Document of The World Bank FOR OFFICIAL USE ONLY Report No. RES23345 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE SOCIAL PROTECTION REFORMS SUPPORT PROJECT October 23, 2013 TO THE REPUBLIC OF TUNISIA June 15, 2017 SOCIAL PROTECTION AND LABOR MIDDLE EAST AND NORTH AFRICA REGION This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. DATA SHEET Tunisia TN: DTF Social Protection Reforms Support (P144674) MIDDLE EAST AND NORTH AFRICA Social Protection & Labor . Report No: RES23345 . Basic Information Project ID: P144674 Financing Instrument: Specific Investment Loan Regional Vice President: Hafez M. H. Ghanem Original EA Category: Not Required (C) Marie Francoise Marie- Country Director: Current EA Category: Not Required (C) Nelly Senior Global Practice Michal J. Rutkowski Original Approval Date: 23-Oct-2013 Director: Practice Hana Brixi Current Closing Date: 30-Jun-2017 Manager/Manager: Yuko Okamura, Carine Team Leader(s): Clert . Borrower: Ministry of Economy & Finance Responsible Ministry of Social Affaires Agency: . Restructuring Type Decision Authority: CD Decision Restructuring Level: Level 2 . Financing ( as of 28-Feb-2017 ) Key Dates Approval Effectiveness Original Revised Project TF Status Signing Date Date Date Closing Date Closing Date P144674 TF-15956 Effective 05-Nov-2013 05-Nov-2013 05-Nov-2013 30-Jun-2017 30-Jun-2017 Disbursements (in Millions) % Cancelle Disburse Undisbur Project TF Status Currency Original Revised Disburse d d sed d P144674 TF-15956 Effective USD 4.70 4.70 0.00 2.00 2.70 43 . Policy Waivers Does the project depart from the CPF in content or in other significant Yes [ ] No [ X ] Page 2 of 11 respects? Does the project require any policy waiver(s)? Yes [ ] No [ X ] . A. Summary of Proposed Changes The proposed restructuring entails the following changes: (i) revision of project components, disbursement estimates, and implementation schedule; (ii) revision of the Results Framework; and (iii) six-month extension of the project closing date, from June 30, 2017 to December 31, 2017. Change in Implementing Agency Yes [ ] No [ X ] Change in Project's Development Objectives Yes [ ] No [ X ] Change in Results Framework Yes [ X ] No [ ] Change in Safeguard Policies Triggered Yes [ ] No [ X ] Change of EA category Yes [ ] No [ X ] Other Changes to Safeguards Yes [ ] No [ X ] Change in Legal Covenants Yes [ ] No [ X ] Change in Loan Closing Date(s) Yes [ X ] No [ ] Cancellations Proposed Yes [ ] No [ X ] Change to Financing Plan Yes [ ] No [ X ] Change in Disbursement Arrangements Yes [ ] No [ X ] Reallocation between Disbursement Categories Yes [ ] No [ X ] Change in Disbursement Estimates Yes [ X ] No [ ] Change to Components and Cost Yes [ X ] No [ ] Change in Institutional Arrangements Yes [ ] No [ X ] Change in Financial Management Yes [ ] No [ X ] Change in Procurement Yes [ X ] No [ ] Change in Implementation Schedule Yes [ X ] No [ ] Other Change(s) Yes [ ] No [ X ] . B. Project Status The project development objective (PDO) is to strengthen institutional capacity to design social protection reforms and improve targeting of safety net programs. The PDO remains relevant and achievable with a set of revised activities proposed under this restructuring. The project has three components, which are originally: (i) Subsidy and Safety Net Reform Support; (ii) Strengthening Social Security System Analysis and Planning; and (iii) project management and monitoring. Some of the activities which were initially envisaged are no longer relevant, such as the support to the implementation of subsidy reform which did not take off. The restructuring will enable the introduction of a modification in project components and activities, focusing on concrete activities on building blocks for both contributory and noncontributory social protection programs. The last ISR rated Progress towards achieving the PDO and Overall implementation progress (IP) as Moderately Unsatisfactory. While implementation progress had been stagnant, including delays in Page 3 of 11 implementation due to Government reshuffling and the complexity of the project content, significant progress has been made, particularly during the last 12 months. The PIU has strengthened its fiduciary capacity, which is now assessed as being adequately staffed to ensure proper implementation of the project. With regard to financial management, the financial report for the second semester of 2016 was submitted on time and the audited report for 2015 was submitted with delay and found to be unqualified. Project disbursements have also improved remarkably over the last few months, and currently stand at 43%. Progress is expected in expediting procurement processes for large contracts needed for developing the management information system, as well as transportation costs to be used for the social survey/assessment to update the SSN beneficiary registry. With the approval of the proposed restructuring, the project is also expected to fully disburse project funds by the requested revised closing date. Furthermore, upon the completion of the restructuring, the project rating may potentially be upgraded based on the revised activities and the revised results framework indicators, given that other major implementation bottlenecks have been already addressed. . C. Proposed Changes . Development Objectives/Results Project Development Objectives Original PDO The project development objective is to strengthen institutional capacity to design social protection reforms and improve targeting of safety net programs. Change in Project's Development Objectives Change in Results Framework Explanation: Under the proposed restructuring, the Results Framework will be revised to reflect the change in the Project’s scope and expected progress. Out of five initial PDO level indicators, three largely remain consistent, while the definition has been fine-tuned to reflect the modification in activities. Target values have also been updated. Two indicators in the subsidy reform plan will be deleted, since there is no reform in place. Intermediate outcome indicators have been revised to reflect the change in activities for each component. . Financing Change in Loan Closing Date(s) Explanation: In order to implement and complete the revised set of activities, the government has requested a one-year extension of the project Closing Date, through June 30, 2018. It was agreed that the proposed restructuring would be carried out in two steps, with a first extension of six months until December 31, 2017, and consideration of any further extensions beyond the six-month extension, would be contingent on demonstrable progress in the coming months. This is the first request to extend the closing date under the Grant. Proposed Original Current Proposed Previous Closing TF Status Application Closing Date Closing Date Closing Date Date(s) Deadline Date TF- Effective 30-Jun-2017 30-Jun-2017 31-Dec-2017 30-Jun-2017 30-Apr-2018 15956 Page 4 of 11 Disbursement Estimates Change in Disbursement Estimates Explanation: Disbursement estimates are revised to reflect the additional extension period of six months. Fiscal Year Current (USD) Proposed (USD) 2014 500,000.00 500,000.00 2015 1,600,000.00 400,000.00 2016 1,600,000.00 0.00 2017 1,000,000.00 1,400,000.00 2018 0.00 2,400,000.00 Total 4,700,000.00 4,700,000.00 . Components Change to Components and Cost Explanation: Activities under each component will be revised as follows: Component 1 would shift away from the activities to support the implementation of ambitious subsidy reform to focus spending on the modernization of the social safety net system. This modernization includes updating of the SSN beneficiary registry through a field survey, developing a targeting tool, and building a foundation for an integrated management information system (MIS). Component 2 would shift away from analysis of and scenarios for social insurance reforms to focus on interconnectivity between contributory and noncontributory social protection programs. This would help implement the unique social identifier and bring coherence to a fragmented set of interventions. Component 3 would go beyond implementation support to include cross-cutting elements of communication and civic engagement (complaints and redress mechanisms) which are key elements of the new social contract. These elements were originally included under the component 1.3 and moved to component 3 due to its cross-cutting nature. All of these elements will help establish key building blocks for a more effective and better-targeted social protection system, consistent with the Tunisia CPF (social inclusion pillar) and the MENA World Bank Group Regional Strategy. Change in cost: To reflect the change in activities, the budget allocation per component was revised, while the total allocated amount remains unchanged. It was confirmed that there are no commitments on the activities which are proposed for elimination under this restructuring. Given that there is only one disbursement category under this project, a reallocation of grant proceeds will not be required. Current Component Proposed Component Current Cost Proposed Action Name Name (US$M) Cost (US$M) Subsidy and Safety Net 3.78 2.15 Revised Reform Support Strengthening Social 0.40 2.30 Revised Security Analysis and Page 5 of 11 Planning Project Management and 0.40 0.25 Revised Monitoring Total: 4.58 4.70 . Other Change(s) Change in Procurement Explanation: This restructuring proposes a set of revised and additional activities under all components. The procurement plan has therefore been revised and updated to reflect these activities. Change in Implementation Schedule Explanation: The implementation schedule for all activities has been delayed. In addition, this restructuring proposes a set of revised and mainstreamed activities under all components. As mentioned above, this restructuring proposes an extension of the closing date by 6 months to address this delay as well as the anticipated time required for the Parliamentary approval of the corresponding amendments to the Grant Agreement. Given that the Government has requested a one-year extension, another extension for an additional six months will be considered contingent on further progress made in the coming months. Page 6 of 11 Results Framework Project Project TN: DTF Social Protection Reforms Support (P144674) Restructuring Status: Name: Stage: Team Requesting Yuko Okamura, Carine Clert MNC01 Created by: Suzanne Essama on 18-Apr-2016 Leader(s): Unit: Product Responsible Recipient Executed Activities GSP05 Modified by: Maya El-Azzazi on 14-Mar-2017 Line: Unit: Country: Tunisia Approval FY: 2014 MIDDLE EAST AND NORTH Lending Region: Specific Investment Loan AFRICA Instrument: . Project Development Objectives Original Project Development Objective: The project development objective is to strengthen institutional capacity to design social protection reforms and improve targeting of safety net programs. Results Core sector indicators are considered: Yes Results reporting level: Project Level . Project Development Objective Indicators Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target Marked for Direct project beneficiaries Number Value 0.00 0.00 10500000.00 Deletion Date 14-Nov-2013 31-Mar-2016 31-Dec-2016 Comment Marked for Female beneficiaries Percentage Value 0.00 0.00 50.00 Deletion Sub Type Supplemental Revised Number of training which Number Value 0.00 0.00 2,645.00 Page 7 of 11 Results Framework enhances knowledge and Sub Type Date 14-Nov-2013 28-Feb-2017 31-Dec-2017 capacity1 Breakdown Comment Revised Number of households in the Number Value 0.00 0.00 300,000.00 system who are updated with Sub Type Date 14-Nov-2013 28-Feb-2017 31-Dec-2017 complete information Breakdown Comment New Development of targeting tool, Yes/No Value No2 No Yes3 socioeconomic classification Date 28-Feb-2017 28-Feb-2017 31-Dec-2017 applied to households registered in the database Comment Revised Number of assessed persons Number Value 0.00 238,0000.00 750,000.00 who received unique social Date 14-Nov-2013 28-Feb-2017 31-Dec-2017 identifier Comment Marked for Share of females who received Percentage Value 0.00 0.00 50.00 Deletion unique social identifier Sub Type Supplemental Marked for Citizens registered in new Percentage Value 0.00 0.00 50.00 Deletion unified database who are Sub Type vulnerable Supplemental Marked for Number of Safety Net Number Value 235000.00 235000.00 258500.00 Deletion Beneficiaries Date 14-Nov-2013 30-Sep-2016 31-Dec-2016 Comment Marked for Number of Safety Net Percentage Value 60.00 60.00 80.00 1 The number of training by public policy decision-makers and practitioners whose knowledge and capacity was enhanced through TA and Capacity building activities, including training on social survey/assessment, new Management Information System, targeting, and interoperability. 2 No targeting framework. 3 Targeting framework formalized, including institutional arrangement; Targeting model developed, validated, and adjusted. For 2018 June, Socioeconomic classification applied to households using the targeting tool. Page 8 of 11 Results Framework Deletion Beneficiaries - of which are Sub Type poor Supplemental Marked for Number of Safety Net Percentage Value 51.00 51.00 50.00 Deletion Beneficiaries - of which are Sub Type female Supplemental Marked for Subsidy and safety net reform Yes/No Value No No Yes Deletion plan prepared and disseminated Date 14-Nov-2013 31-Mar-2016 31-Dec-2016 Comment Marked for Integrated social security Yes/No Value No No Yes Deletion reform plan prepared and Date 14-Nov-2013 31-Mar-2016 31-Dec-2016 disseminated Comment Intermediate Results Indicators Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target Marked for Participants involved in Number Value 0.00 0.00 10000.00 Deletion consultation activities during Date 14-Nov-2013 31-Mar-2016 31-Dec-2016 project implementation Comment New Re-engineering of procedures Yes/No Value No No Yes4 of pension management system Date 28-Feb-2017 28-Feb-2017 31-Dec-2017 in the CNRPS Comment New Number of registered Number Value 0.00 246000.00 400000.00 households in the new MIS Date 28-Feb-2017 28-Feb-2017 31-Dec-2017 (Management Information System) Comment New Number of modules developed Number Value 0.00 2.00 3.00 for the new MIS Date 28-Feb-2017 28-Feb-2017 31-Dec-2017 4 Improvement of business process; Development of application, skills transfer. Page 9 of 11 Results Framework Comment New Implementation of Yes/No Value No No Yes5 interoperable platform Date 28-Feb-2017 28-Feb-2017 31-Dec-2017 Comment New Renovation of pension system Yes/No Value No No Yes6 in the CNSS Date 28-Feb-2017 28-Feb-2017 31-Dec-2017 Comment New Communication plan prepared Yes/No Value No No Yes and implemented Date 28-Feb-2017 28-Feb-2017 31-Dec-2017 Comment Marked for Government staff and civil Number Value 0.00 0.00 500.00 Deletion society representatives trained Date 14-Nov-2013 31-Mar-2016 31-Dec-2016 to evaluate subsidy and social expenditures Comment Marked for Unified database Operations Yes/No Value No No Yes Deletion Manual developed Date 14-Nov-2013 31-Mar-2016 31-Dec-2016 Comment Marked for Targeting Operational Manual Yes/No Value No No Yes Deletion developed for subsidy Date 14-Nov-2013 31-Mar-2016 31-Dec-2016 compensation program Comment Marked for Joint social security-labor code Yes/No Value No No Yes Deletion assessment conducted with Date 14-Nov-2013 31-Mar-2016 31-Dec-2016 stakeholders as part of social dialogue process Comment 5 Development of specifications on data exchange requirements; Selection of service provider; and Support to the implementation of interoperable platform. 6 Designing system architecture plan; Development of specifications on data exchange requirements; Selection of service provider; and Final acceptance of renovated information system. Page 10 of 11 Results Framework Marked for Poverty and social impact Yes/No Value No No Yes Deletion analysis of social security Date 14-Nov-2013 31-Mar-2016 31-Dec-2016 reform options completed and disseminated Comment Marked for Feasibility study to explore Yes/No Value No No Yes Deletion options to finance Date 14-Nov-2013 31-Mar-2016 31-Dec-2016 unemployment insurance completed and disseminated Comment Marked for Annual reports on updates of Yes/No Value No No Yes Deletion pensions and health insurance Date 14-Nov-2013 31-Mar-2016 31-Dec-2016 actuarial analyses completed and disseminated Comment . Page 11 of 11