The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) SOUTH ASIA | Pakistan | Finance, Competitiveness and Innovation Global Practice | Requesting Unit: SACPK | Responsible Unit: GFCSN IBRD/IDA | Program-for-Results Financing | FY 2016 | Team Leader(s): Kiran Afzal, Amjad Bashir Seq No: 6 | ARCHIVED on 13-Mar-2019 | ISR36156 | Created by: Kiran Afzal on 27-Feb-2019 | Modified by: Kiran Afzal on 01-Mar-2019 Program Development Objectives Program Development Objective (from Program Appraisal Document) The objective of the project is to contribute to the competitiveness of Punjab (Pakistan) by reducing the cost of doing and improving the hard and soft infrastructure in support of industry. This Program for Results (PforR) credit will support the industrial development objectives of the Government of Punjab (GoPunjab). It will motivate important business environment regulatory reforms (e.g. business registration, permits and licensing, contract enforcement and property registration) as well as motivate and finance the deployment of important soft and hard industrial infrastructure along the economic spatial development plan (e.g. industrial zones andindustrial clusterdevelopment centers). The project will promote sustainable industrialization from an environmental and social point of view (e.g. Combined Effluent Treatment Plants and special amenities for female workers within industrial zones). The implementation of the actions required to achieve the results will be supported by a parallel program of Bank executed technical assistance financed by DFID. Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Satisfactory Moderately Satisfactory Implementation Status and Key Decisions The Punjab Jobs and Competitiveness (J&C) program for results (PforR) became effective in June 2016 and has disbursed US$40 million (40%). It has achieved the following results: Under the Disbursement Linked Indicator (DLI) 1, the activities of the government of Punjab (GoPunjab) contributed towards improving Pakistan’s Doing Business (DB) ranking by 11 points (from 147 to 136 out of 190 economies), for the first time in 15 years. Lahore’s Distance to Frontier (DTF) increased by 3.17 percentage points against the target of 3 percentage points. The GoPunjab has also successfully institutionalized the implementation of DB reforms by notifying a DB Reform Working Group, appointing Secretary (Planning & Development) as the provincial focal person for leading DB reforms, and establishing a permanent DB reform secretariat as part of the PIU. Similarly, under the DLI 2 (Steps taken to improve compliance with GSP+ Labor Conventions), the Punjab Labour Department conducted a legal gap analysis, which in addition to the drafting of two new labour laws namely: the Punjab Minimum Wages Act, 2018 and the Punjab Industrial Statistic Act, 2018, has also proposed amendments in seven laws. Several rules and subsidiary rules have also been formulated which are being reviewed by the provincial Tripartite Consultation Committee. Upon completion of consultations, the required approval process will be initiated. The year two result under DLI 3 (Steps toward the improvement of investment promotion Investments Announcements) has also been achieved, as five investment announcements were made by the leading foreign investors. However, year 2 result of the DLI 4 (Steps toward developing and implementing the Provincial Spatial Strategy) is facing delays as the PSS is yet to be approved by the provincial cabinet. The DLI 5 (Steps toward the effective development of industrial infrastructure through PPPs) target (one project presented to PPP Steering Committee) has been achieved. Whereas the targets for DLI 6 (Steps toward designing and implementing a new institutional framework to support industrial estates (IE) and clusters), i.e., implementation of IE Policy Framework, restructuring of Punjab Small Industries Corporation (PSIC) and launch of two Cluster Development Initiatives (CDI) is partially achieved. Data on Financial Performance 3/13/2019 Page 1 of 10 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P155963 IBRD-86000 Effective USD 100.00 100.00 0.00 40.26 59.74 40% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P155963 IBRD-86000 Effective 31-Mar-2016 17-Jun-2016 30-Jun-2016 31-Dec-2021 31-Dec-2021 Program Action Plan Action Description Reinforcement of PRMP (now PIU), starting with designation of project heads. Source DLI# Responsibility Timing Timing Value Status Client Due Date 29-Jan-2016 Completed Completion Measurement Comments A dedicated PIU for J&C and SMART PforRs has been established by the client. Its staffing is ongoing. Action Description Program Steering Committee set up to review progress on a quarterly basis. Source DLI# Responsibility Timing Timing Value Status Client Recurrent Quarterly Completed Completion Measurement P&D constituted the Program Steering Committee comprising 24 members through a notification. The Committee Comments convened its first meeting on June 16, 2016. So far it has met seven times, the last two meetings took place each in March and June 2018. Action Description Development of Program Manual for activities related to PforR, including verification protocols. Source DLI# Responsibility Timing Timing Value Status Client Due Date 12-Feb-2016 Completed Completion Measurement Comments 3/13/2019 Page 2 of 10 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Action Description Internal audit function in PRMP (now PIU) established. Source DLI# Responsibility Timing Timing Value Status Client Due Date 29-Dec-2017 Completed Completion Measurement Comments Internal auditor has been hired by the client after initial delays. Action Description Staffing and operational manual of ICRU. Source DLI# Responsibility Timing Timing Value Status Client Due Date 31-Oct-2018 In Progress Completion Measurement Comments The client has to clarify the role of ICRU in the Doing Business agenda to avoid overlaps with the PIU. Action Description Reinforcement of Punjab's Department to undertake labor reforms. Source DLI# Responsibility Timing Timing Value Status Client Due Date 31-May-2016 Completed Completion Measurement Comments Consultants were hired to support the Labor Department. Action Description Reform and reinforcement of PBIT. Source DLI# Responsibility Timing Timing Value Status Client Due Date 31-Jan-2017 Completed Completion Measurement The Board of Directors of PBIT was reconstituted under a notification. The first phase of development of investor Comments targeting system i.e. IRMS went live on May 08, 2017. Establishment of the expert panel for the Punjab Spatial Strategy (PSS). Action Description Source DLI# Responsibility Timing Timing Value Status 3/13/2019 Page 3 of 10 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Client Due Date 12-Feb-2016 Completed Completion Measurement P&D has constituted a Technical Committee of Experts for PSS comprising of 2 national and 2 international Comments members. Public disclosure of assessment of the panel of experts assessing the economic viability of proposed new sites for Action Description new city based on the pre-feasibility study. Source DLI# Responsibility Timing Timing Value Status Client Due Date 01-Jan-2017 Completed Completion Measurement The assessment of panel of experts on viability of proposed new sites was uploaded on the official website of Urban Comments Unit in September 2017. Action Description Development of operating procedures and regulatory framework for enforcement of the spatial strategy. Source DLI# Responsibility Timing Timing Value Status Client Due Date 31-Dec-2018 Delayed Completion Measurement Comments Action Description Updates to the Medium Term Development Framework based on outcomes of the Punjab Spatial Strategy (PSS). Source DLI# Responsibility Timing Timing Value Status Client Recurrent Yearly Delayed Completion Measurement Comments Capacity building for line departments to submit sectoral plans for the Annual Development Plan consistent with the Action Description PSS. Source DLI# Responsibility Timing Timing Value Status Client Recurrent Semi-Annually Delayed 3/13/2019 Page 4 of 10 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Completion Measurement Comments Reinforcement of capacity of DoI/PIEDMC/FIEDMC to build PPP pipeline and ensure compliance with higher labor Action Description and environmental standards. Source DLI# Responsibility Timing Timing Value Status Client Due Date 31-Dec-2016 Completed Completion Measurement A new unit was established in Department of Industries (GoPunjab) named special purpose unit (SPU). The details of Comments capacity reinforcement of PIEDMC/FIEDMC are awaited. Creation of Steering Committee to lead the institutional reforms to improve public support to industrial estates and Action Description clusters. Source DLI# Responsibility Timing Timing Value Status Client Due Date 31-May-2016 Completed Completion Measurement Comments Action Description PRMP (now PIU), PIEDMC, FIEDMC, PSIC to fill vacant positions. Source DLI# Responsibility Timing Timing Value Status Client Due Date 01-Jan-2017 Completed Completion Measurement Comments PSIC to clear its audit backlog since 2010–11 by outsourcing it to a chartered accounts firm under multiyear audit Action Description engagement letter. Source DLI# Responsibility Timing Timing Value Status Client Due Date 29-Dec-2017 Delayed 3/13/2019 Page 5 of 10 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Completion Measurement Audit reports for the years ending June 30th, 2011 and June 30th, 2012 have been issued. The audit of year ending Comments June 30th, 2013 is in the process of finalization and an audit firm has been hired. Establish an effective internal audit function at PRMP (now PIU). Internal audit to carry out FM, procurements, fixed assets and performance audit at the Program level and reports to the Program Steering Committee on a quarterly Action Description basis. Source DLI# Responsibility Timing Timing Value Status Client Due Date 01-Jan-2017 Completed Completion Measurement Comments Internal audit function established and will be reviewed by the WB team during the next mission in October. Action Description Complaint Management System is consistently implemented. Source DLI# Responsibility Timing Timing Value Status Client Recurrent Continuous Completed Completion Measurement The PRMP (now PIU) has established a Grievance Redress Mechanism (GRM) to hear the complaints regarding Comments procurement and safeguards. Action Description Establishment of Social Units in PIEDMC/FIEDMC. Source DLI# Responsibility Timing Timing Value Status Environmental and Social Client Due Date 01-Jan-2017 Delayed Systems Completion To be done during the March 2019 mission Measurement Comments The Bank teams observed that these units have not been established. Capacity building and establishment of Environmental Monitoring center and management information system for Action Description EPA. Source DLI# Responsibility Timing Timing Value Status Client Due Date 29-Dec-2017 Delayed 3/13/2019 Page 6 of 10 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Completion Measurement The PC-II for these targets was approved during April 2017 and the project is in the process of implementation. The Comments next TPV report to confirm the status. Action Description Implementation of the Recommendations of Section 7 (Recommendations and Proposed Actions) of ESSA. Source DLI# Responsibility Timing Timing Value Status Client Due Date 30-Jun-2019 Not Yet Due Completion Measurement Comments Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Substantial Substantial Macroeconomic -- Substantial Substantial Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Moderate Moderate Institutional Capacity for Implementation and Sustainability -- Moderate Moderate Fiduciary -- Moderate Moderate Environment and Social -- Moderate Moderate Stakeholders -- Moderate Moderate Other -- -- Moderate Overall -- Moderate Moderate Results PDO Indicators by Objectives / Outcomes Improve investment climate & promote investment & jobs in more inclusive & sustainable IEs in Punjab IN00674802 ►Improvement in aggregate Doing Business performance for Punjab (business registration, contract enforcement, construction permit and property registration) (Percentage, Custom) 3/13/2019 Page 7 of 10 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Baseline Actual (Previous) Actual (Current) End Target Value 61.00 64.00 68.19 75.00 Date 30-Jun-2016 15-Aug-2018 28-Feb-2019 30-Jun-2021 The target of attaining an increase in DTF from 64 to 68.19 in year 2 has been accomplished and has been Comments validated by the TPV firm. IN00674803 ►Progress made by Punjab on GSP+ Labor conventions as reported in the bi-annual EU evaluation (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1.00 2.00 4.00 Date 30-Jun-2016 15-Aug-2018 28-Feb-2019 30-Jun-2021 Year-1: Legal gap analysis and improved labor inspection system Status: Legal gap analysis completed. Year-2: New Labor laws drafted that would ensure compliance with GSP+ conventions Comments Status: This has been achieved with the help of a consulting firm. Year-3: Stakeholder consultation completed, revised draft also compliant with GSP+ Year-4: New GSP + compliant labor laws presented to the Provincial Assembly IN00674804 ►Increase in number of workers in existing industrial estates (of which women) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 82,000.00 120,000.00 120,000.00 140,000.00 Date 30-Jun-2016 15-Aug-2018 28-Feb-2019 30-Jun-2021 This will be updated in the next ISR based on the final TPV report. Comments IN00674805 ►New investments in existing industrial estates (of which percentage of FDI) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 3,000,000.00 Date 30-Jun-2016 15-Aug-2018 28-Feb-2019 30-Jun-2021 This has not been reported by the client or TPV firm. Comments Intermediate Results Indicators by Results Areas Aggregate improvement of Punjab’s performance with respect to business registration, contract enforcement, construction permits and property registration. IN00674806 ►DLI-1 Doing Business Performance (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 61.00 64.00 68.19 75.00 3/13/2019 Page 8 of 10 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) Date 23-Dec-2015 15-Aug-2018 28-Feb-2019 30-Jun-2021 Change in aggregate Distance to Frontier (DTF) as measured by the WBG Doing Business (DB) Report Year-1: 61% Status: Achieved. Year-2: 64% Comments Status: Achieved, and verified by the TPV firm. Year-3: 67% Year-4: 70% Year-5: 75% Disbursement Linked Indicators DLI_IND_TABLE ►DLI 1 Aggregate improvement of Punjab’s performance with respect to business registration, contract enforcement, construction permits and property registration (Outcome, 20,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) 2021 Value 61.00 64.00 68.19 75.00 Date 30-Jun-2016 15-Aug-2018 28-Feb-2019 -- The DTF of 68.19 verified by the TPV firm. Comments ►DLI 2 Steps taken to improve compliance with GSP+ Labor Conventions (Process, 13,000,000.00, 31%) Baseline Actual (Previous) Actual (Current) 2021 Value 0.00 1.00 2.00 4.00 Date 30-Jun-2016 15-Aug-2018 28-Feb-2019 -- Year-1, Step 1: Legal gap analysis and improved labor inspection system Status: Legal gap analysis completed Year-2, Step 2: New Labor laws drafted that would ensure compliance with GSP+ conventions Comments Status: The client has achieved this and this has been captured in the TPV report. Year-3, Step 3: Stakeholder consultation completed, revised draft also compliant with GSP+ Year-4, Step 4: New GSP + compliant labor laws presented to the Provincial Assembly ►DLI 3 Steps toward the improvement of investment promotion (Intermediate Outcome, 12,000,000.00, 25%) Baseline Actual (Previous) Actual (Current) 2021 Value 0.00 3.00 5.00 45.00 Date 30-Jun-2016 15-Aug-2018 28-Feb-2019 -- PBIT has captured 5 investment announcements worth US$198 million. This will be verified through the TPV report. Already US$3 million have been reimbursed against this DLI due to the achievement of 3 critical milestones in Comments year 1, i.e.: (a) the approval by the PBIT Board of PBIT’s strategy which will specify the priority industries and countries for targeting foreign investors, the implementation plan, the key performance indicators and targets, (b) the completion of a database of potential foreign investors and (c) one overseas outreach mission targeting 3/13/2019 Page 9 of 10 The World Bank Implementation Status & Results Report Pakistan Punjab Jobs and Competitiveness Program for Results (P155963) sector(s) identified in the strategy and involving substantive discussions with a minimum of 20 potential investors. Further disbursement is pending a formal withdrawal request from the client. ►DLI 4 Steps toward developing and implementing the Punjab Spatial Strategy to prioritize and coordinate public investments (Intermediate Outcome, 30,000,000.00, 20%) Baseline Actual (Previous) Actual (Current) 2021 Value 0.00 0.00 0.00 80.00 Date 30-Jun-2016 15-Aug-2018 28-Feb-2019 -- The PSS is pending approval of the provincial cabinet. Comments ►DLI 5 Steps toward the effective development of industrial infrastructure through public private partnerships (Process, 14,000,000.00, 14%) Baseline Actual (Previous) Actual (Current) 2021 Value 0.00 2.00 3.00 7.00 Date 30-Jun-2016 15-Aug-2018 28-Feb-2019 -- One Industrial Estate project has been presented to the PPP Steering Committee by FIEDMC on Weaving City Comments at M-3 Industrial City. ►DLI 6 Steps toward designing and implementing a new institutional framework to support industrial estates and clusters (Intermediate Outcome, 11,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) 2021 Value 0.00 2.00 2.00 7.00 Date 30-Jun-2016 15-Aug-2018 28-Feb-2019 -- The IE Policy Framework, Restructuring Plan of PSIC are both in draft and pending approvals. Two CDI Comments projects have been launched already in Lahore and Sialkot. 3/13/2019 Page 10 of 10