World Bank Document - Documents & Reports€¦ · Document of The World Bank Report No. 15388-JM STAFF APPRAISAL REPORT JAMAICA PUBLIC SECTOR MODERNIZATION PROJECT July 29, 1996 Public

Document of

The World Bank

Report No. 15388-JM

STAFF APPRAISAL REPORT

JAMAICA

PUBLIC SECTOR MODERNIZATION PROJECT

July 29, 1996

Public Sector Modernization andPrivate Sector Development DivisionCountry Department IIILatin America and the Caribbean Region

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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 ProgramCE( Chief Executive OfficerERD Eltliiency and Retorm DirectorateEO European UniyonFMIS Financiial Management Intormnation SystemFD Framework DocumeintFP Financing PliaFPMIP Financial and Program Management Improvement ProjectGARP Government Administrative Reform i rogramGOJ Goverinmenit of JaisiaicaiGDP Gross Domestic ProductHRN11S Human Resources Managemnenit Informatioii SystemIBRD Iiiterinatioiail hliak tor Reconistructioni aiid DevelopmentIMCAR liner-Miniisterial1 Committee for Administrative ReformMIND Manaogement Institute for National DevelopmentMEH Minstry of Environi nent and IlousimgMLGW Ministry of Local Governmenit and WorksMP Modcrnization PlainMOFP Ministry of finance and lPlanningMil Ministry of llcalthNIBJ Natioin.il Investimlenit Bank ol JamaicaODA Overseas Development Administration(IS Opzationial Informationi System(PM Otffice of thIc Prime Minister(SC t)lficc of the Services CominmissionPARP Public Administrationi Relorm ProjectPIIRD Policy aild Hlumanl Resources Developmenit GrantPIOJ Planninlg listitute of JimnaicaPSDAI Private Sector Development Adjustment loanPSMP Public Sectir Modernization ProjectPER Public Sector Expenditure ReviewRGD Registrar Ge neral's DepartmentRC Registrar of ComiipaniesSI Survey DepanrmentSOE Statemiment ol ExpetiditureTAXARP Tax Administration Reform ProjectTPD Town Planning D)epartmicnltUN[)P Unlited Nations D)evelopmnent Program

Jamaica Public Sector Modernization Project:: £4R: 7/96

JAMAICAPUBLIC SECTOR MODERNIZATION PROJECT

TABLE OF CONTENTS

LOAN AND PROJECT SUMMARYTHE SECTOR 1

Macro-Economic Environment 1The Public Sector 2

Structure of the Public Sector 2Composition of the Public Service 2Current Performance of the Public Sector 4Factors Affecting Public Sector Performance 4

A. Scope of the Public Sector 4B. Size of the Public Sector 4C. Bureaucratic Culture 5D. Human Resource Deficiencies 5

(i) Low Public Service Remuneration 5(ii) Inadequate Training of Public Servants 7

E. Antiquated Business Processes 7F. Inadequate Physical Resources 7G. Weak Procurement, Contracting and Control Mechanisms 7

GOJ's Policy For Public Sector Modernization 8Previous and Ongoing Initiatives to Modernize the Public Sector 9

PROJECT CONCEPT AND COMPOSITION 10Project Objectives 10Project Concept 11

Public Sector Modernization: Stage I 12A. Modernization of Public Sector Entities:

Executive Agencies and Ministries 12B. 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 23E. Communication Campaign 24F. Development of Stage II of Public Sector Modernization 24

Project Components 24Project Sustainability 25Lessons 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 26Rationale For Bank Involvement 26

ENVIRONMENT 26PROJECT COSTS AND FINANCING 26INSTITUTIONAL ARRANGEMENTS AND PROJECT IMPLEMENTATION 28

A. Institutional Arrangements 28B. Project Implementation 30C. Procurement 30D) Disbursement and Special Account 33D. Accounting and Audits 34

PROJECT RISKS AND BENEFITS 34SUMMARY OF RECOMMENDATIONS AND LOAN CONDITIONS 35

Agreements Reached at Negotiations 35Loan Conditions 36

A. Conditions of Effectiveness 36B. Conditions of Disbursement 37

Recommendation 37DOCUMENTS IN PROJECT FILES 38

LIST OF TABLES

Table 1: Comparative Pay Data For Selected Positions 6Table 2: Estimated Project Costs 27Table 3: Financing Plan 28Table 4: Financing Plan By Category of Expenditure 28Table 5: Summary of Procurement Arrangements 32Table 6: Procurement Prior Review and SOE Thresholds 33Table 7: Disbursement by Category of Expenditure 34Table 8: Estimated Disbursements By Fiscal Year 34

LIST OF ANNEXES

Annex 1: Key Project Performance IndicatorsAnnex 2: Background Information on Targeted Executive Agencies and MinistriesAnnex 3: Performance Indicators for Targeted Executive Agencies and MinistriesAnnex 4: Indicative List of Facilities and Services Identified for Privatization/Contracting OutAnnex 5: Project Costs By ComponentAnnex 6: Project Implementation ScheduleAnnex 7: Letter of Development Policy of the Government of JamaicaAnnex 8: Statement of Government on the Nature and Extent of Autonomy to be GrantedAnnex 9: Proposal for Decentralizing the Machinery of Government - The Establishment of

Executive Agencies

Jamaica Public Sector Modernization Project:: SAR: 7/96


LOAN AND PROJECT SUMMARY

Borrower: Jamaica.

Implementing Agencies: Cabinet Secretariat, Office of the Prime Minister, in coordination withthe Ministry of Finance and Planning, Ministry of Environment andHousing, Ministry of Local Government and Works, NationalInvestment Bank of Jamaica, the Contractor General, the AuditorGeneral and targeted government agencies.

Beneficiaries: Central Government Ministries, Departments, Agencies andStatutory Bodies.

Poverty: Not Applicable.

Loan Amount: US$ 28.4 million.

Terms: Repayable in 17 years, including five years of grace, at the Bank'sstandard interest rate for LIBOR based US Dollar single currencyloans.

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 25,600IBRD 1,850 26,550 28,400ODA ParallelFinancing 0 3,000 3,000Total 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


THE SECTOR

Macro-Economic Environment

I . Jamaica is an island country in the Caribbean, with a total area of approximately 11,000 squarekilometers and a strong natural resource base. The economy is highly sensitive to international priceand demand changes, primarily due to the nature of its productive base and its dependence on importedoil for commercial energy consumption. Jamaica's principal economic activities are tourism,manufacturing, bauxite/alumina mining and, in employment terms, agriculture. It has a population ofapproximately 2.5 million, with about 55% of the people living in urban areas. The labor force isreasonably well-educated and skilled. A per capita income of US$ 1,5601, for 1994, places Jamaica inthe group of lower-middle income countries.

2. In the decade following independence in 1962, Jamaica enjoyed strong GDP growth, averagingabout 5% per annum. However, from 1973 through the mid-1980s, the economy experiencedsustained contraction as a result of external shocks and domestic policies. Increase in oil prices; theimpact of recession in the industrialized countries on the price of sugar and alumina, the country'smajor exports; and high international interest rates had a negative impact on the economy. At the sametime, the government started a process of expansion of the role of the state in national life. Thisprocess resulted in a bloated and inefficient public sector. The overall result was an erosion of privatesector 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 programsand a progressive adoption of market-oriented policy reforms. These efforts yielded some positiveresults, with average GDP growth being 4. 1 % per annum for the period 1986-91. In the 1990s, andparticularly in the past two years, the Government accelerated the implementation of the reformagenda. The main objectives were to lower inflation, enhance international competitiveness, improvepublic finances, maintain adequate level of international reserves and increase per capita income. Thereform program has been supported by multi-lateral institutions, including the IBRD, and the ParisClub. By mid-1995, the government had achieved significant results. A budget surplus wasmaintained for four consecutive years and Bank of Jamaica losses were reduced. The foreign exchangeregime was liberalized. Inflation declined to 1 % per month. Import tariffs were brought within arange of 5-35% and most trade monopolies and quantitative restrictions were eliminated. Reforms intax policy and administration were initiated. The privatization program was stepped up. The externalcurrent 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 reduceddebt service to more manageable levels.

iSource: Planiing Iistitute of Jamaica

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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 drawndown to stabilize the depreciating Jamaican Dollar, large wage awards to public servants and supportto troubled financial firms have caused the budget surplus to dwindle and external imbalances havewidened due to a jump in consumer imports, high interest rates and a weak financial sector. GDPgrowth 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 Branchconsists of the Privy Council, the Court of Appeals, the Supreme Court, the Resident MagistrateCourts, the Family Court and the Revenue Court. The Executive Branch is led by the Prime Ministerwho is elected by the majority party in the House of Representatives. The Prime Minister appointsCabinet Ministers, who head Ministries dealing with specific portfolios. In some Ministries, Ministersof State and Parliamentary Secretaries are also appointed to assist the Cabinet Ministers. At the centrallevel in each Ministry are various divisions responsible for policy formulation, monitoring ofimplementation, 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 Companiesassociated with it. In the thirty three years since independence, the scope and size of the ExecutiveBranch has grown substantially. At present, besides the Office of the Prime Minister, there are 12Ministries, 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 Generaland 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, 21,800teachers, 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 anestimated 13,870 employees in other public sector entities. In general, employees of these entities arepaid more than employees on the central establishment, but enjoy lesser security of tenure. The publicsector 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 costitem after interest payments. The wage bill for FY 1996-97, including retroactive payments, would beJ$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).

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advice to the political executive, help formulate policies in accordance with the priorities of thegovernment and, thereafter, ensure that these are efficiently implemented. The service is accountableto Parliament through the Ministers. In order to ensure its independence, the civil service has beengranted considerable security of tenure. Normally, civil servants can be removed only after protracteddisciplinary proceedings in which the OSC is closely involved (removal in the context of areorganization is relatively easier). The Cabinet Secretary heads the civil service. The FinancialSecretary is responsible for the administration of the Ministry of Finance and Planning. All otherMinistries are headed by Permanent Secretaries at the administrative level.

Figure 1: The Government of Jamaica

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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 isinadequate in many critical areas. The general level of efficiency and effectiveness of public entities isvery 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 compliancewith 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, badlymanaged and uncompetitive. They are also a recurrent fiscal burden on the exchequer. The publicperception of government was summed up by the Report of the Committee of Advisors on GovernmentStructure, also known as the Nettleford Report 3, as follows:

I .. considerable concerns have been expressed about the poor quality of government inJamaica. These largely centered around over-concentration of decision-making, whichconsigned 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 workleading to a compliance rather than service orientation in its dealings with the public. Ingeneral the impression conveyed was of an over-manned, slow, lumbering bureaucracycharacterized 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 andcommercial activities which were far removed from its core functions. This was in line with the thenprevailing thinking that economic development required active involvement of the government in theproductive sectors, the establishment of government owned enterprises, subsidies to the private sectorand heavy protection of industries engaged in import substitutions. Some of the areas that publicenterprises became involved in included: fish farming, mango orchards, distilleries, housingconstruction, 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 comparativeadvantage over the private sector. On the contrary, in the majority of cases, it positively lacks theskills and incentives needed to run these business enterprises efficiently. This has resulted in lowefficiency and productivity in many government agencies. Since the early 1980's, GOJ has activelytaken up a systematic program of privatization to reduce the scope of the public sector. However, thescope 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 theestablishment of various statutory bodies and public companies, many functions have been transferredfrom 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 PermanentSecretary (PS), who is the administrative linchpin of a Ministry, to contribute to policy formulationand monitoring and control of activities falling within the Ministry's purview. Even where line entitiesreport to the PS, their sheer number extends beyond her/his span of control, causing a seriousbreakdown 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 andoverlapping authority. From the administrative point of view this means wastage of resources andjurisdictional contlicts. For the citizen, it means dealing with multiple authorities for getting evensimple things done.

C. Bureaucratic Culture

11. The Jamaican public sector displays characteristics commonly found in most establishedbureaucracies. Public Sector entities are governed by rigid rules of business. Compliance with therules takes precedence over achievement of organizational objectives. This reduces responsiveness toemerging situations and discourages innovation. Decision-making is hierarchical. Superiors aregenerally reluctant to delegate authority, while juniors are reluctant to use even the limited powers thatare delegated to them for fear of being penalized for mistakes that may occur in the process. Theresult 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 andoutcomes through Program Budgeting and Corporate Planning, as yet, public sector entities are notstrictly held responsible for achieving pre-determined performance targets. The security of tenureenjoyed by civil servants shields them from the worst consequences of poor performance. It also limitsmanagers' ability to enforce high productivity standards. Finally, most bureaucrats regard themselvesas 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 andinconvenience 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 themajor weaknesses of the public sector. The single most important factor in this regard is lowremuneration. There is a wide gap between wages in many areas of the public sector and those in thelabor market as a whole, especially, at managerial and technical levels. Table 1 indicates the salarydifferential for some key positions. Even though, parastatal bodies have a better compensationstructure, in many cases they too lag behind the private sector. The situation has been worsened bysevere salary erosion in recent years on account of inflation.

13. Low salaries make it extremely difficult for the public sector to recruit persons with therequisite skills, especially, for technical and managerial positions at the entry and middle levels thatrequire tertiary education in disciplines such as applied sciences, accounting or management. Evenwhen promising individuals join, they do not stay for long. The difficulty of making ends meet andthe availability of better options soon prompt their migration to the private sector, often after they havereceived formal and on-the- job training at government expense. Thus, the public sector does notattract or retain the best and brightest. Barring a few high caliber people, who remain in the public

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sector either due to a personal affinity for public service, or due to promising career prospects basedupon their individual circumstances, for the most part, the public service is made up of persons whoare content to settle down in a rut - following rules, producing a little above the minimum that isexpected of them and, generally, staying out of trouble. There is a dearth of inspiring leaders, creativeproblem-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 ROtJPPERMAN ENT S ECR E'1ARY I1,253,391 2,332,385 54 % Permanent Secrtary/CEOSEG IV 784,234 1.198.943 65% Division Head/Vice

PresidentSEGIII 648,988 1,049,478 62% Senior Manager/ Asstt.

VPSEG 1 529,224 627,649 84 % Ma nager/Manager

PROGRAM MGMT. & ADMIN.GROUPPMA IV 271,617 611,557 44% Sr.

Administrator/ManagerPMA mI 217,880 464,187 47 % Professional/Credit

l Controlleri 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 Accountingl ~~~~~~~~~~~~~~~~~~~~~~~~~~~~Supervisor.

APPLIED SCIENCES GROUPASG VI 766,040 855,571 90% Chief Engineer./Chief

Engineer

NATURAL, PHYSICAL & SOCIALSCIENCES GROUPNPS TV 306,578 643,096 48% Sr. Professional/Qualit

Assurance Manager

TECHNICAL GROUPTSS 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 andcritical 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.


725 were in key positions. In addition to the unfilled posts, there are another 3,200 positions that areheld by acting or temporary holders who, often, do not possess the skills needed for the job. The largenumber of vacancies have had a damaging impact on organizational performance. Either tasks thatneed to be done are not done at all, or they are done by unqualified or over-burdened individuals whocannot 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 attritionthrough in-house training. The Management Institute for National Development (MIND) is theGovernment's main training institution. It was established in 1994 by the merger of four specializedtraining facilities viz. Administrative Staff College, Finance and Accounting College, Secretarial andClerical College and the Mandeville Outreach Training Center. Training for revenue officers isprovided by the Revenue Board and the Revenue Protection Division. Although these institutions aredoing a commendable job, they face severe constraints. Curricula of many courses are old andinappropriate for the situations being faced by public servants in the field. Teaching faculty is limitedand not fully trained. Training facilities are inadequate. As a result, the general skill level in thepublic 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 spiteof major changes in the external environment and the role of the public sector. Many that could beconveniently completed in one step or location are fragmented between different organizations andbetween different sections in a given organization. This necessitates multiple hand-offs, from oneofficial 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 higherauthorities. Operations in most departments are still pre-dominantly manual and create an environmentwhere 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 costsfor 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 workenvironment. Many buildings are old and congested and lack facilities for employees. In agencies likethe Registrar General, that are custodians of important records, record-keeping facilities arerudimentary. This affects the security of documents as well as their retrieval. In many departmentsthere is a dearth of operational equipment, such as communication systems for customs agents at theairport or vehicles for agencies involved in field work. Physical resource deficiencies lower theoverall 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 downand 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. Contractingfor civil works is the responsibility of the Ministry of Local Government and Works, although severalMinistries and departments manage their own construction projects. The Contractor-General, a publicstatutory 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 hisfindings to Parliament. However, recently steps have been intitated to amend this Act and enhance theauthority of the Contractor General. The procurement of services is currently done by all Ministries anddepartments.

19. Since the decentralization of procurement, there has been no government body officially designatedto coordinate procurement policies and regulations regarding goods, works and services and to monitor theirimplementation. Although the Ministry of Finance has retained some responsibility with regard to theadministration of procurement of goods, it does not have the required professional resources to effectivelycarry out this task. Also, it has no mandate to intervene in and coordinate the contracting of works andservices. Most entities have failed to establish procurement units and "Procurement Committees" staffed byqualified professionals and supported by approved procedures or guidelines. Current procurement andcontracting policies and procedures are outdated, confusing and, frequently, misunderstood. This results inuncertainty and ambiguity as to which regulations and procedures apply and whether they apply equally forgoods, works and services. Lack of understanding of the current procedures leads to inconsistency in theinterpretation of these procedures within and between Ministries and entities. The current financialthresholds 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 orderto avoid competitive bidding and reviews by approving authorities. Many public entities lack expertise inpreparing bidding documents, developing accurate specifications, conducting bid evaluations and contractnegotiations. 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 totake on new projects. There are serious shortcomings in contract management as a result of which a largenumber of projects face cost-overruns and execution delays, inviting public criticism. Finally, inventorystorage and management suffer from major deficiencies. As a result of these factors government does notget the best value for the huge expenditures incurred annually on procurement of goods and services and oncivil works.

20. Weaknesses of systems and procedures in procurement and conrtracting are accentuated bydeficiencies 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 andtimely manner. The weakness of internal control systems leads to low accountability and, in someinstances, corruption. External auditing is the constitutional responsibility of the Auditor General.However, even though various entities are progressively moving towards computerized accounts, the officeof 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 thebenefits of the economic reforms that the country has implemented in recent years. Also, public sectorinefficiencies will hinder the development of the private sector. For it to play an effective role in thenew 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 andaccountable.

22. The essential elements of GOJ's policy for public sector modernization are: (a) improving thequality 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 sizeand scope of the public sector by privatizing entities and contracting out services that can be run moreefficiently by the private sector; (d) enhancing transparency and accountability in governmentprocurement, contracting and financial management; (e) creating an effective regulatory environmentthat would encourage orderly private sector development; (f) improving tax administration; and (g)strengthening local government. The Letter of Development Policy, dated February 23, 1996, (Annex7) 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 enterprisesthrough change of ownership; (ii) eliminate the fiscal drain caused by poorly performing publicenterprises; (iii) optimize the use of GOJ's limited management resources; (iv) create opportunities toaccess foreign capital, technology and markets; and (v) widen the base of ownership and equityparticipation in the economy. The process was intensified in 1991, when 64 entities were identified forprivatization. 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 ofprivatizing the power company and the railway. The Bank-financed Private Sector DevelopmentAdjustment Loan (PSDAL) has had a major impact on the privatization program. The program is nowentering a new phase with the objective of expanding the role of the private sector in infrastructure aswell 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. Anotherindicative list of 26 public facilities/services that are candidates for privatization or contracting out hasalso been drawn up. In view of the severe deficiencies experienced in the performance of publicenterprises engaged in water supply and sewerage, GOJ has also initiated steps aimed at bringing inprivate participation in this sector.

24. In order to improve management and performance of government entities, the PublicAdministration Reform Project (PARP) was undertaken with Bank assistance between 1984-88. Itaimed at strengthening human and financial resource management in government and restructuring theMinistry of Finance. This project was largely unsuccessful in creating sustained improvements, mainlyon account of the change in the government's and the Bank's commitment to the direction of theinitiatives undertaken. It was followed by the on-going Financial and Program ManagementImprovement Project (FPMIP), which became effective in 1991. The project's objectives includestrengthening planning and budgeting throughout government; improving personnel policies; andimplementing a Financial Management Information System (FMIS) and a Human ResourceManagement 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 hasbeen rationalized. The FMIS has been commissioned in all but three Ministries. The pilot modules ofthe HRMIS have been installed at 16 sites. A strong relationship between corporate planning and

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program budgeting is, however, yet to be established. Also, further work needs to be done to enhancethe FMIS and the HRMIS and extend their coverage. Additional funds are needed for this purpose. In1994, a comprehensive reform of tax departments was initiated through the Tax Administration ReformProject (TAXARP). This project aims to broaden the tax base; facilitate voluntary compliance; andimprove the effectiveness of the tax administration in assessment and collection of taxes and control oftax evasion. One major consultancy, which has laid the ground work for reorganization of the taxdepartments on functional lines, has been completed. Work on development of a unique taxpayeridentification number is at an advanced stage and the development of an integrated tax administrationcomputer system is expected to begin shortly. In the context of the PSDAL, significant improvementsin import and export clearance procedures of the Customs Department have been achieved, althoughmuch remains to be done in the area of organization and management of the department andcomputerization of its operations.

25. GOJ has also taken various other steps, outside the framework of donor-supported projects, tostreamline Ministries, achieve greater coherence in policy formulation, improve inter-agencycoordination and enhance quality of service rendered by public entities. These steps includerestructuring of Ministries in January 1995; creation of the post of Cabinet Secretary, as Head of theCivil 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 personnelmanagement, in government agencies; and revival of the Inter-Ministerial Committee onAdministrative Reforms (IMCAR) and the Permanent Secretaries' Board to improve coordinationbetween government agencies. In December 1994, a Citizen's Charter was laid before Parliamentemphasizing the obligation of public entities to improve the quality of service provided by them to thepeople. Twelve entities having extensive dealings with the public were selected as pilot agencies forcustomer service improvement. The progress made by these agencies is regularly monitored by theCabinet Secretariat. Finally, in an effort to improve the quality of top management in governmentagencies, twenty-three well-qualified persons were recently selected from the public as well as privatesectors for appointment to senior management positions in the public service, including those ofPermanent Secretary.

PROJECT CONCEPT AND COMPOSITION

Project Objectives

26. The project aims to support GOJ's efforts to (i) bring about major improvements in the qualityof 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 andevaluate downstream agencies to ensure that desired policy objectives are achieved, and (c) efficientlyperform 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 outof 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 publicsector accountability by strengthening internal and external controls; (vi) improve the quality offinancial 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 theproject in the pilot agencies and Ministries to the rest of the public sector and (b) introduce othersystemic improvements in public sector management. Regulatory reform is proposed to be addressed

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through two other IBRD initiatives: the Regulatory Reform and Private Investment Finance Facility andthe Financial Sector Review. Support to the local government reform effort is proposed to be providedby the Parish Infrastructure Project that is was appraised in May 1996. Complementary efforts tostrengthen the Ministry of Local Government and Works at the central level are included in the presentproject.

Eroject Conceg

27. The project concept went through significant changes as the project evolved. Initially, it wasproposed to undertake a comprehensive reform of the public service grading and salary structure, witha view to improve compensation levels vis-a-vis market comparators and enable GOJ to attract andretain qualified persons. This idea was given up, subsequently, as an across-the-board salary increasefor all public servants implied a significant recurrent cost (estimated at about US$ 30 million perannum for upgrading salaries of posts, with salary mid-point equal to or greater than US$ 2,000, to80% of market comparators) without any guarantee that it would lead to an improvement in publicsector performance. Also, it was noted that low salaries were not the only cause of poor public sectorperformance. Inadequate autonomy, lack of accountability, outmoded business processes andinsufficient physical resources also affected efficiency and effectiveness of public entities. In addition,systemic weaknesses pertaining to procurement, contracting, internal and external control had a publicsector-wide negative impact on performance.

28. It was, therefore, decided to adopt a more targeted approach that would create a tighter linkbetween inputs, outputs and outcomes. The public sector modernization process was seen to have twomajor thrusts. First, entity-specific reforms that would modernize the functioning of individualgovernment institutions. Second, systemic reforms that would bring about improvements in publicsector 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 publicsector 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. Inaddition, systemic reforms in three important areas viz. privatization; strengthening of governmentprocurement, contracting, internal control and auditing; and extension and refinement of financial andhuman resource management systems would be pursued. In Stage II, entity-specific reforms would beextended to the remaining public sector entities, besides undertaking additional systemic reforms asneeded. 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 thedemonstration effect. The present project will finance execution of activities related to Stage I of themodernization process and the preparation of Stage II.

30. The modernization strategy for the operational agencies and Ministries has been developed inclose consultation with the Office of the Prime Minister, the Ministry of Finance and Planning, theOSC, the Solicitor General and the Ministry of Enviromnent and Housing, the Ministry of LocalGovernment and Works, and the management and staff of the pilot operational agencies. Varioussenior management retreats and seminars for public servants have been organized to build a widesupport base for the reform. Valuable support was also received from the UK Overseas DevelopmentAgency (ODA).

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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 tointernal and external clients, which would be converted into "Executive Agencies", and (b) centraldivisions of government Ministries that are engaged in policy formulation, monitoring, coordinationand corporate management. The modernization process would aim to empower managers of theseentities by granting them considerably enhanced autonomy in managerial, financial, personnel andoperational management, in return for strict accountability for pre-determined performance targets.This approach draws upon the experience of other Commonwealth countries, especially the UK, whohave, 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 buildinginvestments would be made to ensure that the current resource gaps do not continue to hamperperformance.

32. Legal Framework: The legal framework governing financial and personnel management inGOJ 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 tosome of the targeted agencies, the Constitution, the Financial Administration and Audit Act and theCivil Service Establishment Act have enough flexibility to enable the government to grant additionalautonomy to executive agencies through administrative orders. It is proposed to use this flexibility tocreate the pilot executive agencies. Be that as it may, it is recognized that in the long-term it would bepreferable to design and enact a self-contained legal framework specifically for executive agencies thatwould put the autonomy granted to them on a firmer footing and reduce the risk of it being withdrawnin 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 politicaland 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 unwarrantedwithdrawal 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. Thesewere chosen on account of the important services they perform for the public or for othergovernmental institutions, and the urgent need to improve the quality of their services. "Entitiesmarked (*) are also amongst the agencies selected as pilots to implement the Citizen's Charter, referredto 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).

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* 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 forconversion 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 ofLocal Government and Works) for this purpose.

34. The British Overseas Development Agency (ODA) will provide parallel financing of UKPounds 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; AdministratorGeneral; and Management Institute for National Development. Goods and training for these agencieswill, however, be financed by the Bank and GOJ. The European Union (EU) is also expected toprovide parallel grant financing of about US$ 3 million for the Planning Institute of Jamaica and theConstruction Division of the Ministry of Local Government and Works. Details of the grant areexpected to be finalized by the EU and GOJ by December 31, 1996. For the present, expected EUfinancing is included in GOJ's counterpart contribution. Background information, main functions andactivities, employment composition, current financial arrangements, and prevailing constraints andweaknesses 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 coremanagement team of the entity. In most cases, the selection would be done on a competitive basisconsidering both public sector and private sector candidates. However, in exceptional cases, where theHead of an agency or a member of its core management has been recently appointed through acompetitive process, or where the performance of the incumbent is extremely strong, a fresh selectionprocess may be dispensed with.

36. Once the top management team of the agency is in place, consultants with the requisiteorganizational, management, legal and technical skills will be engaged. Working closely with the CEOand the core management team they will prepare three main documents that will inform themodernization process for the agency. These are:

a) Modernization Planb) Medium-Term Financing Planc) 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 onincreased delegation of authority and strict accountability for achievement of specificperformance requirements.


Recommendations for changes in agency-specific laws, regulations and norms, if required.These will include recommendations for amendments in laws and regulations to enable theagency 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 foreach 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 employeesdeclared redundant.Design otf internal control system to ensure transparency and accountability.Identification of changes needed in Financial Management Information System (FMIS) andHuman 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, storagefacilities, office space and oftice refurbishing.

The Modernization Plan will provide a fully costed, time-bound implementation plan for theagency.

38. The Medium-Term Financing Plan will indicate the financing needs of the agency for a 5 yearperiod. In order to develop a motivating remuneration structure for the staff, it is proposed to followan, essentially, self-financing strategy. A resource pool receiving contributions from three sourceswill be created in each agency. First, business process redesign, automation of routine processes andmatching 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 salaryand wages, after taking into account severance costs. These savings will contribute to the resourcepool. Second, some of the agencies are legally authorized to charge fees from their clients. For theothers, it may be possible to design user fees. It is proposed to allow the agencies to retain a part oftheir fee revenues, based on their overall performance. Retained fees will be the second source offunds 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 withinflation. At the same time, to prevent agencies from charging monopolistic fees, the fees will beestablished or revised in consultation with the Ministry of Finance which will ensure that a fair anduniform approach is adopted. Finally, efficiency gains reflected in savings made by the agencies intheir operational expenses, through improved productivity or thrift, will be allowed to be retained andwill add to the resource pool. At the end of each year, based on an objective performance evaluationof each staff member, the CEO will award incentives which will supplement staff salaries. Thisapproach would closely align institutional objectives with individual interests and promote rightsizing,productivity and cost-consciousness.

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39. However, since the resource pool will be filled only over time, at the beginning of themodernization process, GOJ will need to provide adequate salaries for the CEO and the coremanagement team so as to have a high quality management team leading the turn-around of eachagency. Also, even after all the funds in the resource pool are accounted for, in some agencies, theremay not be enough to raise the effective remuneration of employees to the requisite level. In suchcases 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 thefollowing:

Capital and revenue expenditures to be financed, including investments to improve theagency's physical resources, salary enhancements for key and critical positions, severancecosts 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 retainedby 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-TermFinancing 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 regardto 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 assuranceregarding predictability of cash flows.

* Extent and nature of managerial, operational, financial and personnel managementautonomy that would be granted to the management.

* Performance indicators and the methods of performance measurement andevaluation to be used.

* Rewards and sanctions that would follow performance evaluation.

42. The Framework Document will constitute the basic contract between the government and themanagement 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 theModernization Plan, Medium-Term Financing Plan and the Framework Document will be made subjectto the appointment of a CEO, with qualifications acceptable to the Bank. Disbursements for theimplementation of the Modernization Plan for a particular agency would be subject to (a) thepreparation 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 tocarry out its Modernization Plan.

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44. After the execution of the Framework Document, the implementation of the ModernizationPlan 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 internalcontrols.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 facilitiesetc.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 itexceeds agreed targets, suitable incentives and rewards will be granted to the management and thestaff. Where, on the other hand, performance is below expectations, appropriate sanctions, includingchanges in top management, will be applied. In order to increase general awareness about theexpectations from these agencies and to ensure transparency of the evaluation process, the FrameworkDocument, performance targets and achievements of the agencies will be published. Preliminaryperformance indicators, covering Service Quantity, Service Quality and Cost Effectiveness, for the firstset of eleven executive agencies have been developed and are indicated in Annex 3. These will befurther refined in the process of preparation of the Framework Document. Also, suitable benchmarkswill be established. Customer surveys will be relied upon, where appropriate, to measure outcomesresulting from the activities of the targeted entities.

46. In the six agencies for which the ODA or EU would have lead responsibility, somemodifications 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.

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(b) Ministries

47. Three Ministries will be taken up for modernization in Stage 1. Two of these, the Ministry ofLocal Government and Works (MLGW) and the Ministry of Environment and Housing (MEH), havealready been identified, the third will be identified during project implementation. The MLGW hasbeen formed recently by amalgamating the Ministry of Construction and the Ministry of LocalGovernment and is in need of signiticant restructuring to integrate its two components. Further, theMinistry is responsible for managing huge capital expenditures and improvements in its managementwould have a significant impact on overall GOJ spending. Also, central level reforms at the MLGWwill complement institutional reforms at the local government level that are proposed to be undertakenunder the Parish Infrastructure Project. The MEH is also high on the GOJ's priorities. Three out ofthe eleven line entities targeted tor conversion to executive agencies viz. the Office of Titles; theSurveys 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 thisMinistry 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 prevailingconstraints and weaknesses of the identified Ministries are indicated in Annex 2.

48. The modernization plan for the Ministries would involve the strengthening of their centraldivisions that are engaged in policy formulation, monitoring of policy implementation and corporatefunctions. The project would aim to improve the access of the Ministries to high quality information onwhich to base policy tormulation; assist in the development of sound sector policies, technicalstandards, and operating norms and guidelines; develop effective monitoring and evaluation systems;strengthen budgeting, planning, accounting, procurement, contracting, internal control and personnelmanagement functions; and provide training to staff in related areas. Since the focus of the projectwould 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 Stage1. 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 ofexecutive agencies. A Modernization Plan; a Medium Term Financing Plan and a FrameworkDocument, on the same pattern as for executive agencies, would be prepared for each Ministry. TheFramework Document in the case of a Ministry will, however, be signed by the Minister, on behalf ofthe government, and by the Permanent Secretary, as the CEO of the Ministry.

50. Disbursement Condition: A disbursement condition similar to that for executive agencieswould also apply to each targeted Ministry. Disbursements under the project for the preparation of theModernization Plan, Medium-Term Financing Plan and the Framework Document will be made subjectto the appointment of a Permanent Secretary. Disbursements for the implementation of theModernization Plan for a particular Ministry would be subject to (a) the preparation of theModernization Plan, Medium-Term Financing Plan and the Framework Document, satisfactory to theBank; (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 tocarry out its Modernization Plan.

51. As part of the review of each Ministry, its mission, role and functions will be examined andsuitable changes, if needed, will be recommended. However, in keeping with current best practice, it

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is not proposed to burden this project with policy conditionalities. Project assistance will address theintrinsic organizational and management deficiencies of the Ministries, so as to equip them to performeffectively in any policy environment. Nevertheless, the importance of sound sector policies cannot beminimized. As such, dialogue to improve and strengthen the policy orientation of the selectedMinistries will continue on a parallel track.

52. Crtical Success Factors: The granting of enhanced autonomy subject to strict accountabilityfor performance is a relatively new concept in Jamaica and marks a significant departure fromtraditional public service management practices. Its success will depend on strong and continuedcommitment, 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 instrategy, legal and administrative framework and management practices will need to be made in atimely manner. The Ministry of Finance will have a special role to play, because only if it allows realfinancial 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 underthe Medium-Term Financing Plan of each agency are made available to them. Also the Ministry willhave to increase its oversight over expenditures to ensure that the autonomy is not misused. Thisunderlines the importance of strengthening internal auditing and extending the FMIS to the selectedagencies on priority. The support of the Efficiency and Reform Directorate (ERD) and the OSC willalso be crucial in adjusting personnel management practices in the agencies. Finally, it will beimportant to secure the full involvement and commitment of the employees of the pilot entities and thesupport of public service unions.

53. The commitment of the present government to the objective of creating responsive and efficientpublic entities is very high. The initiative is supported at the highest level of government. A copy ofthe Cabinet Secretary's letter dated March 5, 1996 regarding the granting of autonomy to the targetedagencies is placed in Annex 8. An extensive public relations campaign has been conducted as part ofproject preparation to build public support for the initiative. So far, the response of the labor unionsand the opposition parties has been, generally, positive. It is expected that once the benefits of theapproach 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 tosignificantly alter the way business has been conducted in the government in the past, some resistanceto change can be anticipated. To some extent, this will decrease as the reform efforts become moreconcrete and comprehensible. Also, a continuing communication campaign would be carried out toallay unjustitied fears and build ownership. Assistance to be provided by the project to strengtheninternal and external auditing and to streamline procurement and contracting practices (discussedbelow) should help increase the Ministry of Finance's level of comfort with enhanced autonomy at theentity level. The response of the ERD and OSC to the proposed changes has been very positive andtheir 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 fromthose commercial and productive activities in which it has no comparative advantage. By doing so, itwould 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 servicewould enable the government to begin paying motivating wages to the remaining employees. This

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would facilitate the induction of high quality individuals into the public service and contribute towardsimproving the efficiency and effectiveness of public institutions. Privatization of public entities andcontracting out of services of a commercial nature are the principal tools through which an orderlyreduction in the size and scope of the public sector is proposed to be achieved. It is also a means toencourage private investments in the productive sectors and infrastructure that are critical to thedevelopment 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 mainimplementing and coordinating agency for the privatization program, is adequately geared to handle theprivatization of the entities that remain out of the list of 1991 and those that were approved fordivestiture by the Cabinet in 1995. However, assistance under the Project is required in the threeareas 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 privatizationstrategy for the water and sewerage sector that would ensure economic allocation of water betweencompeting uses, while improving the quality of service provided to the public.

57. Institutonal Arrangements: Although the control of the water and sewerage sector in Jamaicais widely dispersed between several institutions, the production, treatment and supply of water aredominated 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 agenciessuch 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 invarious locations throughout the country. The Underground Water Authority (UWA), establishedunder the Underground Water Authority Control Act, 1959, has responsibility for data collectionrelating to ground and surface water resources. UWA also develops island-wide master plans forwater resources utilization and both the NWC and NIC need to apply to it for permits for the quantityof water they plan to extract from the ground. The regulatory role of the UWA has recently beenstrengthened by the Water Resources Act of 1995 that will transform the UWA into the WaterResources Authority (WRA). The WRA will manage all the nation's water resources by evaluatingand controlling the allocation of both ground water as well as surface water. It will also rationalizeplanning and development activities in the water sector within the framework of the existing WaterResources 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 WaterAuthority and the Kingston and St. Andrew Water Commission. NWC is the sole water and sewerageauthority, providing water services to about 75% of the population and operating about 30% of thesewerage treatment capacity in the island. Areas not directly served by NWC are served by smallerparish systems, or in some cases by independent entities. The total production capacity of NWC is700,000 cubic meters per day. Of this production, unaccounted for water amounts to over 50%. This

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includes losses due to leaking mains, unrecorded and unbilled consumption as a result of defectivemeters and unregistered consumption. The NWC has a poor operating record and has been able tocontinue operations only as a result of large capital injections by the government. The Jamaica WaterSupply and Sewerage TA Loan (1984-94) provided technical assistance to NWC management, besidesemergency supplies and equipment. Although water accounts doubled, sustainable improvements inmanagement were not achieved. In mid-1995, as an interim measure, GOJ made major managerial andfinancial changes that included (i) a new Board and senior management; (ii) recruitment of five seniortechnical experts with EU assistance and (iii) transfer of the main elements of debt service to thegovernment.

59. The NIC was established in 1987 with the mandate to operate and maintain the publicirrigation system in the island. Its systems are located in areas that have insufficient rainfall and arecompletely independent from the NWC's potable water systems. Generally, the water supplied by theNIC is untreated.

60. The rates for water and sewerage are currently set by the Ministry of Public Utilities andTransport (MPUT). However, all regulatory authority in this respect will be transferred to the Officeof Utility Regulation (OUR), once this office is fully established.

61. Supply and Demand: Present domestic and industrial water usage in Jamaica is about 223million cubic meters per year and irrigation usage is about 682 million cubic meters per year. Theprojected demand in the year 2015 for domestic water is about 346 million cubic meters per year andfor irrigation about 1338 million cubic meters per year. In order to meet the projected demand, anestimated investment of about US$ I billion will be required in the water and sewerage sector. Sincethe public sector would not have the requisite resources, GOJ plans to encourage private participationin this sector.

62. Project Assistance: In the past, numerous studies have been carried out to identify differentprivatization options for the NWC. These have, however, been carried out as isolated efforts and havefocused only on the NWC's need to meet the demand for potable water. As Phase I of the water sectorprivatization, a brief consultancy to review and expand on the previous studies, with a view to developa comprehensive strategy that takes into account water requirements for domestic use and irrigation hasalready been initiated and will be financed retroactively by the Project. It will examine the availabilityof water for all areas of the island, particularly the Kingston Metropolitan Area (KMA), and makerecommendations to resolve any short to medium-term conflicts in the use of water. It will alsoexamine the current institutional arrangements and recommend the broad structure and ownership ofthe various entities comprising the sector. The study will review the experience of other countries thathave involved the private sector in the production and delivery of potable water, irrigation water andprovision of sewerage services. It will consider the extent of vertical and horizontal integration, theextent and nature of existing and potential competition in the sector and types of privatizationarrangements, such as management contract, affermage/service contract, lease, concessions orprivatization of assets, that have been adopted in other countries. The study will identify theprivatization options available to GOJ and their policy implications. A draft report of the study isbeing currently reviewed by GOJ. This study will be followed by a more detailed study, also to befinanced by the project, that will address the institutional, regulatory, legal and financial implicationsof 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


implementing the next phase of the privatization process by financing the engagement of the requiredfinancial, regulatory, legal, accounting and technical experts.

63. The support provided by the PSMP to the privatization of the water and sewerage sector willbe complemented by the proposed Jamaica Water Supply and Sewerage Privatization PreparationProject which aims to: (i) rehabilitate the water production and waste water facilities of the NWC inthe Kingston Metropolitan Area; (ii) install valves, zone meters and consumer meters; (iii) undertakeleak repairs; and (iv) conduct consumer surveys. These inputs are considered necessary to make thesector 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 orcontracting out. These include National Stadium Complex, Hope Garden and Zoo, Maxfield ParkChildren's Home, Minard Great House, Food Stamp Program, Statutory Legal Aid System, PrisonHealth Services, Food Storage Infestation, etc.. In addition, the comprehensive review of theremaining public entities proposed to be carried out as part of the preparation of Stage II of the publicsector modernization process, is expected to identify other entities that would be suitable candidates forprivatization or contracting out. The project will assist GOJ in the privatization or contracting out ofthe selected entities. Not later than December 31 of each year of project implementation, starting in1996, the entities/services to be privatized in the succeeding fiscal year will be agreed to by GOJ andthe Bank. The entities to be taken up for privatization in FY 1996-97 would, however, be included inthe Annual Action Plan for this year to be prepared as a condition of Loan Effectiveness. On thewhole, 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 ofprivatizations proposed under this project, the institutional capacity of NIBJ will be strengthened. Theproject will finance the hiring of a full-time qualified resident advisor, as required by and agreed withNIBJ. The advisor would assist NIBJ management and staff in putting together and implementingprivatization transactions. Further, successful privatization will require NIBJ to conduct an effectivecommunication campaign that explains the costs of maintaining the status quo as well as the benefits ofprivatization to various stake-holders, so as to build broad support for the program and allayunwarranted fears. For this purpose, assistance will be provided to strengthen the public relations andmarketing capabilities of NIBJ. Finally, training to NIBJ staff would be provided in private sectorparticipation in infrastructure projects, economic regulation, privatization techniques, project andcapital 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 theprocurement and contracting processes discussed earlier. The project will support this initiative so as toenhance value for money, transparency and accountability. It is proposed to provide project assistance atthree levels:

Jamaica Public Sector Modernizarion Project:: SAR: 7/96 22

67. First, a Procurement Policy Implementation Unit will be established within the InspectorateDivision of the Ministry of Finance. This unit will have responsibility for developing and updatingprocurement standards and procedures. It will assist ministeries and departments in establishing theprocurement functions of Procurement/Contracting Units and Procurement Committees; provide guidancein procurement matters; and monitor procurement operations of the individual entities. The unit will updatethe procurement policy manual incorporating modern practices in this field. Further, it will act as a centralresource for advice on the procurement process, market conditions, stores management, and overseesprocurements. The project will finance the hiring of a long-term Procurement Adviser for three years aswell as short-term consultancies in specialized areas. In addition, it will finance training for the staff of theunit, 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 generalconfidence in the process, the government has proposed the amendment of the Contractor General's Act tocreate an independent National Contracts Commission (NCC), chaired by the CG and assisted by a smallSecretariat comprised of qualified professionals. Proposals concerning the role of the NCC and the CG arebeing reviewed by the Parliamentary Committe on Infrastructure and are expected to be discussed inParliament at a early date. In line with the final decisions taken in this regard, the project will assist instrengthening the Office of the Contractor General, through establishment of the Secretariat. For thispurpose it will finance the required consulting services, training and equipment.

69. Third, the Procurement/Contracting Units and Procurement Conunittees in different Ministries willbe strengthened through consulting services, training and equipment so that they can effectively implementthe applicable procurement and contracting guidelines. Training activities will focus onprocurement/contracting policies, regulations and procedures of GOJ and international financial institutions;preparation of bidding documents and specifications, bid evaluation, contract negotiation, contractadministration, quality control and materials management.

(ii) Internal Control

70. In order to strengthen internal controls throughout government (these are crucial for theefficient 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 Divisionof the Ministry of Finance. The IAD will establish uniform operating standards and systems forconducting internal audits; set ethical norms; coordinate the training and professional development ofinternal auditors; and conduct internal control reviews under the Financial Administration and AuditAct. A new job classification for auditors is expected to be developed soon to emphasize the group asa profession, establish high qualification criteria and improve their remuneration package. A newcurriculum for training public sector auditors is also proposed to be developed by MIND. The projectwill support the establishment of the IAD through consulting services, training, equipment, books andauditing literature.

(iii) External Auditing

71. In order to strengthen the institutional capacity of the Auditor General in exercising effectiveex-post control, the project will provide consultants, training and equipment to enable the office toenhance 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 functionhas gained added importance in view of GOJ's proposal to give semi-executive functions to theContractor General.

(D) FMIS and the HRMIS

72. Two important activities covered under the IBRD financed Financial Program ManagementImprovement Project (FPMIP), which became effective on 09/17/91, are the development and phasedimplementation of the Financial Management Information System (FMIS) and the Human ResourceManagement Information System (HRMIS). The FMIS is intended to computerize BudgetFormulation, Budget Execution, Accounting and Financial Reporting. Its objective is to enhanceaccountability, transparency and efficiency in public financial management at the central level. TheHRMIS aims to fulfill information and automation needs in human resource management, especially inareas of personnel administration, manpower planning, succession planning, employee developmentand allocation of human resources.

73. A preliminary review of the two systems was conducted during project preparation. In PhaseI of the FMIS, the Expenditure Authorization, Accounting and Check Printing modules have beendeveloped. These have been commissioned in nine of the twelve Ministries, covering 11 sites. PhaseII 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 thesystem would create an Executive Information System to allow reports in a flexible format to begenerated for senior management. Certain aspects of the system that require further strengtheningwere identified during the review. These would be addressed during project implementation. Inaddition, modules for Budget Formulation and Cash Management need to be developed and thelinkages of the FMIS with the tax administration, debt management and central bank computer systemsneed to be established. A prototype of the HRMIS has been developed and installed at 16 sites. Corepersonnel data regarding 36,000 employees has been entered. Additional educational and historicaldata is yet to be entered. The next step would be to automate business functions related to personnelmanagement. A payroll module is proposed to be developed or procured. This will link the financialdata of the FMIS with personnel data of the HRMIS.

74. GOJ is keen to implement these systems throughout the central government. However, sincethe inception of the FPMIP the scope of the systems has been expanded considerably. Originally, theFMIS was expected to be installed in 13 sites with 8-12 users per site. It is now proposed to beinstalled at 42 sites with an average of 20 users per site. The HRMIS would be installed at 60-80sites. Although, to some extent it would use the hardware used for the FMIS, separate servers andPCs for the HRMIS would be needed for 5-10 additional workstations at each site for staff who dealexclusively with personnel management. The FPMIP had provided for a total of US$ 6.235 millionfor the development and implementation of both the FMIS and HRMIS. After allocation of unallocatedcosts 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 presentproject, for further development and extension of the systems. Retroactive financing of US$ 600,000would 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 beimperative to keep all stake-holders and the public informed of the objectives, activities andaccomplishments of the project. This would help in building and widening support for public sectormodernization. Accordingly, the project would support an extensive information campaign that wouldbe 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 toenable GOJ to systematically review all public entities, other than those covered in Stage 1, and decideon entities that need to be closed down, privatized, converted into executive agencies or strengthenedin their present form. Also additional systemic reforms required will be identified. Based on thisanalysis, and the experience of Stage 1, suitable strategies will be developed to extend themodernization process to other Ministries and agencies. A detailed action plan to put these strategiesinto effect will he drawn up. Preliminary studies of some of the Ministries and departments havealready been initiated.

Proiect Components:

77. The project will consist of five components. (i) The Modernization of Public Sector Entitiescomponent [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 technicalstandards; monitoring; coordination; and corporate management, of three Ministries, indicated in para47, 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 theiroperations. (ii) The Privatization component [US$ 7.0 million or 12.2% of total project cost] willfinance engagement of consultants for (a) determination of different options available for private sectorparticipation in the water and sewerage sector and assisting GOJ in the implementation of the selectedoption; (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 forprivatization. (iii) The Government Procurement, Contracting, Internal Control and Auditingcomponent [US$ 2.0 million or 3.5% of total project cost] will provide assistance to the ProcurementPolicy Implementation Unit, MOFP; Office of the Contractor General; Procurement/Contracting Unitsand Committees in different Ministries; the Internal Audit Directorate, MOFP; and the Office of theAuditor 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 byproviding additional funding for software development, acquisition of hardware and training for theFinancial Management Information System (FMIS) and Human Resource Management InformationSystem (HRMIS). (v) Project Implementation, Communication Campaign and Development ofStage 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 communicationcampaign to facilitate project execution; and development of Stage 11 of the public sector modernizationprocess. Physical and price contingencies each amount to US$ 2.6 million or 4.6% of total projectcost.

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 anintegrated approach that will seek to address inter-related organizational deficiencies in acomprehensive manner. It is expected that the project would bring about lasting changes in the waythese entities do business. In the long-run, by modernizing the management practices and workingenvironments of the targeted entities, the project will help create a motivated group of public servantswho will have a vested interest in preserving and building on the improvements made through theproject. Also, the enhancement in quality of public service will create an external demand formaintaining 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 willreduce the fiscal drain caused by inefficient enterprises and enable government to support continuingreforms in the smaller public sector. The strengthening of procurement, contracting, internal controland auditing will bring about long-term improvements in transparency and accountability. Theextension of the FMIS and HRMIS will lead to durable improvements in financial and personnelmanagement by providing up-to-date information in these areas to public sector managers. The phasedapproach to public sector modernization being proposed by the project will keep change within theabsorptive 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 thecompensation level of skilled positions in the targeted entities would be mainly financed by theagencies themselves.

Lessons From Previous Bank Experience:

79. Bank experience in related projects indicates that: (a) complex institution building projectsrequire government commitment at the highest level; (b) local ownership of reforms is imperative fortheir success; (c) the right people, possessing the right skills and facing the right incentives, are crucialto sustainability of institutional improvements; (e) civil service reform is a pre-requisite forinstitutional development in the public sector6 (f) information technology can play a significant part inenhancing organizational performance; (g) detailed project preparation is critical to effectiveimplementation; and (h) institutional change is facilitated by early successes. While designing theproject these lessons have been kept in mind. The proposed project closely reflects the priorities ofGOJ and enjoys the support of the Office of the Prime Minister. The development of the projectconcept has been done in a highly participatory manner and inputs from a wide cross-section ofstakeholders have been sought and incorporated into the project concept and design. Further,provision is being made for a continuing communication campaign during project implementation tokeep all interested constituencies adequately informed and reduce the anxiety that inevitablyaccompanies major transitions. The project places due emphasis on improving the quality of humanresources in the civil service. Strategies for performance-linked improvements in compensation;training and employee empowerment have been built into the project. Adequate provision has beenmade for upgrading information technology in each of the targeted entities. Detailed implementationplans 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 inorganizational 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.


stages of project implementation so that they can be used as models to stimulate further change andbuild 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 economicreform program, which is being supported by a number of Bank operations. Consequently, publicsector reform and institutional strengthening are key objectives of the Bank's Country AssistanceStrategy (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 anew role for the public sector as a facilitator of private sector-led growth. The Bank is alreadyinvolved in public sector reform projects in Jamaica. The proposed project is consistent with the BankGroup Country Assistance Strategy. It would help take the reform process to the next stage, whileensuring that two ongoing initiatives, viz. privatization and introduction of computerized financial andpersonnel management systems, are carried to their logical conclusion. The Bank's vast and variedexperience in institutional development in the public sector would benefit the borrower in ensuring thatthe proposed organizational changes are properly designed and effectively implemented.

ENVIRONMENT

81. This project has been classified as category 'B" in recognition of potential environmentaleffects of privatization activities. For the facilities and services already identified, a preliminaryenvironmental evaluation has been carried out. One facility, Food Storage Infestation (FSI), located atKingston and Montego Bay airports and used for quarantine of food for export, has been identified asbeing possibly associated with some environmental issues. An environmental audit of the FSI will beconducted prior to its privatization and suitable remedial actions will be taken to mitigate adverseenvironmental impacts. Environmental Audit Guidelines have been developed and included in theOperational Manual of the project. These will be followed during project implementation foradditional entities selected for privatization, whose activities, in the opinion of the Bank, may have anegative environmental impact.

PROJECT COSTS AND FINANCING

82. A PHRD Grant of Yen 61.5 million is being used for project preparation. The total projectcost 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 Dollarsingle currency loans. Parallel grant financing of UK Pounds 2.0 million (about US $3.0 million) willbe provided by the UK ODA. The European Union (EU) is also expected to provide parallel grantfinancing of about US$ 3.0 million. This amount is included in GOJ's counterpart contribution of US$25.6 million, pending finalization of the details of the EU project. Retroactive financing of US$ 2.0million will be provided to meet expenditures incurred between January 1, 1996 and date of Loansigning, mainly to purchase hardware for the FMIS and HRMIS and to finance studies related to thewater and sewerage sector. Table 2 indicates the Estimated Project Costs, Table 3 the Financing Planand Table 4 the Financing Plan by Category of Expenditure. Annex 5 indicates the detailed costs foreach project component.

Jamaica Publjc Sector Modernizaton Proqect.: SAR: 7/96 27

Table 2: Estimated Project Cost (USS Thousands)gD : - -- - ' ......... .~~~~~~~~~~~~~~~. . Fr .................Tt £:aC.an ewtn IM)a FortilgD Total % of Total

. -,---,,, ~~~~~~~. . . . . . . : . - -:. . :::-.. ._.Erjs Xs

Modernization of Public Sector Entities

(a) Executive Agencies1. 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) Ministries1. 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 Campaignand 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%


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 25,600IBRD 1,850 26,550 28,400ODA ParallelFinancing 0 3,000 3,000Total 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%

InformationCampaign 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 thisproject. 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 ofHealth, Minister Without Portfolio (Officc of the Prime Minister); Cabinst Secretary, Financial Secretary, Pennanent Secretary- OPM,Director General, ERD and Project Director, PSMP.


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. TheManagement Committee will monitor the progress of various components of the project on a regularbasis and take appropriate actions to ensure that the objectives of the project are met. A ProjectCoordination Unit (PCU), reporting to the Cabinet Secretary, has been established. The PCU hasactively participated in the preparation of the project. It will be responsible for the coordination ofdifferent 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 IMCARWorking Group. The Project Director will have overall responsibility for the efficient implementationof the project. The Senior Project Officer, already working in the PCU, will have responsibility forcoordinating the privatization component and providing assistance to the NIBJ, where required. Hewill also manage all procurement activities under the project, besides providing project managementsupport to the Project Director. An International Coordinator, with experience in management ofchange in public entities, will be appointed to guide the process of modernization of executive agenciesand Ministries. The agencies and Ministries will be divided into four groups. An Agency Coordinatorwill be engaged for each group to facilitate the implementation process on a day to day basis. AnInformation Technology Coordinator will be hired to establish uniform IT standards for thecomputerization of various entities covered by the project and to assist in engagement of consultantsand procurement of computer hardware and software. A Coordinator will be appointed to facilitate theimplementation of the Government Procurement, Contracting, Internal Control and Auditingcomponent. For carrying out the proposed communication campaign, a Communication Specialist hasbeen 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 ofthe PCU will be recruited on contract. Extensions of contracts of individual staff members will beconsidered 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 OperationalManual 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 LoanEffectiveness.

85. Project implementation will require extensive inter-institutional coordination. TheModernization of Public Sector Entities component will be executed in coordination with themanagement of each targeted entity and the respective Ministry. The Privatization component will beimplemented 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 PrivatizationComponent is a condition of Loan Effectiveness. Under the Government Procurement, Contracting,Internal Control and Auditing component, the setting up of the Procurement Policy ImplementationUnit and the Internal Audit Directorate will be coordinated with the Ministry of Finance; theestablishment and strengthening of Procurement Committees and Procurement/Contracting Units willbe coordinated with each Ministry; the creation and strengthening of the National ContractsCommission and the Secretariat in the Office of the Contractor General (OCG) will be coordinatedwith the OCG; and the strengthening of external auditing will be coordinated with the Office of theAuditor 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, andFinance and Accounting Manager. PSMP, and a representative of the private sector.


Administrative Reform Program. The Development of Stage n1 of Public Sector Modernization andCommunication 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 toadopt a phased implementation strategy. As would be evident from Annex 6, Project ImplementationSchedule, the creation of executive agencies and modernization of Ministries will be staggered so as tokeep the implementation burden on the PCU within reasonable limits. This will also enable theexperience 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 fiscalyear 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 implementationresponsibility for each activity; and plans for Procurement, Hiring of Consultants, Training and theInformation Campaign. It will also identify the entities or services to be taken up for privatization orcontracting out during the year. The AAP will form the basis of monitoring the progress of theproject. In order to ensure that project implementation is not adversely affected by the lack ofcounterpart funds, GOJ will, by April 30 of each year, provide satisfactory evidence to the Bankregarding the availability of such funds. Furnishing of the said evidence for FY 1996-97 will be acondition of Loan Effectiveness. The PCU shall also submit semi-annual progress reports to the Bankno 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 whichimplementation will be jointly reviewed with GOJ and actions to deal with problems and bottlenecksencountered will be agreed. One of the supervision missions will be used to carry out an AnnualReview of the project before 30th June of each year. A mid-term review of the project will be carriedout as part of the 1999 Annual Review. To the extent possible the supervision missions will becoordinated with similar missions of other donors participating in the project. In any event, closecoordination with them will be maintained to ensure consistency of approach. Progress made inproject implementation will be monitored through Key Project Indicators (Annex 1). Suitable remedieshave been included in the Loan Agreement to deal with the failure of the targeted agencies andMinistries, on the one hand, and GOJ, on the other, to properly implement Framework Documentsmentioned above. Also, remedies have been provided in case of non-availability, suspension orcancellation 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 sixmonths after the closing date of the Project. This plan will be jointly reviewed by the Bank and GOJwith 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 accordancewith "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in


January 1995 as revised in January 1996. The Bank's Standard Bidding Documents, modified asappropriate, will be used for all ICB and LIB procurement.

91. Goods, such as computer systems, including hardware, software and peripherals; instrumentsrequired for the operations of various entities; teaching aids; air-conditioners; and other officeequipment estimated to cost US$ 10.6 million would be acquired through International CompetitiveBidding (ICB), in packages valued at not less than US$ 150,000 each. Some of aforesaid goods valuedat US$ 50,000 or more, but less than US$ 150,000 per contract, and not exceeding US$ 1.0 million inthe aggregate, would be procured through Limited International Bidding (LIB). Contracts for thesupply of the goods will include installation, maintenance and technical assistance for at least one yearafter the first year of warranty provided by the manufacturer. Goods that cannot be grouped in bidpackages of US$ 50,000 or more, but can be grouped in packages of US$ 25,000 and above, would beprocured through international shopping procedures acceptable to the Bank, for an aggregate amountnot to exceed US$ 400,000. Goods, costing less than US$ 25,000 per contract, will be procuredthrough national shopping procedures acceptable to the Bank, for an aggregate amount not exceedingUS$ 100,000.

92. All contracts for procurement of goods to be awarded through ICB and LIB would be subject toprior review by the Bank and the remaining contracts would be subject to ex-post review by supervisionmissions. The Bank's prior review of procurement documentation would cover all major procurementsteps, including invitation to bid, advertising, bidding documents, evaluation methodologies andreports, award recommendations and contracts.

93. Consulting Services: A plan for hiring consultants would be submitted to the Bank for reviewand approval as part of the Annual Action Plan, before consultants are hired. The selection andappointment of consultants would be in accordance with the World Bank: "Guidelines: Use ofConsultants by Ubrld Bank Borrowers and the Ubrld Bank as Executing Agency" published by the Bankin August 1981. The Bank's Standard Letters of Invitation and Standard Forms of Contract forConsultant's Services would be adapted, as appropriate, to each assigmment and used for contracting alltechnical assistance under the loan.

94. All consultant contracts would be subject to full prior review, in accordance with BankGuidelines, including that of: (a) preparation of the terms of reference and budget; (b) choice ofselection procedure; (c) preparation of the Short List and the Letter of Invitation; (d) the winningproposal and the Evaluation Report; and (e) the draft contract. However, consultant contracts estimatedto cost below US$ 50,000 for firms and US$ 20,000 for individuals, except the first two contracts ineach category, would require only the review of the terms of reference, qualifications, experience, andconditions of employment of the selected consultants on an ex-ante basis. Supporting documents forthese contracts would be reviewed selectively on an ex-post basis. This exception to the Bank's reviewshall not, however, apply to assignments involving single source selection of firms; assignments of acritical nature as reasonably determined by the Bank; amendments to the contracts for the employmentof firms raising the value of such contracts to US$ 50,000 or above; and amendments to the contractsfor 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 inaggregate.

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 ina coverage of about 80% of Bank-financed contracts.

96. The borrower's procurement regulations and procedures have been reviewed by Bank staff inthe context of previous projects and the country procurement assessment and have been found to begenerally consistent with Bank guidelines.

97. Training and Infornation Campaign: After the Annual Action Plan relating to Training andthe Information Campaign has been approved, expenditures under these categories would be madeagainst Statements of Expenditure (SOEs).

98. Civil Wrks: The entire cost of construction of new buildings and refurbishing of old buildingswill 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)

InformationCampaign 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: NationalCompetitive Bidding. 4. 'OTHIER" includes Limited International Bidding, Shopping, consultants and training. 5. NBF: Not BankFinanced.


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 twoSource Selection of Firms; (b) contracts.Assigmnents of a critical nature; and(c) contract amendments increasingthe amount of the contract to morethan 50, in the case of firms, andmore that 20, in the case ofindividuals.

Training * All expenditures, afterapproval of Annual ActionPlan.

Information Campaign . All expenditures, afterapproval of Annual ActionPlan.

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 beenreviewed 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 InformationCampaign. Table 7 indicates different categories of expenditures to be financed by the Loan, theallocation of the loan amount to each category and the percentage of expenditures to be financed ineach category. The Loan, including retroactive financing of US$ 2.0 million, is expected to bedisbursed 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 averagedisbursements, will be established in a commercial bank acceptable to the Bank. During the start-up ofthe project, the PCU will be able to request up to US$ 1.0 million as an initial deposit to the SpecialAccount. 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 notsubject to Bank prior review would be made against Statements of Expenditures (SOEs). Table 8 givesthe 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 1,900Commulative 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 accountingpractices, the operations, resources and expenditures for each project component. The accounts will beconsolidated annually to prepare the financial statements for the project as a whole. Supportingdocumentation will be maintained by the PCU and made available to Bank missions and independentauditors 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 suchexpenditures will be retained by the PCU until at least one year after the Bank has received the auditreport for the Fiscal Year in which the last withdrawal from the Loan Account or payment out of theSpecial Account, whichever is later, was made.

102. Project records and accounts, including the Special Account and SOEs, will be auditedannually in accordance with appropriate auditing principles consistently applied by externalindependent auditors acceptable to the Bank, with terms of reference for auditors and reports approvedby 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 auditingguidelines. Cost of the consultant services to be employed for the annual audits (US$ 25,000equivalent through the life of the project) will be eligible for financing under the loan. Audit reportswill 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 thegovernment to grant adequate autonomy to the executive agencies; the lack of dynamic and inspiringleaders 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 publicservices within a short time period. Such early successes would demonstrate the feasibility and


benefits of the strategy adopted by the project, thus, firming up government commitment. Externalfactors, such as the growing public demand for improved public services and the need for an efficientpublic sector to facilitate private sector growth, would also keep the government committed to publicsector modernization. Discussions with GOJ have indicated that the government is keen on creatingexecutive agencies and would be willing to grant them the requisite autonomy. To further reduce therelated risk, disbursements for the executive agencies and Ministries would be linked to the executionof Framework Documents, satisfactory to the Bank. Appropriate remedies have also been incorporatedin the Loan Agreement to guard against unwarranted withdrawal of autonomy granted to the entitiescovered by the project. To ensure high quality leadership in the executive agencies, the appointmentof CEOs acceptable to the Bank has been made a condition for disbursement. It is expected that astrong PCU, working closely with the agencies involved in the project, will ensure that theorganizational changes in the Ministries and executive agencies are managed effectively.

Project Benefits

104. Conversion of public entities into performance oriented executive agencies, operating withgreater autonomy and a modern resource base, will significantly improve quality of services providedby them to their clients. Strengthening the central divisions in Ministries will improve the quality ofpublic policies and enhance government control over their implementations. The experience gained inthe pilot agencies targeted by the project, will set the stage for modernizing the rest of the publicsector. Privatization of activities that can be better performed by the private sector will increasecompetition and benefit consumers, enable the public sector to focus on its core competencies andreduce the fiscal burden imposed by inefficient public enterprises. Strengthening of procurement andcontracting will ensure that government receives value for money for the huge annual outlays ongoods, works and services. Improving internal control and auditing will enhance accountability andtransparency in public financial management and ensure that delegated financial powers are exercisedproperly. Finally, the extension of the FMIS and HRMIS will improve efficiency in financial andpersonnel 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 inclusionof two additional agencies under the Modernization of Public Sector Entities component,Jamaica Promotions Corporation (JAMPRO) and the Construction Division of the Ministryof 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 leasteconomic cost; (b) attract foreign and local private finance and broaden ownership; and (c)promote environmentally acceptable operation of the water and sewerage sector. Therecommendations 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 thatwould outline a process for rational development and use of the island's water resourcesand sewerage treatment and disposal facilities. The second phase of the study will addressthe 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


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 Fiscalyear 1997-98 onwards.

* With respect to privatization or contracting out of agencies and services, it was agreed totreat the list of such agencies and services developed by GOJ as an indicative list. As partof the Annual Action Plan (AAP) for each year, the Bank and GOI will agree on thespecific agencies and services to be taken up for privatization/contracting out.

* It was agreed to create a separate disbursement category, Information Campaign", forexpenditures to be incurred in connection with the proposed communication campaign.Proposed activities under this category and under "Training" would be included in theAAP 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 OfficerFinance 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 ofthe Privatization Component (see para 85).

* Preparation and furnishing to the Bank of the Action Plan for FY 1996-97 (see para87).

* Furnishing of evidence regarding the availability of adequate counterpart funds for FY1996-97 (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 ExecutiveAgency and Ministry:

* Disbursements for the preparation of the Modernization Plan, Medium-Term FinancingPlan 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 theappointment 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 theFramework Document, satisfactory to the Bank; (b) signing of the FrameworkDocument by GOJ and the concerned CEO or Permanent Secretary, as the case maybe, and (c) a legal framework, satisfactory to the Bank, being in full force and effect toenable the agency or Ministry concerned to carry out its Modernization Plan (see paras43 and 50).

Recommendation

107. Subject to the above, the proposed project would constitute a suitable basis for a loan ofUS$28.4 million repayable in 17 years, including five years of grace, at the Bank's standard interestrate 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 1996/97Government of Jamaica.

2. Review of the Role and Structure of Government: Ken Rattray, Solicitor General, Jamaica3. 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 Strategy8. 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 Government16. 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 TimringIndicators

Modernization of PublicEntities - ExecutiveAgencies

Bring about major Consultancies to prepare, for Improvement in Separate performance Jamaica Customs Departmentimprovements 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 toselected Executive Agencies.,

Medium Term . Service quantity: Executive Agencies 12/01Financing . Cost effectiveness. (Annex 3). Town Planning Department -Plan; and 9/96 to 12/01

* Framework Document. Increased client satisfaction Surveys Department -9/96 toas reflected in surveys. 12/01

Consultants, goods and Jamaica Information Service -training to implement the 9/96 to 9/00Modernization Plan. JAMPRESS - 9/96 to 9/00

Planning Institute of Jamaica -4/97 to 12/01Registrar General'sDepartment - 9/96 to 9/00Registrar of Companies -9/96 to 6/01Administrator General -12/96 to 1/01MIND - 3/97 to 12/01JAMPRO - 4/97 to 12/01Const. Div. of MLGW - 7/97to 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 PublicEntities - Ministries

Improve the ability ofselected 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 tol2/01policies, technical standards * Modernization Plan: * Medium Term technically sound Sector developed for the identifiedand 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 andevaluate downstream * Framework Document. enforcement of high qualityagencies to ensure that technical standards;desired policy objectives areachieved, 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 ofperformance targets; operational agencies

* Strengthened legal and affiliated to the Ministrynormative framework; resulting in cost-effective

* Streamlined and timely policyorganizational structure implementation.of the central divisions; Effective corporate

* Rightsized staffcomplement. management based on

* Improved staff skills; modern corporate planning,* Incentive structure suited budgeting, personnel and

to achievement of financial managementorganizational objectives; accountability techniqaue

* Re-engineered business and standards.processes;

* Modern management and Increased public satisfactionoperational 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 TimningIndicators

Privatization

Continue the Rationalizationof 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 4/01water supply and sewerage privatization strategies and the Water and Sewerage provision of quality of water supply and seweragesector; bidding documents and assist Sector; water supply and sewerage services as reflected in

GOJ in executing transactions services; consumer surveys:related to privatization of thewater and sewerage sector. Private sector investment in Degree of private sector

the water sector to meet involvement in management ofcurrent and anticipated and investment in the watercapacity 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 becontracting 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: 5comparative 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: 10surveys. 4/99 to 3/00: 7

3/00to12/01: 6lbtal: 35

(c) Institutional strengthening A long-term Resident Adviser Privatization transactions; Enhanced institutional Improvements in NlBJ's 9/96 to 12/01of 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 privatizationconsultants to strengthen privatization; and training transactions. transactions as reflected inND3J's public relations and courses attended by NIBJ * design of privatizationmarketing capabilities; and staff. transactions;training to NIBJ staff. * access to potential

investors;* negotiating skills;* quality of outcomes;* degree of transparency of

and public support forexecuted transactions.

Jamnaica Public Sector Modemization FProject: SAR: 7/96: Annex 1: Key Monitoring Indicators 4

Objectives inputs Outputs impact Perfmance TimingIndicators

GovernmentProcurement,Contracting, InternalCooitrol and Auditing

Improve efficiency. value for Consultants. goods and Establishment of: Enhanced value for money. Increased cost-effectiveness. * Procurement Policymoney 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 8/99contracting: * 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 alland 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 OfficeCommiitees and * Secretariat in the Office of the ContractorProcurement/ of the Contractor Reduction in cost over-runs General - 9/96 to 8/99Contracting Units in all General. and slippage in major projects.ministries;

* Establish the Secretariat Updated manuals of policies, Consistency in application ofin the Office of the rules and procedures for prescribed rules andContractor General. procurement and contracting. procedures in procurement

* Development of and contracting decisionstransparent and efficient Computerized information throughout government.systems and procedures systems for gathering marketfor procurement, information, monitoring Diminution in allegations ofcontracting and contract contract execution and misconduct in procurementmanagement. evaluation of performance of and contracting decisions.

suppliers and contractors.

Trained staff to handleprocurement and contractingactivities

Jamaica Public Sector Modemization Project: SAR: 7/96: Annex 1: Key Monitoring Indicators 5

~~~~~~~~~~~~~~ottt. . . .... .... .. .. ... ....

Obeccvs: :hp~it~ :O1nts hpact Perfora::e Timing:Wicators

GovernmentProcurement,Contracting, InternalControl 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 8/99strengthening internal and * Establish and strengthen effective internal control in activities of public irregularities ex-ante asexternal controls. the Internal Audit systems in public entities; entities. reflected in internal audit

Directorate in the reports.Ministry of Finance and Uniform standards forPlanning; conducting internal audits; Increased ability of the Auditor General: 9/96 to 8/99Strengthen the Office of Auditor General to detectthe Auditor General Trained auditors to exercise serious errors and

effective internal control. malfeasance, ex-post asreflected in annual report

Enhanced capacity of the submitted to Parliament.Auditor Geneml to auditcomputerized accounts andprocurement and contractingdecisions.

MNS

Improve the quality of Consultants, goods and Additional modules of the Increased efficiency, control Evaluation of additional 9/96 to 12/01financial 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 andsector 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 dayinstallation of these to day to work of publicsytems in ae entities.government entities.

Quality and timely availabilityof data for preparation of thenational budget, nationalfinancial accounts, auditingand personnel managementdecisions.

Janaica Public Sector Modemization Project: SAR: 7/96: Annex 1: Key Monitoring Indicators 6

Objectives I Outputs Perfonnan unin~~~~~~~~~~~~~~~~~~~~~~..... ............. ..... ...

Project Implementation,CommunicationCampaign andDevelopment of Stage 11

Efficiently and effectively Consultants. goods and Project management Efficient implementation of Degree of achievement of 9/96 to 12/01implement 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 12/01stakeholders for public sector actions modernization project public support built for themodernPization, 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 12/01modernization 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 topilot entities to the rest of the which lessons learnt in pastpublic sector; and initiatives and this project are

(b) introduce other systemic ~~~~~~~~~~~~~~~~~~incorporated therein and therefrm 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 limitsAgency), became a statutory body in April 1. Initiating and coordinating planning for the economic, posts: tax revenue, capital revenue output of all the main1984 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 throughthe functions of the NPA (est. 1972) and the 163 sales of publications.) 2. Salary scales reduce ability toCentral 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. 5strengthen the planning capability of the Temp/Reliefgovernment. 3. Undertaking research. Posts:

29The Institute falls under the portfolio of the 4. Training in planning. Others:Ministry of Fuunce and Panning. The 36Director General heads the Institute's 5. Undertaking consultant activities for Government Total posts beingmanagement team which indcudes a Deputy Ministries, agencies and statutory bodies. operated:Director Generl, a Senior Director and seven 233Directors. 6. Maintaining a national socio-economic reference

library.

7. Managing technical cooperation agreements andprograms.

Jamaica Public Sector Modernization Project: SAR: 7/96: Annex 2: Background Information on Targeted Executive Agencies and Ministries 2

Jamaica Customs DepartmentMinistry of Finance and Planning

Bacrgouid Main Fnnctions/Acdviie5 1995 Curret Finandal Constrais and WeaknessesEmployment 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 944Board. 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 tomaximize revenue collections from CustomsDuties and Taxes, through theimplementation of effective and efficientcompliance programs, while facilitatingtrade.

A computerization program, financed byGOJ, is underway. Some additionalresources may be needed to implement itfully. The Department has also receivedassistance from the USAID in developing anew organizational structure and preparingoperational norms.


Office of TitlesMinistry 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 documentsof 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. Inadequateassistance through the IDB financed Land Administering the Registration of Titles Act and the of registration services. The computerization and recordTitling 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 DocumentTracking System. Further inputs are needed Major Activities: Total: 86 Salary & allowance for 2. Chronic lack of records storagein various operational areas. 1. Issuing new Certificates of Title. permanent staff: space affects document retrieval

JI5,173.556.00 and preservation. New building2. Making memorandum endorsements on existing titles to will not solve this problem.

record transfers, subdivisions, mortgages etc. Salary & allowance fortemporary & 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 precariouscondition.

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 andJS55,304,145.20 binders.Amt. retained for incentives:Nil 5. Poor remuneration and working

conditions.1995/96 Budget:J$20,273,00000 6. Heavy staff turnover. Need forRevenue collected 4/95 to constant re-training as9/95 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 relateddepartments, such as Survey andTown Planning is required tocomplete title registration, butthe same is not readily available.TtIis causes major delays in thereg istration procea.

&

Jamaica Public Sector Modenization Project: SAR: 7/96: Annex 2: Background Informnation on Targeted Executive Agencies and Ministres 4

Town Planning DepartmentMinistry 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 qualifiedurban 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 andMajor Activities: authorities, but not shared with development applications involves a number of1. 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 fieldlevels. 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 JS18,202,000Secretariat.

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 useissues.


Survey DepartmentMinistry 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 retaindivision: Cadastral Mapping Division and Land surveys, mapping and administration of Land 108 JS19,432,000 qualified staff due to lowLand 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 incompleting 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 comprehensivecomprehensive land information system that survey control points. collected 1995/96: Cadastral Map of Jamaica.would integrate land information stored in 4. Prmparing topographical maps. JS2,462,000other 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 ServiceOffice 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 withthe 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 theministries, 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 millioninstitutions. 2. Production of Radio and Television programs for the 4. Insufficient technically trained

Govenunent. Capital: staff.

The deparment has publicity and production 1S16.8 millioncapabilities in radio and television, 3.Buying and placing the GOJ's advertising in several media. 5. Old, inadequate technicaladvertising, 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 revenuedepartments: 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 inand 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 publicopinion. Store current information on the GOJ's eventsand programs.

iA

Jamaica Public Sector Modemization Project: SAR: 7/96: Annex 2: Background hnfonnation on Targeted Executive Agencies and Ministries 7

JAMPRESSOffice 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 withcompany, 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 ofMinister. 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 orinternational conferences by local and international conditions and Enjoys considerable other government informationjournalists. pay stmicture of autonomy in financial agencies.

the civil service management. Collects fees3. 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 feespersonnel are fully retained by it in amanagement. Cost Recovery Fund that isEmployees can be used to pay cash incentivesdismissed at one to staff and meet somemonth's notice. recurrent expenses.

Allowed to retain savingsout of the recurrent budgetallocated to it by GOJ.Office of the Prime Ministercontrols 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 DepartmentMinistry of Health

Mat&fhia ..........TheDet.ha to aindiison: he Mai Fncios.Pots:Fes orreisratonan OerMinaGeneral 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 inlregistersostackedofnuierou fromnctrnacins floortJ$700,000 atv toi eiin.i

employs 380 3. lmbil~~~inaeute sto ragedl area.ev2.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 accesible3. 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 documentsdepartment possesss documents dating back to 1663 and interviews, forthat have considerable historical, cultura and research amendment to recordedvalue. entries.

7 . Lar-kof staff to deal with5 . 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! ManagementI . High rate of attrition.2. Scarcity of mriddle and senior

mianagers and preponderanceof clerical staff who can onlyperform 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 CompaniesMinistry of Industry, Investment and Commerce

.~ ~~~~~~~~~~ . _.,,........,,.. ..... ... ..... . ..,,. . .. . ..... ... ...- .. ,....... ................. .....:' -:-::::::--:- . ..-::,''........ -. : '- '.M FA, :' ..... ....................... '':''':'-''..,.-W.:

Created in 1975. Main Fun cuons: Total staff: 67 Expenditure met out of 1. Legislative framework needsTo register, regulate and supply information on annual budget allocated by strengthening to keep paceCompanies, ndustrial and Provident Societies and business the Ministry of Finance. with changes in the businessenterprises engaged in commercial and charitable activities Revenue collected through environment and internationalin 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 workplace of busincss in Jamaica. and Penalties do not without commensurate incrmase

adequately reflect in staff, work stations and2. Monitoring companies to ensure compliance with the seriousness of breaches and storage space.

Companies Act. costs of services provided by 5. Limited delegation of finarcialthe 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, hightax. User fees need to be revised. delinquency rate and low

penalties leading to lack of4. 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 weakenscompanies and stipulated business entities and making 1994-95 Revenue Receipts: regulatory framework andthe records available to the public. JS35.5 million. hindcrs tax collections.

8. Low level of academically6. 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) yearsfor Trademarks, Patents and)Designs.


Administrator GeneralMinistry 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-keepinginvolvement. commission set by law at capacity.

6% of all payments made 4. Poor access to public recordsMajor 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 exploit2. 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 andand 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 course2. Public financial administration training; outside the Civil Service. offerings relative to changing3. 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


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 retaincombining 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$32Sports with the Public Works functions of the I . Construction, maintenance and management of 353 million 2. Untimely and inadequate flow offormer Ministry of Construction and Housing. the island's public roads; bridges; storm water financial resources.

control, river training and sea defense works; and Temporary: 155drainage networks. 3. Lack of integration of the

ODPEM: 42 organizational structure of the two2. 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 themaintenance 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 atelecommunications network for the use ofGovernment and its Agencies.

5. Provision and maintenance of the trafficmanagement system.

B. Local GovernmmnrI. Local government administration for parishes and

Kingston and St. Andrews Corporation.

2. Provision and maintenance of community amenityservices including garbage collection, streetcleaning, street lighting, public sanitaryconveniences, fire protection, parks and markets,minor water supply systems and disastermanagement.

3. Social Security and community and welfareservices 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 formativecombining 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 JS10,747.890.00Environment and Physical Planning divisions of (as at March 2. Lack of a planned approach to thethe Ministry of Public Service and the - the provision of affordable housing solutions within Temporary & Relief/ 1995) implementation of the Ministry'sEnvironment (MPSE). Further, the subjects of the framework of the National Settlement Strategy; Casual: 442 programs.Land Administration and Estate Management 1995/1996were transferred to this Ministry from the - the effective conservation, protection and development Personal & Executive Administrative 3. Lack of proper systems and modernMinistry of Agriculture and the MPSE of the country's natural and physical resources in Assets: 4 Budget: JSI 1.O technology which could improverespectively. 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 reducingTo develop new repayment models which will link efficiency.repayment to the ability to pay; thus enabling full costrecovery. 5. Archaic laws, Acts, regulations, etc. that

hinder efficient performance.To increase the housing stock by establishing anappropriate policy framework and conditions that 6. Duplication of functions in some unitsfacifitate 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 tosystem. obtain on the spot information.

To develop procedures for dealing with environmentalmatters 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 andprojec 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, timeperspective and usefulness of National Plans.

2. Improvement in the monitoring of implementation ofplans. 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 publicationspublishednonvtime. TBD +10% +10% +10% +10% +10%

5. Improvement in the quality and usefulness ofresearch papers published. TBD + 10% +10% +10% + 10% +10%

Cost-effectivenessu. 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 DepartmentMinistry of Finance and Planning

Performance Dimension Baseline (1994-95) Year 1 Year 2 Year 3 Year 4 Yer 5Abalute Target/ Absolute Tatgetl Absolte TargelW Absolute TargeU Absoutet TafgCt% Change Relative to % Change Relative to % Ctooge Relative % Chaage Relative to % Cba*4ge Retaive toPrevious year Previous year to Previous year Previous year Previous ytat

Service QuantityI. 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 quality1. 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-effectivenessI. 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 aswell as depatnmental resources. The department would attempt to exceed the target through greater effectiveness in enforcement and improved productivity.


Office of TitlesMinistry of Enviromnent and Housing

Service Onantity1. 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 Ouulitv1. 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-effectiveness1. 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 DepartmentMinistry of Environment and Housing

Perfbmance Dimension Baseline (1994-95) Year 1 Year 2 Year 3 Ye 4 Year 5Abso.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 veerService Quantity1. 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 Ouality1. 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-effectiveness1. 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 DepartmentMinstry of Environment and Housing

|~~~~~~~~~~~~~s %4bag ui; 05 % it:0 10e4* :f tb u c4t. k*w 1

Service Ouanzitv1. 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 lualitv1. Average turnaud time for certify'ing plans. 16 weeks 14 weeks 12 weeks 10 weeks 9 weeks 8 weeks2. 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 days3. 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 miinutes4. Avenage respnaetime toqueriesafromciient. TBD + 10% +20% +20% +20% +20%5. Cliet perception as reflected in annual rurveys.

Cogs- effec ti v en sts1. 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%111111111~~~~~~~~~~~~~~~ . ...................... .. .... ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.

Jamaica Puhlic Sector Modernization Project: SAR: 7/96: Annex 3 - Perornnance Indicators for Targeted Executive Agencies and Ministries

Jamaica Information ServiceOffice of the Prime Minister

Performance Dimension Baseline (1994-95) Year I Year 2 Year 3 Year 4 Year 5Absolute 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 yearService Ouantity1. 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 slotsproduced each year. TBD + 10% +20% +20% +20% +20%

Service Quality1. Quality of releases, features, photographs, radio and

television programs, booklets and advertising slots asreflected in client surveys. TBD + 10% + 10% + 10% +10% + 10%

2. Collections from sales of publications and audio andvideo tapes through improved quality, customer serviceand marketing. TBD +10% +20% +20% +20% +20%

Cost-effectiveness1. 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

JAMPRESSOffice of the Prime Minister

}:''''-'- ~ ~ ~ ~ .... .....:' ,. . .........- .. -...... .. . .. 2:: :: R :: : : .... ... .... .m. ......~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. .. . ...

Service Ouantity1. 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 OualityI. 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-effectiveness1. 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 DepartmentMinistry of Health

Nor . Baseli. (1.:4--) Ye: 1Y2 Year 3 - r : 4 -- .Y. 5: : ~~~~.: .::.-::::::.:.. :.:::.::..Ab. ........ :Y AJAbsanaae- 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 Ouantitv1. 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 Ouslity1. 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.

ExpditedKingston/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 andlate 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'sparticulars 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 authenticatedcopies of recorded documents. 15 wd. -10% -20% -20% -10% -5%

7. Average time required for user inquiry to besatisfactorily 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 5A 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-effectivenessI. 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 CompanesMinistry 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 Ouantity1. Reduce the ratio of applications for registration of

Companies, Trademarks, Patents, Designs andBusiness Names pending at the end of the fial yearto the total number of application b/f nd newapplications 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 Oulit1. 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-effectiveness1. 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 GeneralMinistry of National Security and Justice

% Cbangetclivo - ;has~eR . S C-tngeatie - -a ... .... ......... c..... -.- . C. a-:.; , ......................................... ---. . .................... I. . .......... ....

,,', .'.',,'. yr..... t., .Paeia .,,., t,,,, ,rviu r ,

Service OuantitvI . 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 Ouality1. 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 legallycompetent at time of LA. 7 years -15% -75% -60% -50% -20%

3. Avenge account statement turnaround time followingreques 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-effectiveness1. 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 5Absolute 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 Ouantity1. Total trainee days 20,000 days 20,000 22,000 23,000 24,000 25,000

Service Qualit1. 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-effectiveneasCost 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 weightedaverage 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 poorand the elderly.

TBD +10% +10% +10% +10% +I0%

1. snproveie in quliy, tinmeliness and effectivenessotfpoliciefornmlatedand inplemesstd. TBD +10% +10% +10X +10% +10%

2. Jmprovemcnst in capability to monitor policyimplesnessation. TBD +10% +10% +10% +10% +10%

3. Number of projects completed on time anmd withinbudget. TED +10% +10% +10% +10X +10%

4. Improvesnest in corprte functions, especially,planning, budgeting, accounting, internal audit andpersonnel managesnent. TED +10% +10% +10% +10% +10%

5. Improvesmest in the technical quality and durabilityof construction and mainteance works executed bythceministry. TED +10% +10% +10% +10% +10%

6. Increase in the quality of community amenityservices as indicated bycdient surveys. TED +10% +10% +10% +10% +10%

7. Increase in the quality of social security andcommnunity 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 5Abdlute TargetI Absaolute Target/ Absolute TargW Absolute Target! Abslte TUrget

Cble Relative % Change Relative % Change Relative % Chbnge Rdative % Char4ge Rdwtve tOto Previwo yar to Previous yeat to PreVious year t Pevsous year Previous year

Cost-effectiveness1. Administrative costs per unit of each nmajor output. TBD. -10% -10% -10% -10% -10%

2. Reduction in cost over-runs of mnajor constructionand mnaintenance projects. TBD. -10% -10% -10% -10% -10%

;2


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 Quality1. hnprovement in qualily. timeliness and effectiveness

of policdes formulated and implemented. TBD + 10% + 10% + 10% + 10% + 10%

2. Improvement in capability to monitor policyimplementation. TBD + 10% + 10% + 10% + 10% + 10%

3. Number of housing projects compleaed on time andwitbin budgdt. TBD + 10% + 10% + 10% + 10% + 10%

4. Improvemnent in corporate functions, especially.planning, budgeting, accounting, internal audit andpersonnd management. TBD + 10% + 10% + 10% + 10% + 10%

5. Improvement in the effectiveness of conaervation ofnatural reaoucea and environmental protectionmeasures. TEID +10% +10% +10% +10% +10%

6. lmprovement in land use and management. TBD + 10% + 10% + 10% + 10% + 10%

Coat-effectivenaeu1. 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 ServicesIdentified for Privatization/Contracting Out

No. iityfSv :-- L- i io ~ - u ix4 ic y on - : - ::::::

_ ~~~~~~~~~~~~~~~~.:.. ... . ',- ,- ":'. " -'.''-" "..,, ''.'"-'''''''..:

1. Animal Pounds Islandwide Holding of Stray Animals No2. Armory Houses Port Royal Tourist Attraction - monument No3. Bamboo Gardens St. Ann Tourist Attraction No4. Barracks Building Spanish Town Tourist Attraction - monument No5. Bath Botanical Gardens St. Thomas Tourist Attraction No6. Castleton Gardens St. Andrew Tourist Attraction No7. Cemeteries Islandwide Burial No8. Old Court House Spanish Town Tourist Attraction - monument No9. Fern Gully St. Ann Tourist Attraction No10. Food Stamp Program Islandwide Welfare Service for the Destitute No11. Food Storage Infestation Airports Quarantine of Food Exports Yes12. Garrison Building Spanish Town Tourist Attraction - monument No13. Holland Bamboo St. Elizabeth Tourist Attraction No14. Hope Garden and Zoo St. Andrew Recreational Facility No15. Long Lane Gardens St. Andrew Tourist Attraction No16. M. P. Children's Home St. Andrew Children Welfare Service No17. Minard Great House St. Ann Tourist Attraction - monument No18. National Parks Islandwide Recreational and Cultural Facility No19. National Stadium St. Andrew Sports and Cultural Facility No20. Old Kings House Spanish Town Tourist Attraction - monument No21. Prison Medical Services Islandwide Prison Health Service No22. Public Sanitary Islandwide Sanitation No

Convenience23. Road Traffic Safety Islandwide Parking Meters, traffic signals, No

Management towing etc..24. Seville Property St. Catherine Historical Monument No25. Specialized Professional Office of the Training and Employee Welfare No

Services in HRD Prime Minister26. 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 GrandCon. Trg. Goods Total

oMP, FP, FD 54.0 146.0 200.0nplemm moderBlatoss pln_ake legal an administrative changes 1.4 3.7 3.0

l oment hder internai conirols 5.4 14.6 20.0leanest new organizational structure 6.8 18.3 25.0

Refwbish Offices 0.0 0.0 0.0tch slls of current staff with required skills 1.4 3.7 5.0et redundant staff 1.4 3.7 5.0R 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 5.0klesent new perfornance evaluation system 1.4 3.7 5.0

e changes in PMIS 1.4 3.7 5.0Mchanes in HRMIS 1.4 3.7 5.0

Dsin And develop other MIS 2.7 7.3 10.0i•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 Campaignstaff 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


Mnof Public Entities (EAs) Jamaica Customs DepartnentLC 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 20.0dages 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 204.0Adre 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


lodernization of Public Entities (EAs): Office of TitlesActvity 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.


Modernization of Public Entities (EAs): Town Planning DepartmentActivity 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:




Modernization of Public Entities (EAs): Surveys DepartmentActivity LC FC Total Total LG FG Total C Grand


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


ecruit new staff with requird skills 1.4 3.7 5.0 _


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:


MP: Modernization Plan; FP: Financing Plan; ED: Framework Document.

eo


Modernization of Public Entities (EAs): Jamaica Information ServiceActivity LC FC Total Total LG FG Total CW GrLand


Prepare MP, FP, FD 54.0 146.0 200.0 _l

Implement modenization palnMake 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 _


ecruit new staff with required skills 1.4 3.7 5.0



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.



Modernization of Public Entities (EAs): JAMIPRESS _Activity LC FC Total Total LG FG Total CW Grand

Con. Trg. Goods TotalPrepare__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



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 ResourcesTransportation 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.


000


Modemnization of Public Entities (EAs): Registrar General's DepartmentAcivty 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


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.



Modernization of Public Entities (EAs): Registrar of CompanieLC FC Total Total LG FG Total CW Grand

Con. T Goods Total

ArePare 1', FIP, FID_ 54.0 146.0 200.0Imltetmodernization 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 0.0staWsh customer service units 0.8 2.2 3.0 _ _

I. remuneration, incentrive system, career paths 1.6 4.4 6.0lenent 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 30.0ign and develop OIS 12.2 32.9 45.0

Hocue Hardware and off-the-shelf Software 0.0 0.0 0.0 200.0 200.0are manals 4.1 11.0 15.0 _ =Ileanet re-ergmeered business processes 20.3 54.8 75.0 _ ____

blic Relatios Campaignam staff 225.0sire Physical Resourcesr goods 50.0 50. 0Wiri 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


Modmnization of Public Entities (EAs): Administrator GeneralLC FC Total Tota LG FG Total CW Grand


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 50.0Retrbish Offices 0.0 0.0 0.0 15.0 15.0atch skills of crrmnt staff with required skills 1.4 3.7 5.0RdI~3)I redundant staff 1.4 3.7 5.0_

new gaff with required skills 1.4 3.7 5.0ove 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 10.0chdnges 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 50.0namnla 2.7 7.3 10.0

blenen r g d business processes 9.5 25.6 35.0blic Relations Campaign

*staff 65.0eqliePhydRcaloRes_7

rransportation 7. 35.0 375.0er 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


Modernization of Public Entities (EAs): MINDActiviy LC FC Total Total LG FG Total CW Grand


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.


Modernization of Public Entities (EAs): JAMIPRO and Construction Division, MLGWActivity 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


Modernization of Public Entities (Ministries): Ministry of Local Government and WorksAxtivity 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.

so0%


Modernization of Public Entities (Ninistries): Minist of E;nvironment and HousingActivity 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


Modernization of Public Entities (Ministries): One Additional Ministry To Be IdentifiedActivity LC FC Total Total |LG FG Total CW Grand


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


*vatization 3 I I _ I __

divity LC FC Total Total LG FG Total L-IC F-IC Total CW Grin

_______________________________________ __ _Con. T . Goods IC TotalPIkt as mao/Cornmercklization

the Wuler Sectortudy, 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 50ubhtast 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


Government Procurement, Contracting, Internal Control and Audit _ -

ctivity LC FC Total Total LG FG Total CW GrandCon. 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 GeneralConsultants 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.


0


IS/HRMISAtivity LC FC Total Total LG FG Total CW Grand

Con. T Goods __Totalis

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 = 2000.0200.0 600.0 800.0 100.0 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


oject limplementation, Communication Campaign and Development of Stage 11 of PSMLC FC Total Tota LG FG Total L-IC F-IC Total C Grand

Con. T . _ Goods IC _ Total

led htplutnentationDit 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


Year 1 Year 2ID Task Name Duration Start Finish Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 351 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-

=

o0

0.

I-~~~~~~~~~~~~~~~~~~~~~~~~~~LC

LU~~~~~~~~U'-I~~~~~~~~~~~~~~~~~~~~~~~~~~~~LU

0~~~~~~~~~~~~~~~~~~~~~~~~L0

LL~~~~~~~~~~~~~~~~~~~~~~~~I

U E~~~~~~~~~~~~~~U

U~~~~~~~~~~~~~u-I IC - -E '

j Ow ~~~~~~~~~~~~~~~~~~~~~~~~~U~0 C

Os " a co co -J d0 a ~ U~ a C * I - I

Ur c~~~~~~~~~~~~~~~~~~~~~~~~

CL~~~~~~~~~~~

z~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Co~~~~~~~~~~~~~~~~~~~~~~z~~~~~~~~~~~~~~~

'ii~~~~~~~~~~~~~~~~~~~~~~~~~t

L6~~~~~~~~~~~~~~C... m W~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~c

ANNEX 6 6


Year 1 Year 2

ID Task Name Duration Start Finish Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3126 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


YearlI Year 2ID Task Nane Duration Start Finish Qtr I Qtr 2 Qtr 3 Qtr 4 Qtr | Qtr2 Qtr3176 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


Year 1 Year 2ID 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 CETO THIS COCMUNICATIO SCOULO E ACONESMO TO ThE DIRECTOR CEIEPRAILP.C. ICEGo PCi NCTC Tdim PLAI JAM JA

C Oca' BoukwVa Fod (0) 67-NEVhm 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 7103

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 " ~~~~109ANNEX 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} 'GenesDireSor Gncral

ANNEX 8"I

CABliN!cT OFr ICE_I DEVON ROAD'.

P.O. BOX 272.

s,.__________ KINGSTON 6. JAMAICA

March 5,1996

Mr Jit GillThe Wqrld Bank1818 H. StreetWashington, D.C. 20433United 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 modemizingand 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 proposedautonomy includes jurisdic;icn of ,he financial and human resource management They will be headed by a ChiefExecutive Officer, serving under contract, whose autonomy will be balanced by requests for strict accountability inaccordance 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 modemizatonstrategy.

The Jamaican Constitution, the F;.-ancial Administration and Audit Act. Staff Orders and Public Service Regulabonsallow for flexibility through administrative fiats. As an initial step in establishing "Executive Agencies," the GovemorGeneral 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 beintroduced to facilitate the creation of new "Executive Agencies."

Other major considerations include the strengthening of the internal audit mechanism and extending the FinancialManagement Information System (FMIS) to the selected agencies. A management team resident within therespectve agencies will work closely with the Project Coordinating Unit, to plan, monitor and evaluate the progressof implem4ntation. The Interministerial Committee on Administrative Reform will oversee the entire process, directedby the Cabinet Secretary.

Yours sincer ly, d ,

Carlton E. DavisCabinet 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 ofLancaster 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 financial4

'SkrrING UP NI.XT S11YS ibid page 9

'THL- CIVIL SERVTCE CrTwrIUrrY AN) CWANGJE White Paper prewnted to Parliamentby the Primen Minister, thc Chancellor of the Exchequer and the Chancellor of the Duchy ofLancaster 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 tradingfun.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 PrimeMiListcr, the Chancellor of the Exchequer and the Chancellor of the Duchy of Lancaster July1994 Cm 2726 HMSO

"Ibid para 1406

"Next Stcps Review 1994 presented to Parliament by the ChaLncelor of the Duchy ofLancastcr 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 OxfordUniversity 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 callsVtc westmninster system' bears little rclation tn its namesake. With no effective localgovcrrunent and rtot much of a civil service cither. members of parliament are responsible foreverything from disaster relief to road-building.' (Author's note: This view was not illustratedbut 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 incrcasein the cxternal auditing of thc se agencies This auditing has to go beyond financial auditing inorder to ensure that thc objcctive of producing better se.vice to the public is achieved and hasincluded quality auditing, analysc5 of manage ment overheads across different agencies, processindicators 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.

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Report No: 15388 JMType: SAR