The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) REPORT NO.: RES33723 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF TRANSFORMATION OF THE TERTIARY TECHNICAL AND TECHNOLOGICAL INSTITUTES PROJECT APPROVED ON NOVEMBER 23, 2016 TO REPUBLIC OF ECUADOR March 26, 2019 EDUCATION LATIN AMERICA AND CARIBBEAN Regional Vice President: Axel van Trotsenburg Country Director: Alberto Rodriguez Senior Global Practice Director: Jaime Saavedra Chanduvi Practice Manager/Manager: Rita Kullberg Almeida Task Team Leader: Diego Angel-Urdinola, Nelson Gutierrez The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) ABBREVIATIONS AND ACRONYMS EOD Deconcentrated Operating Entity EOD-PRETT Recipient’s Deconcentrated Operating Entity for the Program of Transformation of Tertiary Technical and Technological Public Education in Ecuador (Entidad Operativa Desconcentrada Proyecto de Reconversión de la Educación Técnica y Tecnológica Superior Pública del Ecuador) INEC National Institute of Statistics (Instituto Nacional de Estadísticas y Censo) IST Tertiary Technical and Technological Institutes (Institutos de Educación Terciaria Técnica y Tecnología) MEF Ministry of Economy and Finance (Ministerio de Economía y Finanzas) PRETyT Program of Transformation of Tertiary Technical and Technological Public Education in Ecuador. Also called PRETT (Programa de Reconversión de la Educación Técnica y Tecnológica Superior Pública del Ecuador) SECOB Works Contracting Service (Servicio de Contratación de Obras) SENESCYT Secretariat of Higher Education, Science and Technology (Secretaría de Educación Superior, Ciencia y Tecnología) SENPLADES National Secretariat for Planning and Development (Secretaría Nacional de Planificación y Desarrollo) The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) BASIC DATA Product Information Project ID Financing Instrument P157425 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 23-Nov-2016 31-Dec-2021 Organizations Borrower Responsible Agency SENESCYT,Deconcentrated Operating Entity (EOD) - Republic of Ecuador PRETT SENESCYT Project Development Objective (PDO) Original PDO The objectives of the Project are: to increase enrollment and persistence in public technical and technological programs designed and implemented in collaboration with Employers, and to strengthen the institutional management of Tertiary Technical and Technological Education. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-86670 23-Nov-2016 22-Dec-2016 22-Mar-2017 31-Dec-2021 90.50 1.51 88.99 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Introduction 1. The proposed restructuring would comprise: (i) a partial loan cancellation of US$18 million; (ii) a revision of the Project’s institutional arrangements; (iii) a revision of Eligible Expenditure categories; (iv) changes in budget allocation across Eligible Expenditure categories; and (iv) and changes in the results framework. B. Project Status 2. Overall Project Implementation. There are significant delays in the implementation of all components and disbursement rates are critically low, having disbursed only US$1.5 million as of March 10, 2019 (a disbursement rate of 1.67%). As a result, the ratings for Progress Towards Achievement of PDO and Overall Implementation Progress were downgraded to Moderately Unsatisfactory in the May 2018 Implementation Status and Results Report (ISR). 3. These delays are a result of several factors. At the more structural level, projects managed by the central government are subject to complex budget planning and allocation procedures that require interactions with other ministries, including the National Secretariat for Planning and Development (Secretaría Nacional de Planificación y Desarrollo, SENPLADE) and the Ministry of Economy and Finance (Ministerio de Economía y Finanzas, MEF). Overall procedural confusion on the use of Bank fiduciary rules vis-a-vis national rules has also caused structural delays and risk aversion that limit the fluidity of budget executions. Moreover, counterparts in the Secretariat of Higher Education, Science and Technology (Secretaría de Educación Superior, Ciencia y Tecnología¸ SENESCYT), including Ministers, vice-ministers, sub- secretaries, project coordinators, have changed twice during project implementation. These changes have contributed to important shifts in policy/technical views related to “how” to implement project activities and delays while new teams learn about the program. 4. Most importantly, the Government of Ecuador’s decision to revise the original institutional arrangement for the Project, as specified in the Loan Agreement, has been a main cause for implementation delays. The SENESCYT confirmed the governmental decision (supported by a presidential decree) to create a Deconcentrated Operating Entity, the Recipient’s Deconcentrated Operating Entity for the Program of Transformation of Tertiary Technical and Technological Public Education in Ecuador (Entidad Operativa Desconcentrada Proyecto de Reconversión de la Educación Técnica y Tecnológica Superior Pública del Ecuador, EOD-PRETT), under SENESCYT to execute the entire Project, including the construction and rehabilitation of Tertiary Technical and Technological Institutes (Institutos de Educación Terciaria Técnica y Tecnología, ISTs). This function, under the current Loan Agreement, is attributed to Ecuador’s Works Contracting Service (Servicio de Contratación de Obras, SECOB). While the presidential decree that establishes the EOD-PRETT (Presidential Decree No. 364) was published on April 9, 2018, the agency needed time to become operational and an amendment to the Loan Agreement was needed to reflect the new institutional arrangements. This decision was supported by the Bank, despite the delays it would entail, as it provided a swifter implementation mechanism thereof. The EOD-PRETT would use less burdensome administrative process and would ease intrinsic difficulties and bottlenecks arising from interinstitutional coordination between the SENESCYT and the SECOB to execute infrastructure works. Only until December 2018, the EOD- PRETT was able to hire all its core fiduciary staff. The newest Project management team has invested significant time in the revision of all Project activities, both in scope and budget, and of core operational documents, such as the Project’s Procurement Plan and Operational Manual. 5. Component 1: Optimizing and Upgrading the Supply in Targeted Provinces. This Component envisioned (i) the The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) construction and equipment of 3 new ISTs; (ii) the rehabilitation of 6 ISTs; and (iii) the provision of equipment and laboratories to 2 ISTs (see Table 1). None of these works has begun and the design of the new institutes (location, size, capacity, plans) is under revision. Table 1: Infrastructure Interventions Intervention/Province Pichincha Manabí El Oro Bolívar Tungurahua Sucumbíos Guayas New building + Machala Chimbo Ambato equipment Equipment only SECAP Iñaquito SECAP Manta Rehabilitation + - Quito Aloasí Ambato Lago Agrio Durán equipment - SECAP Quito Norte - SECAP Quito Centro 6. Component 2: Improving Programs’ Relevance, Quality of Teaching and IST Management Capacity. Consultations with employers were undertaken through Consultative Councils at the local level to adapt current programs to the needs of the productive sector (Subcomponent 2.1). A consulting contract to develop 25 macro-curricula and 10 new technological careers is expected to be launched in the first semester 2019. A procurement process was launched in April 2018 to train all rectors of ISTs in the specificities of dual education (Subcomponent 2.1). SENESCYT will provide pedagogical and technical training to IST teachers (at scale) by hiring a regional consulting firm with expertise on the provision of such training services (Subcomponent 2.2). Finally, the Bank plans to support the development of an integrated information system for all ISTs, which currently largely lack modern platforms to administer their administrative data (Subcomponent 2.3). Procurement for the information system is expected to be launched in 2019 and all ISTs are expected to have an operational information system before Project closing. 7. Component 3: Strengthening Mechanisms for Institutional Coordination, Boosting Demand, and Management, Monitoring and Evaluation of the Project. The establishment of Consultative Councils (Subcomponent 3.1) has been piloted in selected municipalities. The intervention is expected to be scaled-up nationally in 2019. A contract to estimate labor demand in 7 provinces (Subcomponent 3.2) will be launched in May 2019 and the National Institute of Statistics (Instituto Nacional de Estadísticas y Censo, INEC) is ready to engage in an ambitious and far-reaching statistical operation to assess labor demand nationally using Project funding. Finally, the SENESCYT has begun the process to hire a consultancy to design a communication strategy to promote technical and technological education nationally (Subcomponent 3.3). C. Rationale for Restructuring 8. The restructuring is necessary to (i) introduce a different implementation arrangement to reflect changes in institutional arrangements; (ii) reduce the investments in new infrastructure; and (iii) strengthen teacher training and Information systems activities. 9. In September 27, 2018, the MEF requested an amendment of the Loan Agreement to reflect the new institutional arrangements, whereby the EOD-PRETT (under SENESCYT) will oversee the implementation of the infrastructure works, in lieu of SECOB. 10. In October 3, 2018 the MEF also requested a partial cancellation of the Loan, amounting to US$18 million and mainly affecting investments in infrastructure under Component 1. This decision was triggered by the fact that several investments The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) under the operation, especially related to the construction of Technical and Technological Institutes (Institutos Superiores Técnicos, ISTs), are not likely to be completed within the Project’s life. This occurs because design and construction of ISTs, as well as equipment purchases, take no less than 32 months considering current administrative, technical (i.e. micro- planning), and procurement processes. Moreover, the legalization of land titles in Ecuador can take up to 12 months. As such, the World Bank and the Government agreed that infrastructure investments will only occur in ISTs that (i) have a legalized land title before April 2019 and (ii) have launched the procurement processes for their structural design no later than December 31, 2019. 11. Lastly, the Government has decided to revamp and increase the size and scope of the Project’s interventions related to teacher training and development of information systems (Component 2). This policy choice reflects the new government’s policy directives, which put teacher development and data-driven policy making as forefront priorities. As such, there will be changes in budget allocation across Eligible Expenditure categories. 12. The changes introduced by this restructuring will not have a substantial effect in the originally envisioned Project goals and the original Project objectives remain fundamentally unchanged. The main implications of the restructuring are (i) the introduction of different implementation arrangements to achieve the Project goals; and (ii) fewer investments in new infrastructure. The revised size of the intervention considers the current institutional capacity to deliver activities within the Project’s lifespan. II. DESCRIPTION OF PROPOSED CHANGES 13. While the Project design remains largely unchanged in terms of PDO Indicators and Components, the following changes are proposed: A. Change in Loan Amount 14. US$18 million, representing 19% of the total Loan amount, would be canceled. This reduction will solely affect activities under Component 1. Annex 1 presents the detailed project budget after the proposed restructuring. B. Institutional Arrangements 15. The EOD-PRETT will become SENESCYT’s Project implementing unit. As such, the agreement to delegate fiduciary and execution management of civil works to SECOB will be rescinded. The EOD-PRETT will also undertake all attributions originally given to the Project Management Unit under SENESCYT. However, the agreement to delegate the fiduciary and management of activities under Subcomponent 3.2 to INEC (development of statistical surveys and data analysis) will be maintained. The fiduciary capacity of the EOD-PRETT has been assessed and the necessary fiduciary changes needed for the new institutional arrangements have been revised in the Operational Manual. With the inclusion of the EOD-PRETT under SENESCYT, the overall Project Procurement and Financial Management ratings remain Moderately Satisfactory. C. Budget allocation across categories of Eligible Expenditures 16. To reflect (a) the partial cancellation request and (b) a revamped prioritization of the activities supported under Component 2; the components and subcomponents would be modified as presented below: i. Component 1: The number of ISTs to be constructed under the Project would be reduced from 11 to 6 (see Table 2). The construction of ISTs without a legalized land title after sixty (60) days after the Loan Amendment signing The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) would not be included in the project implementation plan. Thus, the new budget allocation for this Component would be US$58.4 million (from the original allocation of US$76.40 million). Table 2: Proposed Infrastructure Interventions Pichincha Manabí El Oro Bolívar Sucumbíos New building and IST Saberes IST Machala IST Chimbo equipment Ancestrales Rehabilitation and/or IST Yavirak completion and equipment Rehabilitation, small civil SECAP Luis IST Lago works, and equipment Arboleda Agrio Martínez *Note: Other ISTs could benefit from investments in equipment based on budget availability ii. Component 2: Additional investments would be made to support teacher training at the national level and the development of information systems. Thus, the new budget allocation for this component would increase to US$8.61 million (from US$5.0 million). iii. Component 3: The Component would focus on strengthening INEC’s capacity and coordinate information gathering from employers. Thus, the new budget allocation for this component would be reduced to US$5.49 million (from US$9.10 million). This budget reduction for INEC will go hand in hand with similar increase in funds for SENESCYT to develop surveys and information systems. This resource allocation reflects both (i) the urgent need to strengthen SENESCYT’s capacity to develop its own information systems and (ii) INEC’s limited capacity to implement sector- specific surveys. INEC is currently managing several statistical operations with already limited resources and personnel. D. Eligible Expenditure Categories 17. In response to the Borrower’s request, non-consulting services would be added as an eligible expenditure under Category 2. The proposed budget allocations would be as follows: Category Category Amount of the Loan Amount of the Loan Percentage of (Original) (Proposed revision) Allocated Allocated Expenditures to be (expressed in USD) (expressed in USD) financed (Original) (Proposed) (exclusive of Taxes) (1) Goods, works and consulting (1) Goods, works and services under Part 1 in respect of consulting services under 76,400,000 58,400,000 100% SENESCYT and SECOB Part 1 in respect of SENESCYT The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) (2) Goods, consulting services and (2) Goods, consulting 11,200,000 11,958,874 100% training under Parts 2 and services, non-consulting 3 (a), (b) (i); (c) and (d) of the Project services, Operating Costs in respect of SENESCYT and Training under Parts 2 and 3(a), 3(b)(i); 3(c) and 3(d)(ii) -3(d)(v) of the Project in respect of SENESCYT (3) Goods, consulting services, Survey (3) Goods, consulting 2,900,000 2,141,126 100% Costs and Training under Part 3 (b) services, Survey Costs, and (ii) of the Project in respect of INEC Training under Part 3(b)(ii) and 3(d) (i) of the Project in respect of INEC Sub-total 72,500,000 Cancelled amount effective 18,000,000 September 27, 2018 TOTAL AMOUNT 90,500,000 90,500,000 E. Results Framework 18. The Bank and EOD-PRETT teams identified issues in the definitions, methodology for calculation, and data used to calibrate most indicators included in the Project’s results framework. As a result, the team has faced important challenges replicating and monitoring Project indicators. Consequently, the EOD-PRETT, in coordination with the Bank, developed detailed methodological manuals for all indicators and properly recalibrated the indicator baselines and data sources, which are included in the revised Project Operational Manual (see revised Results Framework). It is worth noting that most indicator targets in the original PAD were, due to data shortcomings, expected to be revised during the first year of implementation. Revised indicators (and targets) rely on available data and will be easily replicable for adequate monitoring. While the formulation of most indicators in the results framework remain unchanged, changes reflect (i) availability of new and better data; (ii) recalibration of targets consistent with the project cancellation (i.e. the change in some indicators are a direct consequence of the downsize of infrastructure interventions); and (iii) revisions to the implementation plan. 19. A comprehensive revision of the Results Framework is required, including in the definition and data sources and in targets to reflect the proposed changes arising from the partial cancellation of the Loan, which directly affect the population that will benefit from the Project’s investments in infrastructure. The revised size of the intervention considers the current institutional capacity to deliver activities within the Project’s lifespan. F. SORT and Legal Covenants 20. Project risk have not been changed since the last ISR (dated November 29, 2018), with the exception of Institutional Capacity for Implementation and Sustainability due to improvements seen since the last ISR. Legal covenants have been revised to include the EOD-PRETT as implementing agency and to incorporate a new legal covenant referring to the IST land title legalization deadline (considered part of the Project implementation plan). G. Fiduciary and Safeguards 21. Fiduciary changes resulting from the changes in institutional arrangements have been reflected in the revised Operations Manual, which was reviewed and found acceptable by the Bank. No major changes in safeguards are envisioned under thing restructuring. 22. The core administrative staff necessary to support implementation of the activities by INEC will now consist of three The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) specialists: (i) a technical coordinator, (ii) a financial management specialist, and (iii) a labor market and statistical specialist. Their roles and responsibilities will be described in the Project’s Operational Manual and their salaries would be financed by the Project. 23. There are no outstanding audits. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Legal Covenants ✔ Institutional Arrangements ✔ Other Change(s) ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Loan Closing Date(s) ✔ Safeguard Policies Triggered ✔ EA category ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) IV. DETAILED CHANGES OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Component 1: Optimizing and Component 1: Optimizing and Upgrading the Supply in Targeted 76.40 Revised Upgrading the Supply in 58.40 Provinces. Targeted Provinces. Component 2: Improving Component 2: Improving Programs Relevance, Quality of Programs Relevance, Quality of 5.00 Revised 8.61 Teaching and IST Management Teaching and IST Management Capacity. Capacity. Component 3: Strengthening Component 3: Strengthening Mechanisms for Institutional Mechanisms for Institutional Coordination, Boosting Coordination, Boosting Demand, 9.10 Revised 5.49 Demand, and Management, and Management, Monitoring Monitoring and Evaluation of and Evaluation of the Project. the Project. TOTAL 90.50 72.50 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation BORROWER' S REQUEST IBRD- Disburs USD 90,500,000.00 18,000,000.00 27-Sep-2018 72,500,000.00 FOR 86670-001 ing COUNTRY REASONS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IBRD-86670-001 | Currency: USD The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) iLap Category Sequence No: 1 Current Expenditure Category: GO,CW,CS - Part 1 EOD SENESCYT 76,400,000.00 0.00 58,400,000.00 100.00 100.00 Current Expenditure Category: Goods, Consulting services, Other Services other iLap Category Sequence No: 2 than Consulting, and Training - Pt 2;3a,bi,c,d SENESCYT 11,200,000.00 79,133.35 11,958,874.00 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: GO,CS,Survey Costs,TR -Pt 3bii INEC 2,900,000.00 0.00 2,141,126.00 100.00 100.00 Total 90,500,000.00 79,133.35 72,500,000.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2017 0.00 223,526.96 2018 8,810,377.36 1,285,677.68 2019 28,911,320.76 20,507,559.68 2020 23,911,320.72 32,429,735.19 2021 19,411,320.72 18,053,500.50 2022 9,455,660.40 0.00 OPS_DETAILEDCHANGES_SORT_TABLE SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating at Approval Current Rating Political and Governance  High  High Macroeconomic  High  High Sector Strategies and Policies  Moderate  Moderate Technical Design of Project or Program  Moderate  Moderate The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) Institutional Capacity for Implementation and  Substantial  Substantial Sustainability Fiduciary  High  Substantial Environment and Social  Moderate  Substantial Stakeholders  Moderate  Moderate Other Overall  Substantial  Substantial OPS_DETAILEDCHANGES_LEGCOV_TABLE LEGAL COVENANTS Loan/Credit/TF Description Status Action SCHEDULE 2, Section I, A (i) Operate and maintain, until the completion of the Project, the Project Management Unit (PMU), comprised of key staff with functions, experience, and qualifications acceptable to the Bank, as described in the Operational Manual, including a Project Partially complied IBRD-86670 Revised coordinator, and specialists for the monitoring and with evaluation, procurement, financial management, social, environmental and infrastructure aspects under the Project, and responsible for the management, coordination, supervision, monitoring and evaluation of the Project activities. SCHEDULE 2, Section I, A (i) Operate and maintain the EOD-PRETT, until the completion of the Project, comprised of key staff with functions, experience, and qualifications acceptable to the Bank, as described in Proposed CP the Operational Manual (OM) including a Project coordinator, and specialists for the monitoring and evaluation, procurement, financial management, social, environment, and infrastructure. SCHEDULE 2, Section I, A (ii) SECOB and INEC until the completion of the Project will maintain a separate Project team comprised of key staff Partially complied IBRD-86670 with functions, experience, and qualifications Revised with acceptable to the Bank, as described in the Operational Manual, including an infrastructure specialist for SECOB and a technical coordinator, and procurement and The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) financial management specialists for INEC, and responsible for the management, coordination, supervision, monitoring and evaluation of the Project activities under their responsibility. SCHEDULE 2, Section I, A (ii) INEC until the completion of the Project will maintain a separate Project team comprised of key staff with functions, experience, and Proposed qualifications acceptable to the Bank, as set in the OM, CP including: a Technical Coordinator, a Financial Management Specialist (FM), and a Labor Market & Statistical Specialist. SCHEDULE 2, Section I, A (iii) Not later than thirty (30) days after the Effectiveness Date, ensure that the Project coordinator, procurement and financial management specialists mentioned in (i) above, and the technical coordinator and procurement Partially complied IBRD-86670 Revised and financial management specialists mentioned in (ii) with above, in respect of within SECOB and INEC, respectively, have been assigned to work full time in said entities. SCHEDULE 2: Section I, A (iii), not later than thirty (30) days after the effective date of this Amendment Letter, ensure that EOD-PRETT key staff have been assigned to Proposed work full time; Section I, A (iv), not later than ninety (90) Not yet due days after the effective date of this Amendment Letter, ensure that INEC key staff have been assigned to work full time. SCHEDULE 2, Section I, A (iv) Not later than sixty (60) days after the Effectiveness Partially complied Marked for IBRD-86670 Date, ensure that the monitoring and evaluation, social, with Deletion environmental and infrastructure specialists mentioned in (i) above, are assigned to work full time. SCHEDULE 2, Section I, A (v) Not later than sixty (60) days after the Effectiveness Date, ensure that a complementary information system IBRD-86670 Not complied with Revised has been established in SENESCYT and is operational, all in a manner acceptable to the Bank. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) SCHEDULE 2, Section I, A (v) Not later than one hundred twenty (120) days after the effective date of the Amendment Letter, ensure that a complementary Proposed Not yet due financial management system has been established in SENESCYT and is operational, all in a manner acceptable to the Bank. SCHEDULE 2, Section I, B (1) -SECOB AGREEMENT To facilitate the carrying out of Component 1 of the Project, the Borrower, through SENESCYT shall enter into an agreement with SECOB (the SECOB Agreement) under terms and conditions acceptable to the Bank including, among other things: (a) the Borrower’s Marked for IBRD-86670 Complied with obligation to transfer, on a non-reimbursable basis, part Deletion of the proceeds of the Loan to SECOB ; and (b) SECOB’s obligations to carry out the activities of Component 1 of the Project in accordance with the relevant provisions of this Schedule, including the provisions of Sections I.D, I.E, I.F and III of the Loan Agreement. SCHEDULE 2, Section 1, C (1) -INEC AGREEMENT To facilitate the carrying out of Subcomponent 3.2 of the Project, the Borrower, through SENESCYT shall enter into an agreement with INEC (the INEC Agreement) under terms and conditions acceptable to the Bank including, among other things: (a) the Borrower’s IBRD-86670 obligation to transfer, on a non-reimbursable basis, part Complied with No Change of the proceeds of the Loan to INEC and; (b) INEC’s obligations to carry out the activities of Subcomponent 3.2 of the Project in accordance with the relevant provisions of this Schedule, including the provisions of Sections I.D, I.E, I.F and Section III of the Loan Agreement. IBRD-86670 SCHEDULE 2, Section I, D (1) Complied with No Change The Borrower shall adopt and carry out the Project in accordance with the provisions of a manual (the Operational Manual), acceptable to the Bank, which shall include, inter alia: (a) a detailed description of Project activities and institutional arrangements for the Project; (b) the Project administrative, budgeting, accounting, auditing, reporting, financial (including cash flow aspects), procurement and disbursement The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) procedures; (c) the monitoring indicators for the Project; (d) the institutional and administrative mechanisms established to ensure inter-institutional coordination; (e) the regulations concerning the design and micro-planning for IST consolidation ; and (f) the ESMF, IPPF and RPF [and the Existing EMPs, the Existing IPPs and the Existing SMP. SCHEDULE 2, Section I, F (6) The Borrower, through SENESCYT shall, not later than ninety (90) days after the Effective Date, develop, in form and substance acceptable to the Bank, and following the guidelines set forth in the Operational Manual, a grievance redress mechanism that IBRD-86670 Complied with No Change encompasses transparent, timely and fair procedures, for the purposes of ensuring that all complaints received from beneficiaries and other interested stakeholders related to any activity under the Project are properly and timely addressed in a manner acceptable. SCHEDULE 2, Section II, B (1) The Borrower, through SENESCYT, shall, and shall cause IBRD-86670 SECOB and INEC to maintain or cause to be maintained Expected soon Revised a financial management system in accordance with the provisions of Section 5.09 of the General Conditions. SCHEDULE 2, Section II, B (1) The Borrower, through SENESCYT, shall, and shall cause INEC to maintain or Proposed cause to be maintained a financial management system SOON in accordance with the provisions of Section 5.09 of the General Conditions. SCHEDULE 2, Section II, B (2) The Borrower, through SENESCYT, shall prepare and furnish to the Bank not later than forty five (45) days Partially complied IBRD-86670 after the end of each calendar semester, interim No Change with unaudited financial reports for the Project covering the pertinent calendar semester, in form and substance satisfactory to the Bank. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) SCHEDULE 2, Section II, B (3) The Borrower, through SENESCYT, shall have its Financial Statements audited in accordance with the provisions of Section 5.09 (b) of the General Conditions. Each audit of the Financial Statements shall cover the Partially complied IBRD-86670 No Change period of one fiscal year of the Borrower, or any other with period acceptable to the Bank. The audited Financial Statements for each such period shall be furnished to the Bank not later than six months after the end of such period. SCHEDULE 2, Section II, B (4) The Borrower, through SENESCYT, shall, not later than 120 days before the end of: (i) the first calendar year of Marked for IBRD-86670 Project implementation or (ii) the period subject to Not yet due Deletion audits, (whichever occurs first), submit to the Bank for its no-objection the terms of reference for the hiring of an independent auditor. SCHEDULE 2, Section V (1) Without limitation to the provision of Section 5.03 of the General Conditions, the Borrower shall provide, promptly, as needed, the counterpart funds required for Project implementation estimated in the amount of approximately twelve million Dollars (US$12,000,000), as further detailed in the Operational Manual and IBRD-86670 Not yet due Revised distributed in accordance with the table set forth in the Annex to this Agreement, as such counterpart fund amounts reflected in said table may be revised from time to time by mutual agreement between the Borrower and the Bank, and reflected in a written notice from the Bank to the Borrower, which notice shall constitute an amendment to this Agreement. SCHEDULE 2, Section V (1) Without limitation to the provision of Section 5.03 of the General Conditions, the Borrower shall provide the counterpart funds required Proposed for Project implementation estimated in nine million six NYD hundred thousand million Dollars (US$9, 600,000), detailed in the OM and distributed in accordance with the table set forth in the Agreement. IBRD-86670 SCHEDULE 2, Section V (2) Not yet due Revised The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) The Borrower, through SENESCYT, shall not later than eighteen months after the Effective Date, select and contract an entity, independent from the Borrower with experience and qualifications acceptable to the Bank, and in accordance with terms of reference satisfactory to the Bank, for purposes of carrying out the technical reviews referred in the Subcomponent 2.1 of the Project, and assessing said process of collaboration to determine if said programs need to be revised by the Employers. SCHEDULE 2, Section V (2) the Borrower through EOD- PRETT not later than 16 months after the effective date of the Amendment Letter, select and contract an entity, independent from the Borrower with Proposed NYD experience& qualifications acceptable to the Bank, in accordance with TORs satisfactory to the Bank, to carry out the technical reviews referred in the Subcomponent 2.1 of the Project. SCHEDULE 2: Section I, A (vi), Not later than sixty (60) days after the effective date of this Amendment Letter, ensure that only ISTs that have a legalized land title will IBRD-86670 Not yet due New be included in the Project implementation plan, as set forth in the activities described under Schedule 1 to the . Loan Agreement. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) . Results framework COUNTRY: Ecuador Transformation of the Tertiary Technical and Technological Institutes Project Project Development Objectives(s) The objectives of the Project are: to increase enrollment and persistence in public technical and technological programs designed and implemented in collaboration with Employers, and to strengthen the institutional management of Tertiary Technical and Technological Education. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Increase enrollment & persistence in public IST programs designed and implemented. PDO Indicator 1: Enrollment in public technical and technological programs 10,629.00 15,179.00 16,189.00 18,860.00 22,201.00 25,376.00 designed and implemented in collaboration with employers. (Number) Action: This indicator has been Revised PDO Indicator 2: Persistence rate in technical and technological programs 0.00 0.00 0.00 68.00 71.00 74.00 designed and implemented in collaboration with employers. (Percentage) Action: This indicator has been Revised Sthrengten the institutional management. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 PDO Indicator 3: Availability of reliable data produced by the new integrated administrative and academic management No No No No Yes Yes system, is used for decision making by main stakeholders. (Yes/No) Action: This indicator has been Revised PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Component 1: Optimizing and Upgrading the Supply in Targeted Provinces. IRI 1: Percentage of students enrolled in the transformed public ISTs in the Targeted 0.00 0.00 0.00 0.00 64.61 77.99 Provinces related to the total capacity of the intervened IST (Percentage) Action: This indicator has been Revised IRI 2: Number of ISTs built or rehabilitated in the targeted 0.00 0.00 0.00 1.00 5.00 6.00 provinces. (Number) The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Action: This indicator has been Revised IRI 3: Number of ISTs fully equipped in the targeted 0.00 0.00 0.00 1.00 5.00 6.00 provinces. (Number) Action: This indicator has been Revised Component 2: Improving Programs Relevance, Quality of Teaching and IST Management Capacity. IRI 4: Number of teachers and management staff trained. 0.00 0.00 0.00 575.00 1,000.00 1,475.00 (Number) Action: This indicator has been Revised IRI 5: Percentage of programs designed and implemented in 34.00 34.00 34.00 54.00 70.00 85.00 collaboration with employers. (Percentage) Action: This indicator has been Revised IRI 6: Development and implementation of the administrative and academic No No No No Yes Yes management system of ISTs. (Yes/No) Action: This indicator has been Revised Component 3: Strengthening Mechanisms for Institutional Coordination, Boosting Demand, and Management, Monitoring and Evaluation of the Project. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 IRI 7: Development and implementation of the module No No No No Yes Yes to track graduates. (Yes/No) Action: This indicator has been Revised IRI 8: Percentage of programs designed and implemented that have been continuously 0.00 0.00 0.00 48.00 78.00 85.00 reviewed by the consultive councils. (Percentage) Action: This indicator has been Revised IRI 9: Percentage of graduates tracked out of total graduates. 0.00 0.00 0.00 0.00 35.00 70.00 (Percentage) Action: This indicator has been Revised Monitoring access, Diagnostic of access, a) Implementation of the persistence, and persistence and gender specific actions graduation by gender and graduation rates previously defined. program through the disaggregated by gender b) Monitoring of access, administrative and Very Limited gender Very Limited gender Very Limited gender and program. IRI 10: Implementation of persistence and academic management specific information specific information specific information Gender Plan. (Text) graduation by gender system. It also includes a available available available a) Design, based on the and program through proposal to diagnostic results, of the administrative institutionalize the gender specific actions and academic monitoring action process to guarantee equality of management system. through the opportunities in administrative and The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 technical and academic management technological education system. for women and men as needed Action: This indicator has been Revised Monitoring of scholarship Monitoring of Monitoring of coverage and access, scholarship coverage scholarship coverage Diagnostic of scholarship Monitoring of persistence and IRI 11: Monitoring of sholarship and access, persistence and access, persistence coverage and access, scholarship coverage graduation rates for coverage and access, and graduation rates for and graduation rates for Very limited information persistence and and access, persistence students from the B40 by persistence and graduation students from the B40 students from the B40 available. graduation rates for and graduation rates for program institutionalized rates of students from the B40. by program through the by program through the students from the B40 students from the B40 through the (Text) administrative and administrative and by program. by program. administrative and academic management academic management academic management system. system. system. Action: This indicator has been Marked for Deletion IRI 12: Survey on beneficiary communities’ satisfaction in the targeted provinces Six published reports. regarding: (a) the process of Not available Not available Not available Not available Three published reports. social management and (b) the results of the implemented new ISTs (Text). (Text) Action: This indicator has been Revised IO Table SPACE The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) Annex 1. Project Cost Composition by Part (Component/Subcomponent) and Source of Financing (US$ million) Part of the Project Bank Loan Borrower % % Total cost (including Project expenditures) Funds Bank Borrower Part 1. Optimizing and upgrading the supply in 58,400,000 7,592,000 65,992,000 88% 12% targeted Provinces: Consulting services (feasibility and technical studies, and supervision); works and goods (equipment and furniture) Part 2. Improving program relevance, quality of 8,610,429 1,179,810 9,790,240 88% 12% teaching and IST management capacity 2.(a): Consulting services: design and review of TTE 1,519,791 208,243 1,728,034 88% 12% programs and the review process in collaboration with employers 2.(b): Consulting services; non-consulting services 5,050,638 692,044 5,742,682 88% 12% and Training (design of training programs and training for teachers and administrative staff, and design of the selection process and the careers of teachers) 2.(c): Goods, Consulting services, non-consulting 2,040,000 279,524 2,319,524 88% 12% services (design and implementation of the academic and administrative management system) Part 3. Strengthening Mechanisms for Institutional 5,489,571 813,016 6,302,586 87% 13% Coordination, Boosting Demand and Management, Monitoring and Evaluation of the Project 3.(a) Consulting services and non-consulting 303,174 44,901 348,075 87% 13% services (institutional strengthening with the Association of Employers and private ISTs) 3.(b) Consulting services, Survey Costs, goods and 2,900,000 429,495 3,329,495 87% 13% Training (update of the methodology for estimating labor market demand) 3.(c) Consulting services, non-consulting services 887,882 131,497 1,019,379 87% 13% and Training (communication campaigns to boost the demand for higher technical education) and design and implementation of the awareness program 3.(d) Consulting services, goods, non-consulting 1,398,514 207,123 1,605,637 87% 13% services, Operating Costs and Training (administration, monitoring, audits and studies and impact evaluation of the Project) Subtotal 72,500,000 9,584,826 82,084,826 88% 12% Cancelled amount effective September 27, 2018 18,000,000 [2,380,174] [20,380,174] 88% 12% TOTAL 90,500,000 [11,965,000] [102,465,000] 88% 12%