish procurement units and "Procurement Committees" staffed by qualified professionals and supported by approved procedures or guidelines. Current procurement and contracting policies and procedures are outdated, confusing and, frequently, misunderstood. This results in uncertainty and ambiguity as to which regulations and procedures apply and whether they apply equally for goods, works and services. Lack of understanding of the current procedures leads to inconsistency in the interpretation of these procedures within and between Ministries and entities. The current financial thresholds for decision-making at operational levels are quite low. This results in delays due to multi- layered reviews and approvals. It also encourages contract fragmentation by Ministries and entities in order to avoid competitive bidding and reviews by approving authorities. Many public entities lack expertise in preparing bidding documents, developing accurate specifications, conducting bid evaluations and contract negotiations. There is no central database of performance of different contractors and suppliers. Consequently, in awarding contracts, due weightage is not given to their past performance or capacity to take on new projects. There are serious shortcomings in contract management as a result of which a large number of projects face cost-overruns and execution delays, inviting public criticism. Finally, inventory storage and management suffer from major deficiencies. As a result of these factors government does not get the best value for the huge expenditures incurred annually on procurement of goods and services and on civil works. 20. Weaknesses of systems and procedures in procurement and conrtracting are accentuated by deficiencies in internal control systems. The internal audit function in different entities is, generally, weak. Consequently, internal auditors are unable to flag errors, ommissions or malpractices in an effective and timely manner. The weakness of internal control systems leads to low accountability and, in some instances, corruption. External auditing is the constitutional responsibility of the Auditor General. However, even though various entities are progressively moving towards computerized accounts, the office of the Auditor General lacks the expertise to audit such accounts. GOJ's Policy for Public Sector Modernization 21. The government recognizes that the continuing weaknesses of the public sector will offset the benefits of the economic reforms that the country has implemented in recent years. Also, public sector inefficiencies will hinder the development of the private sector. For it to play an effective role in the new environment, the nature and orientation of the public sector needs to change significantly. It Jamaica Public Sector Modernization Projecr:: SAR: 7/96 9 needs to focus on its core competencies and become more performance-oriented, cost-effective and accountable. 22. The essential elements of GOJ's policy for public sector modernization are: (a) improving the quality of service provided by essential government agencies to internal and external clients; (b) enhancing the efficiency and effectiveness of central government Ministries; (c) rationalizing the size and scope of the public sector by privatizing entities and contracting out services that can be run more efficiently by the private sector; (d) enhancing transparency and accountability in government procurement, contracting and financial management; (e) creating an effective regulatory environment that would encourage orderly private sector development; (f) improving tax administration; and (g) strengthening local government. The Letter of Development Policy, dated February 23, 1996, (Annex 7) explains GOJ's development objectives. Previous and Ongoing Initiatives to Modernize the Public Sector 23. Efforts to reform the public sector have gone in parallel with the economic reform program. Privatization was initiated in Jamaica in 1981 with a view to (i) increase efficiency of enterprises through change of ownership; (ii) eliminate the fiscal drain caused by poorly performing public enterprises; (iii) optimize the use of GOJ's limited management resources; (iv) create opportunities to access foreign capital, technology and markets; and (v) widen the base of ownership and equity participation in the economy. The process was intensified in 1991, when 64 entities were identified for privatization. Out of these 47 entities covering a wide spectrum of sectors, such as hotels, banks, sugar mills, airlines and telecommunications, have been divested. Government is in the process of privatizing the power company and the railway. The Bank-financed Private Sector Development Adjustment Loan (PSDAL) has had a major impact on the privatization program. The program is now entering a new phase with the objective of expanding the role of the private sector in infrastructure as well as transferring to it operational responsibilities in selected public administration and social areas. In April 1995, GOJ approved a new list of 26 entities/activities slated for privatization. Another indicative list of 26 public facilities/services that are candidates for privatization or contracting out has also been drawn up. In view of the severe deficiencies experienced in the performance of public enterprises engaged in water supply and sewerage, GOJ has also initiated steps aimed at bringing in private participation in this sector. 24. In order to improve management and performance of government entities, the Public Administration Reform Project (PARP) was undertaken with Bank assistance between 1984-88. It aimed at strengthening human and financial resource management in government and restructuring the Ministry of Finance. This project was largely unsuccessful in creating sustained improvements, mainly on account of the change in the government's and the Bank's commitment to the direction of the initiatives undertaken. It was followed by the on-going Financial and Program Management Improvement Project (FPMIP), which became effective in 1991. The project's objectives include strengthening planning and budgeting throughout government; improving personnel policies; and implementing a Financial Management Information System (FMIS) and a Human Resource Management Information System (HRMIS). Considerable progress has been made under this project. All Ministries and departments have begun preparing annual Corporate Plans and Program Budgets; the accounting system has been adapted to program budgeting; and the financial reporting system has been rationalized. The FMIS has been commissioned in all but three Ministries. The pilot modules of the HRMIS have been installed at 16 sites. A strong relationship between corporate planning and Jamaica Public Sector Modernization Project.: SAR: 7/96 l 0 program budgeting is, however, yet to be established. Also, further work needs to be done to enhance the FMIS and the HRMIS and extend their coverage. Additional funds are needed for this purpose. In 1994, a comprehensive reform of tax departments was initiated through the Tax Administration Reform Project (TAXARP). This project aims to broaden the tax base; facilitate voluntary compliance; and improve the effectiveness of the tax administration in assessment and collection of taxes and control of tax evasion. One major consultancy, which has laid the ground work for reorganization of the tax departments on functional lines, has been completed. Work on development of a unique taxpayer identification number is at an advanced stage and the development of an integrated tax administration computer system is expected to begin shortly. In the context of the PSDAL, significant improvements in import and export clearance procedures of the Customs Department have been achieved, although much remains to be done in the area of organization and management of the department and computerization of its operations. 25. GOJ has also taken various other steps, outside the framework of donor-supported projects, to streamline Ministries, achieve greater coherence in policy formulation, improve inter-agency coordination and enhance quality of service rendered by public entities. These steps include restructuring of Ministries in January 1995; creation of the post of Cabinet Secretary, as Head of the Civil Service, to improve the quality of advice available to the Prime Minister and Cabinet; establishment of the Efficiency and Reform Directorate to strengthen management, especially personnel management, in government agencies; and revival of the Inter-Ministerial Committee on Administrative Reforms (IMCAR) and the Permanent Secretaries' Board to improve coordination between government agencies. In December 1994, a Citizen's Charter was laid before Parliament emphasizing the obligation of public entities to improve the quality of service provided by them to the people. Twelve entities having extensive dealings with the public were selected as pilot agencies for customer service improvement. The progress made by these agencies is regularly monitored by the Cabinet Secretariat. Finally, in an effort to improve the quality of top management in government agencies, twenty-three well-qualified persons were recently selected from the public as well as private sectors for appointment to senior management positions in the public service, including those of Permanent Secretary. PROJECT CONCEPT AND COMPOSITION Project Objectives 26. The project aims to support GOJ's efforts to (i) bring about major improvements in the quality of service provided by selected public agencies; (ii) improve the ability of selected Ministries to (a) formulate sound sector policies, technical standards and operational norms, (b) effectively monitor and evaluate downstream agencies to ensure that desired policy objectives are achieved, and (c) efficiently perform corporate management functions; (iii) continue the rationalization of the public sector through (a) private participation in the water supply and sewerage sector and (b) privatization or contracting out of other facilities or services where government has no comparative advantage; (iv) improve efficiency, value for money and transparency in government procurement and contracting; (v) enhance public sector accountability by strengthening internal and external controls; (vi) improve the quality of financial and personnel management in the public sector through computerized information systems and (vii) prepare the next stage of the modernization process to (a) extend the reforms initiated by the project in the pilot agencies and Ministries to the rest of the public sector and (b) introduce other systemic improvements in public sector management. Regulatory reform is proposed to be addressed Jamaica Public Sector Modernization Project:: SAR: 7/96 1 1 through two other IBRD initiatives: the Regulatory Reform and Private Investment Finance Facility and the Financial Sector Review. Support to the local government reform effort is proposed to be provided by the Parish Infrastructure Project that is was appraised in May 1996. Complementary efforts to strengthen the Ministry of Local Government and Works at the central level are included in the present project. Eroject Conceg 27. The project concept went through significant changes as the project evolved. Initially, it was proposed to undertake a comprehensive reform of the public service grading and salary structure, with a view to improve compensation levels vis-a-vis market comparators and enable GOJ to attract and retain qualified persons. This idea was given up, subsequently, as an across-the-board salary increase for all public servants implied a significant recurrent cost (estimated at about US$ 30 million per annum for upgrading salaries of posts, with salary mid-point equal to or greater than US$ 2,000, to 80% of market comparators) without any guarantee that it would lead to an improvement in public sector performance. Also, it was noted that low salaries were not the only cause of poor public sector performance. Inadequate autonomy, lack of accountability, outmoded business processes and insufficient physical resources also affected efficiency and effectiveness of public entities. In addition, systemic weaknesses pertaining to procurement, contracting, internal and external control had a public sector-wide negative impact on performance. 28. It was, therefore, decided to adopt a more targeted approach that would create a tighter link between inputs, outputs and outcomes. The public sector modernization process was seen to have two major thrusts. First, entity-specific reforms that would modernize the functioning of individual government institutions. Second, systemic reforms that would bring about improvements in public sector performance as a whole. The project has been designed around these two parallel approaches. 29. Limitations in absorptive capacity dictated that instead of attempting to modernize the public sector at one go, it would be better to break up the modernization process into two stages. In Stage I, a small number of high priority entities would be taken up for modernization, on a pilot basis. In addition, systemic reforms in three important areas viz. privatization; strengthening of government procurement, contracting, internal control and auditing; and extension and refinement of financial and human resource management systems would be pursued. In Stage II, entity-specific reforms would be extended to the remaining public sector entities, besides undertaking additional systemic reforms as needed. This approach would allow adaptation of the modernization strategy to the Jamaican reality; reduce risk associated with innovation and facilitate the extension of the reform process through the demonstration effect. The present project will finance execution of activities related to Stage I of the modernization process and the preparation of Stage II. 30. The modernization strategy for the operational agencies and Ministries has been developed in close consultation with the Office of the Prime Minister, the Ministry of Finance and Planning, the OSC, the Solicitor General and the Ministry of Enviromnent and Housing, the Ministry of Local Government and Works, and the management and staff of the pilot operational agencies. Various senior management retreats and seminars for public servants have been organized to build a wide support base for the reform. Valuable support was also received from the UK Overseas Development Agency (ODA). Jamaica Public Secror Modernizatlon Project:: SAR: 7/96 12 Public Sector Modernization: Stage I (A) Modernization of Public Sector Entities: Executive Agencies and Ministries 31. In Stage 1, public entities at two levels will be targeted: (a) agencies providing services to internal and external clients, which would be converted into "Executive Agencies", and (b) central divisions of government Ministries that are engaged in policy formulation, monitoring, coordination and corporate management. The modernization process would aim to empower managers of these entities by granting them considerably enhanced autonomy in managerial, financial, personnel and operational management, in return for strict accountability for pre-determined performance targets. This approach draws upon the experience of other Commonwealth countries, especially the UK, who have, in the recent past, attempted fundamental changes in public sector management on these lines. Side by side with reorienting the management of the pilot agencies, well-defined institution building investments would be made to ensure that the current resource gaps do not continue to hamper performance. 32. Legal Framework: The legal framework governing financial and personnel management in GOJ was examined to determine the feasibility of granting increased autonomy to public entities (Annex 9). It was found that, but for a few minor amendments needed in specific Acts pertaining to some of the targeted agencies, the Constitution, the Financial Administration and Audit Act and the Civil Service Establishment Act have enough flexibility to enable the government to grant additional autonomy to executive agencies through administrative orders. It is proposed to use this flexibility to create the pilot executive agencies. Be that as it may, it is recognized that in the long-term it would be preferable to design and enact a self-contained legal framework specifically for executive agencies that would put the autonomy granted to them on a firmer footing and reduce the risk of it being withdrawn in the future through administrative fiat. The development of such a legal framework would.......... however, require observation of the experience of the pilot agencies and building of a wide political and administrative consensus. This process will be supported by the project. In the meantime, suitable remedies have been incorporated in the Loan Agreement to guard against unwarranted withdrawal of autonomy granted to the entities covered by the project. (a) Executive Agencies 33. GOJ has selected the following pilot entities for conversion into executive agencies. These were chosen on account of the important services they perform for the public or for other governmental institutions, and the urgent need to improve the quality of their services. "Entities marked (*) are also amongst the agencies selected as pilots to implement the Citizen's Charter, referred to earlier. * Planning Institute of Jamaica (Ministry of Finance and Planning). * Jamaica Customs Department* (Ministry of Finance and Planning). * Office of Titles* (Ministry of Environment and Housing). * Town Planning Department* (Ministry of Environment and Housing). * Surveys Department (Ministry of Environment and Housing). * Jamaica Information Service (Office of the Prime Minister). I JAMPRESS (Office of the Prime Minister). * Registrar General's Department* (Ministry of Health). Jamaica Public Sector Modernization Prolect:: SAR: 7/96 13 * Registrar of Companies* (Ministry of Industry, Investment and Commerce). * Administrator General (Ministry of National Security and Justice). * Management Institute for National Development (Efficiency and Reform Directorate, Office of the Prime Minister). At Appraisal, provision had been made for the selection of two additional entities for conversion to executive agencies in the course of project implementation. During negotiations, it was indicated by GOJ that it had identified Jamaica Promotions Corporation - JAMPRO (Ministry of Industry, Information and Commerce) and the Construction Division (Ministry of Local Government and Works) for this purpose. 34. The British Overseas Development Agency (ODA) will provide parallel financing of UK Pounds 2.0 million (about US$ 3.0 million) to finance consulting services for four of the above- mentioned agencies, namely Registrar General's Department; Registrar of Companies; Administrator General; and Management Institute for National Development. Goods and training for these agencies will, however, be financed by the Bank and GOJ. The European Union (EU) is also expected to provide parallel grant financing of about US$ 3 million for the Planning Institute of Jamaica and the Construction Division of the Ministry of Local Government and Works. Details of the grant are expected to be finalized by the EU and GOJ by December 31, 1996. For the present, expected EU financing is included in GOJ's counterpart contribution. Background information, main functions and activities, employment composition, current financial arrangements, and prevailing constraints and weaknesses of the first set of eleven agencies listed above are indicated in Annex 2. 35. For each of the pilot agencies, the modernization strategy will consist of the following steps. First, GOJ will select/confirm the Chief Executive Officer (CEO) of the Agency and the core management team of the entity. In most cases, the selection would be done on a competitive basis considering both public sector and private sector candidates. However, in exceptional cases, where the Head of an agency or a member of its core management has been recently appointed through a competitive process, or where the performance of the incumbent is extremely strong, a fresh selection process may be dispensed with. 36. Once the top management team of the agency is in place, consultants with the requisite organizational, management, legal and technical skills will be engaged. Working closely with the CEO and the core management team they will prepare three main documents that will inform the modernization process for the agency. These are: a) Modernization Plan b) Medium-Term Financing Plan c) Framework Document 37. The Modernization Plan will be based on a detailed review of organization, management, business processes and resources of the agency. It will provide, inter alia, the following: Identification of actions to be taken to implement the new management strategy based on increased delegation of authority and strict accountability for achievement of specific performance requirements. Jamaica Public Sector Modernization Project:: SAR: 7/96 14 Recommendations for changes in agency-specific laws, regulations and norms, if required. These will include recommendations for amendments in laws and regulations to enable the agency to charge or revise fees for services provided to clients. Design ot re-engineered business processes to enhance effectiveness and productivity. Design of the new organizational structure to support the re-engineered business processes. Recommendations for developing client service orientation. Job descriptions and skill requirements at all levels of the new organizational structure. Design of career paths. Design of an effective performance appraisal system, including performance indicators for each position. Salary grades for each position to ensure ability to attract and retain the required skills. Design of a performance-linked incentive system. Rightsizing strategy, including design of severance package and support to employees declared redundant. Design otf internal control system to ensure transparency and accountability. Identification of changes needed in Financial Management Information System (FMIS) and Human Resource Management Information System (HRMIS), being developed separately, to adapt them to the agency. Requirements definition for other management information systems needed. Requirements definition for information systems needed to automate agency operations. Assessment of other physical resource needs for effective functioning of the agency, including operational equipment, transportation, communication facilities, storage facilities, office space and oftice refurbishing. The Modernization Plan will provide a fully costed, time-bound implementation plan for the agency. 38. The Medium-Term Financing Plan will indicate the financing needs of the agency for a 5 year period. In order to develop a motivating remuneration structure for the staff, it is proposed to follow an, essentially, self-financing strategy. A resource pool receiving contributions from three sources will be created in each agency. First, business process redesign, automation of routine processes and matching of the agency's outputs with employee skills will be used to rightsize the staff complement. In some of the agencies this process is expected to generate net savings over the current level of salary and wages, after taking into account severance costs. These savings will contribute to the resource pool. Second, some of the agencies are legally authorized to charge fees from their clients. For the others, it may be possible to design user fees. It is proposed to allow the agencies to retain a part of their fee revenues, based on their overall performance. Retained fees will be the second source of funds for the resource pool. Where current fee levels do not reflect the actual cost of service provided, these would be revised. Also buoyancy will be built into them so that they can keep pace with inflation. At the same time, to prevent agencies from charging monopolistic fees, the fees will be established or revised in consultation with the Ministry of Finance which will ensure that a fair and uniform approach is adopted. Finally, efficiency gains reflected in savings made by the agencies in their operational expenses, through improved productivity or thrift, will be allowed to be retained and will add to the resource pool. At the end of each year, based on an objective performance evaluation of each staff member, the CEO will award incentives which will supplement staff salaries. This approach would closely align institutional objectives with individual interests and promote rightsizing, productivity and cost-consciousness. Jamaica Public Sector-Modern,zation Prolect:: .SIIR. 7/96 15 39. However, since the resource pool will be filled only over time, at the beginning of the modernization process, GOJ will need to provide adequate salaries for the CEO and the core management team so as to have a high quality management team leading the turn-around of each agency. Also, even after all the funds in the resource pool are accounted for, in some agencies, there may not be enough to raise the effective remuneration of employees to the requisite level. In such cases GOJ will have to consider financing salary increases through the regular budget. 40. Taking the above factors into account, the Medium-Term Financing Plan will indicate the following: Capital and revenue expenditures to be financed, including investments to improve the agency's physical resources, salary enhancements for key and critical positions, severance costs and performance-linked incentives to be paid to management and staff. GOJ budgetary support to the agency. Amount of own revenues (user fees etc.) and savings from efficiency gains to be retained by the agency for its own use. * Resources to be provided by the Public Sector Modernization Project (PSMP). * Resources to be provided by the ODA and other donors, where applicable. 41. The Framework Document will be based on the Modernization Plan and the Medium-Term Financing Plan and would, inter alia: Define the mission and objectives of the agency. Establish the rights and obligations of the management and GOJ, respectively, with regard to the functioning of the agency. These would include: * Specific outputs to be delivered by the management. * Resources that would be available to management to achieve the required outputs (as detailed in the medium term financing plan) along with MOFP assurance regarding predictability of cash flows. * Extent and nature of managerial, operational, financial and personnel management autonomy that would be granted to the management. * Performance indicators and the methods of performance measurement and evaluation to be used. * Rewards and sanctions that would follow performance evaluation. 42. The Framework Document will constitute the basic contract between the government and the management of the entity. It will be duly signed by the Permanent Secretary of the relevant Ministry, on behalf of GOJ, and the CEO of the executive agency. 43. Disbursement Condition: Disbursements under the project for the preparation of the Modernization Plan, Medium-Term Financing Plan and the Framework Document will be made subject to the appointment of a CEO, with qualifications acceptable to the Bank. Disbursements for the implementation of the Modernization Plan for a particular agency would be subject to (a) the preparation of the Modernization Plan, Medium-Term Financing Plan and the Framework Document, satisfactory to the Bank; (b) signing of the Framework Document by GOJ and the concerned CEO and (c) a legal framework, satisfactory to the Bank, being in full force and effect to enable the agency to carry out its Modernization Plan. Jamaica Public Sector Alodernizarion Project. £4R: 7'96 16 44. After the execution of the Framework Document, the implementation of the Modernization Plan will begin. This will involve the following main activities: Make administrative changes to grant increased autonomy and enhance accountability. Make changes in FMIS, if needed, and implement it in agency along with other internal controls. Implement new organizational structure. Refurbish offices. Match skills of current staff with required skills. Retrench redundant staff. Recruit new staff with required skills. Move staff to new organizational units and functions. Establish customer service units. Implement revised remuneration system, incentive system and career paths. Implement new performance evaluation system. Make changes in HRMIS, if needed, and implement it in agency. Design, develop and implement other management information systems. Design, develop and implement information systems to automate agency operations. Prepare manuals of norms, procedures and regulations based on new structure, management systems and business processes. Train staff. Implement re-engineered business processes. Acquire operational equipment, transportation, communication facilities, storage facilities etc. Carry out civil works, where required. * Monitor and evaluate developmental impact of modernization. 45. To ensure that the investments being made in the targeted agencies produce tangible results, the performance of these entities will be strictly monitored through regular annual reviews. Where it exceeds agreed targets, suitable incentives and rewards will be granted to the management and the staff. Where, on the other hand, performance is below expectations, appropriate sanctions, including changes in top management, will be applied. In order to increase general awareness about the expectations from these agencies and to ensure transparency of the evaluation process, the Framework Document, performance targets and achievements of the agencies will be published. Preliminary performance indicators, covering Service Quantity, Service Quality and Cost Effectiveness, for the first set of eleven executive agencies have been developed and are indicated in Annex 3. These will be further refined in the process of preparation of the Framework Document. Also, suitable benchmarks will be established. Customer surveys will be relied upon, where appropriate, to measure outcomes resulting from the activities of the targeted entities. 46. In the six agencies for which the ODA or EU would have lead responsibility, some modifications in approach may be made. However, the broad thrust of the activities will be similar. Close coordination between GOJ, ODA, EU and the Bank will be maintained throughout. Jamaica Public Sector Aoderni:ation Prolect:: SAR: 7196 17 (b) Ministries 47. Three Ministries will be taken up for modernization in Stage 1. Two of these, the Ministry of Local Government and Works (MLGW) and the Ministry of Environment and Housing (MEH), have already been identified, the third will be identified during project implementation. The MLGW has been formed recently by amalgamating the Ministry of Construction and the Ministry of Local Government and is in need of signiticant restructuring to integrate its two components. Further, the Ministry is responsible for managing huge capital expenditures and improvements in its management would have a significant impact on overall GOJ spending. Also, central level reforms at the MLGW will complement institutional reforms at the local government level that are proposed to be undertaken under the Parish Infrastructure Project. The MEH is also high on the GOJ's priorities. Three out of the eleven line entities targeted tor conversion to executive agencies viz. the Office of Titles; the Surveys Department, and the Town Planning Department fall within the purview of this Ministry. There would be considerable synergy in undertaking simultaneous reform at the central level in this Ministry and at the line agency level in the three agencies affiliated to it. Background information, main functions and activities, employment composition, current financial arrangements, and prevailing constraints and weaknesses of the identified Ministries are indicated in Annex 2. 48. The modernization plan for the Ministries would involve the strengthening of their central divisions that are engaged in policy formulation, monitoring of policy implementation and corporate functions. The project would aim to improve the access of the Ministries to high quality information on which to base policy tormulation; assist in the development of sound sector policies, technical standards, and operating norms and guidelines; develop effective monitoring and evaluation systems; strengthen budgeting, planning, accounting, procurement, contracting, internal control and personnel management functions; and provide training to staff in related areas. Since the focus of the project would be on the central divisions of the Ministries, operational agencies affiliated to these Ministries, other than those included in the list of executive agencies indicated above, will not be covered in Stage 1. These would be taken up in Stage 11. 49. The process of modernization of Ministries would follow a course similar to that in the case of executive agencies. A Modernization Plan; a Medium Term Financing Plan and a Framework Document, on the same pattern as for executive agencies, would be prepared for each Ministry. The Framework Document in the case of a Ministry will, however, be signed by the Minister, on behalf of the government, and by the Permanent Secretary, as the CEO of the Ministry. 50. Disbursement Condition: A disbursement condition similar to that for executive agencies would also apply to each targeted Ministry. Disbursements under the project for the preparation of the Modernization Plan, Medium-Term Financing Plan and the Framework Document will be made subject to the appointment of a Permanent Secretary. Disbursements for the implementation of the Modernization Plan for a particular Ministry would be subject to (a) the preparation of the Modernization Plan, Medium-Term Financing Plan and the Framework Document, satisfactory to the Bank; (b) signing of the Framework Document by GOJ and the concerned Permanent Secretary and (c) a legal framework, satisfactory to the Bank, being in full force and effect to enable the Ministry to carry out its Modernization Plan. 51. As part of the review of each Ministry, its mission, role and functions will be examined and suitable changes, if needed, will be recommended. However, in keeping with current best practice, it Jamaica Public Sector Modernization Proejecr:: SAR. 7/ 96 18 is not proposed to burden this project with policy conditionalities. Project assistance will address the intrinsic organizational and management deficiencies of the Ministries, so as to equip them to perform effectively in any policy environment. Nevertheless, the importance of sound sector policies cannot be minimized. As such, dialogue to improve and strengthen the policy orientation of the selected Ministries will continue on a parallel track. 52. Crtical Success Factors: The granting of enhanced autonomy subject to strict accountability for performance is a relatively new concept in Jamaica and marks a significant departure from traditional public service management practices. Its success will depend on strong and continued commitment, at both the political and the administrative levels. Also, especially in the early period, the evolution of the executive agencies will have to be watched closely and suitable refinements in strategy, legal and administrative framework and management practices will need to be made in a timely manner. The Ministry of Finance will have a special role to play, because only if it allows real financial autonomy to the executive agencies will the latter be able to perform at the expected level. This would include ensuring that, barring extraordinary circumstances, the cash flows agreed to under the Medium-Term Financing Plan of each agency are made available to them. Also the Ministry will have to increase its oversight over expenditures to ensure that the autonomy is not misused. This underlines the importance of strengthening internal auditing and extending the FMIS to the selected agencies on priority. The support of the Efficiency and Reform Directorate (ERD) and the OSC will also be crucial in adjusting personnel management practices in the agencies. Finally, it will be important to secure the full involvement and commitment of the employees of the pilot entities and the support of public service unions. 53. The commitment of the present government to the objective of creating responsive and efficient public entities is very high. The initiative is supported at the highest level of government. A copy of the Cabinet Secretary's letter dated March 5, 1996 regarding the granting of autonomy to the targeted agencies is placed in Annex 8. An extensive public relations campaign has been conducted as part of project preparation to build public support for the initiative. So far, the response of the labor unions and the opposition parties has been, generally, positive. It is expected that once the benefits of the approach are demonstrated by some early successes, political support would be strengthened further. At the top administrative level also, commitment is quite strong. Nevertheless, as the project aims to significantly alter the way business has been conducted in the government in the past, some resistance to change can be anticipated. To some extent, this will decrease as the reform efforts become more concrete and comprehensible. Also, a continuing communication campaign would be carried out to allay unjustitied fears and build ownership. Assistance to be provided by the project to strengthen internal and external auditing and to streamline procurement and contracting practices (discussed below) should help increase the Ministry of Finance's level of comfort with enhanced autonomy at the entity level. The response of the ERD and OSC to the proposed changes has been very positive and their support is expected to continue. (B) Privatization 54. In order for the public sector to improve its performance, it is essential for it to withdraw from those commercial and productive activities in which it has no comparative advantage. By doing so, it would be able to focus on its core competencies and avoid the fiscal drain caused by inefficiently run, loss-making public enterprises. Also, the consequential reduction in the size of the public service would enable the government to begin paying motivating wages to the remaining employees. This Jamaica Public Sector Modernization Proqecv: SAR: 7/96 19 would facilitate the induction of high quality individuals into the public service and contribute towards improving the efficiency and effectiveness of public institutions. Privatization of public entities and contracting out of services of a commercial nature are the principal tools through which an orderly reduction in the size and scope of the public sector is proposed to be achieved. It is also a means to encourage private investments in the productive sectors and infrastructure that are critical to the development of the country, but cannot be afforded by the government. 55. GOJ is of the view that the National Investment Bank of Jamaica (NIBJ), the main implementing and coordinating agency for the privatization program, is adequately geared to handle the privatization of the entities that remain out of the list of 1991 and those that were approved for divestiture by the Cabinet in 1995. However, assistance under the Project is required in the three areas mentioned below: * Privatization of the Water and Sewerage Sector; * Privatization or contracting out of an additional set of facilities and services; * Institutional strengthening of NIBJ. (i) Privatization of Water and Sewerage Sector 56. The project will assist GOJ in developing and implementing an appropriate privatization strategy for the water and sewerage sector that would ensure economic allocation of water between competing uses, while improving the quality of service provided to the public. 57. Institutonal Arrangements: Although the control of the water and sewerage sector in Jamaica is widely dispersed between several institutions, the production, treatment and supply of water are dominated by the National Water Commission (NWC) and the National Irrigation Commission (NIC), who have responsibility for production and distribution of domestic and irrigation water, respectively. These agencies are also the major competitors for water in the island. Several other GOJ agencies such as the Ministry of Local Government and Works, the Urban Development Corporation (UDC) and a number of limited liability companies are also involved in water supply or sewerage projects in various locations throughout the country. The Underground Water Authority (UWA), established under the Underground Water Authority Control Act, 1959, has responsibility for data collection relating to ground and surface water resources. UWA also develops island-wide master plans for water resources utilization and both the NWC and NIC need to apply to it for permits for the quantity of water they plan to extract from the ground. The regulatory role of the UWA has recently been strengthened by the Water Resources Act of 1995 that will transform the UWA into the Water Resources Authority (WRA). The WRA will manage all the nation's water resources by evaluating and controlling the allocation of both ground water as well as surface water. It will also rationalize planning and development activities in the water sector within the framework of the existing Water Resources Development Master Plan developed with the assistance of the UNDP. 58. The NWC was established as a statutory body in 1980 by combining the National Water Authority and the Kingston and St. Andrew Water Commission. NWC is the sole water and sewerage authority, providing water services to about 75% of the population and operating about 30% of the sewerage treatment capacity in the island. Areas not directly served by NWC are served by smaller parish systems, or in some cases by independent entities. The total production capacity of NWC is 700,000 cubic meters per day. Of this production, unaccounted for water amounts to over 50%. This Jamaica Public SectorModernization Project:: SAR: 7/96 20 includes losses due to leaking mains, unrecorded and unbilled consumption as a result of defective meters and unregistered consumption. The NWC has a poor operating record and has been able to continue operations only as a result of large capital injections by the government. The Jamaica Water Supply and Sewerage TA Loan (1984-94) provided technical assistance to NWC management, besides emergency supplies and equipment. Although water accounts doubled, sustainable improvements in management were not achieved. In mid-1995, as an interim measure, GOJ made major managerial and financial changes that included (i) a new Board and senior management; (ii) recruitment of five senior technical experts with EU assistance and (iii) transfer of the main elements of debt service to the government. 59. The NIC was established in 1987 with the mandate to operate and maintain the public irrigation system in the island. Its systems are located in areas that have insufficient rainfall and are completely independent from the NWC's potable water systems. Generally, the water supplied by the NIC is untreated. 60. The rates for water and sewerage are currently set by the Ministry of Public Utilities and Transport (MPUT). However, all regulatory authority in this respect will be transferred to the Office of Utility Regulation (OUR), once this office is fully established. 61. Supply and Demand: Present domestic and industrial water usage in Jamaica is about 223 million cubic meters per year and irrigation usage is about 682 million cubic meters per year. The projected demand in the year 2015 for domestic water is about 346 million cubic meters per year and for irrigation about 1338 million cubic meters per year. In order to meet the projected demand, an estimated investment of about US$ I billion will be required in the water and sewerage sector. Since the public sector would not have the requisite resources, GOJ plans to encourage private participation in this sector. 62. Project Assistance: In the past, numerous studies have been carried out to identify different privatization options for the NWC. These have, however, been carried out as isolated efforts and have focused only on the NWC's need to meet the demand for potable water. As Phase I of the water sector privatization, a brief consultancy to review and expand on the previous studies, with a view to develop a comprehensive strategy that takes into account water requirements for domestic use and irrigation has already been initiated and will be financed retroactively by the Project. It will examine the availability of water for all areas of the island, particularly the Kingston Metropolitan Area (KMA), and make recommendations to resolve any short to medium-term conflicts in the use of water. It will also examine the current institutional arrangements and recommend the broad structure and ownership of the various entities comprising the sector. The study will review the experience of other countries that have involved the private sector in the production and delivery of potable water, irrigation water and provision of sewerage services. It will consider the extent of vertical and horizontal integration, the extent and nature of existing and potential competition in the sector and types of privatization arrangements, such as management contract, affermage/service contract, lease, concessions or privatization of assets, that have been adopted in other countries. The study will identify the privatization options available to GOJ and their policy implications. A draft report of the study is being currently reviewed by GOJ. This study will be followed by a more detailed study, also to be financed by the project, that will address the institutional, regulatory, legal and financial implications of the recommended policy. Based on the results of these studies, GOJ is expected to take a decision, by March 31, 1997, on the particular course to be adopted. Thereafter, the project will assist it in Jamaica Public Sector Modernization Project:: SAR: 7/96 21 implementing the next phase of the privatization process by financing the engagement of the required financial, regulatory, legal, accounting and technical experts. 63. The support provided by the PSMP to the privatization of the water and sewerage sector will be complemented by the proposed Jamaica Water Supply and Sewerage Privatization Preparation Project which aims to: (i) rehabilitate the water production and waste water facilities of the NWC in the Kingston Metropolitan Area; (ii) install valves, zone meters and consumer meters; (iii) undertake leak repairs; and (iv) conduct consumer surveys. These inputs are considered necessary to make the sector attractive for private investment or management. (ii) Privatization/Contracting Out of Facilities and Services 64. GOJ has prepared an indicative list (Annex 4) of entities and services for privatization or contracting out. These include National Stadium Complex, Hope Garden and Zoo, Maxfield Park Children's Home, Minard Great House, Food Stamp Program, Statutory Legal Aid System, Prison Health Services, Food Storage Infestation, etc.. In addition, the comprehensive review of the remaining public entities proposed to be carried out as part of the preparation of Stage II of the public sector modernization process, is expected to identify other entities that would be suitable candidates for privatization or contracting out. The project will assist GOJ in the privatization or contracting out of the selected entities. Not later than December 31 of each year of project implementation, starting in 1996, the entities/services to be privatized in the succeeding fiscal year will be agreed to by GOJ and the Bank. The entities to be taken up for privatization in FY 1996-97 would, however, be included in the Annual Action Plan for this year to be prepared as a condition of Loan Effectiveness. On the whole, this sub-component would assist in the privatization of 30 to 35 entities or services. (iii) Institutional strengthening of NIBJ 65. In order to boost the ongoing privatization program as well as ensure the efficient execution of privatizations proposed under this project, the institutional capacity of NIBJ will be strengthened. The project will finance the hiring of a full-time qualified resident advisor, as required by and agreed with NIBJ. The advisor would assist NIBJ management and staff in putting together and implementing privatization transactions. Further, successful privatization will require NIBJ to conduct an effective communication campaign that explains the costs of maintaining the status quo as well as the benefits of privatization to various stake-holders, so as to build broad support for the program and allay unwarranted fears. For this purpose, assistance will be provided to strengthen the public relations and marketing capabilities of NIBJ. Finally, training to NIBJ staff would be provided in private sector participation in infrastructure projects, economic regulation, privatization techniques, project and capital financing, and project appraisal and management. (C) Government Procurement, Contracting, Internal Control and Auditing (i) Procurement and Contracting 66. GOJ has recently decided to launch a broad-based reform in order to address the deficiencies in the procurement and contracting processes discussed earlier. The project will support this initiative so as to enhance value for money, transparency and accountability. It is proposed to provide project assistance at three levels: Jamaica Public Sector Modernizarion Project:: SAR: 7/96 22 67. First, a Procurement Policy Implementation Unit will be established within the Inspectorate Division of the Ministry of Finance. This unit will have responsibility for developing and updating procurement standards and procedures. It will assist ministeries and departments in establishing the procurement functions of Procurement/Contracting Units and Procurement Committees; provide guidance in procurement matters; and monitor procurement operations of the individual entities. The unit will update the procurement policy manual incorporating modern practices in this field. Further, it will act as a central resource for advice on the procurement process, market conditions, stores management, and oversees procurements. The project will finance the hiring of a long-term Procurement Adviser for three years as well as short-term consultancies in specialized areas. In addition, it will finance training for the staff of the unit, computer equipment, hooks and literature. 68. Second, assistance will be provided to strengthen the office of the Contractor General (CG). Recently, in order to provide a central authority for the award of contracts that would enhance general confidence in the process, the government has proposed the amendment of the Contractor General's Act to create an independent National Contracts Commission (NCC), chaired by the CG and assisted by a small Secretariat comprised of qualified professionals. Proposals concerning the role of the NCC and the CG are being reviewed by the Parliamentary Committe on Infrastructure and are expected to be discussed in Parliament at a early date. In line with the final decisions taken in this regard, the project will assist in strengthening the Office of the Contractor General, through establishment of the Secretariat. For this purpose it will finance the required consulting services, training and equipment. 69. Third, the Procurement/Contracting Units and Procurement Conunittees in different Ministries will be strengthened through consulting services, training and equipment so that they can effectively implement the applicable procurement and contracting guidelines. Training activities will focus on procurement/contracting policies, regulations and procedures of GOJ and international financial institutions; preparation of bidding documents and specifications, bid evaluation, contract negotiation, contract administration, quality control and materials management. (ii) Internal Control 70. In order to strengthen internal controls throughout government (these are crucial for the efficient delegation of financial authority in the context of the creation of executive agencies, as well) GOJ proposes to set up an Internal Audit Directorate (IAD) within the Financial Management Division of the Ministry of Finance. The IAD will establish uniform operating standards and systems for conducting internal audits; set ethical norms; coordinate the training and professional development of internal auditors; and conduct internal control reviews under the Financial Administration and Audit Act. A new job classification for auditors is expected to be developed soon to emphasize the group as a profession, establish high qualification criteria and improve their remuneration package. A new curriculum for training public sector auditors is also proposed to be developed by MIND. The project will support the establishment of the IAD through consulting services, training, equipment, books and auditing literature. (iii) External Auditing 71. In order to strengthen the institutional capacity of the Auditor General in exercising effective ex-post control, the project will provide consultants, training and equipment to enable the office to enhance its auditing capabilities, especially in computer-aided auditing of automated accounts and in Jamaica Public Sector Modernization Pro;ect.: 94R: 7,96 23 exercising effective external control over procurement and contracting decisions. The latter function has gained added importance in view of GOJ's proposal to give semi-executive functions to the Contractor General. (D) FMIS and the HRMIS 72. Two important activities covered under the IBRD financed Financial Program Management Improvement Project (FPMIP), which became effective on 09/17/91, are the development and phased implementation of the Financial Management Information System (FMIS) and the Human Resource Management Information System (HRMIS). The FMIS is intended to computerize Budget Formulation, Budget Execution, Accounting and Financial Reporting. Its objective is to enhance accountability, transparency and efficiency in public financial management at the central level. The HRMIS aims to fulfill information and automation needs in human resource management, especially in areas of personnel administration, manpower planning, succession planning, employee development and allocation of human resources. 73. A preliminary review of the two systems was conducted during project preparation. In Phase I of the FMIS, the Expenditure Authorization, Accounting and Check Printing modules have been developed. These have been commissioned in nine of the twelve Ministries, covering 11 sites. Phase II of the system, now under development, would cover Commitment Planning and Control, Consolidation of Central Accounts and Management of Externally Funded Projects. Phase III of the system would create an Executive Information System to allow reports in a flexible format to be generated for senior management. Certain aspects of the system that require further strengthening were identified during the review. These would be addressed during project implementation. In addition, modules for Budget Formulation and Cash Management need to be developed and the linkages of the FMIS with the tax administration, debt management and central bank computer systems need to be established. A prototype of the HRMIS has been developed and installed at 16 sites. Core personnel data regarding 36,000 employees has been entered. Additional educational and historical data is yet to be entered. The next step would be to automate business functions related to personnel management. A payroll module is proposed to be developed or procured. This will link the financial data of the FMIS with personnel data of the HRMIS. 74. GOJ is keen to implement these systems throughout the central government. However, since the inception of the FPMIP the scope of the systems has been expanded considerably. Originally, the FMIS was expected to be installed in 13 sites with 8-12 users per site. It is now proposed to be installed at 42 sites with an average of 20 users per site. The HRMIS would be installed at 60-80 sites. Although, to some extent it would use the hardware used for the FMIS, separate servers and PCs for the HRMIS would be needed for 5-10 additional workstations at each site for staff who deal exclusively with personnel management. The FPMIP had provided for a total of US$ 6.235 million for the development and implementation of both the FMIS and HRMIS. After allocation of unallocated costs and some adjustment to other component costs the amount for computerization was raised to US$ 7.0 million. But even this amount would be inadequate for the full implementation of the two systems. Accordingly, it is proposed to provide additional funding of US$ 7.3 million, under the present project, for further development and extension of the systems. Retroactive financing of US$ 600,000 would be provided to enable the purchase of urgently needed computer hardware. Janaica Public Sector AModernizaunon Prolecr: . R: 7. 96 24 (E) Communication Campaign 75. Given the far-reaching impact of the project, an effective communication campaign would be imperative to keep all stake-holders and the public informed of the objectives, activities and accomplishments of the project. This would help in building and widening support for public sector modernization. Accordingly, the project would support an extensive information campaign that would be carried out throughout the duration of the project. Development of Stage 11 of Public Sector Modemnization 76. To prepare Stage 11 of the public sector modernization process, consultants will be engaged to enable GOJ to systematically review all public entities, other than those covered in Stage 1, and decide on entities that need to be closed down, privatized, converted into executive agencies or strengthened in their present form. Also additional systemic reforms required will be identified. Based on this analysis, and the experience of Stage 1, suitable strategies will be developed to extend the modernization process to other Ministries and agencies. A detailed action plan to put these strategies into effect will he drawn up. Preliminary studies of some of the Ministries and departments have already been initiated. Proiect Components: 77. The project will consist of five components. (i) The Modernization of Public Sector Entities component [US$ 32.5 million or 57.0% of total project cost of US$ 57.0 million] will assist in (a) converting thirteen operational entities, mentioned in para 33, into 'Executive Agencies', above; and (b) modernizing the central divisions, dealing with policy formulation; establishment of technical standards; monitoring; coordination; and corporate management, of three Ministries, indicated in para 47, above. These entities will be granted greater autonomy in return for strict accountability for pre- determined performance targets. They will also be provided with resources to modernize their operations. (ii) The Privatization component [US$ 7.0 million or 12.2% of total project cost] will finance engagement of consultants for (a) determination of different options available for private sector participation in the water and sewerage sector and assisting GOJ in the implementation of the selected option; (b) assisting in the privatization/contracting out of 30-35 other facilities and services; and (c) institutional strengthening of the National Investment Bank of Jamaica (NIBJ), the lead agency for privatization. (iii) The Government Procurement, Contracting, Internal Control and Auditing component [US$ 2.0 million or 3.5% of total project cost] will provide assistance to the Procurement Policy Implementation Unit, MOFP; Office of the Contractor General; Procurement/Contracting Units and Committees in different Ministries; the Internal Audit Directorate, MOFP; and the Office of the Auditor General. (iv) The Management Information Systems component [US$ 7.3 million or 12.8% of total project cost] will complement the Financial and Program Management Improvement Project by providing additional funding for software development, acquisition of hardware and training for the Financial Management Information System (FMIS) and Human Resource Management Information System (HRMIS). (v) Project Implementation, Communication Campaign and Development of Stage II component [US$ 3.0 million or 5.3% of total project cost] will provide consultant services, goods and training for implementation of the project, carrying out of an effective communication campaign to facilitate project execution; and development of Stage 11 of the public sector modernization process. Physical and price contingencies each amount to US$ 2.6 million or 4.6% of total project cost. Jamaica Public Sector Modernizatron Project:: SAR: 7/96 25 Project SustainabilitW: 78. The modernization of operational agencies and core divisions of Ministries will be based on an integrated approach that will seek to address inter-related organizational deficiencies in a comprehensive manner. It is expected that the project would bring about lasting changes in the way these entities do business. In the long-run, by modernizing the management practices and working environments of the targeted entities, the project will help create a motivated group of public servants who will have a vested interest in preserving and building on the improvements made through the project. Also, the enhancement in quality of public service will create an external demand for maintaining and increasing efficiency levels, besides consolidating political support for the reforms. Privatization will help rid the public sector of activities that it cannot perform efficiently. It will reduce the fiscal drain caused by inefficient enterprises and enable government to support continuing reforms in the smaller public sector. The strengthening of procurement, contracting, internal control and auditing will bring about long-term improvements in transparency and accountability. The extension of the FMIS and HRMIS will lead to durable improvements in financial and personnel management by providing up-to-date information in these areas to public sector managers. The phased approach to public sector modernization being proposed by the project will keep change within the absorptive limits of the public sector, thus, facilitating its acceptance and internalization. Financially, the project will not impose a major recurrent burden on GOJ as the required improvements in the compensation level of skilled positions in the targeted entities would be mainly financed by the agencies themselves. Lessons From Previous Bank Experience: 79. Bank experience in related projects indicates that: (a) complex institution building projects require government commitment at the highest level; (b) local ownership of reforms is imperative for their success; (c) the right people, possessing the right skills and facing the right incentives, are crucial to sustainability of institutional improvements; (e) civil service reform is a pre-requisite for institutional development in the public sector6 (f) information technology can play a significant part in enhancing organizational performance; (g) detailed project preparation is critical to effective implementation; and (h) institutional change is facilitated by early successes. While designing the project these lessons have been kept in mind. The proposed project closely reflects the priorities of GOJ and enjoys the support of the Office of the Prime Minister. The development of the project concept has been done in a highly participatory manner and inputs from a wide cross-section of stakeholders have been sought and incorporated into the project concept and design. Further, provision is being made for a continuing communication campaign during project implementation to keep all interested constituencies adequately informed and reduce the anxiety that inevitably accompanies major transitions. The project places due emphasis on improving the quality of human resources in the civil service. Strategies for performance-linked improvements in compensation; training and employee empowerment have been built into the project. Adequate provision has been made for upgrading information technology in each of the targeted entities. Detailed implementation plans and performance indicators have been developed to facilitate project implementation. Finally, the project design aims at posting early successes. Some of the selected agencies are quite small in organizational terms. Significant improvements in their performance would be sought in the initial 6 The Caribbean Region: A Review on World Bank Assistance: Operations Evaluation Departirnent, the World Bank, November 1994. Jamaica Public Sector Modernization Project:: SAR: 7/96 26 stages of project implementation so that they can be used as models to stimulate further change and build credibility for the reform process. PROJECT CONTEXT Rafonale For Bank Involvement 80. A robust public sector is essential for the success and sustainability of Jamaica's economic reform program, which is being supported by a number of Bank operations. Consequently, public sector reform and institutional strengthening are key objectives of the Bank's Country Assistance Strategy (CAS) discussed by the Board on March 4, 1993. GOJ's Medium-Term Policy Framework (MTPF) also emphasizes the need for greater administrative efficiency, improved public services and a new role for the public sector as a facilitator of private sector-led growth. The Bank is already involved in public sector reform projects in Jamaica. The proposed project is consistent with the Bank Group Country Assistance Strategy. It would help take the reform process to the next stage, while ensuring that two ongoing initiatives, viz. privatization and introduction of computerized financial and personnel management systems, are carried to their logical conclusion. The Bank's vast and varied experience in institutional development in the public sector would benefit the borrower in ensuring that the proposed organizational changes are properly designed and effectively implemented. ENVIRONMENT 81. This project has been classified as category 'B" in recognition of potential environmental effects of privatization activities. For the facilities and services already identified, a preliminary environmental evaluation has been carried out. One facility, Food Storage Infestation (FSI), located at Kingston and Montego Bay airports and used for quarantine of food for export, has been identified as being possibly associated with some environmental issues. An environmental audit of the FSI will be conducted prior to its privatization and suitable remedial actions will be taken to mitigate adverse environmental impacts. Environmental Audit Guidelines have been developed and included in the Operational Manual of the project. These will be followed during project implementation for additional entities selected for privatization, whose activities, in the opinion of the Bank, may have a negative environmental impact. PROJECT COSTS AND FINANCING 82. A PHRD Grant of Yen 61.5 million is being used for project preparation. The total project cost of US$ 57.0 million includes an IBRD loan of US$ 28.4 million, repayable over seventeen years, including a five year grace period, at the Bank's standard interest rate for LIBOR based US Dollar single currency loans. Parallel grant financing of UK Pounds 2.0 million (about US $3.0 million) will be provided by the UK ODA. The European Union (EU) is also expected to provide parallel grant financing of about US$ 3.0 million. This amount is included in GOJ's counterpart contribution of US$ 25.6 million, pending finalization of the details of the EU project. Retroactive financing of US$ 2.0 million will be provided to meet expenditures incurred between January 1, 1996 and date of Loan signing, mainly to purchase hardware for the FMIS and HRMIS and to finance studies related to the water and sewerage sector. Table 2 indicates the Estimated Project Costs, Table 3 the Financing Plan and Table 4 the Financing Plan by Category of Expenditure. Annex 5 indicates the detailed costs for each project component. Jamaica Publjc Sector Modernizaton Proqect.: SAR: 7/96 27 Table 2: Estimated Project Cost (USS Thousands) gD : - -- - ' ......... .~~~~~~~~~~~~~~~. . Fr . . . . . . . . . . . ......Tt £:a C.an ewtn IM)a FortilgD Total % of Total . -,---,,, ~~~~~~~. . . . . . . : . - - :. . :::-.. . _.Erjs Xs Modernization of Public Sector Entities (a) Executive Agencies 1. Planning Institute of Jamaica 435 1105 1540 2.7% 2. Jamaica Customs Department 2949 4351 7300 12.8% 3. Office of Tltles 1290 2040 3330 5.8% 4. Town Planning Department 160 690 850 1.5% 5. Surveys Department 192 1008 1200 2.1% 6. Jamaica Information Service 543 707 1250 2.2% 7. JAMPRESS 182 768 950 1.7% 8. Registrar General's Depanrment 407 1208 1615 2.8% 9. Rtgistrar of Companies 497 728 1225 2.1% 10. Administrator General 128 412 540 0.9% 11. Management Institute for National Development 3670 715 4385 7.77% 12. JAMPRO and Construction Division of MLGW 700 1300 2000 3.5% (b) Ministries 1. Ministry of Local Government and Works 657 2178 2835 5.0% 2 Ministry of Environment and Housing 1115 1395 2510 4.4% 3. One Additional Ministry To be Identified 350 650 1000 1.8% Subtotal 13275 19255 32530 57.0% Privatization (a) Privatization of the Water and Sewerage Sector 1000 4000 5000 8.8% (b) Privatization/Contracting Out of Facilities/Services 475 625 1100 1.9% (c) Institutional Strengthening of NIBJ 300 600 900 1.5% Subtotal 1775 5225 7000 12.2% Procurement, Contracting Internal Control & Auditing (a) Procurement Policy Implementation Unit, MOFP 100 425 525 0.9% (b) Office of the Contractor General 100 300 400 0.6% (c) Procurement/Contracting Units in Ministries 150 200 350 0.6% (d) Internal Audit Directorate, MOFP 50 275 325 0.7% (e) Office of the Auditor General 100 300 400 0.7% Subtotal 500 1500 2000 3.5% Mfanae-ement Information Systems (a) FMIS 1150 3250 4400 7.7% (b) HRM IS 250 2650 2900 5.1 % Subtotal 1400 5900 7300 12.8% Prolect Implementation. Communication Campaign and Develooment of Stage 11 (a) Project Implementation and Communication 2050 450 2500 4.4% Campaign (b) Development of Stage 11 of PS Modernization 400 100 500 0.9% Subtotal 2450 550 3000 5.3% Base Cost 19400 32430 51830 90.8% Physical Contingencies @5% 970 1620 2590 4.6% Price Contingency @ 2.3% per annum 975 1605 2580 4.6% Total Project Cost 21345 35655 57000 100.0% Jamaica Public Sector Modernization Project:: SAR: 7/96 28 Table 3: Financing Plan (uss Thousands) ... ............ L o c a l F o r e i g n T o t al~~~~. .... .. . . Government 19,495 6,105 25,600 IBRD 1,850 26,550 28,400 ODA Parallel Financing 0 3,000 3,000 Total 21,345 35,655 57,000 Table 4: Financing Plan by Category of Expenditure (uss Thousands) =3____ Total IBID GO 0:t O- %U%RJ_____ Consultants 26200 14000 9200 3000 53,43% 35.11% Local 9825 1850 7975 0 18.82% 81.18% Foreign 16375 12150 1225 3000 74.20% 7.48% Goods 18430 12100 6330 0 65.65% 34.35% Local 1200 0 1200 0 0.00% 100.00% Foreign 17230 12100 5130 0 70.22% 29.78% Training 4090 2050 2040 0 50.12% 49.88% Local 2040 0 2040 0 0.00% 100.00% Foreign 2050 2050 0 0 100% 0.00% Information Campaign 250 250 0 0 100% 0% Local 250 250 0 0 100% 0% Civil Works 8030 0 8030 0 0.00% 100.00% Local 8030 0 8030 0 0.00% 100.00% INSTITUTIONAL ARRANGEMENTS AND PROJECT IMPLEMENTATION A. Institutional Arrangements 83. The Cabinet Secretary, Office of the Prime Minister, will be the executing agency for this project. The Inter-Ministerial Committee for Administrative Reform (IMCAR)8 chaired by the Prime Includes parallel financing of approximately USS 3.0 million expected from the European Union. 8lTe member of the IMCAR are: the Prime Minister (Chairman), Minister of Finance, Minister of State - Ministry of Finance, Minister of Health, Minister Without Portfolio (Officc of the Prime Minister); Cabinst Secretary, Financial Secretary, Pennanent Secretary- OPM, Director General, ERD and Project Director, PSMP. Jamaica Public Sector Modernization Project:: SAR: 7/96 29 Minister, will provide high level support and policy direction. A Project Management Committee9, chaired by the Cabinet Secretary, will oversee project implementation at the operational level. The Management Committee will monitor the progress of various components of the project on a regular basis and take appropriate actions to ensure that the objectives of the project are met. A Project Coordination Unit (PCU), reporting to the Cabinet Secretary, has been established. The PCU has actively participated in the preparation of the project. It will be responsible for the coordination of different components of the project and for overall project management. 84. The PCU is headed by a Project Director, who is an ex-officio member of the IMCAR Working Group. The Project Director will have overall responsibility for the efficient implementation of the project. The Senior Project Officer, already working in the PCU, will have responsibility for coordinating the privatization component and providing assistance to the NIBJ, where required. He will also manage all procurement activities under the project, besides providing project management support to the Project Director. An International Coordinator, with experience in management of change in public entities, will be appointed to guide the process of modernization of executive agencies and Ministries. The agencies and Ministries will be divided into four groups. An Agency Coordinator will be engaged for each group to facilitate the implementation process on a day to day basis. An Information Technology Coordinator will be hired to establish uniform IT standards for the computerization of various entities covered by the project and to assist in engagement of consultants and procurement of computer hardware and software. A Coordinator will be appointed to facilitate the implementation of the Government Procurement, Contracting, Internal Control and Auditing component. For carrying out the proposed communication campaign, a Communication Specialist has been appointed. A Finance and Accounting Manager will be appointed to look after project accounts. In addition, two Secretaries and one Administrative Officer will be recruited for the PCU. The staff of the PCU will be recruited on contract. Extensions of contracts of individual staff members will be considered in light of their performance and the needs of the project, subject to the Bank's no- objection. No extensions will be allowed beyond the completion of the project. An Operational Manual containing guidelines on various facets of project management has been developed. Recruitment of key PCU staff and adoption of the Operational Manual are conditions of Loan Effectiveness. 85. Project implementation will require extensive inter-institutional coordination. The Modernization of Public Sector Entities component will be executed in coordination with the management of each targeted entity and the respective Ministry. The Privatization component will be implemented through the NIBJ, which would work closely with the PCU and the Cabinet Secretariat. Signing of a Cooperation Agreement between GOJ and the NIBJ for the execution of the Privatization Component is a condition of Loan Effectiveness. Under the Government Procurement, Contracting, Internal Control and Auditing component, the setting up of the Procurement Policy Implementation Unit and the Internal Audit Directorate will be coordinated with the Ministry of Finance; the establishment and strengthening of Procurement Committees and Procurement/Contracting Units will be coordinated with each Ministry; the creation and strengthening of the National Contracts Commission and the Secretariat in the Office of the Contractor General (OCG) will be coordinated with the OCG; and the strengthening of external auditing will be coordinated with the Office of the Auditor General. The FMIS/HRMIS component will be executed through the Government The Project Management Committee will consist of the Cabinet Secretary, Financial Secretary/Representative MOFP, Director General, ERD, Executive Director, GARP, Finance and computerization specialists from the FPMIP, Project Director, Senior Project Officer, and Finance and Accounting Manager. PSMP, and a representative of the private sector. Jamaica Public Sector Modernization Project:: SAR: 7/96 30 Administrative Reform Program. The Development of Stage n1 of Public Sector Modernization and Communication Campaign will be the responsibility of the Project Coordination Unit. B. Project Implementation 86. Given the wide scope of the project and the large number of entities involved, it is proposed to adopt a phased implementation strategy. As would be evident from Annex 6, Project Implementation Schedule, the creation of executive agencies and modernization of Ministries will be staggered so as to keep the implementation burden on the PCU within reasonable limits. This will also enable the experience gained with each batch of entities to be used to refine the strategy for succeeding batches. The privatization of facilities and services will also be similarly phased. 87. The PCU shall prepare and furnish to the Bank for its approval, an Annual Action Plan (AAP) not later than December 31 of each fiscal year, starting in 1996. The submission of the AAP for fiscal year 1996-97 will, however, be a condition of Loan Effectiveness. The AAP shall indicate, inter alia, activities to be undertaken; the budget, sources of financing, start and end dates and implementation responsibility for each activity; and plans for Procurement, Hiring of Consultants, Training and the Information Campaign. It will also identify the entities or services to be taken up for privatization or contracting out during the year. The AAP will form the basis of monitoring the progress of the project. In order to ensure that project implementation is not adversely affected by the lack of counterpart funds, GOJ will, by April 30 of each year, provide satisfactory evidence to the Bank regarding the availability of such funds. Furnishing of the said evidence for FY 1996-97 will be a condition of Loan Effectiveness. The PCU shall also submit semi-annual progress reports to the Bank no later than April 30 and October 31 of each year, starting from 1997. 88. At least two supervision missions will be organized by the Bank each year at which implementation will be jointly reviewed with GOJ and actions to deal with problems and bottlenecks encountered will be agreed. One of the supervision missions will be used to carry out an Annual Review of the project before 30th June of each year. A mid-term review of the project will be carried out as part of the 1999 Annual Review. To the extent possible the supervision missions will be coordinated with similar missions of other donors participating in the project. In any event, close coordination with them will be maintained to ensure consistency of approach. Progress made in project implementation will be monitored through Key Project Indicators (Annex 1). Suitable remedies have been included in the Loan Agreement to deal with the failure of the targeted agencies and Ministries, on the one hand, and GOJ, on the other, to properly implement Framework Documents mentioned above. Also, remedies have been provided in case of non-availability, suspension or cancellation of parallel grant financing from the ODA and the EU. 89. GOJ shall prepare an Operational Plan for the future operation of the Project, not later than six months after the closing date of the Project. This plan will be jointly reviewed by the Bank and GOJ with a view to ensure the sustainability of the reforms introduced by the Project. C Procurement 90. Goods: Procurement of goods under the proposed project will be carried out in accordance with "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in Jamaica Public Sector Modernization Project:: SAR: 7/96 31 January 1995 as revised in January 1996. The Bank's Standard Bidding Documents, modified as appropriate, will be used for all ICB and LIB procurement. 91. Goods, such as computer systems, including hardware, software and peripherals; instruments required for the operations of various entities; teaching aids; air-conditioners; and other office equipment estimated to cost US$ 10.6 million would be acquired through International Competitive Bidding (ICB), in packages valued at not less than US$ 150,000 each. Some of aforesaid goods valued at US$ 50,000 or more, but less than US$ 150,000 per contract, and not exceeding US$ 1.0 million in the aggregate, would be procured through Limited International Bidding (LIB). Contracts for the supply of the goods will include installation, maintenance and technical assistance for at least one year after the first year of warranty provided by the manufacturer. Goods that cannot be grouped in bid packages of US$ 50,000 or more, but can be grouped in packages of US$ 25,000 and above, would be procured through international shopping procedures acceptable to the Bank, for an aggregate amount not to exceed US$ 400,000. Goods, costing less than US$ 25,000 per contract, will be procured through national shopping procedures acceptable to the Bank, for an aggregate amount not exceeding US$ 100,000. 92. All contracts for procurement of goods to be awarded through ICB and LIB would be subject to prior review by the Bank and the remaining contracts would be subject to ex-post review by supervision missions. The Bank's prior review of procurement documentation would cover all major procurement steps, including invitation to bid, advertising, bidding documents, evaluation methodologies and reports, award recommendations and contracts. 93. Consulting Services: A plan for hiring consultants would be submitted to the Bank for review and approval as part of the Annual Action Plan, before consultants are hired. The selection and appointment of consultants would be in accordance with the World Bank: "Guidelines: Use of Consultants by Ubrld Bank Borrowers and the Ubrld Bank as Executing Agency" published by the Bank in August 1981. The Bank's Standard Letters of Invitation and Standard Forms of Contract for Consultant's Services would be adapted, as appropriate, to each assigmment and used for contracting all technical assistance under the loan. 94. All consultant contracts would be subject to full prior review, in accordance with Bank Guidelines, including that of: (a) preparation of the terms of reference and budget; (b) choice of selection procedure; (c) preparation of the Short List and the Letter of Invitation; (d) the winning proposal and the Evaluation Report; and (e) the draft contract. However, consultant contracts estimated to cost below US$ 50,000 for firms and US$ 20,000 for individuals, except the first two contracts in each category, would require only the review of the terms of reference, qualifications, experience, and conditions of employment of the selected consultants on an ex-ante basis. Supporting documents for these contracts would be reviewed selectively on an ex-post basis. This exception to the Bank's review shall not, however, apply to assignments involving single source selection of firms; assignments of a critical nature as reasonably determined by the Bank; amendments to the contracts for the employment of firms raising the value of such contracts to US$ 50,000 or above; and amendments to the contracts for the employment of individuals raising the value of such contracts to US$ 20,000 or above. Contracts with consulting firms valued at US$ 50,000 or below will not exceed US$ 3.0 million in aggregate. Jamaica Pu blic Sector Modernizahon Project:: SAR: 7/96 32 95. The limits established for prior Bank review of procurement decisions are expected to result in a coverage of about 80% of Bank-financed contracts. 96. The borrower's procurement regulations and procedures have been reviewed by Bank staff in the context of previous projects and the country procurement assessment and have been found to be generally consistent with Bank guidelines. 97. Training and Infornation Campaign: After the Annual Action Plan relating to Training and the Information Campaign has been approved, expenditures under these categories would be made against Statements of Expenditure (SOEs). 98. Civil Wrks: The entire cost of construction of new buildings and refurbishing of old buildings will be financed by GOJ according to its local procedures. 7Tble 5: Summary of Procurement Arrangements (uss thousands) .':..-' .. .... . .' ... .,', ' ..... '_ TO TA L Goods 10,600 0 1,500 6,330 18,430 (10,600) (0) (1,500) (0) (12,100) Consultants 14,000 12,200 26,200 (14,000) (0) (14,000) Training 2,050 2,040 4,090 (2,050) (0) (2,050) Civil Works 8,030 8,030 (0) (0) Information Campaign 250 250 (250) (250) Total 10,600 0 17,800 28,600 57,000 (10,600) (0) (17,800) (0) (28,400) Notes: 1. Figures in parentheses indicate expenditures financed by IBRD. 2. ICB: Intemational Competitive Bidding. 3. NCB: National Competitive Bidding. 4. 'OTHIER" includes Limited International Bidding, Shopping, consultants and training. 5. NBF: Not Bank Financed. Jamaica Public Sector Modernization Project:: SAR: 7/96 33 Table 6: Procurement Prior Review and SOE Thresholds (uss thousands) . < . ~.. . ... .. ... . -- Goods All contracts 250 All contracts < 50 Consultants . Firms: Contracts 2 50 and first two . Fimis: Contracts < 50, contracts < 50 except the first two * Individuals: Contracts 2 20 and first contracts. two contracts < 20 . Individuals: Contracts < * All contracts involving: (a) Single 20, except the first two Source Selection of Firms; (b) contracts. Assigmnents of a critical nature; and (c) contract amendments increasing the amount of the contract to more than 50, in the case of firms, and more that 20, in the case of individuals. Training * All expenditures, after approval of Annual Action Plan. Information Campaign . All expenditures, after approval of Annual Action Plan. Civil Works Not Applicable Not Applicable 12 Disbursement and Special Account 99. The Borrower's Financial Administration and Audit Act, as amended up to July 1992, has been reviewed during appraisal and has been found to be acceptable for use with a Special Account. 100. The proceeds of the Loan would be disbursed against 100% of foreign expenditures and 85% of local expenditures on Goods, and 100% of expenditures on Consultants, Training and Information Campaign. Table 7 indicates different categories of expenditures to be financed by the Loan, the allocation of the loan amount to each category and the percentage of expenditures to be financed in each category. The Loan, including retroactive financing of US$ 2.0 million, is expected to be disbursed by the end of the fifth year of project implementation. A Special Account in US Dollars, with an authorized allocation of US$ 2.0 million, equivalent to an estimated four months of average disbursements, will be established in a commercial bank acceptable to the Bank. During the start-up of the project, the PCU will be able to request up to US$ 1.0 million as an initial deposit to the Special Account. After disbursements and commitments from the loan account have reached US$ 5.0 million, the PCU would be able to request up to the authorized allocation. Disbursements against contracts not subject to Bank prior review would be made against Statements of Expenditures (SOEs). Table 8 gives the estimated disbursements by fiscal year. Jamaica Public Sector Modernization Project: SAR: 7/96 34 Table 7: Disbursement by Category of Expenditure (USS thousands) C ~Y. .... Amiouof. Loa % f Expp_ I~tr tob . Goods 12,100 100% of Foreign and 85% of Local Expenditures. Consultants 14,000 100% Training 2,050 100% Information Campaign 250 100% Total 28,400 Table 8: Estimated Disbursements By Fiscal Year (uss thousands) FY96-~7 FY97-9 FY98-&F94 . Y01 F042. Annual 1,500 5,000 7,500 7,500 5,000 1,900 Commulative 1,500 6,500 14,000 21,500 26,500 28,400 E. Accounting and Audits 101. The PCU will maintain records and accounts to reflect, in accordance with sound accounting practices, the operations, resources and expenditures for each project component. The accounts will be consolidated annually to prepare the financial statements for the project as a whole. Supporting documentation will be maintained by the PCU and made available to Bank missions and independent auditors for scrutiny, as required. For expenditures incurred on the basis of Statements of Expenditure (SOEs) all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures will be retained by the PCU until at least one year after the Bank has received the audit report for the Fiscal Year in which the last withdrawal from the Loan Account or payment out of the Special Account, whichever is later, was made. 102. Project records and accounts, including the Special Account and SOEs, will be audited annually in accordance with appropriate auditing principles consistently applied by external independent auditors acceptable to the Bank, with terms of reference for auditors and reports approved by the Bank. The Bank's "Financial Accounting, Reporting, and Auditing Handbook (FARAH)" published in January 1995 would be used by the independent auditors in accordance with Bank auditing guidelines. Cost of the consultant services to be employed for the annual audits (US$ 25,000 equivalent through the life of the project) will be eligible for financing under the loan. Audit reports will be furnished to the Bank within three months after close of the Government's fiscal year. PROJECT RISKS AND BENEFITS Project Risks 103. The major risks are: waning of political commitment to the project; the unwillingness of the government to grant adequate autonomy to the executive agencies; the lack of dynamic and inspiring leaders in the targeted agencies; and the mismanagement of the complex organizational change process. The project is being designed to achieve observable improvements in some of the targeted public services within a short time period. Such early successes would demonstrate the feasibility and Jamaica Public Sector Modernization Project:: SAR: 7/96 35 benefits of the strategy adopted by the project, thus, firming up government commitment. External factors, such as the growing public demand for improved public services and the need for an efficient public sector to facilitate private sector growth, would also keep the government committed to public sector modernization. Discussions with GOJ have indicated that the government is keen on creating executive agencies and would be willing to grant them the requisite autonomy. To further reduce the related risk, disbursements for the executive agencies and Ministries would be linked to the execution of Framework Documents, satisfactory to the Bank. Appropriate remedies have also been incorporated in the Loan Agreement to guard against unwarranted withdrawal of autonomy granted to the entities covered by the project. To ensure high quality leadership in the executive agencies, the appointment of CEOs acceptable to the Bank has been made a condition for disbursement. It is expected that a strong PCU, working closely with the agencies involved in the project, will ensure that the organizational changes in the Ministries and executive agencies are managed effectively. Project Benefits 104. Conversion of public entities into performance oriented executive agencies, operating with greater autonomy and a modern resource base, will significantly improve quality of services provided by them to their clients. Strengthening the central divisions in Ministries will improve the quality of public policies and enhance government control over their implementations. The experience gained in the pilot agencies targeted by the project, will set the stage for modernizing the rest of the public sector. Privatization of activities that can be better performed by the private sector will increase competition and benefit consumers, enable the public sector to focus on its core competencies and reduce the fiscal burden imposed by inefficient public enterprises. Strengthening of procurement and contracting will ensure that government receives value for money for the huge annual outlays on goods, works and services. Improving internal control and auditing will enhance accountability and transparency in public financial management and ensure that delegated financial powers are exercised properly. Finally, the extension of the FMIS and HRMIS will improve efficiency in financial and personnel management in the public sector as a whole. SUMMARY OF RECOMMENDATIONS AND LOAN CONDITIONS 105. Agreements Reached at Negotiations: * It was agreed that, against the provision that had been made at Appraisal for the inclusion of two additional agencies under the Modernization of Public Sector Entities component, Jamaica Promotions Corporation (JAMPRO) and the Construction Division of the Ministry of Local Government and Works would be included in the component. * It was agreed that the objectives of privatization of the water and sewerage sector were to (a) provide an efficient and reliable supply of water and sewerage services at the least economic cost; (b) attract foreign and local private finance and broaden ownership; and (c) promote environmentally acceptable operation of the water and sewerage sector. The recommendations of a diagnostic study are currently being reviewed by government. Informed by the findings of the study, GOJ plans to introduce a Water Policy Paper that would outline a process for rational development and use of the island's water resources and sewerage treatment and disposal facilities. The second phase of the study will address the institutional, regulatory, legal and financial implications of the recommended policy. Based on the results of the second phase study, GOJ is likely to take a decision by March Jamaica Public Sector Modernization Project:: SAR: 7/96 36 31, 1997 on the strategy for private sector participation in the water and sewerage sector. An Action Plan will, thereafter, be prepared for implementation of the strategy from Fiscal year 1997-98 onwards. * With respect to privatization or contracting out of agencies and services, it was agreed to treat the list of such agencies and services developed by GOJ as an indicative list. As part of the Annual Action Plan (AAP) for each year, the Bank and GOI will agree on the specific agencies and services to be taken up for privatization/contracting out. * It was agreed to create a separate disbursement category, Information Campaign", for expenditures to be incurred in connection with the proposed communication campaign. Proposed activities under this category and under "Training" would be included in the AAP and the related expenditures would be incurred through Statements of Expenditure (SOEs) after the AAP has been approved by the Bank. * Agreements were reached on the following: The Operational Manual of the Project (para 84). * Terms of Reference (TORs) of PCU staff were agreed at Negotiations (para 84). * TORs for the preparation of the Modernization Plan, the Medium- Term Financing Plan and the Framework Document (para 36). * Project Costs and Financing (para 82). * Project Implementation, Procurement, Disbursement and Special Account, and Accounting and Audits (para 83 to 102). * Key Project Performance Indicators (annex 1). * Project Implementation Schedule (Annex 6). 106. Loan Conditions:. (A) Conditions of Effectiveness * Adoption by GOJ of the Operational Manual, satisfactory to the Bank. (para 84). * Appointment of the following staff in the PCU (para 84): * Project Director * International Project Coordinator Senior Project Officer Finance and Accounting Manager * Accounting and Administration Officer * Information Technology Coordinator * Two Agency/Ministry Coordinators * Procurement, Auditing and Internal Control Component Coordinator * Administrative Secretaries. * Signing of the Cooperation Agreement between GOJ and the NIBJ for the execution of the Privatization Component (see para 85). * Preparation and furnishing to the Bank of the Action Plan for FY 1996-97 (see para 87). * Furnishing of evidence regarding the availability of adequate counterpart funds for FY 1996-97 (see para 87). Jamaico Public Sector Modernizanon Project: SAR: 7,96 37 (B) Conditions of Disbursement Under the Modernization of Public Sector Entities Component, for each Executive Agency and Ministry: * Disbursements for the preparation of the Modernization Plan, Medium-Term Financing Plan and the Framework Document would be subject to the appointment of a CEO, with qualifications acceptable to the Bank, in the case of an Executive Agency, and the appointment of a Permanent Secretary, in the case of a Ministry (see paras 43 and 50). * Disbursements for the implementation of the Modernization Plan would be subject to (a) the preparation of the Modernization Plan, Medium-Term Financing Plan and the Framework Document, satisfactory to the Bank; (b) signing of the Framework Document by GOJ and the concerned CEO or Permanent Secretary, as the case may be, and (c) a legal framework, satisfactory to the Bank, being in full force and effect to enable the agency or Ministry concerned to carry out its Modernization Plan (see paras 43 and 50). Recommendation 107. Subject to the above, the proposed project would constitute a suitable basis for a loan of US$28.4 million repayable in 17 years, including five years of grace, at the Bank's standard interest rate for LIBOR based US Dollar single currency loans. Jamaica Public Sector Modernizalion Pro ect:: .AR: '196 38 DOCUMENTS IN PROJECT FILES 1. Medium-Term Policy Framework and Public Sector Investment Program - 1994/95 to 1996/97 Government of Jamaica. 2. Review of the Role and Structure of Government: Ken Rattray, Solicitor General, Jamaica 3. The Establishment of Executive Agencies: Certain Constitutional, Legal and Practical Considerations: Michael Prescod. 4. Opinion of the Attorney General of Jamaica on the Suitability of the Existing Legal Framework for the Creation of Executive Agencies. 5. Draft Handbook For Government Financial Administration. 6. Guidelines for Delegated Functions. 7. Executive Agency Strategy 8. Executive Agency Agreement - Guidelines. 9. Functional Review of the Ministry of Local Government and Works. 10. Functional Review of Ministry of Environment and Housing. 11. Study of Procurement Procedures and Operations. 12. Jamaica Country Procurement Assessment Report. 13. Review of FMIS and HRMIS. 14. Matrix of Expected Wage Costs. 15. Full Salary Matrix and Post Analysis for Central Government 16. Outline of Communications Program for Public Sector Modernization Project. 17. Feedback of various agencies involved in the Project on different versions of the SAR. 18. Comments of Peer Reviewers. 19. Operational Manual dated June 5, 1996. ANNEX 1 KEY PROJECT PERFORMANCE INDICATORS ectives Inputs Outputs Impact Performance Timring Indicators Modernization of Public Entities - Executive Agencies Bring about major Consultancies to prepare, for Improvement in Separate performance Jamaica Customs Department improvements in the quality each Executive Agency: indicators have been - 4/96 to 12/01 of servlc provided by A . Modernization Plan; Service quality; developed for eleven Office of Titles - 9/96 to selected Executive Agencies., Medium Term . Service quantity: Executive Agencies 12/01 Financing . Cost effectiveness. (Annex 3). Town Planning Department - Plan; and 9/96 to 12/01 * Framework Document. Increased client satisfaction Surveys Department -9/96 to as reflected in surveys. 12/01 Consultants, goods and Jamaica Information Service - training to implement the 9/96 to 9/00 Modernization Plan. JAMPRESS - 9/96 to 9/00 Planning Institute of Jamaica - 4/97 to 12/01 Registrar General's Department - 9/96 to 9/00 Registrar of Companies - 9/96 to 6/01 Administrator General - 12/96 to 1/01 MIND - 3/97 to 12/01 JAMPRO - 4/97 to 12/01 Const. Div. of MLGW - 7/97 to 12/01 w Jamaica Public Sector Modemization Project: SAR: 7/96: Annex 1: Key Monitoring Indicators 2 Ot.jectvts 0;0 i;; Inp:; Outputs Impact PeTformance Ti:ming ... . ...... ~~~~~~~~~~Indicators Modernizatdon of Public Entities - Ministries Improve the ability of selected Ministries to: Consultancies to prepare. for For each Ministry: Well-informed, Separate performance Ministry of Environment and (a) formulate sound sector each Ministry: * Modernization Plan; economically and indicators have been Housing - 9/96 tol2/01 policies, technical standards * Modernization Plan: * Medium Term technically sound Sector developed for the identified and oe rational snors * Medium Term Financing Policies: Ministries (Annex 3). Ministry of Local Government and oeai , Financing Plan; and and Works - 2/97 to 12/01 (b) effectively mronitor and Plan; and * Framework Document. Formulation and evaluate downstream * Framework Document. enforcement of high quality agencies to ensure that technical standards; desired policy objectives are achieved, and Consultants, goods and For each Ministry , upon Formulation and training to implement the implementation of the enforcement of efficient, (c) efficienthy perform Modernization Plan. Modernization Plan: transparent and object- corporate management * Increased autonomy; oriented operational norms; functions; * A contractual obligation to achieve clearly defined Effective monitoring of performance targets; operational agencies * Strengthened legal and affiliated to the Ministry normative framework; resulting in cost-effective * Streamlined and timely policy organizational structure implementation. of the central divisions; Effective corporate * Rightsized staff complement. management based on * Improved staff skills; modern corporate planning, * Incentive structure suited budgeting, personnel and to achievement of financial management organizational objectives; accountability techniqaue * Re-engineered business and standards. processes; * Modern management and Increased public satisfaction operational sgernes with the performance of the * Upgraded tools,tm Ministry, as reflected in equipment and facilities. luniiaica Puhlic Sector Modernization Project: SAR: 7/96: Annex 1: Key Monitoring Indicators 3 Objecth,es inputs Outputs Impact Performance Timning Indicators Privatization Continue the Rationalization of the public sector through: (a) private participation in the Consultants to prepare Private sector participation in Improved and economical Improvement in the quality of 2/96 to 4/01 water supply and sewerage privatization strategies and the Water and Sewerage provision of quality of water supply and sewerage sector; bidding documents and assist Sector; water supply and sewerage services as reflected in GOJ in executing transactions services; consumer surveys: related to privatization of the water and sewerage sector. Private sector investment in Degree of private sector the water sector to meet involvement in management of current and anticipated and investment in the water capacity gaps; and sewerage sector. Consultants to prepare Privatization or contracting Better quality, more cost- Number of entities Number of facilities and (b) privatization or privatization strategies and out of targeted facilities and effective provision of privatized/contracted out. services to be contracting out of facilities bidding documents and assist services. services to clients. privatized/contracted out: and services, where GOJ in executing transactions Cost savings achieved. government has no related to facilities and 9/96 to 3/97: 5 comparative advantage; and services targeted for Improvement in quality of 4/97 to 3/98: 7 privatization/contracing ouL service as reflected in client 4/98 to 3/99: 10 surveys. 4/99 to 3/00: 7 3/00to12/01: 6 lbtal: 35 (c) Institutional strengthening A long-term Resident Adviser Privatization transactions; Enhanced institutional Improvements in NlBJ's 9/96 to 12/01 of NIBJ to assist NIBJ to put togetier communication campaigns to capacity of NIBJ to efficiency and effectiveness in and implement privatizations; inform the public on implement privatization conducting privatization consultants to strengthen privatization; and training transactions. transactions as reflected in ND3J's public relations and courses attended by NIBJ * design of privatization marketing capabilities; and staff. transactions; training to NIBJ staff. * access to potential investors; * negotiating skills; * quality of outcomes; * degree of transparency of and public support for executed transactions. Jamnaica Public Sector Modemization FProject: SAR: 7/96: Annex 1: Key Monitoring Indicators 4 Objectives inputs Outputs impact Perfmance Timing Indicators Government Procurement, Contracting, Internal Cooitrol and Auditing Improve efficiency. value for Consultants. goods and Establishment of: Enhanced value for money. Increased cost-effectiveness. * Procurement Policy money and transparency in training to establish and * Procurement Policy efficiency. transparency and Implementation Unit - government procurement and strengthen: Implementation Unit: accountability in Reduction in time taken to 9/96 to 8/99 contracting: * Procurement Policy * Procurement procurement and complete procurement and * Procurement Committees Implementation Unit in Committees and contracting. contracting actions. and Procurement] the Ministry of Finance Procurement/ Contracting Units in all and Planning; Contracting Units in all Improved contract Improvement in disbursement ministries - 9/96 to 9/00 * Procurement ministries; management. profile of major projects. * Secretariat in the Office Commiitees and * Secretariat in the Office of the Contractor Procurement/ of the Contractor Reduction in cost over-runs General - 9/96 to 8/99 Contracting Units in all General. and slippage in major projects. ministries; * Establish the Secretariat Updated manuals of policies, Consistency in application of in the Office of the rules and procedures for prescribed rules and Contractor General. procurement and contracting. procedures in procurement * Development of and contracting decisions transparent and efficient Computerized information throughout government. systems and procedures systems for gathering market for procurement, information, monitoring Diminution in allegations of contracting and contract contract execution and misconduct in procurement management. evaluation of performance of and contracting decisions. suppliers and contractors. Trained staff to handle procurement and contracting activities Jamaica Public Sector Modemization Project: SAR: 7/96: Annex 1: Key Monitoring Indicators 5 ~~~~~~~~~~~~~~ottt. . . .... .... .. .. ... .... Obeccvs: :hp~it~ :O1nts hpact Perfora::e Timing :Wicators Government Procurement, Contracting, Internal Control and Auditing (contd.) Enhance public sector Consultants, goods and Manual of principles, norms Increased transparency, Increased ability of internal Internal Audit Directorate: accountability by training to: and procedures to establish accountability and probity auditors to check errors and 9/96 to 8/99 strengthening internal and * Establish and strengthen effective internal control in activities of public irregularities ex-ante as external controls. the Internal Audit systems in public entities; entities. reflected in internal audit Directorate in the reports. Ministry of Finance and Uniform standards for Planning; conducting internal audits; Increased ability of the Auditor General: 9/96 to 8/99 Strengthen the Office of Auditor General to detect the Auditor General Trained auditors to exercise serious errors and effective internal control. malfeasance, ex-post as reflected in annual report Enhanced capacity of the submitted to Parliament. Auditor Geneml to audit computerized accounts and procurement and contracting decisions. MNS Improve the quality of Consultants, goods and Additional modules of the Increased efficiency, control Evaluation of additional 9/96 to 12/01 financial and personnel training to: FMIS and ERMIS and transparency in public software modules developed, management in the pubfic * Complete the financial and personnel through expert opinions and sector through computerized developmnent of the Installation and management. client surveys. infornation systems. FMIS and HRMIS; and commissioning of the systems * Complete the in all government entities. Use of the systems in the day installation of these to day to work of public sytems in ae entities. government entities. Quality and timely availability of data for preparation of the national budget, national financial accounts, auditing and personnel management decisions. Janaica Public Sector Modemization Project: SAR: 7/96: Annex 1: Key Monitoring Indicators 6 Objectives I Outputs Perfonnan unin~~~~~~~~~~~~~~~~~~~~~~..... ............. ..... ... Project Implementation, Communication Campaign and Development of Stage 11 Efficiently and effectively Consultants. goods and Project management Efficient implementation of Degree of achievement of 9/96 to 12/01 implement the project. training activities, the project. targets set in the Annual Action Plans. Mobilize support of Consultants Communication strategy and Wide-spread support for the Effectiveness with which 9/96 to 12/01 stakeholders for public sector actions modernization project public support built for the modernPization, amongst different project and opposition stakeholders. reduced . Prepare the next stage of the Consultants Action plan for Stage 11 of Sustained momentum for Quality of Action Plan for next 9/96 to 12/01 modernization process to public Sector Modernization Modernization of the whole stage of public sector public sector, modernization, with special (a) extend the reforms in the reference to the degree to pilot entities to the rest of the which lessons learnt in past public sector; and initiatives and this project are (b) introduce other systemic ~~~~~~~~~~~~~~~~~~incorporated therein and the refrm inrequired inther publeic nature, feasibility and cost of reforms required in the public ~~~~~~~~~~~~~~~~~~proposed strategy. sector. ANNEX 2 Background Information on Targeted Executive Agencies and Ministries Planning Institute of Jamaica (PIOJ) Ministry of Finance and Planning ..... . . Main Functions/Acddties 1995 CunT Pit Fludal Consams and Weaknses ._ _ _ _ _ _ _ _ _ _ _ __ :.:_._::_ _::::_:::. _:_:_::_.... _ _:_:_:_ _::_: _._. Em ploym ent A rran enms ts The PIOJ (formerly the National Planning Main Functions: No. of sanctioned The PIOJ is funded through 1. Inadequate financing limits Agency), became a statutory body in April 1. Initiating and coordinating planning for the economic, posts: tax revenue, capital revenue output of all the main 1984 under the provisions of the Planning financial, social, cultural and physical development of 179 (loans and grants) and functions/major activities. Institute of Jamaica Act (1984). In addition to Jamaica. Posts filled: revenue generated through the functions of the NPA (est. 1972) and the 163 sales of publications.) 2. Salary scales reduce ability to Central Planning Unit (est. 1955), the PIOJ 2. Monitoring the implementation of plans so initiated or Part-time Posts: compete for high quality staff. was given the special responsibility to coordinated. 5 strengthen the planning capability of the Temp/Relief government. 3. Undertaking research. Posts: 29 The Institute falls under the portfolio of the 4. Training in planning. Others: Ministry of Fuunce and Panning. The 36 Director General heads the Institute's 5. Undertaking consultant activities for Government Total posts being management team which indcudes a Deputy Ministries, agencies and statutory bodies. operated: Director Generl, a Senior Director and seven 233 Directors. 6. Maintaining a national socio-economic reference library. 7. Managing technical cooperation agreements and programs. Jamaica Public Sector Modernization Project: SAR: 7/96: Annex 2: Background Information on Targeted Executive Agencies and Ministries 2 Jamaica Customs Department Ministry of Finance and Planning Bacrgouid Main Fnnctions/Acdviie5 1995 Curret Finandal Constrais and Weaknesses Employment Arrangements. The Jamaica Customs and Excise Main Fun nions. Posts filled: 1995-96 Budget: Financial constraints: Department was established under the 1. Assessment and collection of Customs Duties and GCT on 900 JS141 million. -Low salaries: Revenue Administration Act No. 12 of imports at the ports of entry. Posts Vacant: -Lack of funds to purchase equipment. 1985. It is one of the country's six 44 1994-95 Revenue targets: -Lack of funds to renovate and revenue collecting agencies. Initially, the 2. Enforcemcet of Customs Laws and Regulations. Total posts: 1$8.841.20 million. improve work environment. depanment was supervised by the Revenue 944 Board. However, in April 1991. the 3. Surveillance over activities of all vessels and persois 1994-95 Revenue collection: Physical constraints: supervisory functions of the Revenue Board entering or leaving the island in order to prevent smuggling. J$11,089.14 million -Inadequate space; were transferred to the Financial Secretary. -Lack of furniture and equipment: In October, 1991. Excise functions were 4. Issuing of licenses to Inbound Operators. -Inadequate/inappropriate working transferred to the newly established General conditions; Consumption Tax (GCT) Department and 5. Inspection of factories to ensure compliance with physical -Inadequate transportation. the name of the Department was changed to and accounting controls. Jarnaica Customs. Lack of autonomy to take decisions on critical issues such as: Te Department is headed by a -Appropriate grades for staff; Commissioner of Customs supported by a -Employment of full complement of Deputy Commissioner, three Collectors of staff as demanded by the level of Customs and other administrative staff. operations; -Recruitment and removal of staff. The Department's primary objective is to maximize revenue collections from Customs Duties and Taxes, through the implementation of effective and efficient compliance programs, while facilitating trade. A computerization program, financed by GOJ, is underway. Some additional resources may be needed to implement it fully. The Department has also received assistance from the USAID in developing a new organizational structure and preparing operational norms. Jamaica Public Sector Modernization Project: SAR: 7/96: Annex 2: Background Information on Targeted Executive Agencies and Ministries 3 Office of Titles Ministry of Environment and Housing flagrt f . .. Main fctons/Aeiivitiet 1995 Curreent Finandal ConstrAints and W _ Arralements.. Established in 1889 under the Registration Main Functions Permanent The public is charged a fee I . Large number of documents of Tftles Act. The Department is receiving Regulating all activities affecting the titling of registered land. posts : 30 set by GOJ for the provision received daily. Inadequate assistance through the IDB financed Land Administering the Registration of Titles Act and the of registration services. The computerization and record Titling project for the construction of a new Registration (Strata) Titles Act and regulations made Temporary & fees were last adjusted in imaging equipment. Therefore, building and development of Titles thereunder. relief posts: 56 March 1995. heavy backlog of work. Information System and Document Tracking System. Further inputs are needed Major Activities: Total: 86 Salary & allowance for 2. Chronic lack of records storage in various operational areas. 1. Issuing new Certificates of Title. permanent staff: space affects document retrieval JI5,173.556.00 and preservation. New building 2. Making memorandum endorsements on existing titles to will not solve this problem. record transfers, subdivisions, mortgages etc. Salary & allowance for temporary & relief staff: 3. A large number of old title 3. Carrying out title searches on behalf of the public. J$4,286,570.00 documents are in a precarious condition. 4. Storage and safe-leeping of original titles and 1994/95 Budget: documents. JS14,893,000.00 4. Inadequate number of qualified Revenue collected: lawyers, middle managers and JS55,304,145.20 binders. Amt. retained for incentives: Nil 5. Poor remuneration and working conditions. 1995/96 Budget: J$20,273,00000 6. Heavy staff turnover. Need for Revenue collected 4/95 to constant re-training as 9/95 JS37,388,740.97 specialized staff leave. Amt. retained for incentives: Nil 7. Lack of resources to deal with public queries promptly. 8. Information from related departments, such as Survey and Town Planning is required to complete title registration, but the same is not readily available. TtIis causes major delays in the reg istration procea. & Jamaica Public Sector Modenization Project: SAR: 7/96: Annex 2: Background Informnation on Targeted Executive Agencies and Ministres 4 Town Planning Department Ministry of Environment and Housing :aruz M; -:::-!--: :044:: inF sAs :: ivl l9S Cuir ren!Firnancia Arrangeen C r n 1i9C ents fnd eannes Ar Established in 1959. Main functions: Filled Posts: Totally financed through the 1. Shortage of planners: 70% posts vacant. To ensure the orderly and progressive development of rural and 70 regular budgetary mechanism of Remuneration inadequate to attract qualified urban areas in order to secure a balance between competing GOJ. Fees for subdivision of individuals. demands for land. Sanctioned posts: land and development 117 applications collected by local 2. The process of clearing subdivision and Major Activities: authorities, but not shared with development applications involves a number of 1. Advising local authorities on: the TPD even though it plays a entities and a series of approvals. Needs to be * Subdivision of land; major role in the process. Some streamlined to reduce delays. * Development applications; revenue earned from sale of * Use of land. Atlas. 3. Inadequate and outdated equipment. 2. Preparing physical plans at the national, regional and local Total revenue tarned 1994/95: 4. Inadequate transportation facilities for field levels. J$ 168,905 work. 3. Preparing Development Orders on bchalf of the Town and 1994/95 Budget: Country Planning Authority and serving as its Technical JS18,202,000 Secretariat. 1995/96 Budget: 4. Assisting in the enforcement of the Town and Country JS25,000,000 Planning Act (TCPA). 5. Advising the Minister, professionals and the public on land use issues. Jamaica Public Sector Modernization Project: SAR: 7/96: Annex 2: Background Information on Targeted Executive Agencies and Ministries 5 Survey Department Ministry of Environment and Housing ... . .... . Maid FndKstA*tivitifs 1195 Current Fiancia Constraint and Weakneusi~ '::,,,,,,,,:':. . . .. . . . . . . . . . . . . . ..':'''' aBF .195:'' CSxadl_s.W _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __..._ _._..._A rran g e zna.... ...._ _ _ _ _ _ _ _ _ _ Established in 1938. Currently, two of its Main Functions: Posts filled: 1994/95 Budget: 1. Inability to recruit and retain division: Cadastral Mapping Division and Land surveys, mapping and administration of Land 108 JS19,432,000 qualified staff due to low Land Information Systems Division are Surveyors Act. remuneration. receiving assistance under the IDB financed Posts vacant: Revenue Collected 1994/95: Land Titling Project. This project aims at Major Achivieis: 57 JS2,038,648 2. Lack of computerization in completing the titling process for 36,000 1. Surveying of Public Lands. majority of operational areas. parcels and developing methodologies for 2. Checking of Cadastral Plans to support the land Total: 1995/96 Budget: cadastral mapping and for the digitization of registration system and technical assistance to Registrar of 165 JS22,101,000 3. Outdated equipment. information generated by the mnapping. The Titles. project also aims at establishing a 3. Establishing and maintaining an island-wide network of Estimated revenue to be 4. Lack of a comprehensive comprehensive land information system that survey control points. collected 1995/96: Cadastral Map of Jamaica. would integrate land information stored in 4. Prmparing topographical maps. JS2,462,000 other government agencies. 5. Surveying and charting harbors and coastal waters to 5. Inadequate training. ensur safe navigation. 6. Arbitrating disputes under the Land Surveyors Act. Jamaica Public Sector Modemnization Project: SAR: 7196: Annex 2: Background Information on Targeted Executive Agencies and Ministries 6 Jamaica Information Service Office of the Prime Minister ~~~~~~~~~~~~~~~~.. ......... .. ..... ... .... .. - -E- . , . . . ..-.. .... ... -,--., a ~ *g~a.ai .tIA~iis uetIad ~ Cqt~~p c JIS is the masin organization through which Official infornation dissemination agency of the Govermment Total staff: Recurrent and Capital I Salaries not competitive with the government informs citizens about the of Jamaica. Its chief function is to help maintain effective 251 Expenditures financed by private sector. policies, programs and activities of its various communication and feedback between the govenunent and Annual Budget from the ministries, deparmaents and other public citizens. GOJ. 2. Unrealistic fee setting levels. sector agencies. The department also Fees cover only some costs. disseminates Jamaica's culture and values Maior Activities Budget 1994/95: and helps to promote a sense of unity, 1. Public Affairs and Public Education Campaigns. Recurrent: 3. No cost accounting system. national identity and respect for national J$50.5 million institutions. 2. Production of Radio and Television programs for the 4. Insufficient technically trained Govenunent. Capital: staff. The deparment has publicity and production 1S16.8 million capabilities in radio and television, 3.Buying and placing the GOJ's advertising in several media. 5. Old, inadequate technical advertising, publishing, graphic arts and Production of publications for the GOJ. Revenue: equipment and vehidcles. public relations. It is organized in seven The J1S is not a revenue departments: Public Affairs; Radio; 4. Informing overseas public through Information Attaches in earning Department. Television; Publications and Advertising; Jamaica's foreign missions about the GOJ's policies, Regional Services; Research Unit; Finance programs and developments in Jamaica. Fees charged only assist in and Administration; and Overseas Operations. recovering some costs, e.g. 5.Provide Mobile Information Units to reach distant parishes publications. and inform citizens of the GOJ's policies and programs. 6.Research topics of interest to the GOJ and monitor public opinion. Store current information on the GOJ's events and programs. iA Jamaica Public Sector Modemization Project: SAR: 7/96: Annex 2: Background hnfonnation on Targeted Executive Agencies and Ministries 7 JAMPRESS Office of the Prime Minister :. -. :::'::::::':-:''.':':.. :. ::................. . .... .. ..... ':.. :'.. . -' . . . .. .. : . ...... ......... ... ..::''.' '1' :'C.. ......... ... ... ... ... :'':,:, ...... ... ... ....... .................. . .....- - ........ .. . .. . .. . .. . . .. . . .. .. .. .. . .... . . .. .... ........... ........... ..... . . ... . . . .. , , , , ,,,,,.. .. , .... .,. .., ... , . .. . . .. . , . . , . . . . . . . ...... . .. . . ... .... .I. . . .. .. ....... . -.. - . . . .- .. .. . . . . :.:..:.. Formed in 1984 as a limited liability Official news agency of the Government of Jamaica. Total posts: 35 Financed by annual 1. Salaries not competitive with company, wholly owned by GOJ. Board and subvention from GOJ and private sector. Executive Director appointed by Prime Major Acfvi ies: Editors, reporters revenues from sale of Minister. 1. Collection and dissemination of information relating to and photographers services and publications. 2. Weak financial and personnel government policies and programs. are employed on Capital expenditures management systems. two year contracts approved by OPM. 2. Making arrangements for coverage of state visits and under the rules, 3. No computerized links to JIS or international conferences by local and international conditions and Enjoys considerable other government information journalists. pay stmicture of autonomy in financial agencies. the civil service management. Collects fees 3. Training of Information Officers of the Jamaica (except pensions from ministries, other than 4. Inadequate transportation Information Service (JIS). structure). Enjoys Ministry of Fmance and facilities. conaiderable Planning and Office of the 4. Isaing miniAerial statenensi. autonomy in Prime Minister. Tne fees personnel are fully retained by it in a management. Cost Recovery Fund that is Employees can be used to pay cash incentives dismissed at one to staff and meet some month's notice. recurrent expenses. Allowed to retain savings out of the recurrent budget allocated to it by GOJ. Office of the Prime Minister controls capital expenditure. 1994-95 Budget: J59.1 million. 1994-95 Fee Revenues: J$ 2 million. U. Jamasica Public Sector Modernization Project: SAR: 7/96: Annex 2: Background Ionnoration on Targeted Executive Agencies and Minites i$ Registrar General's Department Ministry of Health Mat&fhia .......... TheDet.ha to aindiison: he Mai Fncios.Pots:Fes orreisratonan OerMina General Register and the sland.. Recor Rei.rtonad.ae..ig.freodso.irh..6.crife.ope.cage...N.omuerzt.no Office The epartent'sfunctins inolve arriaes, daths, ills,commo law itlesetc., hich ncomig.docments llx ept ha tw nui diisins:the Major Auctionis: fieldFesfo registrar, Rvneclctiod 199/9d doera ments. Generl Regsterand te Isand Rc1.dRegisterin n bits,adeaths,go mrriages and adoptios, and mainlyfiedcopies 4hre. I. Re cordmnpooeriztonditon. extensie dealng wit the pufc.produces rlevattsant croertifcts (regitstrandfrmGeneral's housewiivn tes.det1992 Bisouned inlregistersostacked ofnuierou fromnctrnacins floortJ$700,000 atv toi eiin.i employs 380 3. lmbil~~~inaeute sto ragedl area.ev 2.jo Regviieste wiells,egiswers,ofevateorney,ctcommon9lawdHumndres.oouet conveyance deeds, opticians, trade union and building partially destroyed. societies (Islan Records Office). S. Poor security of records. Original documents accesible 3. Provide certified copies of records to the public on to all staff increasing risk of request. tampering of documents. 6. Lengthy procedures, requiring 4. Store vitai records and Laws of Janmaica. The multiple supporting documents department possesss documents dating back to 1663 and interviews, for that have considerable historical, cultura and research amendment to recorded value. entries. 7 . Lar-kof staff to deal with 5 . Compile and publish vital statistics. Public Relations. 8. Significant levels of backlog. 9. Inability to link birth and death records electronically. 10. No facility to communicate with Field Staff. Personne! Management I . High rate of attrition. 2. Scarcity of mriddle and senior mianagers and preponderance of clerical staff who can only perform routin tasks. 3. Unqualified fielId registrars. IA Jamaica Public Sector Mod.nization Project: SAR: 7/96: Annex 2: Background Iformation on Targeted Executive Agencies and Miristies 9 Ofrice of the Registrar of Companies Ministry of Industry, Investment and Commerce .~ ~~~~~~~~~~ . _.,,........,,.. ..... ... ..... . ..,,. . .. . ..... ... ...- .. ,....... ................. ... . .:' -:-::::::--:- . ..-::,''........ -. : '- '.M FA, :' ..... ....................... '':''':'-''..,.-W.: Created in 1975. Main Fun cuons: Total staff: 67 Expenditure met out of 1. Legislative framework needs To register, regulate and supply information on annual budget allocated by strengthening to keep pace Companies, ndustrial and Provident Societies and business the Ministry of Finance. with changes in the business enterprises engaged in commercial and charitable activities Revenue collected through environment and international in Jamaica, and protection of intellectual property rights registration fees, license developments. through registration of Trademarks, Patents, and Designs. fees, asset tax, interest 2. Inefficient and cumbersome penalties and user fees for work processes. Major Actvities: supply of information to the 3. Inadequate computerization. I. Registering all companies operating in the island, public is deposited in the 4. High rate of increase in including overseas companies with an established Consolidated Fund. Fees volume of registration work place of busincss in Jamaica. and Penalties do not without commensurate incrmase adequately reflect in staff, work stations and 2. Monitoring companies to ensure compliance with the seriousness of breaches and storage space. Companies Act. costs of services provided by 5. Limited delegation of finarcial the office. Last increase in and personnel decision making 3. Examining the accounts of companies and provident fees was in 1992. powers. and industrial societies to ensure collection of asset 6. Weak compliance unit, high tax. User fees need to be revised. delinquency rate and low penalties leading to lack of 4. Initiating court proceedings against delinquent 1994-95 Expenditure info. on busines.es to investors companies and socieies. Budget: and regulatory agencies. J$ 10.9 million. 7. High volume of unregistcred 5. Maintaining up-to-date records of all registered businesses which weakens companies and stipulated business entities and making 1994-95 Revenue Receipts: regulatory framework and the records available to the public. JS35.5 million. hindcrs tax collections. 8. Low level of academically 6. Registration of Trademarks, Patents, Designs and qualified staff. Large Businers Names. contingent of temporary staff. 9. Inadequate physical facilities for public and staff. 10. No changes in legislative framework in thirty (30) years for Trademarks, Patents and )Designs. Jamaica Public Sector Modernization Project: SAR: 7/96: Annex 2: Background Information on Targeted Executive Agencies and Ministries 10 Administrator General Ministry of National Security and Justice - Badipound ~~~~~~~~Main F=n tinnActiVites 195Carrent Thsanda CbnstmW:ns ad W~ams ..0 ....: .D :.....0:00 .. - ..- ..- .. . .... EAS AiS :: :,: fD 0X:, : E : :007 .: . : t70: 0: Established under The Administrator Main Funciions Total Staff: 83 Financed by GOJ and by 1. Too few staff. General's Act, 1873. Intervenes in and oversees the disposition of estates whose No vacancies. fees on estates administered. 2. Inadequate training resources. disposition would be problematic without state Estate management 3. Weak records-keeping involvement. commission set by law at capacity. 6% of all payments made 4. Poor access to public records Major Activines: from the estate. Fees for on estate properties. 1. Determiining need for intervention in the disposifion of searches and copies also 5. Weak rent collection capacity. an estate. established by law. 6. Inadequate capacity to exploit 2. Overseeing distribution of the assets of such estates. informnation technology. 3. Managing estate assets for beneficiaries (e.g., minors Budget: JS15.8 million. 7. Lack of transport facilities. and lunatics). User Fees: J$913,158. 4. Issuing distributions to beneficiaries. 5. Closing estates under its tewardship. Jamnaica Public Sector Modanization Project: SAR: 7/96: Annex 2: Background Information on Targeted Executive Agencies and Ministries I I Management Institute for National Development (MIND) Office of the Prime Minister ,:, . : ' ' 195 C,r'''t .i.nia.. C........ .@ t..........t.... 1..F....... ,W Ca c _ , d - W, d ........ .. ::.:, ::,: . ...,. .. ... . ::''''::'' '-.........., ,.:'., ,,,. ':. ,,:......... ::::.. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _~~~~.... . ._ _.........._ __. A rra uzanents Established in 1994 by merger of Main Funcicons Lecturers The training of Civil 1. Poor faculty compensation. Administrative Staff College (ASC), Finance To provide the training required to build those human 21 Servants is directly funded 2. Inadequate classroom and and Accounts College of Training (FACT), resource capacities that are difficult for public entities to by the GOJ. MIND also faculty facilities. Secretarial and Clerical College (SCC) and recruit and retain (because of the low salaries and limnited Others: offers training on a fee-basis 3. Inadequate equipment, the Mandeville Training Centre (MTC). chances for advancement that typify Jamaica's Civil 50 to public employees of especially modern information Service). statutory bodies, technology. Total staff: Government-owned 4. Inadequate curricula Major Acriviies: 61 companies and other public development. I. Executive and management training; entities whose employees are 5. Inappropriate mix of course 2. Public financial administration training; outside the Civil Service. offerings relative to changing 3. Secretarial and clerical skills training; demand. 4. Project management training; 1994-95 GOJ budget: 5. Certificate-granting program in Public J$19.0 million. Administration; 6. Training to support major GOJ reform initiatives, Revenue from course fees: such as Corporate Planning, FMIS/EIRMIS and the J$SI. million. Adninistrative Reform Program. LA Jamaica Public Sector Modernization Project: SAR: 7/96: Annex 2: Background Information on Targeted Executive Agencies and Ministries 12 Ministry of Local Government and Works M~~itt ~ OI - uctte 1995 EM*liytn. Cuutml Firinen1 tt Wab The ministry was created in January 1995 by Main Functions: Permanent Posts: 774 1995-96 1. Inability to attract and retain combining the Local Government functions of the Administrative professional staff. former Ministry of Local Government, Youth and A. Public Works: Acting in vacant posts: Budget: J$32 Sports with the Public Works functions of the I . Construction, maintenance and management of 353 million 2. Untimely and inadequate flow of former Ministry of Construction and Housing. the island's public roads; bridges; storm water financial resources. control, river training and sea defense works; and Temporary: 155 drainage networks. 3. Lack of integration of the ODPEM: 42 organizational structure of the two 2. Provision of Technical Services to ministries and recently merged components of the government agencies for the design, construction Fire Brigade: 1,652 Ministry. and maintenance of government buildings and the maintenance of vehicles and equipment. Total: 2,976 4. Inadequate computerization. 3. Protecion of people and property against fires, 5. Insufficient training. floods and other disasters. 4. Operation and maintenance of a telecommunications network for the use of Government and its Agencies. 5. Provision and maintenance of the traffic management system. B. Local Governmmnr I. Local government administration for parishes and Kingston and St. Andrews Corporation. 2. Provision and maintenance of community amenity services including garbage collection, street cleaning, street lighting, public sanitary conveniences, fire protection, parks and markets, minor water supply systems and disaster management. 3. Social Security and community and welfare services relating to the poor and the elderly. I______________________________ 4. Supervsn. of Friendly Societies and Cooperatives. I 0% Jamaica Public Sedtor Modemization Project: SAR: 7/96: Annex 2: Background Information on Targeted Executive Agencies and Ministries 13 Ministry of Environment and Housing Maiot AchttsiowbJe vsvg I995 employmton cotetl Thluci* CcitPAfr.# anWeanoms .. ......... . ..... .* ....... 9 5 eplyis n . . ...... ... C t.* t The Ministry was created in January 1995 by Main Functions Permanent staff: 695 Total salary & I The Ministry is still in its formative combining the Housing section of the Ministry To develop policies and strategies and manage programs allowance: stage. of Construction and Housing with the to promote: Project Staff: 43 JS10,747.890.00 Environment and Physical Planning divisions of (as at March 2. Lack of a planned approach to the the Ministry of Public Service and the - the provision of affordable housing solutions within Temporary & Relief/ 1995) implementation of the Ministry's Environment (MPSE). Further, the subjects of the framework of the National Settlement Strategy; Casual: 442 programs. Land Administration and Estate Management 1995/1996 were transferred to this Ministry from the - the effective conservation, protection and development Personal & Executive Administrative 3. Lack of proper systems and modern Ministry of Agriculture and the MPSE of the country's natural and physical resources in Assets: 4 Budget: JSI 1.O technology which could improve respectively. keeping with the principles of sustainable development; million efficiency and facilitate the production Total 1. 184 and retrieval of information which is - the proper management and use of lands. necessary for proper planning and decision making. Objectives: 4. Fragmentation of activities reducing To develop new repayment models which will link efficiency. repayment to the ability to pay; thus enabling full cost recovery. 5. Archaic laws, Acts, regulations, etc. that hinder efficient performance. To increase the housing stock by establishing an appropriate policy framework and conditions that 6. Duplication of functions in some units facifitate more private sector participation in housing which are now part of the "new' development. Ministry. To develop a land divestment and administration 7. Lack of mobility to enable officers to system. obtain on the spot information. To develop procedures for dealing with environmental matters and see to their wide dissemination. To review and revise existing legislation. Annex 3 Performance Indicators for Targeted Executive Agencies and Ministries Planning Institute of Jamaica (PIOJ) Ministy of Finance and Planning Service Ouantitv 1. Number.ofPIO-producedreseurc documents. TBD +0 +10% +10% +.10% +.10% 2. Revenues from consultmncies. TBD + 10% + 10% +10%X + 10% + 10% 3. Number of GO1 officals trained in planning and projec identification, appraisal, management and TD +.10% +10% +10% +10% +10% evaluation. Service Ouality . Improvement ininformational base, analytical TBD + 10% +10% +10% +10% + 10% quality, coherence with policy objectives, time perspective and usefulness of National Plans. 2. Improvement in the monitoring of implementation of plans. TBD +10% + 10% +10% +10% +10% 3. Improvement in physical performance, disbursement, outputsandoutcomesofprojetsarel,tive tomtargets. TBD +10% +10% + 10% + 10% +10% 4. Improvement in regularly scheduled publications publishednonvtime. TBD +10% +10% +10% +10% +10% 5. Improvement in the quality and usefulness of research papers published. TBD + 10% +10% +10% + 10% +10% Cost-effectiveness u. Administrative costs per unit of each major output. TBD -10% -10% -10% -10% -10% 2. Revenues fromsle ofpublications. TBD +10% +10% +10% +10% +10% xu Jamaica Public Sector Modernization Project: SAR: 7/96: Annex 3 - Performance Indicators for Targeted Executive Agencies and Ministries 2 Jamaica Customs Department Ministry of Finance and Planning Performance Dimension Baseline (1994-95) Year 1 Year 2 Year 3 Year 4 Yer 5 Abalute Target/ Absolute Tatgetl Absolte TargelW Absolute TargeU Absoutet TafgCt % Change Relative to % Change Relative to % Ctooge Relative % Chaage Relative to % Cba*4ge Retaive to Previous year Previous year to Previous year Previous year Previous ytat Service Quantity I. Total Revenue Collected TBD Exceed Annual Tarrct Exceed Annual Target Exceed Annual Exceed Annual Target Exceed Annual Target set set by GOJ by 1096 set by GOJ by 10% Target set by GO set by GOJ by 10% by GO by 10% by 10% +10% 2. Revenue collected through enforcement actions TBD +10% + 10% +10% +10% Service quality 1. Average processing time for: * Green-line passengers; TBD -10% -20% -20% -10% -5% * Red-line passengers TBD -10% -20% -20% -10% -5% * Infornal Commaercial mporters TBD -10% -20% -20% -10% -5% * Fornal Commercial Importers TBD -10% -20% -20% -10% -5% a Personal Effects (cargo) TBD -10% -20% -20% -10% -5% * Cornmercial Cargo TBD -10% -20% -20% -10% -5% * Pre-clearance entries TBD -10% -20% -20% -10% -5% * 1-3 line entries (cornnodity imports) TBD -10% -20% -20% -10% -5% * Entries exceeding three lines TBD -10% -20% -20% -10% -5% * Refunds and duty drawback TBD -10% -20% -20% -10% -5% 2. Client perception as reflected in annual TBD -10% -20% -20% -10% -5% surveys. TBD +10% +20% +20% +20% +20% Cost-effectiveness I. Admninistrative costs per J1 of revenue TBD -10% -10% -10% -10% -10% colleeted I I I I I I The annual target would be agreed between the department and MOFP. It would be set at a realistic level after taking into account expected macro-economic variations and legal changes as well as depatnmental resources. The department would attempt to exceed the target through greater effectiveness in enforcement and improved productivity. Jamaica Public Sector Modernization Project: SAR: 7/96: Annex 3 - Performance Indicators for Targeted Executive Agencies and Ministries 3 Office of Titles Ministry of Enviromnent and Housing Service Onantity 1. New certificates of tidle issued: a. without plans To be determined (TBD) +10% +10% +10% +10% +10% b. with plans TBD +10% +10% +10% +10% +10% 2. Memorandumnendorsements on existing titlea. TBD +10% +10% +10% +10% +10% 3. Ownership determinations (title searches) completed. TBD +10% +10% +10% +10% +10% 4. Notifications of rejection of caveat issued. TBD +10% +10% +10% +10% +10% Service Ouulitv 1. Average new certificates of tidie turnaround time: a. without plans 65 working days (wd) -10% -20% -20% -10% -5% b. with plans TBD -10% -20% -32% -10% -5% 2. Average memorandum endorsement turnaround time. 25 wd -10% -20% -20% -10% -5% 3. Average ownership determnination (tidie search) turnaround time. 90 minutes -20% -20% -20% -10% -5% 4. Average caveat rejection turnaround timne. 15 wd -10% -20%l -20% -10% -S% 5. Client perceptiona*sreflected ina*nnualasurveys. TBD +10% +20% +20% +20% +20% Cost-effectiveness 1. Administrative costs per unit of each major output. TED -10% -10% -10% -10% -10% 2. User fees collected as a result of increased productivity. TED +10% +10% +10% +10% +10% .. . . ..... ....... ... . .. . .................... ...~~~~e Jamnaica Public Sector Modemization Project: SAR: 7/96: Annex 3 - Performance Indicators for Targeted Executive Agencies and Ministries 4 Town Planning Department Ministry of Environment and Housing Perfbmance Dimension Baseline (1994-95) Year 1 Year 2 Year 3 Ye 4 Year 5 Abso.ft Ttga! A:ott T.g.: Absoute TngeU AbsoWl Tngu Absofttle Tngt % Chantge Rttive to %Chlngctke ativeo % Change EWative % Chag keltiv, %chbaaget e wW: .: . .. :___________ Prwe'4ous yer Pevifus yew to Prevku yetr to Pteviou yenr Prewiovs veer Service Quantity 1. Number of new national/regional/local plans prepared TBD + 10% +10% + 10% + 10% + 10% each year. 2. Number of Development Orders published. TBD + 10% + 10% + 10% + 10% +10% 3. Number of applications for division of land processed. TBD + 10% +10% +10% + 10% +10% Service Ouality 1. Average time taken to publish devdopment orders. TBD -10% -20% -20% -10% -5% 2. Average time taken to process applications for division of land. TBD -10% -20% -20% -10% -5% 3. Averge respone time to queries from dients. TBD -10% -20% -20% -10% -5% 4. Client perception as rflected in annualsrveys. TBD + 10% +20% +20% +20% +20% Cost-effectiveness 1. Adminiatrative costs per unit of each mjor output. TBD. -10% -10% -10% -10% -10% Jamaica PubEic Sedor Modmnitim Projne: SAR. 7/96: Amex 3 - P futiume Indictm for Tgicd Exeoutive Agecs and Minisrie 5 Surveys Department Minstry of Environment and Housing |~~~~~~~~~~~~~s %4bag ui; 05 % it:0 10e4* :f tb u c4t. k*w 1 Service Ouanzitv 1. Number of new nationaliregional/local maps prepareo 0 4 6 8 10 12 acsc year. 2. Number of parcls suirveyed for ceadaral purposcs. TBD 30 40 50 60 60 Service lualitv 1. Average turnaud time for certify'ing plans. 16 weeks 14 weeks 12 weeks 10 weeks 9 weeks 8 weeks 2. Average time taken for preparing plans for anexation to Certificates of rtde. 6 working days 5 working days 4 working days 3 working days 2 working days 2 working days 3. Time taken to stunt surveys of paes requested by 6 months 5 months 4 months 3 months 2 months 2 months govt. 30 minutes 25 minutes 20 minutes 1S minutes 10 miutes 10 miinutes 4. Avenage respnaetime toqueriesafromciient. TBD + 10% +20% +20% +20% +20% 5. Cliet perception as reflected in annual rurveys. Cogs- effec ti v en sts 1. Adminisrtive costs per unit of each major output TBD -10% -10% -10% -10% -10% 2.Userfees oolleaed bsed onimpmoved productivity. TBD + 10% +10 lO! +10% + 10% + 10%1 11111111~~~~~~~~~~~~~~~ . ...................... .. ....~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. Jamaica Puhlic Sector Modernization Project: SAR: 7/96: Annex 3 - Perornnance Indicators for Targeted Executive Agencies and Ministries Jamaica Information Service Office of the Prime Minister Performance Dimension Baseline (1994-95) Year I Year 2 Year 3 Year 4 Year 5 Absolute Target/ Absolute TargcU Absolute Target/ Absolute Target! Absolute Targeti % Change Relative % Change Relative % Change Relative % Change Relative % Change Relative tc, .______.______._ _.__ to Previous year to Pmevious year to Previous year to Previous vear Previous year Service Ouantity 1. No. of main Promotional Events covered each year. TBD + 10% + 10% + 10% +10% +10% 2. No. of releases. features, photographs, radio and television programs, booklets and advertising slots produced each year. TBD + 10% +20% +20% +20% +20% Service Quality 1. Quality of releases, features, photographs, radio and television programs, booklets and advertising slots as reflected in client surveys. TBD + 10% + 10% + 10% +10% + 10% 2. Collections from sales of publications and audio and video tapes through improved quality, customer service and marketing. TBD +10% +20% +20% +20% +20% Cost-effectiveness 1. Cost/miain promotional event. TBD -10% -10% -10% -10% -10% Jamaica Public Sector Modanization Project: SAR: 7/96: Amex 3 - Pefrmce Imicators for Tgeted Exeoetive Agacits an Ministries 7 JAMPRESS Office of the Prime Minister }:''''-'- ~ ~ ~ ~ .... .....:' ,. . .........- .. -...... .. . . . 2:: :: R :: : : .... ... .... . m. . . . . . .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. . . . . . . Service Ouantity 1. No. of news events covered each year. 1,431 + 10% +10% + 10% +10% + 10% 2. No. of releases, features and photographs. Releases: 2,566; Features: 74; +410% +20% +20% +20% +20% Phoographs: 2,128. Service Ouality I. Quality of release, features and photographs as retflected 1. TBD + 10% +10% + 10% + 10% +10% in dient surveys. 2. Collections from subscriptions and user fees through 2. User Fee: JS 1,800,000; improved quality, customer service and marketing. Subsciptions 1S 69,000 + 10% +20% +20% +20% +20% Cost-effectiveness 1. Cost/release. JS 500 -10% -10% -10% -10% -10% o' Janaica Public Sodor Modenizatimn Projct: SAR: 7/96: Anex 3 - Peformance Indicators for Targeted Executive Agmicies and Mitries Registrar General's Department Ministry of Health Nor . Baseli. (1.:4--) Ye: 1Y2 Year 3 - r : 4 -- .Y. 5 : : ~~~~.: .::.-::::::.:.. :.:::.::..Ab. ........ :Y A JAbsanaae- A4bsolteTaxgct/ AhmbeTisar -Absolutie Tagt Absolute Target .% Change Reative : ChangeReative % Cne Relative .: Ciange RelatMive : Chang Relative to :............::-::............ -:.. . .. t Pvious to vousyar t PiUSa to Prevs er Prvi . yes Service Ouantitv 1. Vital statistics' registrations completed (births, deaths, marriages, stillbirths). 84,600 +10% +10% +10% + 10% + 10% 2. Certified registralion copies isued. 150,000 +10% +10% +10% +10% + 10% 3. Deeds recorded. 18,720 + 10% +10% + 10% +10% + 10% 4. Authenticated copies of recorded documents issued. 1,150 + 10% + 10% + 10% +10% +10% 5. Inquries answered. TBD + 10% + 10% + 10% +10% + 10% Service Ouslity 1. Average turnaround time for registering records that need no assesment. 20 working days (wd). -10% -20% -20% -10% -5% 2. Averge turound time for late registntions. Expdited Kingston/St. Catherine/Clarendon 30 wd -10% -20% -20% -10% -5% * Rest of ldand 30 wd -10% -20% -20% -10% -5% Non-expedited * Kingston/St. Catherine/Clarendon 19 months -10% -20% -20% -10% -5% * Rest of sland 12 months -10% -20% -20% -10% -5% 3. Average turnaround time for correction of errors and late entry of names. * Expedited 20 wd -10% -20% -20% -10% -5% * Non-expedited 30 wd -10% -20% -20% -10% -5% 4. Average turnaround time for addition of father's particulars and re-registration of status. a Expedited 5 wd -10% -20% -20% -10% -5X * Non-expedited 65 wd -10% -20% -20% -10% -5% 5. Average turnaround time for recording of deeds. v Expedited 4 years -10% -20% -20% -10% -5% * Non-expedited 5 years -10% -20% -20% -10% -5% 6. Average turnaround time for providing authenticated copies of recorded documents. 15 wd. -10% -20% -20% -10% -5% 7. Average time required for user inquiry to be satisfactorily answered. TBD -10%. -20% -20% -10%. -5% 8. Client perception as reflected in annual surveys. TBD + 10% + 10% +10OX + 10% + 10% 0o, Jamraica Public Sector Modernization Project SAR: 7/96: Armex 3 - Performance Indicators for Targeted Executive Agencies and Ministries 9 Perfowance Dinension ase B ie (1994-95).Y ar 1 Ye2 YeVa 3 a 4 Year 5 A so ii Taeg: Ab te TaiV AbsoWe Targ. . AW10.. Tatr Absolute Target/ % Cba~~p ~~4 ~ 0ve 20 R4tWe %cmftm Pi"e % J(h l ~**it %Chsoe Relatiwc I" _______:::______::::________:_::::__:: _i _:_____:_ ::::_:: to Ptviout ycir t ?revious tfi a twsPyw w presus t yogFieV,Mvio0s yi Ptviousa year Cost-effectiveness I. Administrative costs per unit of each rnajor output. TBD -10% -10% -10% -10% -10% 2. User fees collected based on improved productivity. TBD + 10% + 10% +10% + 10% +10% ol Jamaica Public Scstor Modemnization Project SAR 7/96 Amex 3 -Perfomance Indicators for Targetd Exewtive Agencies and Ministries 10 Office of the Registrar of Companes Ministry of Industry, lInvestment and Commerce Pfrmane Dimension Bse.line ( 149) Yea 1 . .: Ye'r 2 Yer3Year .: . ' ' - ..4 Year '... :AbsduTc eV! bo#irst Aslt a ) AbsolTe TrgEt Absolute TsS:- n a - - - -- - - - - - - -- %:Change eVW % I s - _ _ _ ~~~_________ toinn yea ta Pnwiiaar _oPeiosya to ; _rlbssa Peiu Service Ouantity 1. Reduce the ratio of applications for registration of Companies, Trademarks, Patents, Designs and Business Names pending at the end of the fial year to the total number of application b/f nd new applications received during the year. TBD -10% -20% -30% -20% -10% 2. No. of company acom eamined. TBD +10% +10% +10% +10% +10% 3. No. of court procdigs initiated against deinquen Ts D +10% +10% +10% +10% +10% wmpanies and soeties. 4. Ratio of number of senvice request responded to tod rmmber of evwye reqoea recived. TBD 80% 85% 90% 95% 100% Service Oulit 1. Avae tunwound time for egitrati: a. Companies 30 wodking days (wd) -20% -30% -30% -20% -10% b. TrademArks TBD -20% -30% -30% -20% -10% c. Paten TBD -20% -30% -30% -20% -10% d. Designs TBD -20% -30% -30% -20% -10% e. Buin names TBD -20% -30% -30% -20% -10% 2. Compliance rate for companys' registation. TBD -20% -30% -30% -20% -10% 3. Fraction of court procmedings initiated that resulted in judgments in favor of the Registraes complaint. TBD +10% +10% +-10% +10% +10% 4. Average turnaround time for responding to service requests. TBD -20% -30% -25% -20% -10% 6. Client perception as reflected in annual surveys. TBD +10% + 10% + 10% + 10% + 10% Cost-effectiveness 1. Administrative costs per unit of each major output. TBD -10% -10% -10% -10% -10% 2. User fees collecd based on improved productivity. TSD +10% +10% +10% +10% +10% Jamaica Public Sector Modernization Project: SAR: 7/96: Annex 3 - Perfonane ndicats for Tageted Executive Agencies and Ministries 1t Administrator General Ministry of National Security and Justice % Cbangetclivo - ;has~eR . S C-tngeatie - -a ... .... .........c..... -.- . C . a-:.; , ......................................... ---. . .................... I. . .......... .... ,,', .'.',,'. yr..... t., .Paeia .,,., t,,,, ,rviu r , Service Ouantitv I . Number of inquiries. TBD +5% +20% +20% +10% +5% 2. Number of Lett of Administration (LA). TBD +5% +-20% +20% +10% +5% 3. Number of estates administered. 20,000 +5% +5% +5% +5% +5% 4. Number of retal properties nanaged. 490 0% +0% +0% +0% +0% 5. Number of estates closed. 80 +10% +50% +30% +10% +5% Service Ouality 1. Avenge tunround tine between Instructiona to 6 mnonths -10% -10% -10% -10% -10% Altorney and LA. 2. Averge turnaround time from LA to final payment for beneficiaries who wert of age and legally competent at time of LA. 7 years -15% -75% -60% -50% -20% 3. Avenge account statement turnaround time following reques from beeficiary. 2 years -10% -10% -10% -10% -10% 4. Avenge net expenses on real estate rental properties. 5. Average rate of return on esate assets relative to TBD [specific market iDdexi: a. Trus Fund Inveamenu a. 25.1% less index +10% + 10% + 10% +10% +10% b. TrustFundfBankAccounts b. 15% lessindex +10% +10% +10% +10% +10% 6. Backlog of accounts needing Final Statemnents. 200 -60% -100% 0% -0% -0% 7. Client perception as reflected in annul surveys. TBD + 10% + 10% +10% + 10% + 10% Cost-effectiveness 1. Cost per preliminary inquiry. TBD -10% -10% -10% -10% -10% 2. Cost per LA. TBD -10% -10% -10% -10% -10% 3. Cost per estate administered. TBD -10% -10% -10% -10% -10% 4. Cost per estate closed. TBD -10% -10% -10% -10% -10% a, S Jamaica Public Sedor Modenization Project: SAR: 7/96: Annex 3 - Perfornince Indicatos for Targeted Executive Agencies and Ministies 12 Management Institute for National Development (MIND) Office of the Prime Minister Peorm n ie Iimension BIimne (1994-95) Ye 1 Year 2 Year 3 Year 4 Year 5 Absolute Target Absolute Targdt/ AbsOlUte Target? Absolute Target Abso-lut Target .: . :. : :. Change Relative . .Change Relative % Changc Relative % Change Relative:: % Chae Rvlative to :o .reviou~s -er to .. a ye. . .... .to Previous year to Previ ous year t re.ious ycar Service Ouantity 1. Total trainee days 20,000 days 20,000 22,000 23,000 24,000 25,000 Service Qualit 1. Weighted average trainee course evaluation. 54% 57.5% 60% 62.5% 65% 67.5% 2. Weighted average evaluation of usefulns of training 54% 57.5% 60% 62.5% 65% 67.5% by supervisors of trainees. Cost-effectiveneas Cost per trainee-day US$ 27 -10% -10% -10% -10% -10% T-e trainees and their supervisors will be asked to rate the courses on a scale of I to 6, with the score of I representing 'Poor" and the score of 6 representing 'Excellent". The weighted average would be computed by the multiplying the percentage of responses in each category with its corresponding numerical score. Janmica Public Sector Modemization Project: SAR: 7/96: Annex 3 - Performance Indicators for Targeted Executive Agencies and Ministries 13 Ministry of Local Government and Works <=~~~(~-s ear Yea2 Yar Year eaSt Service Ouantitv 1. Vabue ofwork completed on constniction projects. TBD +10% +10% +10% +10% +10% 2. Number of miles of roads covered by rehabilitation and maintenance works. T.-D +10% +10% +10% +10% +10% 3. Number of miles of drains and gullies covered by maintenance worka TBD +I0% +10% +10% +10% +10% 4. Number of bridgesacovered by maintenance wors. TBD +10% +10% +10% +10% +10% 5. Icese in the quantum of community amenity services. TBD +10X +10% +10% +10% +10% 6. Incese in the quantum of social security and cornunity and welfare services relating to the poor and the elderly. TBD +10% +10% +10% +10% +I0% 1. snproveie in quliy, tinmeliness and effectiveness otfpoliciefornmlatedand inplemesstd. TBD +10% +10% +10X +10% +10% 2. Jmprovemcnst in capability to monitor policy implesnessation. TBD +10% +10% +10% +10% +10% 3. Number of projects completed on time anmd within budget. TED +10% +10% +10% +10X +10% 4. Improvesnest in corprte functions, especially, planning, budgeting, accounting, internal audit and personnel managesnent. TED +10% +10% +10% +10% +10% 5. Improvesmest in the technical quality and durability of construction and mainteance works executed by thceministry. TED +10% +10% +10% +10% +10% 6. Increase in the quality of community amenity services as indicated bycdient surveys. TED +10% +10% +10% +10% +10% 7. Increase in the quality of social security and commnunity and wefar servicea rclating to thepoor TBD +10% +10% +10% +10X +10% and the elderly as indicated by client surveys. 8. Improvemeat in thceffedtivenesa of superviaion of TBD +10% +10% +10% +10% +10% Friendly Societies and Cooperatives .. ................. ..... .. ~ ~ ~ ~ ~ - ................... . ~ ~ ~ ~ ~ ~ Jamaica Public Sector Modernization Project: SAR: 7/96: Annex 3 - Performance Indicators for Targeted Executive Agencies and Ministnes 14 Performanc Dlimensioni Baseline (1994-95) Year I Year 2 Year 3 Year 4 Year 5 Abdlute TargetI Absaolute Target/ Absolute TargW Absolute Target! Abslte TUrget Cble Relative % Change Relative % Change Relative % Chbnge Rdative % Char4ge Rdwtve tO to Previwo yar to Previous yeat to PreVious year t Pevsous year Previous year Cost-effectiveness 1. Administrative costs per unit of each nmajor output. TBD. -10% -10% -10% -10% -10% 2. Reduction in cost over-runs of mnajor construction and mnaintenance projects. TBD. -10% -10% -10% -10% -10% ;2 Jamaica Public Sector Modernization Project: SAR: 7/96: Annex 3 - Performance Indicators for Targeted Executive Agencies and Ministries 15 Ministry of Environment and Housing 19 - . .... ......../.slt WU gk ~ sitTtet bslt.~ boueTgS , } o - " - ~~~~~~~~~~~~~~~~~1 Pfv0i iea -o Prviu -ea -~ Prviu -ea ts P-:in yea :s m ear. i Service Ouantity 1. Value of housing projects completed. TBD + 10% + 10% + 10% +910% + 10% Service Quality 1. hnprovement in qualily. timeliness and effectiveness of policdes formulated and implemented. TBD + 10% + 10% + 10% + 10% + 10% 2. Improvement in capability to monitor policy implementation. TBD + 10% + 10% + 10% + 10% + 10% 3. Number of housing projects compleaed on time and witbin budgdt. TBD + 10% + 10% + 10% + 10% + 10% 4. Improvemnent in corporate functions, especially. planning, budgeting, accounting, internal audit and personnd management. TBD + 10% + 10% + 10% + 10% + 10% 5. Improvement in the effectiveness of conaervation of natural reaoucea and environmental protection measures. TEID +10% +10% +10% +10% +10% 6. lmprovement in land use and management. TBD + 10% + 10% + 10% + 10% + 10% Coat-effectivenaeu 1. Adniniatrativ costs.per unit of.each major output. TBD. -10% -10% -10% -10% -10% 2. Reductionincostover-runsofmajorcapitalproject. TBD. -10 -10% -10% -10% -10% 73 Annex 4 Indicative List of Facilities and Services Identified for Privatization/Contracting Out No. iityfSv :-- L- i io ~ - u ix4 ic y on - : - :::::: _ ~~~~~~~~~~~~~~~~.:.. ... . ',- ,- ":'. " -'.''-" "..,, ''.'"-'''''''..: 1. Animal Pounds Islandwide Holding of Stray Animals No 2. Armory Houses Port Royal Tourist Attraction - monument No 3. Bamboo Gardens St. Ann Tourist Attraction No 4. Barracks Building Spanish Town Tourist Attraction - monument No 5. Bath Botanical Gardens St. Thomas Tourist Attraction No 6. Castleton Gardens St. Andrew Tourist Attraction No 7. Cemeteries Islandwide Burial No 8. Old Court House Spanish Town Tourist Attraction - monument No 9. Fern Gully St. Ann Tourist Attraction No 10. Food Stamp Program Islandwide Welfare Service for the Destitute No 11. Food Storage Infestation Airports Quarantine of Food Exports Yes 12. Garrison Building Spanish Town Tourist Attraction - monument No 13. Holland Bamboo St. Elizabeth Tourist Attraction No 14. Hope Garden and Zoo St. Andrew Recreational Facility No 15. Long Lane Gardens St. Andrew Tourist Attraction No 16. M. P. Children's Home St. Andrew Children Welfare Service No 17. Minard Great House St. Ann Tourist Attraction - monument No 18. National Parks Islandwide Recreational and Cultural Facility No 19. National Stadium St. Andrew Sports and Cultural Facility No 20. Old Kings House Spanish Town Tourist Attraction - monument No 21. Prison Medical Services Islandwide Prison Health Service No 22. Public Sanitary Islandwide Sanitation No Convenience 23. Road Traffic Safety Islandwide Parking Meters, traffic signals, No Management towing etc.. 24. Seville Property St. Catherine Historical Monument No 25. Specialized Professional Office of the Training and Employee Welfare No Services in HRD Prime Minister 26. Statutory Legal Aid Islandwide Legal Services No System I _ I _I_I PROJECT COSTS BY COMPONENT ANNEX 5 Modernization of Public_Entities_(EAs):_PIOJ _____ Activ-it LC FC Total Total ILG FG Total CW Grand Con. Trg. Goods Total oMP, FP, FD 54.0 146.0 200.0 nplemm moderBlatoss pln_ ake legal an administrative changes 1.4 3.7 3.0 l oment hder internai conirols 5.4 14.6 20.0 leanest new organizational structure 6.8 18.3 25.0 Refwbish Offices 0.0 0.0 0.0 tch slls of current staff with required skills 1.4 3.7 5.0 et redundant staff 1.4 3.7 5.0 R ilnew staff with required ssills 1.4 3.7 5.0 Mve staff to new org. units And funltions 0.0 0.0 0.0_ st bfisb customer service units 1.4 3.7 5.0 ___ I. remuneration, incentive system, career paths 1.4 3.7 5.0 klesent new perfornance evaluation system 1.4 3.7 5.0 e changes in PMIS 1.4 3.7 5.0 Mchanes in HRMIS 1.4 3.7 5.0 Dsin And develop other MIS 2.7 7.3 10.0 i•n and develop OIS 5.4 14.6 20.0 Pcure Hardware and off-the-shelf Software 0.0 0.0 0.0 100.0 100.0 arep marnuals 1.4 3.7 5.0 _ lement re-engineered business procsses 6.8 18.3 25.0 blic Relations Campaign staff 500.0 ute Physical Resources er goods 500.0 500.0 _ ivil Work 90.0i Total 94.5 255.5 350.0 500.0 600.0 600.0 90.0 1540.0 Legend: IC: Local Consultant; FC: Foreign Consultant;LG: Local Goods; FG: Foreign Goods; CW: Civil Works. MP: Modernization Plan; FP Financg Plan; FD: Framework DocumenL PROJECT COSTS BY COMPONENT ANNEX 5 Mnof Public Entities (EAs) Jamaica Customs Departnent LC FC Total Total LG FG Total CW Grand Con. Tr _. Goods Total hpoe M FP, IFD 81.0 219.0 300.0 elepzd aftinWhivifued 14.9 40.2 55.0 Sp_ Oda 5.4 14.6 20.0 -w cgg_Iam.1 iiune 2 7.0 73.0 100.0 R ____ _______ 50.0 50.0 *fth of mm ff wilh required aiDs 2.7 7.3 10.0 _ rw doff 2.7 7.3 10.0 Rn mff wib - akdil 2.7 7.3 10.0 _ aveaff mo am . u b ldfunm 0.0 0.0 0.0 _ "mie us 2.7 7.3 10.0 _ rin.r . imuive system c. pies 5.4 14.6 20.0 _ .- _ new ped_e evahatlo sysm 5.4 14.6 20.0 dages m P)AS 13.5 36.5 50.0 __.- ediaes in HRMIS 13.5 36.5 50.0 _ .- tip d e&ew odha MIS 54.0 146.0 200.0 .- and &vbp OIS Butdgd _uhr OQY oompdwffAdm _ pm" 172.8 467.2 640.0 2440.0 2440.0 OdYr 189.0 511.0 700.0 Hne leand dff4hhelf S&ftwm 0.0 0.0 0.0 nups m_-17.6 47.5 65.0 Imp w4w ered b1W_m pieces= 54.0 146.0 200.0 P_b_e_ Rel___ Cs_p_ __ 20.0 _ 20.0 _ Ba4ed in 0I oaB ad prjec 26.0 _ O6wr 204.0 Adre FhdW mhout goos lI Works 2100.0 Total 684.2 1795.8 240.01 230.0 50.0 2440.0 2490.0 2100.0 7300.0 Lqgd: LC: Low C q_ PC: FcP C zic LO: Loca Ooods; PO: Fmgn Goode; CW: Cvi Wcds. B:Madm~ik Pim FP: P ; FD: Pt_wmk DoaL PROJECT COSTS BY COMPONENT ANNEX 5 lodernization of Public Entities (EAs): Office of Titles Actvity LC FC Total Total LG FG Total CW Grand Con. Trg. Goods Total prs MP, FP, D 54.0 146.0 200.0 M legal and administrative changes 5.4 14.6 20.0 plesest otber idernal cor rols 1.4 3.7 5.01 lamest nvw organzational structure 13.5 36.5 50.01 eftirbish Offices 0.0 0.0 0.0 a ill slils of Cwrrta st aff with required skills 1.4 3.7 5.0 Retremt redundait staff 1.4 3.7 5.0 _ ecruit new staff with required skills 14 3.7 5.0 Move staff to new org. units and functions 0.0 0.0 0.0 Eslahlish customfr servicr units 1.4 3.7 5.0 hnpl. rammneration, incentive systan, career palhs 1.4 3.7 5.0 Enplemcu nLw perfornance evatuation systemn 1.4 3.7 5.0 M balccchnges in FMIS 2.7 7.3 10.0 M*e clwnges in HRMIS 2.7 7.3 10.0 esgn and develop other MIS 2.7 7.3 10.0 DcsiKD anbd develop OIS 13.5 36.5 50.0 P cHardwrc snd off-the-sbelf Softwae 0.0 0.0 0.0 300.0 300.0 Prepare rnls 4.1 11.0 15.0 = lmest - neered business processes 27.0 73.0 100.0 lic Reltions Campaign 30.0 30.0 StaffS _ _ 250.0 Play"6 Resouce D*er goods _ 1250.0 1250.0 Works 1000.0 Total 165.0 365.0 530.0 250.0 0.0 1550.0 1550.0 1000.0 3330.0 Legend, LC: Local Consultant; FC: Foreign Consultant; LG: Local Goods; FG: Foreign Goods; CW: Civil Works. MP: Modernization Plan; FP: Financing Plan; FD: Framework Document. PROJECT COSTS BY COMPONENT ANNEX 5 Modernization of Public Entities (EAs): Town Planning Department Activity LC FC -Total Tota LG FG Total C Gran _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ Con. Trg. G;oods Total P MP, F?, ED 54.0 146.0 200.0 Imlnt m eod_aiati pian ake legal and administrative changes 2.7 7.3 10.0 = = _=_= pleent other internal controls 1.4 3.7 5.0 plement new organizational structure 13.5 36.5 50.0 efurbish Offtce 0.0 0.0 0.0 sktch ils of current staff with required skills 1.4 3.7 5.0 etrench redundant staff 1.4 3.7 5.0 ecmit new staff with required skills 1.4 3.7 5.0 _ ove staff to new org. units and functions 0.0 0.0 0.0 blish cusomer service units 1.4 3.7 5.0 p. remuneration, incentive system, career paths 2.7 7.3 10.0 mplerein new perfonnance evaluation system 1.4 3.7 5.0 _ e changes in FMIS 2.7 7.3 10.0 _ ake changes in HRMIS 2.7 7.3 10.0 D and develop other MIS 5.4 14.6 20.0 _ gn and develop OIS 13.5 36.5 50.0 re Hardware and off-the-shelf Softwar 0.0 0.0 0.0 200.0 200.0 are manuals 2.7 7.3 10.0 mplement re-engineered business processes 27.0 73.0 100.0 _ blic Relations Campaign staff 50.0 _ Acquire Physicl Resources 100.0 100.0 Civil Works 0.0 Total 135.0 365.0 500.0 50.0 0.0 300.0 300.0 0.0 850.0 Legend: LC: Local Consultant; FC: Foreign Consultant; LG: Local Goods; FG: Foreign Goods; CW: Civil Works. MP: Modernization Plan; FP: Financing Plan; FD: Framework Document. PROJECT COSTS BY COMPONENT ANNEX 5 Modernization of Public Entities (EAs): Surveys Department Activity LC FC Total Total LG FG Total C Grand Con. Trg. Goods Total Prepam MP, FT, Fl) 54.0 146.0 200.0 = = - Implement modenization plan Make legal and administrative changes 2.7 7.3 10.0 _ mplement other internal controls 1.4 3.7 5.0 plement new organizational structure 13.5 36.5 50.0 _ Rfurbish Offices 0.0 0.0 0.0 atch skills of current staff with required skills 1.4 3.7 5.0 etrench redundant staff 1.4 3.7 5.0 ecruit new staff with requird skills 1.4 3.7 5.0 _ ove staff to new org. units and functions 0.0 0.0 0.0 blish customer service units 1.4 3.7 5.0 pl. remuneration, incentive system, career paths 1.4 3.7 5.0 _ mplement new performance evaluation system 1.4 3.7 5.0 _ ake changes in FMIS 2.7 7.3 10.0 _ e changes in HRMIS 2.7 7.3 10.0 . _ _ *gn and develop other MIS 2.7 7.3 10.0 _ ign and develop OIS 13.5 36.5 50.0 1 re Hardware and off-the-shelf Software 0.0 0.0 0.0 500.0 500.0 Prepare manuals 4.1 11.0 15.0 . Implement re-engineered business processes 27.0 73.0 100.0 ___ _ Public Relations Campaign 10.0 10.0 T staff 100.0 Aquire Physical Resources __ 100.0 100.0 Civil Works 0.0 Total 142.3 357.7 500.0 100.0 0.0 600.0 600.0 0.0 1200.0 Legend: LC: Local Consultant; FC: Foreign Consultant; LG: Local Goods; FG: Foreign Goods; CW: Civil Works. MP: Modernization Plan; FP: Financing Plan; ED: Framework Document. eo PROJECT COSTS BY COMPONENT ANNEX 5 Modernization of Public Entities (EAs): Jamaica Information Service Activity LC FC Total Total LG FG Total CW GrLand Con. Trg. Goods Total Prepare MP, FP, FD 54.0 146.0 200.0 _l Implement modenization paln Make legal and administrative changes 2.7 7.3 10.0 In-plement other internal controls 2.7 7.3 10.0 plement new organizational structure 13.5 36.5 50.0 _ _ efurbish Offices 0.0 0.0 0.0 100.0 100.0 atch skills of current staff with required skills 1.4 3.7 5.0 _ etrench redundant staff 1.4 3.7 5.0 ecruit new staff with required skills 1.4 3.7 5.0 ove staff to new org. units and functions 0.0 0.0 0.0 blish customer service units 2.7 7.3 10.0 pl. remuneration, incentive system, career paths 5.4 14.6 20.0 mplement new performance evaluation system 1.4 3.7 5.0 _ o changes in FiMS 2.7 7.3 10.0 ile changes in HRMIS 2.7 7.3 10.0 gn and develop other MIS 5.4 14.6 20.0 ign and develop OIS 10.8 29.2 40.0 re Hardware and off-the-shelf Software 0.0 0.0 0.0 200.0 200.0 are manuals 2.7 7.3 10.0 nplement re-engineered business processes 27.0 73.0 100.0 blic Relations Campaign 40.0 40.0 rain staff 230.0 Aquire Physical Resourcs 0.0 Transportation 0.0 0.0 goods 20.0 20.0 ivWorks 150.0 ToWl 177.7 372.3 550.0 230.0 100.0 220.0 320.0 150.0 1250.0 Legend: LC: Local Consultant; FC: Foreign Consultant; Local Goods; FG: Foreign Goods; CW: Civil Works. MP: Modernization Plan; FP: Financing Plan; FD: Framework Document. PROJECT COSTS BY COMPONENT ANNEX 5 Modernization of Public Entities (EAs): JAMIPRESS _ Activity LC FC Total Total LG FG Total CW Grand Con. Trg. Goods Total Prepare__MP, FP, FD 27.0 73.0 100.0 Iplnemfft moderins tion plan__ _ Mke legal and adrninistrative changes 1L4 3.7 5.0__ lmpement ofthrinternal controls 1L4 3.7 5.0__ _ hplement_new organizational structure 6.8 18.3 25.0 efurbish Offices 0.0 0.0 0.0 60.0 60.0 atcb skills of current staff with required skills 0.5 L 5 2.0 Rtrench redundant staff 0.5 LS 2.0 ecruit new staff with required skills 0.5 i.5 2.0 ove staff to new org. units and functions 0.0 0.0 0.0 blish customer service units 0.5 1.5 2.0 pl. remuneration, incentive system, career paths 0.5 1.5 2.0 uplement new performance evaluation system 1.4 3.7 5.0 ake changes in FMIS 1.4 3.7 5.0 ake changes in HRMIS 1.4 3.7 5.0 __ ign and develop other MIS 2.7 7.3 10.0 ign and develop OIS 5.4 14.6 20.0 Procure Hardware and off-the-shelf Software 0.0 0.0 0.0 _ 160.0 160.0 _ Prepare manuals 2.7 7.3 10.0 _ _ Implement re-engineered business processes 8.1 21.9 30.0 _____ Public Relations Campaign 0.0 0.0 0.0 Traim staff 120.0 ___ Acqure Physical Resources Transportation 100.0 100.0 Convert BIW lab to color 40.0 40.0 ameras and access rigs 40.0 40.0 ergoods 200.0 200.0 lvii Works 0.0 otal 62.1 167.9 230.0 120.0 60.0 540.0 600.0 0.0 950.0 Legend: LC: Local Consultant; FC: Foreign Consultant;LG: Local Goods; FG: Foreign Goods; CW: Civil Works. MP: Modernization Plan; FP: Financing Plan; FD: Framework Document. 00 0 PROJECT COSTS BY COMPONENT ANNEX 5 Modemnization of Public Entities (EAs): Registrar General's Department Acivty LC FC Total Total LG FG Total CW Grand Con. Tr Goods Total MIP, FP FD 54.0 146.0 200.0 ~Irnt modeonization plan _ aelegal and administrative changes 2.7 7.3 10.0 Iiplement other internal controls 1.4 3.7 5.0 plement new organizational stucture 13.5 36.5 50.0 etahrbiab Offices 0.0 0.0 0.0 140.0 140.0 atch aills of carrent staff with required skills 1.4 3.7 5.0 Retrenh redundant staff 1.4 3.7 5.0 ecrit new staffwith required skills 1.4 3.7 5.0 ove staff to new org. units and functions 0.0 0.0 0.0 bliab customer serv:ice units 1.4 3.7 5.0 = I. reneration, incentive system, career paths 2.7 7.3 10.0 I newt new performance evaluation system 2.7 7.3 10.0 e chuages in FMIS 2.7 7.3 10.0 changes in HRMIS 2.7 7.3 10.0 D and develop other MIS 8.1 21.9 30.0 D and develop OIS 13.5 36.5 50.0 = = Hardware and off-the-shelf Software 0.0 0.0 0.0 700.0 700.0 Prepare muals 5.4 14.6 20.0 Implement re-engineered business processes 27.0 73.0 100.0 Public Relations Campaign 50.0 50.0 Train gtaff 150.0 Acquire Physical Resources Other goods 50.0 50.0 Ciil Works 0.0 Total 191.8 383.3 575.0 150.0 140.0 750.0 890.0 0.0 1615.0 Leged: LC: Local Consultant; FC: Foreign Consultant;LG: Local Goods; FG: Foreign Goods; CW: Civil Works. MP: Modernization Plan; FP: Financing Plan; FD: Framework Document. PROJECT COSTS BY COMPONENT ANNEX 5 Modernization of Public Entities (EAs): Registrar of Companie LC FC Total Total LG FG Total CW Grand Con. T Goods Total ArePare 1', FIP, FID_ 54.0 146.0 200.0 Imltetmodernization plon ake legal and administrative changes 4.1 11.0 15.0_ lement other internal controls 1 6 4.4 6.0 lenient new organizational structure 16.2 43.8 60.0 _ Refutish Offices 0.0 0.0 0.0 200.0 200.0 __ itch skills of current staff with required skills 0.8 2.2 3.0 _ Retrencb redundant staff 0.8 2.2 3.0 necrt new staff with requited skills 0.8 2.2 3.0 _ ove staff to new org. units and functions 0.0 0.0 0.0 staWsh customer service units 0.8 2.2 3.0 _ _ I. remuneration, incentrive system, career paths 1.6 4.4 6.0 lenent new performance evaluation system 1.6 4.4 6.0 change in FMIS 4.1 11.0 15.0_ chnges in HMIS 4.1 11.0 15.0 i•4 and devekop othr MIS 8. 1 21.9 30.0 ign and develop OIS 12.2 32.9 45.0 Hocue Hardware and off-the-shelf Software 0.0 0.0 0.0 200.0 200.0 are manals 4.1 11.0 15.0 _ = Ileanet re-ergmeered business processes 20.3 54.8 75.0 _ ____ blic Relatios Campaign am staff 225.0 sire Physical Resources r goods 50.0 50. 0 Wiri Worl_ 50.0 135.0 365.0 500.0 225.0 200.0 250.0 450.0 50.0 1225.0 Legend: LC; 1oceConsuhan; PC: Poreign Cotlsuhallt; LG: 1oo Goods; FG: ForeignGoods; CW: Civil Works. IMP: Modemaization PlaD; FP: Financing Phln, FD: Framework Document oc PROJECT COSTS BY COMPONENT ANNEX 5 Modmnization of Public Entities (EAs): Administrator General LC FC Total Tota LG FG Total CW Grand Con. Trg. Goods Total MP, FP, PD 27.0 73.0 100.0 _ pi pt umodernization pla. e legal and administrative changes 5.4 14.6 20.0_ Iiplement other internal controls 1.4 3.7 5.0 tement new organizational strucure 13.5 36.5 50.0 Retrbish Offices 0.0 0.0 0.0 15.0 15.0 atch skills of crrmnt staff with required skills 1.4 3.7 5.0 RdI~3)I redundant staff 1.4 3.7 5.0_ new gaff with required skills 1.4 3.7 5.0 ove staff to ncw org. units and functions 0.0 0.0 0.0 Ebsh cuaomer service units 1.4 3.7 5.0 b m. remneration, incentive system, career paths 1.4 3.7 5.0 __ new performance evaluation system 1.4 3.7 5.0 changes in FMIS 2.7 7.3 10.0 chdnges in ERMIS 2.7 7.3 10.0 c inu develop other MIS 2.7 7.3 10.0 and develop OLS 5.4 14.6 20.0 Hardwae and off4he-shelf Software 0.0 0.0 0.0 50.0 50.0 namnla 2.7 7.3 10.0 blenen r g d business processes 9.5 25.6 35.0 blic Relations Campaign *staff 65.0 eqliePhydRcaloRes_7 rransportation 7. 35.0 375.0 er goods 3505_ _ .0 ivil Works _ _ 0.0 Total 81.0 219.0 300.0 65.0 15.0 160.0 175.0 0.0 540.0 Legend: LC: Local Consultant; FC: Foreign Consultant; Local Goods; FG: Foreign Goods; CW: Civil Works. MP: Modernization Plan; FP: Financing Plan; FD: Framework Document. 00 PROJECT COSTS BY COMPONENT ANNEX 5 Modernization of Public Entities (EAs): MIND Activiy LC FC Total Total LG FG Total CW Grand Con. Trg. Goods Total Pre W, FP, ID 54.0 146.0 200.0 _ legl and a&ninistrative changes 2.7 7.3 10.0 Ilanemt ohder iAen.l cotrols 1.4 3.7 5.0 smenew organizational sture 13.5 36.5 50.0 Refnbish Offices 0.0 0.0 0.0 25.0 25.0 skills of cunent stff With requred skills 1.4 3.7 5.0 retndant staff 1.4 3.7 5.0 ecnnt now staff with reqwred suills 1.4 3.7 5.0 Megstff to now org. oaks and nuons 0.0 0.0 0.0 a aeandbi c sftvihe units 1.4 3.7 5.0 remuneraton, incemive system, cm"e paths 1.41 3.7 5.0 bwlme parformae evahiation systemn 1.41 3.7, 5.0 echanges in FMIS 2.7 7.3 10.0 Chgs in HRtfS 2.7 7.3 10.0 r and devrsip otahr MIS 2.7 7.3 10.0 Wand deveop OIS 13.5 36.5 50.0 aordware an offlshf Sof1wa5 0.0 0.0 0.0 100.0 100.0 PeaW nrals 6.81 18.3 25.0 rmla ecgnt ere business processes 27.0 73.0 100.0 Pu clc RCons Cau aign L M: ff M 100.0 Pcqyskal Resources irconditioners, teaching aids, copier etc. 1200.0 200.01 Casroom furniture cet. _ 100 100.01 workl s 3360.0 Toud ~~~~~~~~~~~~~~~~~~~~~~~~~~~135.0 365.0 L500.0 10O0.0 125.0 300.0 425.0 3360.0 4385 .0 LC: Local Consultant; FC: Foreign Consultant;LG: Local Goods; FG: Foreign Goods; CW: Civil Works. IMP: Modemization Plan; FP: Financing Plan; FD: Framework Document. PROJECT COSTS BY COMPONENT ANNEX 5 Modernization of Public Entities (EAs): JAMIPRO and Construction Division, MLGW Activity LC FC Total Total LG FG Total CW Grand Con. Trg. = = Goods Total Preparation and lmplementation of MP, FP and FD 400 600 1,000 200 200 600 800 0 2,000 Total | 4001 6001 1,000| 2001 2001 6001 8001 01 2,w0 Legend: LC: Local Consultant; FC: Foreign Consultant: LC: Local Goods; FG: Foreign Goods; CW: Civil Works. MP: Modernization Plan; FP: Fnancing Plan; FD: Frmework Doaument. LA PROJECT COSTS BY COMPONENT ANNEX 5 Modernization of Public Entities (Ministries): Ministry of Local Government and Works Axtivity LC FC Total Total LG FG Total C'WGrand - Con._ T_g Goods I Total Prepabre MP, FP, FD 54 146 200 __ [rplement modcrntzation plan ike legal and administrative changes 14 37 50 _ plement other internal controls 1 4 5 lernent new organizational structure 14 37 50 rove Working Enviroment 14 37 50 aIds skils of cuffsent staff with required skills 3 7 10 Retrend redundant staff 3 7 10 _ ecruil new staff with required skills 3 7 10 ave staff to new org. units and funtions 0 0 0 I. remuneration, incentive system, career paths 3 7 10 lanem new perfomance evaluaton system 3 7 10 be dteges in FMIS 3 7 10 I de uuagea in HRMIS 3 7 10 *n and develop oder MIS 14 37 50 an and develop OIS 14 37 50 P Hardware and off-tbe-uself Software 0 O O 80 80 mamals 14 37 50 lrne agincred buiness proceaes 27 73 100 Spede C_oa. way Plg. Erg. (Rate US$2,200/wk) 165 165 Ecanonist (Rate USS2,200/wk) 165 165 * Cons. (Rate USS2,200/wk) 70 70 lic Relations CanIpag Rate: (USS2000/mooth) 25 25 _ staff 100 idre Physical Resou _ Acomts 5nd Audit 70 70 PlMd Unit 115 115 Teinical Services 1140 1140 rrA _23 230 Clvi Works 0 Total 607 493 1100 100 0 1635 1635 O 2835 Legend: LC: Laca Consultant; PC: Poeign Consuha;LC: Local Goods; FG: Foreign Goods; CW: Civil Works. MP: ModernatoD Plan, FP: FiPmncitg Plan; FD: Framework Documen. so 0% PROJECT COSTS BY COMPONENT ANNEX 5 Modernization of Public Entities (Ninistries): Minist of E;nvironment and Housing Activity LC FC Total Total LG FG Total CW Grand Con. T Goods Total pare MP, FP, FD 54 146 200 plement modernization plan ike legal and administrative chures 81 219 300 lement other isuemal controls 1 4 5 lmesnet new ofgit7zatsonAl sctssure 5 15 20 rove Working Envirmnent 0 0 0 100 100 a gds skils of currmi staff wids requied skills 1 4 5 etrench redundant staff I 4 5 ecrut new staff with required skills 1 4 5 ove staff to new ot. units and functiona 0 0 0 I. remuneration, incensive system, career paths 1 4 5 lhmnent new perfonnance evahastion system 1 4 5 Mechanges in FMIS 1 4 5 e chazges in HRMIS 1 4 5 ign and develop other MIS 14 37 50 Dgn and develp 018 14 37 50 ocure Hardware and off-the-shelf Software 0 0 0 50 50 Prqrre mam 14 37 50 ' re-engmneered husubw proceual 27 73 100 Codnsd Out selected s 78 212 290 Public Resfions Cmpn 92 248 340 S _ _ _ _ _ _ _ __C__apity in En__ronmen M s__ 16 44 60 l___staff 100 mcire Physksl Resoue Dlher goods 200 200 _ = Civil Works 5560 Total 1 405 1095 1500 100 100 250 350 560 2510 IAgend: LC: Local Consulhant FC: Foreign Consuhan; LC: Local Goods; FG: Foreign Goods; CW: Civil Works. MP: ModernizatioD Plan; FP: Financin Plan; FD: Framework DocumenL 00 PROJECT COSTS BY COMPONENT ANNEX 5 Modernization of Public Entities (Ministries): One Additional Ministry To Be Identified Activity LC FC Total Total |LG FG Total CW Grand Con. Trg. Goods Total Preparation and Implementation of MP, FP and FD 200.0 400.0 600.0 100.0 100.0 200.0 300.0 0.0 1000.0 Total | 200.0 400.0 600.01 100.0 100.0 200.0 300.01 0.0 1000.0 Legend: LC: Local Consultant; FC: Foreign Consultanl; LC: Local Goods; FG: Foreign Goods; CW: Civil Works x0 PROJECT COSTS BY COMPONENT ANNEX 5 *vatization 3 I I _ I __ divity LC FC Total Total LG FG Total L-IC F-IC Total CW Grin _______________________________________ __ _Con. T . Goods IC Total PIkt as mao/Cornmercklization the Wuler Sector tudy, vakai of ae, rsitDagm cowtitarEy. dtit== eovrcamau wesHm, legal few etc. 1,000 4,000 5,0W( 5,0)0 Yubtlit 1.000 4,00t SON =_== =_ __ ____ S. 11. PrtvW1ain/conirading 0,A Facifitie/Servics_ rmwicai Service for priatiaiwo/ sgt of 26 ilatifiad fcilities welvicea 400 400 _Ot edcmic&l Se,wie for a&itkm-] isabot 10-12) to be idmlit for pravatrii/m ma rat oil a in the cois of im 5ahitzL 50 200 250 _25 Audits 25 25 50 50 ubhtast 475 tS 14 as 110 It. Itut_tS Tam Advi o 200 200 R*ltc Rda dot Masket 75 200 275 125 0 125 _ 400 Tr x-^ 200 _ _ 200 100 100 No _Matal 75 4tt 475 200 9 10 in 125 e _ 0_ __ dAul 1,550 50256,575 200 0 100 100 125 0 125 0 7000 Legsad: LC: Local Cauullmnt PC: Foreign ComsaPI LG: Loca Goods; IC: Foreign Goods; IC: Infonemati Can xaigCW: Civil Wors. MP Modcrzaion Plui FP: rmwa*F Pen HD: Fework Doounms 00 PROJECT COSTS BY COMPONENT ANNEX 5 Government Procurement, Contracting, Internal Control and Audit _ - ctivity LC FC Total Total LG FG Total CW Grand Con. Tr Goods Total OF Proc. Polcy Impl. Unit ng term Procurement Adviser (3 yrs) 225.0 225.0 225.( hort-Term Consultants 50.0 50.0 100.0 1004 mining 100.0 100.( Equipment __ 100.0 100.0 100. SUbtotal 50.0 275.0 325.0 100.0 100.0 100.0 525.0 OF Internl Audit Diredorate ternal Audit Adviser (2yrs) 0.0 125.0 125.0 125.0 aining 0.0 100.0 100.( Equipment 0.0 100.0 100.0 _0100.0 Subtoal 0.0 125.0 125 .0 100 .0 100.0 e 100.0 325.0 rial Procurement Units onsultants 100.0 50.0 150.0 150. mining 100.0 100.0 Equipment 100.0 100.0 100.0 Itotl 100.0 50.0 150.0 100.0 100.0 100.0 350.0 C tor General Cnwltants 50.0 150.0 200.0 2 200.0 mraining ___100.0 100.( Equipment __100.0 100.0 100 .0 btotal 50.0 150.0 200.0 100.0 100.0 100.0o 400. Auditor General Consultants 50.0 150.0 200.0 200.0 Training 100.0 100.0 uipment 100.0 100.0 100.0 1toal 50.0 150.0 200.0 100.0 100.0 100.0 400.0 otal 250.0 750.0 1000.0 500.0 500.0 500.0 _ 2000.0 Legend: LC: Local Consultant; FC: Foreign Consultant;LG: Local Goods; FG: Foreign Goods; CW: Civil Works. MP: Modernization Plan; FP: Financing Plan; FD: Framework Document. 0 PROJECT COSTS BY COMPONENT ANNEX 5 IS/HRMIS Ativity LC FC Total Total LG FG Total CW Grand Con. T Goods __Total is Consultars 1000. 0 500.0 1500.0 1500. Trainig 300.0 300.0 * Relroartive Finaocing 600.01 600.0 600. . tDU2000.0 2 2000.0 2000. SubtO4I 1000.0 500.0 1500.0 300.0 0.0 2tS600.0 2600.0 0.0 4400. HRMIS Corjults 200.0 S00.0 80.0 800. raing 100.0 100._ _000__0_20_ 2000.0 2t00.0 = 2000.0 200.0 600.0 800.0 100.0 0.0 2000.0 2000.0 0.0 2900. Total 1200.0 1100.0 2300.0 400.0 0.0 4600.0 4600.0 0.0 7300.0 Leed: LC: Local Consulta; FC: Foreign Consultait;LG: Local Goods; FG: Foreign Goods; CW: Civil Works. MP: Modenization Plsn; FP: Financing Plan; FD: Franework Doacment. *0 PROJECT COSTS BY COMPONENT ANNEX 5 oject limplementation, Communication Campaign and Development of Stage 11 of PSM LC FC Total Tota LG FG Total L-IC F-IC Total C Grand Con. T . _ Goods IC _ Total led htplutnentation Dit Director 225 225 _22 Peror i?ojed Offcmr 2C0 200 200 juintiasul RA Coordinitor 300.0 300 3M0 i IA Coordintors for: 0 0 MM, IT. 1TD h& SD 125.0 125 _ 125 L 3D. JA)ESS and Customs 125.0 125 125 I LGW 125.0 125 123 t GD, UCAG MMND 125.0 125 125 ardorion Canpaign 125.0 0.0 125.0 _ 125 ir rm tion Technology Coordinaor 200.0 200 200 versaned iuProoranee, Couiraating and Auditing Coord. 125.0 125 125 mco and Aecouting Coorditor 125.0 125 125 jralratr th, Andotat 100.0 t00 loo ik 03) 375.0 375 375 ludag of PCU staff 100.0 __ 0lo * sag for PCU 100.0 100.0 ID_ 100 udil of Project Accue. 25.0 25.0 1375.0 300. 2175.0 100., 0.0 100.0 10.0 1t i250.0 125.0 0.0 25. _ooment of Stage H of PS Modenlzsaok 400.0 100.0 500 50D 51 _sial 400.0 100.0 SOO.0 0.0 0.0 0.0 0.0 _ _ _ 500. Totali 2275.0 400.0 2675.0 100.0 0.0 100.0 100.0 12S.0 0.0 125.0 0.0 3000.0 Legend: iIcrl ConUILaI: FC: Foreign Coulli; LG: Local Goods: K- Fonign Goods. l diag vehicle: C: lhfomtion Caupai CW Civil Wods. UP Modnizslon Plan FP Fancnn Pn; FD PDFraom'ork DocummL ANNEX 6 PROJECT IMPLEMENTATION SCHEDULE Year I Year 2 ID Task Narme Duration Start Finish Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr I Qtr 2 Qtr 3 1 MODERNIZATION OF PUBLIC ENTITIES 306.4w 2N96 12/31101 2 3 A. FINANCED BY BANK AND GOJ 300.2w 4J1196 12/31 __ -_.______ 4 6 MINISTRY OF ENVIRONMENT L HOUSING 278.2w 9296 12/31101 6 AppointConfirm Ceo and Core Managernent Team 3 8w 912lY 9)2. 7 Appoint Agency Coordinator (Shared by MEH, RT, TPD, SD) 36w 92Q)96 9)25)96 8 Prepare MP, MTFP, FD 59 6w 92/96 10/22/97 _ 9 Seect and Engae Consubtants (same for MEH, RT, TPD, SD) 7 8w 92M96 10/23)96 10 Consultants Prepare MP, FP, FD s 10/24) 1WO 97, 11 Obtin GOJ nd Bank approval for FD, MP and MTFP 8w 1023/97 12f17.97 12 PS and CEO uign FD, MP and MTFP 4w 12/18/97 1114/98 13 knpuwnt nwdeniaion plan 206w 1/15)98 12)31101 14 Seect and Engage Consultants 12w 1/1598 4/8198 16 Implenent modernizaon plan 194 ow 4u9 12)31101 16 Civil Works 278.2w 9/2)96 12/31/01 17 19 REGISTRAR OF TITLES 278.2w 9M96 121311 _1 19 AppointUConfirrn Ceo and Core Managerment Team 36ew 9296 9)25/96 20 Appoint Agency Coordinator (Shared by MEH, RT, TPD, SD) 3 lw 91/96 9125 21 Prepare MP, MTFP, FD 59.6w 9/2/96 1022/97 MM 22 Select and Engage Consultants (same for MEH, RT, TPD, SD) 7 6w 9296 10123/96 23 Consultants Prepare MP, FP, FD 52w 102496 10122)97 24 Obtain GOJ and Bank approval for FD, MP and MTFP 8w 10123197 12/17/97 25 PS and CEO sign FD, MP and MTFP 4w 12/18/97 1/14/98 (4 -io I It a 00~~~~~~~~~~~x1 ......................................................................................................................................................................................................................................... m 0 E ~ ~ ~ ~ ~ 0 *1I~ ~~ 11 is1 1,6 __ ANNEX6 3 PROJECT IMPLEMENTATION SCHEDULE Year 1 Year 2 ID Task Name Duration Start Finish Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 51 Implenent modernization plan 20S.6w 1/1 59t 12V31/01 52 Select and Engage Consultants 12w 1/15198 4/s898 53 Implement rnodernization plan 194 6w 4/9/ 12/31101 64 65 JAMAICA INFORMATION SERVICE 212.6w _ W9 9_27/0 _0 56 Appoint/Confirm Ceo and Core Management Team 3 6w 9/216 9/2596. 57 Appoint Agency Coordinator (Sum for JAMPRESS and JIS) 36w /6 9259 s8 Prepare MP, MTFP, FD 32.6w 9/2/96 4/16197 - __ 69 Sebet and Engage ConsuKants (Samne for JAMPRESS and JIS) 7 9w W21 1023196 60 Consulants Prepare MP, FP, FD 25w 10/2419 4/16197 G1 Obtain GOJ and Bank approval for FD, MP and MTFP Sw 4/17/97 6/11197 62 PS and CEO sign FD, MP and MTFP 4w 6/1297 7/0/97 63 nplment nodernization pln 16sw 7/10f97 WV27=00 64 Selct and Engage Consulants 12w 7/10197 1011197 65 Implemret modeniation plan 1Sew 10197 9127100 566 67 JAMPRESS 212.6w m9si 9/27100 _ 68 AppointConfirn Ceo and Core Management Team 3 6w 91219 91251 69 Appoint Agency Coordinator (Shared by JAMPRESS and JIS) 36Ow 9MM9 9/251e6 70 Prepare MP, MTFP, FD 32-5w 9/2/95 4/16i97 71 Seect and Engage Consultants 7 6w 96 101319 72 Consultants Prepare MP, FP, FD 25w 101241 4116 97 73 Obtain GOJ and Bank approval for FD, MP and MTFP 8w 4117197 6/11197 74 PS and CEO sign FD, MP and MTFP 4w 6/12197 719197 75 Implement modemization plan 16ew 7/10197 9127/00 96 LU- = o 0 0. I-~~~~~~~~~~~~~~~~~~~~~~~~~~LC LU~~~~~~~~U' -I~~~~~~~~~~~~~~~~~~~~~~~~~~~~LU 0~~~~~~~~~~~~~~~~~~~~~~~~L0 LL~~~~~~~~~~~~~~~~~~~~~~~~I U E~~~~~~~~~~~~~~U U~~~~~~~~~~~~~u-I I C - -E ' j Ow ~~~~~~~~~~~~~~~~~~~~~~~~~U~0 C Os " a co co -J d0 a ~ U~ a C * I - I Ur c~~~~~~~~~~~~~~~~~~~~~~~~ CL~~~~~~~~~~~ z~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~C o~~~~~~~~~~~~~~~~~~~~~~ z~~~~~~~~~~~~~~~ 'ii~~~~~~~~~~~~~~~~~~~~~~~~~t L6~~~~~~~~~~~~~~ C... m W~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~c ANNEX 6 6 PROJECT IMPLEMENTATION SCHEDULE Year 1 Year 2 ID Task Name Duration Start Finish Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 126 PS and CEO sign FD, MP and MTFP 4w 6/12/97 71/97 127 Implement modernization plan 168w 7110197 9/27/00 128 Select and Engage Consultants 12w 7110197 10/1197 129 Implement modernzabon plan 156w 10/297 M 927100 130 131 REGISTRAR OF COMPANIES 252w 9M2M96 6/29/01 ._ 132 AppointConfifm Ceo and Core Management Team 3 6w 9/2/96 9125M96 133 Appoint Agency Coordinator 3 6w 9M/96 9125996 134 Prepare MP, MTFP, FD 1 326W 9M2M96 4/16/97 135 Select and Engage Consultants 7 6w 92196 101W3NW 136 Consultants Prepare MP, FP, FD 25w 10124/96 4116t97 137 Obtain GOJ, ODA and Bank approval for FD, MP and MTFP 6w 4/17/97 6111197 138 PS and CEO sign FD, MP and MTFP 4w 3/12/97 4/6197 139 Implement moremization plan 1s6w 49/97 6127t00 140 Select and Engage Consultants 12w 4/9197 711.97 141 Implement modemration plan 156w 721/97 6127/00 142 Civil Works 252w 912196 6129101 143 144 ADMINISTRATOR GENERAL 216.8w 2_1 - _2=1 145 Appoint/Confirm Ceo and Core Management Team 3 8W 1212/96 1212696. 146 Appoint Agency Coordinator (Shared by MEH, RT, TPD, SO) 3.w 1296 12126_ 147 Prepare MP, MTFP, FD 32-tw 12/2/96 7117197 148 Seled and Engage Consultants (Same for JAMPRESS and JIS) 7 8w 12 1MM 37 149 Consultants Prepare MP, FP, FD -9 127 7/7197 150 Obtain GOJ, ODA and Bank approval for FD, MP and MTFP 12W 7118/97 10_9/97 .4 -i ~~~~- -4 i ,-4* ~ X . 100u~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2 02;U0 a C,~~~~~~~~~~~~~~~~~~~~~~~~~~~C ......................................... ................. .. ........ ... .............................................. ................... ................................................. z~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~. . . . . . .. .. . . . .. . ... . . . . .. .. . .. . . . ... . . 66 H111 1 1 - ANNEX6 8 PROJECT IMPLEMENTATION SCHEDULE YearlI Year 2 ID Task Nane Duration Start Finish Qtr I Qtr 2 Qtr 3 Qtr 4 Qtr | Qtr2 Qtr3 176 ConsuRants Prepare MP, FP, FD 25w 5/26/99 11116/98 177 Obtain GOJ and Bank approval for FD, MP and MTFP 8w 11/1798 1/11/99 178 PS and CEO sign FO, MP and MTFP 4w 1/12/99 2/a_9 179 Implement mnodernization plan 151w 21919 1231101 1SO Select and Engage Consultants 12w 2/9/99 5_3_ 181 Implement modemrization plan 139W 51499 12131/01 192 183 CONSTRUCTION DMSION OF MLGW 234.9w 711197 12/31101 184 Appoint/Confirm Ceo and Core Management Teamn _ _ 71897 /825/97 186 Appoint Agency Coordinator 1Bw 826197 12/15/97 186 Prepare MP, MTFP, FD 61w 12116191 211599 187 Select and Engage Consultants 3Bw 12/16/97 8/24/98 188 Consultants Prepare MP, FP, FD 25w 2S98 2115/99 139 Obtain GOJ and Bank approval for FD, MP and MTFP Sw 216/99 4/12/9 190 PS and CEO sign FD, MP and MTFP 4w 4)13199 511/99 191 Implement mnodemization plan 137.9W #1U99 12131101 192 Select and Engage Consultants 12_ 5)11/99 82:w 193 Implement modemrization plan 125.9w 8/3199 12t31/01 194 196 PRIVATIZATION 30BW 2120196 12131101 196 (i) PRIVATIZATION OF WATER AND SEWERAGE SECTOR 268W 212096 419101 _; 197 Complete Water Sector Studies 58w 2r20/9 3131/97 198 Obtain GOJ Decision Sw 411/97 512697 199 Select consultants 2Cw 527/97 10/13/97 200 Prepare Bidding Documents 78w 10/14/97 4112/99 ANNEX 6 9 PROJECT IMPLEMENTATION SCHEDULE Year 1 Year 2 ID Task Name Duration Start Finish Qtr I Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 201 Execute Transaction 104w 4n13/99 4/9/01 202 (ii) PRIVATIZATOIO/CONTRACTING OUT OF FACILITIES/SERVICES 274.6w 9f216 12V01 _ 203 complete privatization/contracting out of First set of 5 facilties/services 302w (2/9 3/31/97 204 complete prtization/contracting out of Second set of 7 facilRties/servi 52w 4/1/97 330/98 206 complete privatization/contracting out of Third set of 10 facilities/servic 52w 4/198 3/30/9 206 complete privatzatiorncontracting out of Fourth set of 7 facilities/servic 52w 4/119 3r29/00 207 complete prvatizatioi/contrading out of Fifth set of 6 faciliies/services 87 ew 4100 1215/01 208 (fil) Instutional Strengthening of NIBJ 278 2w 92/8 1231/01 209 210 GOVT PROC., CONTG., INT. CONTROL & AUDIT 210w 9296 919100 _ 211 Strerten Procurment Poicy Implementation Unit 156w 9/2/6 8/27s9 212 Strengthen Ofce of Contractor General 156w 9M/8 8/27/99 213 Strengthen Procurment Units in Ministries 210w 9/2/9 9/8/oo_ 214 Establish Intemal AudR Directorate 156w 9M 8(27/99 216 Strengthen Ofice of AudRor General 15w 8/2/9 8/27/9 216 217 FMIS/HRMIS 278.2w 91296 12131101 _ 218 Complete installation of Systems at All SRes 20_ w 9/2/ 8(25_00 219 Develop Addtinal System Modules 278 2w 9/2/ 12Z311 01 220 221 PROJECT IMPLEMENTATION & DEV. 278.2w 9N9S 12121101 _ 222 Implement propct 278 2w si2/96 12131S1_ 223 Conduct Communication Campaign 278.2w 9/ 12131101 224 Develop Stage ll of Public Sector Modemization Process 272w 9/2s6 12/31101 ANNEX 7 102 THE PLANNING INSTlTUTE OF JAMAICA AN M.Y COR SLuasgO.xT REiowZ CE TO THIS COCMUNICATIO SCOULO E ACONESMO TO ThE DIRECTOR CEIEPRAIL P.C. ICEGo PCi NCTC Tdim PLAI JAM JA C Oca' BoukwVa Fod (0) 67-NE Vhm Jnauic. W.I. 23rd February, 1996 Mr. Paul Iswrman, Dirctor, Latin American and Caribbean Department ll, 1818 H St. NW, Washington D C 20433. Dcaz Mir. Tserman, The Jamaican economy, after more th a decade of structural adjustment and support from the International Monetary Fund ClMF), still faces najor developmental challenges to increase economic growth and development while ensuring stability and greater equity. Fundamental reform mcasures have been instituted since the mid 1980s to help in metng these challengcs, and there havc bcen significant gains during the period. There have bean sustained improvcments in the Balance of Payment position over the past dme ycarn, undcrlined by growth in exporm of loods and services, sustained improvemets in private transfers and incrcased private capital inflow. As such thc reserve position impoved fom a bal:ec of -USS749.0 million-in 1990, to approximately USS460.0 million by September 1994, or the equivalcnt of thirtn (13) weeks of total imnports. Over Lhe pcriod, the economy also recordcd positive gowth in Gross Domestic Product, albeit at low levels, and total exrcrnal debt declined from a high of USS4.2 billion in 1990 to US$3.7 billion at the end of Ciol-S: ct Wu m Dk* G.m& *i n Jwf . Mc Dnt_ Lawo. Me c _t0U ANNEX 7 103 2 1994. The government is committcd to build on these gains, and further, to work towards the reduction of povcrty and a more equitable distribution of income. GOVERNMENT OF JAMAICA CURRENT DEVELOPMENTAL OBJECTiVES The major focus of thc government's developmentl agenda during the next three years, will be on four (4) broad areas. These are macroeconomic stability, increased invcstrnent, improvcd Public Sector efficiency and pov?rty reduction. In the short term, mamroeconomic stability i.e. luwcring the rate of inflation and ensuring the viability of the extcmal sector will be given top priority. A major initative in this regard is the development of a National Partnership as a complementary measure to fiscal and monctary measures to reduce inflation. The government has cinbarked on a major uxercise to induce the social partners in the economy -ade unions and the private sectors along with the public sector) to adhere to a more balanced adjustment or prices and incomes. The governmcnts contribution to the process will include consistent monetry and fiscal policies to cnsure exchange rate stability as well as institutional changcs. In this regard, improved regulations governing the moneLary sector will be implcmented shortly. As part of the fiscal efforts expenditure will be contained to targeted levels consistcnt with the broader stabilition objcctive. The govemment intends to restructure it's debt over a longer period of time, cffecting a more manageable repayment schedule and containing the level of annual recurient expenditures. With regard to capital expenditure, inFrastructural development will rcmain an integral part of the govcrnment's programme of expenditure. The government recognises its role in providing the necessary infrastructure to supporL private sector activities, production and ANNEX 7 104 3 hence growth. niis will dircctly impact on the productivity of sectors like agriculture. ranufacturing, transportation and distribution, whose outpuLs are directly linked to the state of the country's infrastructurr. In addition the govemment reCogni7.s the need to build local govcrnment and the public sector as a whole, to mrakc them more erricient in carryin, out their roles in the economy, and in parricularuin facilating the needs of the private sector. There is also the need ror an increase in living standar)s by tackling the most acute form of poverty as a way of building support for the national thrst and macroeconomic policy. In pursuit of these developmental goals the govemrnment will vigorously implement the following projccts. 1. The Parish Infrastrucnr Project; 2. The Modernization of the Public Sector, and; 3. The Social Investment Fund (SIF). The Parish Infrastructure Project: The Parish Infrastructure project forms part of the institutional reform of the Local Govermment Reform Programme (LGRP) and is designed to support this programme by helping to build the capacities of parishes and local communitics to perform the new roles and responsibilities to help advance the three (3) overall objectives. The Parish Infrastructure project is thus designed to complement the LGRP through provision of invcstfrent funds to restore major clemcnts of pansh intrastructure which have suffered erosion due to neglert and insufficient maintenance. The project has as its main objectives (as stmted in the project document): ANNEX 7 105 . .~~~~~~~~~~~~~~~~~~~~~O 4 a) Support of the Local Govimrnment Reforrn by mnlang it a rcality in the local communities, thus cnsuring a consaituency to sustain thcse reforms in the long run. b) Strengthening the financial viability and capacity of parishes and local communities to manage and rnaintain infrastructure systems and to improve the delivery of service. C) Assisting in anr-sting the deterioration of the infstructure in the parishes and local communitics, thus fostering the resumption of economic developmcnt in thesm areas. d) Helping to alleviate povcrty in parish communities, with particular emphasis on rural and inner-city areas. Thc project has thrce major components which should facilitate the achievemnent of the above objectives. The first is a technical assistance component for instiLution building. This incorporates a strengthening of the parishes' administrative, financial management, and tchnical capacitics. This component will also ensure the availability of selectve support for the provision of facilitics, cquipmenL and training to institutions which dcliver services to the paihes. The second comnponent is that of investments designed to arrcst the dctcioraLion of major infrastructure. This aspect will be targeted and prioritized, and will be subject to environmental considetions. nTe third component is or a social nature which will initiate a social assessment and participatory approach in investment lending for poverty alleviation. ANNEX7' 106 Thc major beneficiaries of the projcct are expccted to include the small business and farning sectors as well as the strcngthening of the local communities' administrLion and fiscal discipline. Modernization of the Public Sector: The scope and size of the public sectur has increased substantially over the past thirty (3) years. There are approxirately seventy cight thousand 6E8,000) posts, permanent or temporary within the public sector. Despite or, possibly bccause of the size of the public sector, its performance is generally considered to be weak and the quality of service to the public less than optimal. This occurs because of poor, Inter alia, management, cumbersome bureaucratic procedures, inadcquately trained staff, lack of automation or computerization, low levels of compensation and the centraliation of authority. The consequences of a sub-optimally-performing public sector also affects private sor development. Successive governments havc implemented a number of reform measures with varying degrees of success. Thnc government's growing recognition of the need for a more re-sponsive (proacLive) public sector, has motivated the conceptualization of te Public Sector Modernzation Projcct (PSMP) which proposes to create a smnall, efricient, effective and accountable public sctor that dlivcrs high quality service to the people. The primary component of this project is the rationalizaLion of the public sector which will etail: i) Privatizaton of some public sector entities including contracting out of thoase wrvices that can be delivered more effectively and cfficicntly by the privale sector, ii) Down-sizing and stengthening the rcquircd work-force; ANNEX 7 107 6 iii) Abolishing redundant statutory bodies anid government companies; iv) The creation of executive agencies. The concept behind the creation or executive agencies is a new one to Jamaica. Ile primary aim is to reduce excessivc cantralization of control and to delegate authority to managen in Central Civil Service Departments or Agencies i.e. those not created by statute or fall under The Companies Act. This will enable them to to dccisions in the intcrcst of their organizations with the focus on results shown in the provision of high quality goods and services. The governmcnt is committed to the rapid implementalion of the Public Sector Modernization Project to achieve the stated objectives. The first major phase of the project to be implemented within the first half of the year 1996, involves restructuring on a pilot basis, the 'inistry of Local Governmit and Worlm and the Ministry ofEnvironmwnt and Housing, eleven (11) departments of govemment tareLed for Executive Agency StaLus and the privaizadon of some- govemnment agencies. In the meantime, other meanurcs such as the reviewing of conditions of service as they affect arcas like leave, hases ror redrement and pensions wiLh the views of maidn, the service more erficient as well as being ablc to attract and retain persons of high competence. The Jamaica Social Investment Fund (SIF): Ihe Government, in enunciating its poverty cradication policy, makes refcrcnce to thc distinction between private poveny (which is sufferd by an individual when he or she cannot afford to meet his or her basic needs) and public poverty (which exists when a society fin&ls itself unable to make adequate provision of the basic public goods such as roads, water, sanitation and X " ~~~~109 ANNEX 7 7 transport). The policy accepts that boLh kinds of poverty exist in Jamaica at an unacceptable high level. It also recognises that poverty is inherently multifaceted and demands a multifaceted straegy consisting of a range of anti-poverty interventions designed and iniplernented by an efficient operational partnership between the Governmcnt itself, the beneficiaries, non- governmental organizations, oLher coLnmunuty-based bodies and the private scctor. Government has indicated that its cradication policy must work towards the achievement of the following three thrusts: i) the introduction of efficient, equitable and flexible human rcsourec decvlopmcnt strategies; ii) the amendment of the existing welfare system so as to widen its coverage of needy persons, so as to streamline it for mom efricient adminis=tion and so as to rcst its operations on the principle Lhat only temporary relief should be available to pcrsons able in body and mind; and iii) the implementation of an integrated programne of poverty reduction activitics geographically targeted to deprived communities. In identifying a poverty eradication strategy, the Government has made reference to programmes within a Social Agenda which is a priority for its administration. This Social Agerttda will receive the resources, the sustaincd cffort and participation of all sectors of the society towards achieving specific social objectives. The present policy direction of the Social Agenda will differ significantly from past approaches. Its guiding principles will be that of integration, partnership and community-based ANNEX.7 -' 109 8 participation, and will entail the following: a. The establishment of the Human Rcsource Developmnct Programme to empower individuals to achieve sclf-development through training and improvements in the quality of cducation. b. Individuals and their community organitions will be empowered to identify their needs, design appropriate projects, generate finance to irpprovc their environment through self help. c. The facilitation of income genemting activities through the provision of credit and ensuring the participation of small and micro businesses in the economic sector. d. All actors in civil society will be assured a participatory role in the development process, through a system of consultation and representadon at various levels of Lhe system. C. An improvernent in the delivery of basic social services, including shelter, to ensure that there is optimal use of Government resources and that these efforts will have a positive impact on communities. The lamaica Social Investment Fund (JSIF) is one important mechanism within the Government's Social Agenda. Its establishment is considered an imnportant tool in the reduction of public and private poverty in Jamaica and embodies a mechanism which would be adopting and 'Jamaicanizina- a straLegy which has to date been adopted with support froin the World Banlc acting in collaboration with other bilateral financing agencies in more than thirty other countries with similar problems. The primary goal of the Fund is to contribute to the reduction and eradication of poverty and to create an environment for sustainable national development. More specifically, the Fund ANNEX 7 110 9 is designed to assist the Government in responding to the neods of the most vulnerable groups currently undeserved by existing povcrty rcduction programmes. Tne objectives of JSIF will be to: i) Establish an efficient, demand-driven and complementary mechanism lo deliver basic services and infrastnucture to the poor; ii) Mobilise and channel addiLional resources to the pcas social assistancc and basic social and economic infrastructure; iii) Increasc thc institutional capacity of governmental and non governmental enlilies to design, implement, and manage small scale community based projects; and iv) Expand community opportunities to identify local socio economic needs and manage and sustain smal scale coinmuniLy development projects. The government is convinced that implementing these projects will make a significant contuibution to stabilizing the economy, reducing poverty and engendering growth and development. The government is also thankful for Lhe support of the World Bank in implementing these projects. Yours sincerely, W s r&t} 'Genes DireSor Gncral ANNEX 8"I CABliN!cT OFr ICE_ I DEVON ROAD'. P.O. BOX 272. s,.__________ KINGSTON 6. JAMAICA March 5,1996 Mr Jit Gill The Wqrld Bank 1818 H. Street Washington, D.C. 20433 United States of America 1 Dear Mr. Gill: Re: Statement of Government on the nature and extent of the autonomy to be granted The Govemment of Jamaica is committed to the establishment of "Executiye Agencies" as a method of modemizing and stream-lining the public sector. Central to the implementation of the Public Sector Modernzation Project, are "Executive Agencies" with the requisite autonomy to manage totally the affairs of the agency. The proposed autonomy includes jurisdic;icn of ,he financial and human resource management They will be headed by a Chief Executive Officer, serving under contract, whose autonomy will be balanced by requests for strict accountability in accordance with pre-determined performance targets. Resources to modernize their operabons will be provided. Granting autonomy in financial and personnel management is one of the important elements in the modemizaton strategy. The Jamaican Constitution, the F;.-ancial Administration and Audit Act. Staff Orders and Public Service Regulabons allow for flexibility through administrative fiats. As an initial step in establishing "Executive Agencies," the Govemor General and the Minister of Finance will be asked to grant the requisite administrative fiats required to create "Executive Agencies" within the present legal and administrative framework. At a later date, legislaton will be introduced to facilitate the creation of new "Executive Agencies." Other major considerations include the strengthening of the internal audit mechanism and extending the Financial Management Information System (FMIS) to the selected agencies. A management team resident within the respectve agencies will work closely with the Project Coordinating Unit, to plan, monitor and evaluate the progress of implem4ntation. The Interministerial Committee on Administrative Reform will oversee the entire process, directed by the Cabinet Secretary. Yours sincer ly, d , Carlton E. Davis Cabinet Secretary / Permanent Secretary sin a giiiautwpd ANNEX9 112 PROPOSALS FOR DECENTRALIZING THE MACHINERY OF GOVERNMENT THE ESTABLISHMELqT OF EXECUTIVE AGENCIES. INTRODIJCTION 1. The Executive branch of government established by the Constitution and laws of Jamaica is based on the constitutional norms known as the Westminster model of parliamentary democracy. It embodies a highly centralized structure with agencies are gouped in departments under ministries which reflect the particular rmix of subjects in the structure of government designated by each Primc Minister. There is no constitutional norm establishing the core of the public service and establishing the structure and organization of goverment in ministres or departments. 2. The centralization is characterized by a Civil Service which has a common personnel and human resource systcm supervised by the Public Service Commission undcr the Constitution and a set of rules for fmancial prudence -.and administration supervised by the Ministry of Finance under the Financial Administration and Audit Act. This Act does not have special constitutional status but includes provisions that are envisioned by the Constitution. 3. The Government of Jamaica has embarked on a programme of refonn of the Public Sector to sccure a 'small efficient piiblic service, able to respond flexibly to need, rccovering as rnmch of its costs as possible from fees and with ANNEX 9 113 2 delegatcd authority as far as possible within separate agencies.'' The World Bank has comnmissioned this study to identify options available to the Government of Jamaica for the achievement of the objective of significantly delegating the dccision-making fimctions within Jamaica's constitutional and legal framework 4. This study examines the structure of Executive Agencies carried out in the United Kingdom, and to a lesser extent, New Zealand and explores the extent to which tey can be replicated in Jamaica. There are some other experiences in countries which have adopted the Wesuninster form of government, but the time within which this study has been commissioned does not allow for their carefuil examination. THE EXPERIENCE OF THE UNITED KINGDOM 5. Next Steps is the name that the British government gave to the Civil service reforms under which Executive Agencies were set up to deliver government services.2 The reports that led to the establishment of Next Steps recognized that a) 'although the main business of some 95% of the Civil Service was to ' deliver services, operational efficiency attracted a low priority among 'JAMAICA Puinuc SERVICI REFORM by Kate Jenkins January 1"4 'Sr. rnlm UP Nxi' STEPi by Dianne Goldsworthy HMSO London May 1991 ANNEX 9 114 3 senior people compared with giving policy advice to Minister,' b) ' the Civil Service was still largely governed by a body of centrally laid down rules, even though it was too bil and too divers to be managed as a single entity,' c) 'central controls prevented local managers from being able to make decisions in thc best interests of their own opprations.'" 6. The solution that was recommended and which has been imnplenented was the separation of thc executive fwLictions of government from the policy-makcing role and the dissolution of the centrally controlled management structure. The old structure has been largely replaced by a number of executive agencies in which there is delegation of personal responsibility for the effective delivery of igh quality and responsive services to the public. By September 1994 62% of the British Civil Scrvice were working in the new system which now has over 1 00 agencies and there are plans for the Revenue departments and a further 17% of the functions of the civil iwnice to be agency candidates.' 113 Chief Executive otTicers had been appointed up to August 1995, 71 of whom as a rcsult of the posts being advertised, aid 35 of them coming from busMess and outside the Civil Service.' 7. .JThe refonns have been so radical that they have witnessed the advertisement Jlbid page 4 'NEXT SrRs RFVTFw 1994 proetod to Parliament by the Chancelor of the Duchy of Lancaster Cm 2750 Ocigber 1994 HMSO lIntcrview with Karen Caines Augumt 17, 1 995 London ANNEX9 115 4 of vacancies in posts of Perrnanent Secretaries. The achievements of the new system have rested on clear and meaningful delegation of personnel responsibilities, managerial independence and autonomy ovcr resources, flexible pay agrcenients and budgeting arrangements, all within the context of the acceptance of accountability of the Chief Executives to the appropriate minister and without 'erodimg Ministers accountability to Parliament or imperilling the control of public expenditure ' The British Govemment, through Prime Minister Major, has concluded that these changes bave introduced more transparency into the work of Govermnent, within the constitutional principle that it is Ministers who are accountable to Parliament for all that their departments (including agencies) do." S. A significant factor in the success of thc refonns in Britain has been the fact that they received strong support from Mrs. -Margaret Thatcher, the Prime Minister at the time when the initial steps were taken. Her supporn was * uquivocal and was characterized by the directness and brevity of ber speech in the House of Commons wbhn the proposals were first presented. This comaiitrnent has been followed by her successor Mr. John Major. 9. -In Britain the processes that have been introduced have included the establishmcnt of a Audit Conunission that goes beyond the issues of financial 4 'SkrrING UP NI.XT S11YS ibid page 9 'THL- CIVIL SERVTCE CrTwrIUrrY AN) CWANGJE White Paper prewnted to Parliament by the Primen Minister, thc Chancellor of the Exchequer and the Chancellor of the Duchy of Lancaster July 1994 Cm 2627 k1NISO ANNEX 9 116 accountability with which the Auditor Gcneral is concemerd. The requirement that each agency publishes its annual business plan and annual report in addition to annual accounts has been strengthened by the requirement that annual public meetings musct be held to solicit public reaction to their performance. 10. The lcpl framework that the British government has established for the creation of Execujtivc agencies has restcd partly on lcgislation and partly on the exercise of thc royal prerogative. The legislation is the Govemrnment Trading Act 1973, The Govcrrunent Trading 1990, The Property Services Agency and Crown Suppliers Act 1990 and The Deregulation and Contracting Out Act 1990. The Govcmrent Trading Act 1990 amended the 1973 Act and provides for the financing by trading fimds of certain services of the Crown. 11 The Ministcrs responsible for the admninistation of certain government services may. if it appears to them expedient in the interests of improved commcrcial operatiou and public accountability of a service, by order made with thc concurrence of the Treasury, direct that the service shall be financed by mcan of a trding fimd established with public money, instead of by means of anmual budget votcs and appropriations. Orders must be made by statutory #ipsnMcnts which must be laid in draft forn before the House of Commons and approved by resolution by that House. The initial capital for the fund is normally provided by way of a loan from the National Loan Fund. '4 Halsbury's Laws orEngland Vol K Constitutional Law pamr 1399 ANNEX 9 117 6 12. Trading profits in the fornm of public capital dividends are paid into the Consolidated Fund and the fund is under the cnntrol and management of the rcsponsible minister, who is under a duty to manage the funded operations so that tOe revcnue of the fund is sufficicnt to meet the outgoings properly chargeablc to revcnue account and to meet such financial advantages that the minuster with thc concurrence of the Treasuiry ha- from time to time laid before the House of Camnuons.' Ministers set targets for rates of return on capital and other indicators of financial performance, which means that trading funds operate with targcts sinilar to those used by equivalent service providers in the privatc sector. 0 The Treasury appoiints accounting officers for the trading fund and they are subject to the in.spection of the Comptroller and Auditor General, who has a duty to examine and certify the accounts and report on it to Parliament." Up to December 1994 twelve agencies were operating as trading fun.12 13. LIkc the tading fiuded agcncies the others are required to publish commercial- style accounts on an accruals basis and the government has decided that this approach should be extended to all dcpartments by April 1998. The other 'Ibid para 1405 tThe Civil Service Continuity and Chanyge presented to Parliament by the Prime MiListcr, the Chancellor of the Exchequer and the Chancellor of the Duchy of Lancaster July 1994 Cm 2726 HMSO "Ibid para 1406 "Next Stcps Review 1994 presented to Parliament by the ChaLncelor of the Duchy of Lancastcr Deccmber 1994 Cm 2750 ANNEX9 11 7 development that has been of special interest to Jamaica is that agencies have dcveloped pay and grading arrangements tailored to their specific needs and the British Government has proposcd to cxtenid delegation of responsibility for pay and grading of staff belowv senior levels to all departmcnts and agencies by April 1996.'3 14. The Property Services Agency and Crown Suppliers Act 1990 gives the Secretary of State power to makc schemes for the 'ansfer to persons of property, rights and liabilities to whicii a Minister of the. Crown is entitled. The schemes may confer liabilities for the purpose of converting into a contract between the transferce under it and a Minuster of the Crown any arrangements existing before the existence of the scheme under which goods and services were being provided. These schemes can also include companies formed or acquired by the Secretary of State. i 5. These statutes havc not been relied on for the creation of the majority of the cxecutive agencies that havc been formed in Britain. By virtue of the Royal Prerogative thc sovercign is the supreme executive authority in the state and all executive actionsare done in the nmne of the sovereigi." "Ministcrs rely daily on the royal prerogative for what they do. That Miristers can rely on that part ; of the common law known as the royal prerogative to do what would otherwise bc ut]awfutl is highly convenicnt to them. In relying on the prerogative, "Ibid "4 Halsbury's Laws of England Vol 8 pare 931 ANNEX 9 119 Ministers are obviously not limited by the terms of any Act of Parliament." a. The ability of the British cabinet minister to rely on this residuary power not only made it relatively simple for the creation of executive agencies but also sharply distinguishcs the legal constraints that exist under the unwritten constitutional govemance of that system and the written Westminster model in Jamaica. THE NEW ZEALAND EXPERIENCE 16. It is instructive to look at the experiences of a Commonwealth nation that has becn modeled on the Westminster systcm. New Zealand undertook a radical progranmme of reform its economy and the managcment of public administration. These reforms have been at. the forefront of the political agendas of the political parties for over 10 years, and it was recognized that total reform of the systems of government management was required to accompany the economic reforms vvhich were designed to redefine the role of government. Like the British the New Zcalanders set out to separate policy advice from the operational units which have responsibility for the administration of that policy. They established arm's length contractual arrangements between the govcrnment's role as funder, purchaser and provider of services both to the govcrnment and to the public directly. They also developed stuctures that promoted competition between government providers "Constitutional reform Rcshaping the British Political System by Rodney Brazier Oxford University Press 1991 ANNEX 9 120 9 of public services and betwecn govenunent providers and prvate sector providers. 17. There were two process by which the transformation was achieved. One was by corporatizatior' under the Companies Act and the appointment of directors witl private sector experience, who wcre not selected because of their political connections. The other process was the radical reform of the core of the government administration under a system that saw the introduction of The State Sector Act and the Public Finance Act, that require government departmcnts and non-commercial departments to (a) have clearly defined strategic and operational objectives, (b) decentralize financial and administrative management and accept accountability for results, (c) receive allocations from State funds through the Budget based on achievement of results, (d) publish information on thc results that had been achieved and the condition of the organization. The new system is described by Scott C. Graham, visiting scholar at the New Zealand Fiscal Affairs Department of the Ministry of Finance in these words; " the Mini-vier, acting within the collective respunsibility of the Cabinet, is fifrmally respon ible fimr specitjing the perfurmance re uircmcnt:s qf the dcpurimental (.hiuf Executive responsible for .service delivcry. Decision-making authority about how to meet those performancc requirements is passed lo that C.hief Executive. 7here are now incentivcs to perform, and raquirefments for performance inlormation. "7 'CGovernment Refoz iiin Ncw Zealand by C;raham Scott, 1995 Section 5 "Ibid page 38. ANNEX 9 121 I0 18. The New Zealand constitution does not have the kind of constraints that exist under the Jamaican Constitution. As a result the two Acts established the framework for performance agreements between the Ministers and the Chief Executives and he Chief Executives are the legal cmployers of the staff of the depart;ments. This radical departure from the old civil service model has taken place in a context where the laws tleniTselves shifi of the focus of the managernct system and the allocation of resources from imputs to outputs. The objective is to givc Parliamcnt control over the disposition of public funds. 19. In the section of Scott' paper which deals with the Operational Financial Management he lists 14 charactenistics of the framework surrounding a Chief Executive, which include, (i) an employment contract for 5 years with a possible cxtension based on perfonnance, (ii) possibility of receiving perfornance bonuses for above-expectation performance or criticism or dismissal for below expected performance, (iii) freedom to manage staff without central regulations, (iv) budget based on rcsources for output production, (v) tabling of financial forecast statements and other accountability documents in Parliament (vi) monthly monitciing of financial information by the Treasury and (vii) annual reports to Parliament on performance of dcpartment based on a standard questionnaire by the Finance and Expenditure V Committee.I' THE JAMAICAN CONSTITUTIONAL AND LEGAL FRAMEWORK "Ibid page 89 ANNEX 9 122 11 20. By Section 68 of the Jamaican Conistitution executive authority m Jamaica is vested in the Queen This authority is exercised on her behalf by the Govemor- Generl either directly or through subordinate officers. parliament has the power to confer executive fimctions on persons and authorities other than the Governor-General. 21. Section 77 of the Constitution of Jamaica recognizes the division of the organization of the central govemment into ministries. This is done by the assigiment of subjects to Cabinet Ministers by the Governor-General on the advice of the Prime Minister. Ministers excrcise general direction and control over the departbnents but the supervision of them rests with the Permaent Secretary (Section 93). The Constitution makes no provisions as to how the intenal organization of the departments are organized and recognizes through the provisions thal it mikes relating to the personnel functions relating to public officrs that delegation of thesc fmcntions is contemplated. Section 127 permits the delegation by the Governor-General of the appointment, removal and discipline of public officers to 'any other authority or public officer' as he may specify. 22. The provisions relating to Finance are contained in Chapter VIII and do not contain specific terms rclating to the management of the finances of dcpartnents and agencies of Govenunent. Section 116 contemplates that the estimates of expenditure which the Minister responsible for f&ance prepares will be incorporated in an Appropriation Bill which will be broken down into 'appropriate heads Ibr the sevcral services required ' during the financial ycar. ANNEX 9 123 12 The detailed regimc for achieving good order in the financial administration of the public sector is contained in the Financial Administration and Audit Act. The Minister of Finance has specific power to make regulations and in some cases to delegate his powers to Accounting and Accountable officers. 23. It would be a simplistic approach to the speedy transformation of the existing Jamaican administrative Civil service structures to merely copy the legislative framework within which the British government has established Executive Agencies. It overlooks the fact that the Bn'tish Govement does not operate wthin the context of a wntten constitution. In addition it is enToneously assume that because Jamaican governance is based on Westninster parliamentary denocracy that this in itself ensures that the threads that make up the fabric of British political culture are of the same genus as those that hold political practice together in Jamaica. 24.. The significant difference between Britain and Jamaica is that parliamentary democracy in Britain operates in an environment in which the power of the Legislature over the Executive has been cxercised from time to time and that the accoumtability of the Executive to the Legislature is ensured by the fact that there is a tradition of backbencbers bring the Government to books. Parliament is powerfl because there are sufficient members whose political reputations depend upon their ability and willingness to champion causcs even at the risk of falling foul of their own party when it forms the government. No such tradition exists in Jamaica. The Executive dominatcs the Legislature and in a real sense the practice of 'parliamentary democracy in Jamaica is in the form ANN]R 9 124 13 of 'cabinct government' resulting from the fact that what has been copied is not the 'Westminster model' but a form of cabinet govemment in which the legislaturc has become dominated by the Executive and in which legislators themselves are embroiled in administrative finctions." 25. Jamaica faces a number of issues that will have to be addressed in the ongoing discussions that arc taing place on constitutional refonm. While that process moves to a state of fruition it is noted that the United Kingdom and New Zealand share much in common with Jamaica's political and administrative culture which can guide our transfomation to an efficient results-oriented system of public administration. Both expenrences have cmerged over many years of change and both have takcn place within the context of specific laws that were enacted to drive the processcs of change forward. Jamaica does not have the time to allow the process to evolve slowly and it has no alternative but to enact the laws, that will create the framework within our constitution, for radical change. SOME PRE REQUISITES FOR THE NEW SYSTEM 26. Tlbere are a number of political assumnptions that wiU have to be accepted and .also enshrined in the enabling legislation that will govem decentralization "The Economist 7 October. 1995 page 52. Jamaica New Politrics ? " What Jamaica calls Vtc westmninster system' bears little rclation tn its namesake. With no effective local govcrrunent and rtot much of a civil service cither. members of parliament are responsible for everything from disaster relief to road-building.' (Author's note: This view was not illustrated but it demonstrates a view of the Jamaican political system which has gained wide support.) ANNEX 9 125 14 through the introduction of Executive agencies. 27. First and forcmost. the Minister must remain accountable to Parliament for the agency which will be made into an exectutive agency. The Minister must also be accountable for the core department that remains a part of the Civil Service establishment under the ministry for which he or she has portfolio responsibility. This must be clcarly set out in enabling statute and it must be clear that it overrides all statutes that establish any statutory authority. For example, if it were decided to make the Water Commission or the National Insurance Scheme into an executive agency the should be no doubt that the respective ministers remain accoTntable to Parliament. Thc creation of executive agencies must not create a shield behind which the ulnmatc executive responsibility at the Cabinet level can be hidden and a statute should spell out the minimuri standards for accounting. ; 28.. The statutes should also set out clearly the nature of the accountability of the Chief Executive officer in terms that will not blur that responsibility with ministerial accountability. There should be no doubt that the reforms are centered on the objectives of accountability, greater effciency and transparency -in the use of public funds. There must be standards by which the public can measure the performance of the agencies and assess whether the quality of the services that are delivered is compatible with the provision of value for money. 29. Another area that will require spccific trcatment will be the demarcation of the relationships of the Minister, the Civil Service department and the executive ANNEX 9 15G agcncy. This will require clear definition of the stucture with'in which the ministcr monitors the rnanagement of the agency, the obligation of the Minister to publish the outputs against which he will measure the agency's performance and the publication of the framework agreement through which a CEO undertakes to manage the agency in ptirsuiit of the stated outputs. 30. In this connmction the statute will have to spell out the level of autonomy that CEOs will enjoy and will havc to recognize the professionalism of the Civil Service. it is arguable that details of this kind should be excluded from statute law and should bc left to the framcwork agreements that will be signed between the mini5tcrs and the CEOs. The difficulty with this approach is that it come against the background of a Civil service that has yielded its obligation and right to defer from Ministers on adcninistrative matters and we are operating in the context of an environment in which the demarcation between policy and executive function have become blurred In addition the Government would have to cstablish some professional machinery to ensure that the faramework axeernents clearly state the following: (a) what the tasks of the Executive agency are. (b) the outputs against which the pcrformance of the agency will be assessed (c) the indicators of changc that will be uscd to assess whether in addition to achieving the targeted ouitputs thc service to the public has improved; for example the extent to which the public is getting value for ANNEX9 127 16 money.= THE POLITICS OF TRANSFORMA rFION 31. Tlicrc are a number of othcr considerations for which no legislative standards can be established but which nouethclcss will require attention to ensure that the accountability of Ministers aid agencies to Parliament does not become the kind of process that the Public Accoults Comunittce has become. Systems will hiave to be established that will ensure that, the targets having been set between the Minister and the CEO, and having been embodied in a quasi legal contract, the performance of the agencies and the monitoring process by the Minister is open to public scrutiny This among other things will require that a special Parliamentary Conrumittee with the requisite expertise is cstablished and that therc are managerial systems that will tell that committee and Parliament what is happening, not merelv with the peripheral Issues buit more so with regard to the big issues that impact on the public on a day to day basis. 32. There are other rcasons why the approach of ' minor amendments' to the existing Financial Administration and Audit Act and the Civil Service Establishmcnt Act are undesirable. The reforms will only be credible if they enjoy the enthusiastic support of the senior ministers of government, including 'In the U.K the introduction of executive agencies has been accompanied by an incrcase in the cxternal auditing of thc se agencies This auditing has to go beyond financial auditing in order to ensure that thc objcctive of producing better se.vice to the public is achieved and has included quality auditing, analysc5 of manage ment overheads across different agencies, process indicators and spot checks. ANNEX 9 130 19 (c) the services that will be provided to the ptublic and the government, (d) the spccific measurable qiiality, quantity, cost effectiveness targets, (e) thc resourue flows required to fulfill the targets of thc agreement, (f) the miniTnum reporting requircments, (g) the activities to be implementcd in the contract period, (h) the lcvel of personnel ajnd financial managerial responsibility that will be undertaken by the Chief ExectiAve Officer, (') the Jevcl of financial and performance accountability that will be required of the Chief Exccutive Officer. THE PILOT PROJECTS 37. Four agencies have been chosen as pilot projects, viz; The Registrar of Copn i'es, The Registrar of Births and Deaths, The Registrar of Titles and the Customs Departmcnt.. E;ach one of these agencies operates under its own statute. For easy reference I will examine the Companies Registry and the Registrar General's Office. 38 The Registration (Births and Deaths) Act, which was enacted in 1881, provides for the Govenor-General to appoint "a fit person" to be Reg'strar of Births and deaths in Jamaica. This person holds office during the Governor-General's .: plcasure and is removable by him." The Registrar of Rilrth% and Deaths is also the Rcgistrar of Mamages under the Marriage Act.ZZ Under the Rcgistration z'Section 4 Registration (Births and Deaths) Aut 22Section 42 Marriage Act. ANNEX 9 131 20 (Births and Dcaths) Act the Governor-General appoints a] of tilc staff The legal basis for creating an cxecutive agency is therefore already in existence. 39. i thie case of the Companies Registry, the office of Registrar of Comparuies is a public officc3and appointments to this office are in the authority of the Public Service Commission under the Constitution. i 40. In practice thcrc is no distinction between the authority for the appointment of the two offices and thc distinction is related to the fact that the Companies Act is a post-independence statute which complies with the lettr of the Constitution and Registration (Births and Deaths) Act was enacted within the norms of the structure of Government that existed when the Govemor had the powers which now vest in the Public Service Connssion. REGISTRAR OF COMPANIES AND PERSONNEL MANAGEMENT 41. The Governor-Ccneral hms authority under Scction 127 of the Constitution to delegate the functions of the Public Service Comrission over the appointment transfer and discipline of public servants. This power should be evoked in respect to the staff of the Office of the Registrar of Companies anid the Registar Gencral and delcegated the holders of the posts of Registrar. Separate I lcgal instrunicts should be used which are tailored to the particular circumstances of each agency. '3Section 333 Companie5 Act -132 ANNEX 9 2L 42. The instruments should set out the standards of good employrneiit practices that the CEO will be required to practice, and establish the procedures for discipline that will be followed under the delegated atithonty. These standards and practices should conform to enlightcned and modern standards and must enable the CEO to effectively take responsibility for the efficient management of the personiel under her control 43. Thcre will be thc problem of the rights of existing staff who enjoy the nrghts that civil servants have under Constitution The Government muLst take a number of polic;y decisions abotit hiow they will approach this problem. It is faced with its obligation to uphold thc Constitution. It is also faced with its obligation to deliver eficient, cost-effective and courteous service to the public. In pursuit of thesc objectives it must decide whether it is going to dis-establish the entire offices of the two Registries except for the Chief Executive Officers or creatc the mechanism for seconding staff in and oUt nf the two offices as the need arises. 44 Tie later course is faced with the anomaly that employees within the registries will bc under a diffcrent set of terms of employment than exists under their substantive cngagements as Civil Scrvants. A great deal depends on the speed with which the transformation is undertaken, the level of commitment that is . generated for the new system within the particular departments and the Civil Service as a whole, the extent to which the labour movement, the political establishment and the public at large arc recruited as active supporters of the modernization and the assessment of the timing for the enactment of 133 ANNEX 9 22 comprehensive legislation to goveni the implementation of the new system throughout the Public Sector. THE REGISTRAR OF COMPANIES - FINANCIAL MANAGEMENT 45. The delegabon of financial management to the Registrar of Companies and the Registrar Gencral can be effcct'vely and ifficiently undertaken under the Financial Administration and Audit Act. As in the case of the delegation of personncl finctions each delegation should be undertaken by a separate instrument that is specially tailored to meet the requirements of the particular agency. Tiis is not only required to easure that the delegation meets the differing dictates of good order that are indicated by the nature of the activities that each undertakes. but also because the statutes that establish each agency deals with revenue in specific ways. 46. In the case of the Companies Act Section 334 reqcuires that all fees shall be paid into the Consolidated Fund. This includes the fees payable vunlder the. Ninth Schedule which makes provision for a variety of fees for several categories of business activities that are regtilated by the Act. Similarly the other statutes that arc administered by the Registrar. including the Business Names Act, the Industrial and Provident Societies Act, the Trade Marks Act and the Designs sand Patents Acts, have their fees set out in schedules that require amendment by Parliament. Since these are user fees and are not taxes the power to amend them and keep thme in line with the costs of maintaining the services of the Rcgistry should be delegated to the CEO and account taken of this in the ANNEX 9 13' 23 regulations for this registry uinder the Financial Administration and Audit Act. 47. Section 50 of the Financial Administration and Audit Act gives the MiLnister general powcrs to make regulations. It is proposed that appropriate regulations specifically crafted to meet the objectives of creating an efficient Executive Agcncy at the Registrar of Companies should be made under this section embracing the power of the Financial Secretary to give directions to institutions unidcr Section 51. Some of the specific instructions would address the sevcral powers set out in the different sections of the Act. 48. Section 7 dcals with revenues to be paid into the Consolidated Fund and Section 8 with directions for the payment of fees penalties and unusual receipts. Thc Minister of Finance has power to give special directions under these sections and thc directions for the functioning of the Companies Registry as an Executivc agency. should incorporate flexible but transparent procedures that would enable the efficient finctioning of this agency. 49. Sitnilarly the dircctions would provide expanded powers of virement under Section 1 9A, power to make contracts for goods and services under Section 1 9B and flexiblc power over the custody and control of govermnent property. which would includc the power to dispose of property which is no longer useful to the agency 50. Section 24A(3) of the Financia) Administration and Audit Act contains provisions relating to the preparation and stubmission of Estimates of Revenue ANN EX 9 135 24 and Expenditure and the keeping of, among other things, accounts and records. Section 24E deals with credit arrangements and Section 24F with standard financial instructions. The comprehensive regulations under the Act, which would cover the items which fall tmdeT the jurisdiction of the Financial Secretary as well as those under the Minister's authority could address all of the concerns that relate to maintaining accountability. THE REGISTRAR-GENERAL 51. The approach to the transformation of thic Reg'strar-General's OfFicc as a pilot project should proceed along similar lines to that proposed for the Registrar of Companies. This means that a separate delegation of personnel and financial management directions should be tailorcd to meet the ex-agencies of that office and the performnance environment in which it will operate and the targets that will be set. There are some differences in the Registration (Births and Deaths) Act which are worth noting. Section 9 contains provisions relating to payment of fees of the Re 'strar-General into the Treasury. Tbc Act also contains provisions for payment of salaries (Section 6), expenses for carrying out the Act (Section 60), and Section 73 gives thc portfolio Minister power to alter the appointed fces by Order This latter power can be delegated by the appropriate legislative instrument to the Registrar-General. 52. The portfolio Minister also has power under Section 8 of the Act to make rcegulations for the government of the office. This power can also be delegated to the Registrar-General by an appropriate legislative instrument. ANNEX 9 136 25 53; It cannot be over-emphasized that the initiation of the pilot project. no less than the introduction of the comprehensive framework for the transformation of the public sector by introducing Executive Agencies, will depend openness anid winning the support of the leadersbip and management cadre of the Civil Scrvice, the labour movement, the political parties, the press and the managemcnt organizations of the private sector. Unless significant leaders own and promote thc concept in the context of a recognition that the public is entitled to better standards of servicc and value for money, the pilot project will not move smoothly and produce optimum results. HUG14 SMALL QC 25 81 u.S. 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