World Bank Document · PWA Palestine Water Authority ... mitigate the deterioration of service delivery to the Palestinian population in the parts of ... activities/contracts using

Document of

The World Bank

Report No: ICR2033

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(TF-057315)

ON A

GRANT

IN THE AMOUNT OF GBP 43.98 MILLION (US$88.04 MILLION EQUIVALENT)

TO THE

PALESTINE LIBERATION ORGANIZATION

(FOR THE BENEFIT OF THE PALESTINIAN AUTHORITY)

FOR THE

EMERGENCY SERVICES SUPPORT PROJECT

MULTI-DONOR TRUST FUND (ESSP MDTF)

December 27, 2011

Human Development Sector

MNCO4

Middle East and North Africa Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective December 5, 2011)

Currency Unit = New Israeli Shekel (NIS)

US$1.00 = NIS3.73 = JOD 0.71

GBP1.00 = NIS5.85 = JOD1.11

NIS1.00 = US$0.27 = GBP0.17 = JOD0.19

FISCAL YEAR

January 1 - December 31

ABBREVIATIONS AND ACRONYMS

AA Administration Agreement

CMU Country Management Unit

CMWU Costal Municipalities Water Utility

EC European Commission

ESSP Emergency Services Support Project

ESSP MDTF Emergency Services Support Project – Multi-Donor Trust Fund

FM Financial Management

FMR Financial Management Report

IBRD International Bank for Reconstruction and Development

IBTF Initiating Brief for Trust Fund

ICB International Competitive Bidding

IDA International Development Association

IERC Interim Emergency Relief Contribution

INT World Bank Integrity Vice Presidency

ISN Interim Strategy Note

ISR Implementation Status Report

LCS Least Cost Based Selection

M&E Monitoring and Evaluation

MDTF Multi-Donor Trust Fund

MENA Middle East and North Africa

MOE Ministry of Education

MOEHE Ministry of Education and Higher Education

MOF Ministry of Finance

MOH Ministry of Health

MOSA Ministry of Social Affairs

NGO Non-governmental Organization

OM Operations Manual

OPCS Operational and Policy Services

PA Palestinian Authority

PCU Project Coordination Unit

PEGASE Mécanisme Palestino-Européen de Gestion de l'Aide Socio-Economique

PENRA Palestine Energy & National Resources Authority

PLO Palestine Liberation Organization

PM Project Management

PO President‘s Office

PWA Palestine Water Authority

QAG Quality Assurance Group

RFP Request for Proposal

SA Special Account

SOE Statement of Expenditure

SSNRP Social Safety Net Reform Project

TACT Trust Funds Accounting Clearance Team

TF Trust Fund

TFC Trust Fund Coordinator

TFGA Trust Fund Grant Agreement

TFO Trust Funds Operations Department

TIM Temporary International Mechanism

TOR Terms of Reference

UNRWA United Nations Relief and Works Agency for Palestine Refugees in the

Near East

US Utility Sectors

WBG West Bank and Gaza

WHO World Health Organization

Vice President: Inger Andersen

Country Director: Mariam J. Sherman

Sector Director: Steen Lau Jorgensen

Sector Manager: Roberta Gatti

Project Team Leader: Samira Ahmed Hillis

ICR Team Leader: Samira Ahmed Hillis

WEST BANK AND GAZA

EMERGENCY SERVICES SUPPORT PROJECT

MULTI-DONOR TRUST FUND

CONTENTS

Data Sheet

A. Basic Information

B. Key Dates

C. Ratings Summary

D. Sector and Theme Codes

E. Bank Staff

F. Results Framework Analysis

G. Ratings of Project Performance in ISRs

H. Restructuring

I. Disbursement Graph

1. Project Context, Development Objectives and Design ............................................... 1

2. Key Factors Affecting Implementation and Outcomes .............................................. 5

3. Assessment of Outcomes .......................................................................................... 13

4. Assessment of Risk to Development Outcome ......................................................... 18

5. Assessment of Bank and Borrower Performance ..................................................... 19

6. Lessons Learned ....................................................................................................... 22

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 23

Annex 1. Project Costs and Financing .......................................................................... 25

Annex 2. Outputs by Component ................................................................................. 29

Annex 3. Economic and Financial Analysis ................................................................. 42

Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 43

Annex 5. Beneficiary Survey Results ........................................................................... 46

Annex 6. Stakeholder Workshop Report and Results ................................................... 47

Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 48

Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 67

Annex 9. List of Supporting Documents ...................................................................... 68

Annex 10. Contribution of Donors to the ESSP MDTF ............................................... 69

Annex 11. Context at Appraisal .................................................................................... 72

Annex 12. Detailed Program/Project Description ........................................................ 77

Annex 13. Other Significant Changes .......................................................................... 80

Annex 14. Safeguards and Fiduciary Compliance ........................................................ 83

MAP

PROJECT DATA SHEET

A. Basic Information

Country: West Bank and Gaza Project Name:

Emergency Services

Support Project Multi-

Donor Trust Fund

Project ID: P104993 L/C/TF Number(s): TF-57315

ICR Date: 12/05/2011 ICR Type: Core ICR

Lending Instrument: SIM Grantee: PALESTINIAN

AUTHORITY

Original Total

Commitment: USD 65.44M Disbursed Amount: USD 81.32M

Revised Amount: USD 65.39M

Environmental Category: C

Implementing Agencies:

Ministry of Finance

Ministry of Social Affairs

Ministry of Education and Higher Education

Ministry of Health

Public Utilities (CMWU, PWA, and PEA)

Cofinanciers and Other External Partners: Department for International Development UK (DFID) Italy Ministry of Foreign Affairs Norway Ministry of Foreign Affairs Belgium

Switzerland

Spain France Swedish International Development Agency (SIDA) European Commission (EC) Australian Agency for International Development (AusAID) Austrian Development Agency

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: Effectiveness: 09/18/2006 09/18/2006

Appraisal: Restructuring(s):

Approval: 09/18/2006 Mid-term Review:

Closing: 06/30/2008 06/30/2011

C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Satisfactory

Risk to Development Outcome: Substantial

Bank Performance: Satisfactory

Grantee Performance: Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing

Agency/Agencies: Satisfactory

Overall Bank

Performance: Satisfactory

Overall Borrower

Performance: Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation

Performance Indicators

QAG Assessments

(if any) Rating

Potential Problem Project

at any time (Yes/No): No

Quality at Entry

(QEA): Moderately Satisfactory

Problem Project at any

time (Yes/No): No

Quality of

Supervision (QSA): None

DO rating before

Closing/Inactive status: Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

General education sector 20 36

Health 40 52

Other social services 30 2

Power 5 5

Water supply 5 5

Theme Code (as % of total Bank financing)

Conflict prevention and post-conflict reconstruction 67 20

Other human development 33 80

E. Bank Staff

Positions At ICR At Approval

Vice President: Inger Andersen Daniela Gressani

Country Director: Mariam J. Sherman A. David Craig

Sector Manager: Roberta V. Gatti David J. Steel

Project Team Leader: Samira Ahmed Hillis Sima W. Kanaan

ICR Team Leader: Samira Ahmed Hillis

ICR Primary Author: Paul Geli

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document)

According to the Trust Fund Grant Agreement, the objective of the Project was to

mitigate the deterioration of service delivery to the Palestinian population in the parts of

the West Bank and Gaza under the jurisdiction of the Palestinian Authority.

Revised Project Development Objectives (as approved by original approving authority)

The PDO has not been revised.

(a) PDO Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised

Target

Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 : Education, health and social service facilities operate at the same or higher levels

than baselines

Value

quantitative or

Qualitative)

Same as for the

intermediate outcome

indicators.

Schools operating: 1,615

Hospital occupancy:

overall 76%

MOSA training centers:

13 with 1,300 students

Same as for the

intermediate

outcome indicators

- same or higher

value than baseline

values

NA

Same as for the

intermediate

outcome indicators.

Schools operating:

1,155

Hospital

occupancy: overall

78%

MOSA training

centers: 13 with

1,600 students

Date achieved 09/30/2007 06/30/2008 06/30/2011

Comments

(incl. %

achievement)

Targets met. Facilities continued to operate at about the same level as the 2007

baselines for education, health and social services. Note: in baseline, there was a

mistake in the # of public primary school as of Sept 2007; the actual # was 972,

not 1,615.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 : Number of public primary schools operating and number of students attending

those schools, per school, compared to a baseline from end September 2007.

Value

(quantitative

or Qualitative)

No. of schools: 972

No. of students per

school: 400

Same or higher

values than

baseline values

NA

No. of schools:

1,155

No. of students per

school: 542

Date achieved 09/30/2007 06/30/2008 06/30/2011

Comments

(incl. %

achievement)

Targets met. Actual numbers are 19% higher than baselines for the # of schools

operating and 36% higher than baselines for the # of students per school.

Indicator 2 : Number of professors and students in the 9 universities supported by the project.

Value

(quantitative

or Qualitative)

Number of academic

staff: 3,209

Number of students:

123,429

Same or higher

values than

baseline values

NA

No. of academic

staff: 3,209

Number of

students: 132,750

Date achieved 06/30/2010 06/30/2011 06/30/2011

Comments

(incl. %

achievement)

Targets met.

Indicator 3 : Utilization rates (overall, gynecology and outpatients) in the Shefa and Rafedia

hospitals, compared to a baseline of end-September 2007

Value

(quantitative

or Qualitative)

Overall occupancy:

Shefa: 76%

Rafedia: 67%

Gynecology occupancy:

Shefa: 78%

Rafedia: 95%

Outpatients (Nos):

Shefa: 12,683

Rafedia: 3,243

Same or higher

values than

baseline values

NA

Overall occupancy:

Shefa: 70%

Rafedia: 87.2%

Gynecology

occupancy:

Shefa: 91%

Rafedia: 102.5%

Outpatients (Nos):

Shefa: 17,775

Rafedia: 10,782

Date achieved 09/30/2007 06/30/2008 06/30/2011

Comments

(incl. %

achievement)

Targets met. With the exception of the overall occupancy for the Shefa hospital,

actual values exceed baseline values. Particularly noteworthy is the sharp

increase in numbers of outpatients (40% for Shefa & 232% for Rafedia)

Indicator 4 :

Number of facilities (training centers, youth centers and disabled rehabilitation

centers) that are able to operate normally, compared to a baseline of mid-

November 2007.

Value

(quantitative

or Qualitative)

13 training centers with

1300 students

3 youth centers benefiting

125 youths

7 disabled rehabilitation

centers benefiting 800

disabled people

Same or higher

values than

baseline values

NA

13 training centers

with 1600 students

8 youth

rehabilitation

centers benefiting

413 youths

7 disabled

rehabilitation

centers benefiting

850 disabled people

Date achieved 11/15/2007 06/30/2008 06/30/2011

Comments

(incl. %

achievement)

Targets met. There has been some increase in the number of beneficiaries of

social services

G. Ratings of Project Performance in ISRs

No. Date ISR

Archived DO IP

Actual

Disbursements

(USD millions)

1 06/26/2008 Satisfactory Satisfactory 57.11







H. Restructuring (if any)

Restructuring

Date(s)

Board

Approved

PDO Change

ISR Ratings at

Restructuring

Amount

Disbursed at

Restructuring

in USD

millions

Reason for Restructuring &

Key Changes Made DO IP

06/24/2010 N S S 80.85

The reason behind the

restructuring request was to

extend the closing date from

June 30, 2010 to June 30, 2011.

This was the second request for

closing date extension and

required RVP approval, since

cumulative extension was over

2 years. The reason for the

second extension was to allow

Restructuring

Date(s)

Board

Approved

PDO Change

ISR Ratings at

Restructuring

Amount

Disbursed at

Restructuring

in USD

millions

Reason for Restructuring &

Key Changes Made DO IP

the completion of ongoing

activities/contracts using the

remaining undisbursed balance

and to assimilate the EU's

commitment of Euro 10 million

to the ESSP MDTF.

I. Disbursement Profile

1

1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

Country and Sector Background

1.1.1 In early 2006, Israel made the decision to suspend the transfer of clearance revenues

that it collected on behalf of the Palestinian Authority (PA). This led to a severe fiscal

crisis that undermined public institutions and the delivery of essential public services by

the PA. Monthly revenues and external financing fell from US$135 million in 2005 to

roughly US$30 million; the PA had full control over only US$15-20 million per month.

The economic and social implications of the crisis were evident in deteriorating

performance in the social sectors – including health, education, and social services.

Insufficient domestic revenues squeezed operating budgets, leaving limited resources for

these services, and resulted in disruptions and declines in service provision.

Donor Response to the Emergency and the Initiating Brief for Trust Fund (IBTF)

1.1.2 In 2006, the European Commission (EC) proposed a Temporary International

Mechanism (TIM) for providing direct delivery of assistance to the Palestinian

population. The World Bank and other donors launched the Emergency Services Support

Project – Multi-Donor Trust Fund (ESSP MDTF) as a window of the TIM financed by a

donor trust fund (TF) and administered by the International Development Association

(IDA). The ESSP MDTF would finance non-salary recurrent expenditures of the PA‘s

social sector ministries (Ministry of Health (MOH), Ministry of Education and Higher

Education (MOEHE), and the Ministry of Social Affairs (MOSA)) based on the PA‘s

expenditure programs for these ministries, and the non-salary recurrent costs of other PA

entities.

1.1.3 The Initiating Brief for Trust Fund (IBTF) was approved on July 31, 2006 and,

following the signing of the Administration Agreements (AA) between IDA and some

donors, the Trust Fund Grant Agreement (TFGA) for GBP 24.34 million was signed

between the Palestine Liberation Organization (PLO) and IDA on September 18, 2006.

With additional contributions from donors, the Grant was increased four times

(December 2006, December 2007, March 2008 and April 2009) to a total of GBP 43.98

million (US$88.04 million equivalent).

1.1.4 The EC and ten individual countries (Australia, Austria, Belgium, France, Italy,

Norway, Spain, Sweden, Switzerland and the United Kingdom) financed the ESSP

MDTF1. In the following table, donor contributions in their own currencies have been

1 More detailed information on the contributions of the eleven donors that financed the ESSP MDTF is

included in Annex 10.

2

converted into US Dollars equivalent based on the exchange rates on the dates their

contributions were received by the Bank. Donor contributions were as follows:

Donor Currency and amounts US$ equivalent

(million)

European Commission Euro 20,000,000 27.44

Spain Euro 15,000,000 19.50

United Kingdom Pounds Sterling 6,000,000 11.38

Sweden Swedish Krona 45,000,000 6.53

Switzerland US Dollar 4,300,000 4.30

France Euro 3,000,000 3.98

Australia Australian Dollar 4,000,000 3.60

Norway Norwegian Kroner 21,696,711 3.53

Belgium Euro 2,500,000 3.28

Italy Euro 2,277,000 3.24

Austria Euro 1,000,000 1.26

Total 88.04

Rationale for Bank Assistance

1.1.5 The PA‘s emergency program in social services was launched with the help of the

World Bank in 2002 through the ESSP with the aim to provide a means of rapidly

channeling donor funds to priority social services in a coordinated manner. ESSP I and II

were instrumental in sustaining the PA‘s social service delivery system. In response to

PA and donor requests, the Bank agreed to administer the ESSP MDTF for provision of

donor financing to sustain the delivery of basic services. In January 2008, the Bank

approved and financed a third ESSP (ESSP III) that is closely linked to the Bank-

administered ESSP MDTF. These two operations have the common objective of helping

to mitigate the deterioration in the provision of essential public services in education,

health and social services. Both projects also have the same components and fiduciary

requirements. The main difference is the funding source. The ESSP MDTF is a Bank-

administered TF financed by eleven donors. Within the Bank, the ESSP MDTF was

processed under TF arrangements.

1.1.6 Detailed information on the context at appraisal is included in Annex 11.

1.2 Original Project Development Objectives (PDO) and Key Indicators

1.2.1 There are three slightly different wordings for the project development objectives

(PDO), but the substance is the same because all three wordings include mitigating the

deterioration of service delivery to the Palestinian population under the PA. For the

purpose of assessing project outcomes, the Implementation Completion and Results

(ICR) Report will use the wording included in the TFGA. According to the TFGA

(TF057315), the objective of the Project was to mitigate the deterioration of service

delivery to the Palestinian population in the parts of the West Bank and Gaza (WBG)

3

under the jurisdiction of the PA. In the IBTF, the PDO is summarized as follows: ―The

development objective of the Emergency Services Support Project is to mitigate the

deterioration of service delivery brought about by the inability of the Palestinian

Authority to meet its non-salary recurrent costs‖. In the Program Document (Technical

Annex), the PDO is defined as follows: ―The Project‘s objective is to mitigate the

deterioration of basic services brought about by the inability of the Palestinian Authority

to meet its budget requirements by providing financing for non-salary operating

expenditures in key social and service delivery sectors‖.

1.2.2 The TFGA states that the PA shall monitor and evaluate the progress of the project

and prepare quarterly project reports on the basis of the indicators agreed with the World

Bank, but it does not indicate what those indicators are. The Program Document

(Technical Annex) does not discuss monitoring and evaluation (M&E) and does not list

any key performance indicators. The ESSP Operations Manual is also silent on M&E and

indicators. However, the IBTF included a list of key performance indicators. As

mentioned in Section 2.3 on M&E, the indicators selected for the ESSP III were

monitored also for the ESSP MDTF.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators,

and reasons/justification

1.3.1 The PDO was not revised.

1.4 Main Beneficiaries

1.4.1 The Program Document (Technical Annex) and the ESSP Operations Manual do

not include a discussion of the Project‘s main beneficiaries. However, it is clear from the

PDO and the implementing entities to be supported under the ESSP MDTF that the whole

Palestinian population in both the West Bank and Gaza would benefit from the Project.

The distribution of benefits between the West Bank and Gaza would vary over time

depending on the estimates of the financial needs of the relevant ministries and other

implementing entities and the allocations of the proceeds of the trust fund grant.

1.5 Original Components

1.5.1 The Project had two components: (1) Financing non-salary recurrent expenditures

and other expenditures; and (2) Project management and monitoring.

Component 1: Financing Non-Salary Recurrent Expenditures2 and Other Expenditures

Part A. Education Services, covering (i) the recurrent expenditures of MOEHE, (ii) the

costs of general examinations, (iii) support for schools and vocational training centers,

2 Non-salary recurrent expenditures include (a) rent payments; (b) transportation costs, including fuel,

vehicle maintenance, licensing and insurance; (c) water and electricity; (d) communications, including

telephones and mail; (e) consumables; (f) maintenance of equipment and buildings; (g) fuel for heating and

generators; and (h) office supplies.

4

(iv) support to higher education institutions, and (v) minor rehabilitation of school

buildings.

Part B. Health Services, covering (i) non-medical recurrent expenditures, (ii) the

provision of essential drugs, supplies and medical consumables, (iii) treatment in

private/non-governmental clinics, (iv) nutrition supplements, and (v) hospital food and

cleaning contracts.

Part C. Social Welfare Services, covering the recurrent operating expenditures of the

MOSA and its shelters, rehabilitation and training centers, and support to the centers,

including the provision of tools, equipment and materials as well as food.

Part D. Recurrent Expenditures in Other Key Sectors. Support to selected ministries and

institutions for sustaining basic water, sanitation and electricity services.

Component 2 – Project Management and Monitoring

Part E. Support to the President‘s Office (PO) of the PA to strengthen its implementation

capacity for project management (PM). This component would finance the costs of

consultancies, technical assistance, essential equipment and external financial and

physical spot audits, as well as management operating costs.

1.5.2 A detailed project description is included in Annex 12.

1.6 Revised Components

1.6.1 The components were not revised.

1.7 Other significant changes

1.7.1 Information on other significant changes3 (extensions of closing date, amendments

of TFGA and new allocations of Grant proceeds) is included in Annex 13. The main

points are as follows:

a) The closing date was extended twice for a total of three years, mainly to fully

disburse the additional donor contributions. Also, the PA was keen on ensuring

that the ESSP MDTF would remain open due to its prominent role in the

management of the PA‘s emergency response.

b) The TFGA was amended five times, once to reflect a change in implementation

responsibility, and four times to reflect increased budget based on additional

donor contributions.

c) There were five new allocations of the proceeds of the Grant to accommodate the

increases in donor contributions. More importantly, in order to speed up

disbursements, the allocations of the new donor contributions were towards fast

3 Only the second extension of closing date on June 30, 2010 was processed in accordance with the

restructuring guidelines. For earlier changes, the restructuring guidelines did not apply to trust funds.

5

disbursing items, such as incremental operating costs and higher education

salaries that do not require lengthy procurement procedures.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

2.1.1 The PA and a number of donors had asked the Bank to establish a mechanism for

providing financial assistance to the Palestinians, particularly in the areas of health,

education and social assistance. The Bank proposed to use the ESSP model which had

been successful; since it did not include any conditionality and reform requirements, it

proved to be an efficient and effective vehicle for responding to emergency and crisis

situations. In collaboration with the PA and donors, the Bank worked on the modalities

and structure of a TF to channel donor funds to the Project. The Bank-administered ESSP

MDTF would be one of the main instruments to finance the PA‘s social sector emergency

program. It complemented other Bank operations financed through the Trust Fund for

Gaza and West Bank (TFGWB), such as the Bank‘s Social Safety Net Reform Project

(SSNRP).

Assessment of Project Design

2.1.2 A review of ESSP I and II conducted by the Bank in late 2004 had concluded that

the projects‘ performance was satisfactory since they were achieving their objectives.

Stakeholders also confirmed that ESSP financing was critical for maintaining adequate

levels of municipal, social, health and education services. The design of the ESSP MDTF

was informed by the lessons learned from the implementation of the previous and

ongoing ESSPs. However, there were significant differences between the ESSP MDTF

and earlier ESSPs:

Financing. Early on for ESSP I and ESSP II, the Bank was the main provider of funds;

other donors contributed through a series of individual trust funds that specified the use

of resources. All funds were administered by the Bank. Under the ESSP MDTF, donors

pooled their resources in a single trust fund, the Multi-Donor Trust Fund (MDTF). The

Bank provided no resources to the Fund, but acted as Fund administrator. About one-half

of the financing was unconditional beyond the general requirement that it be spent on

non-salary budget support for social services. In five instances (Austria, EC, Italy,

Switzerland and the United Kingdom), donors have been more specific about the use of

their funds.

Coverage. Under ESSP I and II, coverage included not only non-salary recurrent

expenditures of social sector ministries, but also, selectively, non-salary expenditures of

other ministries and municipal utilities, and the printing of scientific textbooks. These

earlier ESSPs also included elements of explicit capacity building. The ESSP MDTF was

6

focused solely on non-salary recurrent expenditures4 of social sector ministries and public

utility companies.

Management structure. Previously, line ministries had managed program implementation,

supported by a Project Coordination Unit (PCU) in the Ministry of Finance (MOF). The

PCU was the first line of contact with the World Bank, and it was responsible for the

overall financial management (FM) aspects of the program. Under ESSP MDTF, an

additional management layer was introduced – the PO – which had overall program

oversight and sign-off authority on program activities.

2.1.3 An excellent Concept Note for the ESSP MDTF included a clear presentation of the

project design and implementation arrangements, covering in particular the legal

framework, eligible expenditures and supervision.

The Legal Framework

2.1.4 The ESSP MDTF would be administered by the Bank. As the fiscal crisis was

expected to persist in the medium-term, the TF‘s duration would be two years. Each

donor would enter into an AA with the Bank; the AA would include standard terms and

provisions governing the operation of the ESSP/MDTF as a whole that would be identical

for all donors. Each AA would also include the amount of the donor‘s contribution and

the donor‘s preferences for the windows (sectors) to which it should be allocated. Donor

contributions would not be conditional upon PA implementation of policy measures. For

each window, the Bank would accept donor contributions up to the annual estimated

needs for this window and thereby ensure de facto that donor contributions are not spent

on other than the donors‘ preferred window(s). The list of windows would be attached to

the AA. The Bank would send donors‘ updated attachments whenever new windows

were added.

2.1.5 The Bank would enter into one or more Grant Agreement(s) with the PA,

represented by the PO. The Grant Agreement would be for the estimated needs of the

annual recurrent expenditure program. However, the agreement would state that

disbursements to the PA would be limited to the amount actually received from the ESSP

donors for each of the windows. Additional funds would be added to the Grant as donors

make additional contributions to the ESSP MDTF.

2.1.6 Supervision responsibility for ESSP MDTF implementation would rest solely with

the Bank, which would convene a steering committee of participating donors on a

quarterly basis to discuss implementation progress and problems encountered. ESSP

MDTF donors would receive quarterly unaudited financial statements and annual audited

financial statements from the Bank, together with quarterly unaudited summaries of

donor contributions and expenditures by window. Moreover, donors would receive

quarterly financial management reports (FMRs) that would be prepared by the PO for

each window. The Bank would also submit a progress report after each supervision

4 However, as an exception to the rule, the Project financed also the salaries of contractual (not civil

servants) university professors.

7

mission. Within six months after closing, the donors would receive a final

implementation report and a final audit report of the Bank‘s TF account issued by the

Bank‘s external auditors.

2.1.7 A customized fee structure would be designed to enable the Bank to recover the full

incremental costs (staff time, benefits, travel and consultants) of administering the ESSP

MDTF on the donors‘ behalf. The fee would be paid by the donors in proportion to their

contribution to the overall TF budget.

Eligible expenditures

2.1.8 The TF would disburse against an annual PA recurrent expenditure program in

eligible sectors. This expenditure program, to be prepared by the PO in consultation with

the Bank and the implementing entities, would be based on estimates of the financial

needs of implementing entities. Initially, disbursements would be limited to non-wage

recurrent expenditures in three sectors (windows): education, health and social assistance

(the TF was, therefore, complementary to the financing provided by the EC, in particular,

to cover salary recurrent expenditures). The main expenditure categories would be goods,

services, and incremental operating costs. However, as in the past, small-scale

rehabilitation activities (works), essential equipment, and the salaries of staff of tertiary

education institutions who are not PA civil servants would also be included.

Disbursements would also cover project management costs to be incurred by the

counterpart implementation units.

2.1.9 Windows could be added at a later stage, if the Bank determined such windows

were appropriate and one or more donors committed acceptable levels of funding to these

windows. If implementation arrangements for additional windows differed from the

initial set-up, they would first be assessed for readiness for implementation. The addition

of windows would not require the approval of all the donors participating in the ESSP

MDTF.

Supervision

2.1.10 Since the Bank would be responsible for supervising the implementation of the

ESSP MDTF, the design included rigorous fiduciary and implementation procedures

acceptable to the Bank. All Bank policies and fiduciary procedures would apply. All

procurement would be in accordance with Bank Guidelines, and procurement and FM

would be supervised by Bank technical specialists. An independent firm would be

contracted to carry out quarterly spot checks to verify that the items were delivered in the

agreed quantity and quality. In addition, an annual independent audit of the Project

accounts would be carried out. The Bank would undertake periodic supervision missions

to review implementation progress and adherence to fiduciary requirements.

Furthermore, the Bank would compare past actual expenses and future estimated needs

every six months and would revise the expenditure program and allocations between the

windows as needed.

8

Government Commitment

2.1.11 The Project was developed in response to the PA‘s urgent request that the Bank

establish a mechanism for providing financial assistance to help the Palestinians deal with

the ongoing crisis. The PA, which was interested in ensuring that the social sectors

(health, education and social assistance) continue to operate, was very committed to the

Project‘s objective, and its ministries took an active part in project preparation.

Assessment of Risks

2.1.12 The Project Document (Technical Annex) included an assessment of the

Recipient‘s capacity to implement procurement, and rated the overall project risk for

procurement as ―High‖. The identified risks included limited knowledge of international

public procurement principles upon which Bank procedures and guidelines are largely

based, limited understanding of Bank procurement, and limited knowledge of the local

and international market and suppliers. These risks would be mitigated by the provision

of technical assistance under the Project. Capacity-building was provided under the

project in a number of areas, for example, through consultancies which provided

guidance in the contracting aspects of tertiary health care services provision (e.g.,

procurement, evaluations). Further, the PCU, which was familiar with Bank procedures,

was able to provide guidance and training to ministry staff in various areas of PM.

Regarding the Project‘s FM, because of the previous experience of ESSP I and II, the risk

was considered ―Moderate‖.

2.1.13 According to the ESSP IBTF, the risk associated with this TF was considerable for

several reasons: (i) poor security situation and poor enforcement of law and order; (ii)

non-payment by the PA of civil servant salaries, then in its fifth month (a massive walk

out by the staff from MOEHE, MOH and MOSA would bring project implementation to

a halt); (iii) multiplicity of benefiting institutions; and (iv) low capacity of the PO (the

primary implementing agency). The administration of the TF posed a significant

reputational risk to the Bank, since it could be seen as an instrument of donor politics in

WBG. The scattered nature of the Project and the inability of Bank staff to access Gaza

and some parts of the West Bank posed an additional challenge to the Bank in

supervising the Project. However, the Task Team responsible for supervision had a

proven track record and the appropriate skills mix, with a good balance between

Headquarter and Country Office-based staff. Also, the Country Management Unit (CMU)

would assist the project team in the dialogue with partners, including the PO, PA and

donors, to ensure a full understanding of the Bank‘s role and adequate handling of

relationships with donors. The ESSP IBTF had an overall risk rating of ―High‖ for the

TF.

2.2 Implementation

2.2.1 The implementation arrangements for the Project were generally similar to those

being followed under the previous two ESSPs. However, efforts were made to simplify

the processes for the ESSP MDTF (financed by Donors) and the ESSP III (financed by

9

IDA) that were implemented concurrently. The Multi-Donor Trust Fund offered a more

suitable arrangement for managing large donor-financed operations than single donor

trust funds. Implementation was facilitated by the financing modality (partial pooling and

partial earmarking) and by the flexibility of adding new intervention windows as needed.

2.2.2 The main factors outside the control of Government or implementing agencies that

influenced project implementation and ultimately the project outcomes can be

summarized as follows:

(a) The environment was one of continuous conflict and insecurity. Restrictions on

movements of people and goods between West Bank and Gaza because of the closures

imposed by Israel, as well as periodic work stoppages, contributed to project

implementation delays.

(b) With Israel‘s restrictions on movements between West Bank and Gaza, PCU staff

based in Gaza worked under extremely difficult circumstances with limited fuel and

severe power outages.

(c) The implementing agencies‘ limited knowledge of Bank procedures was another

cause of delays. When the management of the MOH, MOEHE and MOSA was moved to

West Bank, the PCU had to provide assistance to new teams with limited experience in

managing a project administered by the Bank. The strong implementation support

provided by the WBG field office staff who collaborated closely with the authorities

helped to mitigate this problem.

(d) The willingness of donors to join in the financing and increase their contributions, and

their preference for the sectors to be financed with their contributions was also a factor.

Eleven donors provided US$88.04 million equivalent for the ESSP MDTF. However,

funding was unpredictable and erratic from year to year. Some scheduling of budget

assistance among donors would have facilitated the PA‘s task. Five donors earmarked

their contributions; of those, most expressed a preference for financing health services.

Six donors did not earmark their contributions, which provided more flexibility for the

management of the ESSP MDTF.

2.2.3 The factors subject to Government control that negatively influenced project

implementation included the complex management structure. Compared to previous

ESSPs, an additional management layer – the PO - had been introduced to provide

overall program oversight and sign-off authority on program activities. This increased

processing time significantly. On September 30, 2007, implementation arrangements

were changed; the responsibility for implementing the Project was transferred from the

PO to the Economic Affairs Department of the PLO, with the PCU as the first line of

contact with the Bank and responsible for the overall project financial management

aspects. Other negative factors were the weak budget management and the limited

procurement capacity within the line ministries. The various increases in donor

contributions and the related new allocations of the Grant proceeds provided an

opportunity to focus on quick disbursing items (such as incremental operating costs and

10

higher education salaries) and to thereby reduce the share of the Grant allocated to goods

which required often cumbersome and lengthy procurement procedures. Further, it was

possible to monitor closely the delivery of essential goods and services and provide

assurances to donors regarding the use of their contributions as there were quarterly spot

check audits.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

M&E design

2.3.1 As mentioned in Section 1.2, the TFGA, the Project Document (Technical Annex)

and the ESSP Operations Manual did not discuss M&E and did not provide information

on indicators. However, the IBTF included a list of key performance indicators, but

without any baselines or quantified targets.

M&E implementation

2.3.2 The Emergency Project Paper for ESSP III and a Supplemental Letter to the TFGA

of January 17, 2008 included the PDO and intermediate outcome indicators. These

indicators were based in part on the IBTF indicators and had baseline values as of end of

September 2007. They dealt with the operating levels of education, health and social

services facilities: the number of public primary schools operating and the number of

students attending these schools, the utilization rates of two hospitals and the number of

social services facilities that are able to operate normally and their occupancy. The Bank

decided that these indicators which were formally approved in the supplemental letter for

the ESSP III TFGA will be monitored also for the ESSP MDTF, as reflected in a mission

aide-memoire and implementation status report (ISR). In 20105, an indicator was added

for the numbers of professors and students in the nine universities supported by the

Project. All of these indicators, with their baseline and end-of-project values, are shown

in the Project Data Sheet.

M&E utilization

2.3.3 The key performance indicators were monitored closely by the PA (including

through the spot check audits) and the Bank. Given the emergency nature of the Project,

the objective was to either maintain or increase the baseline values. It is not known

whether the M&E data was used to inform decision-making and resource allocation.

2.4 Safeguards and Fiduciary Compliance

2.4.1 Detailed information on ―Safeguards and Fiduciary Compliance‖ is included in

Annex 14. The main points are summarized below.

5 This was included for the first time in ISR No. 6 dated December 29, 2010.

11

Procurement

2.4.2 At the beginning of the Project, procurement delays (particularly for the

procurement of pharmaceuticals) contributed to slow disbursements. To avoid those

delays, the additional donor contributions were allocated to fast disbursing items, such as

incremental operating costs and higher education salaries, reducing the amounts for

procurement of civil works and goods that require lengthy procurement procedures.

2.4.3 The findings of an ex-post procurement review in March 2008 confirmed that the

Bank had done its part in terms of transparency and efficiency. Procurement for the

education sector and the utilities was satisfactory, but there were some problems for

health and social welfare:

a) There were problems with two contracts with a pharmaceutical company which

committed fraud. The fraud was identified by the PA who brought it to the Bank‘s

attention. The case was investigated by the PA and the World Bank Integrity Vice

Presidency (INT). The PA took immediate action: the two contracts were

canceled, the amounts were reallocated to fuel and electricity bills for hospitals

and clinics in Gaza, and the PA returned to the Bank the small amount already

paid to the firm. The case remains under both judicial and administrative

investigations by the PA‘s Attorney General, and pending the final decision by

the PA‘s Supreme Court.

b) There was one case of misprocurement for the procurement of materials for

training centers in Gaza. The amount involved was small (about US$40,000

equivalent) and was refunded to the Special Account (SA).

2.4.4 The Project was able to develop and implement a competitive and transparent

process for the award of tertiary health care contracts to private and non-governmental

organization (NGO) clinics that were previously awarded on a direct contracting basis.

This is one of the Project‘s achievements.

Financial management and disbursements

2.4.5 The original time-frame for the ESSP MDTF was 22 months, with a Closing Date

of June 30, 2008. However, since contributions were expected to be provided in tranches,

the Project Budget was prepared on the basis of a six month cycle of expenditures

(estimated initially at US$55.75 million), to be updated regularly in line with the Grant

Agreement and the Procurement Plans, taking into account additional donor

contributions.

2.4.6 An interesting aspect of the design is that there were four special (designated)

accounts for the Project, one for each sector (MOH, MOEHE and MOSA) and one for the

PO. To facilitate the monitoring of the project-financed activities, each SA would be

maintained as a separate identifiable account to be used exclusively for eligible project

expenditures financed under the Grant.

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2.4.7 Steps were taken to enhance project management and the implementation process,

including (i) the adoption of an FM system (computerized accounting system) to follow

up the disbursement process and to ensure accuracy of transactions and promptness of

payment, and (ii) special arrangements to control the financing of incremental operating

costs, particularly fuel.

2.4.8 The financial audit reports were all unqualified and submitted on time. The final

audit report is due by December 31, 2011. The reporting and auditing requirements

included quarterly spot check reports on a representative sample of expenditure

categories in each implementing agency, with physical inspection and a count of

quantities received. Sixteen spot check reports were submitted up to March 31, 2011(the

final report for the quarter ended June 30, 2011 yet to be submitted). Also, two

transaction reviews were carried out by a Bank consultant during the project life.

2.4.9 After the closing of the Project, the Bank identified an issue related to the final

disposal of funds reimbursed by the Bank to the PA for those eligible expenditures that

the PA had financed with its own resources. These funds, which were deposited into a

sub-account opened for that purpose by the Office of the President in November 2006,

have not been transferred immediately to the PA‘s Central Treasury Account, as required

by both Bank and PA financial management control mechanisms and guidelines. As

requested by the Bank, the PA took corrective action.

Safeguards

2.4.10 The ESSP MDTF did not finance investments. It was an emergency project that

financed only non-salary recurrent expenditures and did not, therefore, trigger any

safeguards.

2.5 Post-completion Operation/Next Phase

2.5.1 The whole Grant amount has been disbursed. The emergency operation was entirely

dependent on contributions from donors. Emergency-type budget support to help the PA

provide basic social services will continue to be needed in the short- and medium-term,

even under an optimistic scenario on fiscal developments in WBG. There is no planned

operation that could finance the recurrent expenditures of social sector ministries. If part

of the assistance provided by donors in the form of general budget support is not used to

finance non-salary recurrent expenditures, services to the Palestinian population are

bound to suffer.

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3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

Rating: Highly Relevant

3.1.1 The objectives, design and implementation of the Project were and remain highly

relevant to the Bank assistance strategy and to the current WBG priorities. Since WBG is

not a member country of the Bank, there is no formal Country Assistance Strategy

(CAS). Instead, the Bank relies on strategy notes to guide its work and keep the

Executive Directors informed on activities. The latest Interim Strategy Note (ISN) (2008-

2010) was endorsed by the Board on April 22, 2008. One of its pillars is the emergency

provision of basic services. A new interim strategy is planned for the second quarter of

FY12. With respect to WBG priorities, the ESSP MDTF was certainly aligned with the

PA‘s strategy to help prevent a collapse in social service delivery in this particular

moment of crisis.

3.1.2 The current strategy emphasizes the Bank‘s desire to carefully target its limited

resources to areas where the Bank can be most effective or can leverage additional donor

funds. Along with grants, the strategy calls for the Bank to use its analytical ability and

technical assistance to leverage other donor funds. Indeed, the Bank‘s most effective

efforts have been directed at encouraging donor funding of the recurrent budget on a

much larger scale than the ESSP MDTF.

3.2 Achievement of Project Development Objectives

Rating: Satisfactory

3.2.1 The ESSP MDTF is a pure emergency operation with a focus on project outputs.

Although the original wording of the PDO indicator that was repeated in the ISRs may

have been confusing,6 the intent was clearly that, in order to assess the project

achievements, one would measure the extent to which education, health and social

services operate at the same or at higher levels than the September 2007 baseline figures7.

3.2.2 The main project outcomes were to: (a) maintain essential operation of public

education, health and social care facilities; (b) promote greater synergies among donor-

funded emergency projects in the social sectors; (c) leverage additional donor resources

to be channeled through the next phase of the ESSP MDTF; and (d) underpin discussions

on sector development by maintaining a policy dialogue in the social sectors.

6 The wording is ―Education, health and social service facilities operate at the same, higher or lower levels

than baselines‖, which means that targets will always be met. However, all the ISRs made it clear that the

targets were end-of-project values the same or higher than the baseline values. 7 Unfortunately, there was also a mistake in the baseline number of public primary schools due to confusion

on the definition of such schools and the inadvertent inclusion in that number of schools run by the United

Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). The actual number

of public primary schools at baseline was 972, not 1,615.

14

Achievement of targets

3.2.3 As shown in the Project Data Sheet, the assistance provided through the ESSP

MDTF prevented deterioration of education, health and social services in West Bank and

Gaza. Targets have basically been met. At the conclusion of the project, facilities

continued to operate at the same or higher levels than the 2007 baselines, as follows:

a. The number of public primary schools operating in 2011 (1,155) is 19

percent higher than the 2007 baseline (972), and the number of students

per school (542) in 2011 is 36 percent higher than the 2007 baseline (400).

b. In nine universities, the number of academic staff supported by the Project

in 2011 (3,209) is the same as the 2010 baseline, and the number of

students in 2011 (132,750) is 8 percent higher than the 2010 baseline

(123,429).

c. Regarding the utilization rates for the Shefa and Rafedia Hospitals, most

actual values for 2011 for overall occupancy and gynecology occupancy

exceed 2007 baseline values by significant margins, varying between 8

and 50 percent; the exception is the overall occupancy for the Shefa

Hospital which decreased by 8 percent. Particularly noteworthy are the

sharp increases in the numbers of outpatients (40 percent for Shefa and

232 percent for Rafedia).

d. Regarding the social services provided by MOSA facilities, there have

also been increases in the number of beneficiaries in 2011 compared to

2007: a modest increase for the number of disabled (+6 percent), a

significant increase for the number of students in training centers (+23

percent), and a very substantial increase for the number of youths in youth

centers (+230 percent).

Project Impact

3.2.4 Annex 2 provides a comprehensive list of outputs by component which shows that

the Project affected positively many areas that are important for the well-being of the

Palestinian population. The ESSP MDTF provided non-salary budgetary support to key

social sector ministries and utilities to allow them to continue to operate so that essential

services were continuously provided; this was accomplished by bridging the shortfall in

budget financing available to them. The main impacts are summarized below.

3.2.5 For all sectors supported by the Project, the ESSP MDTF covered a significant

percentage (about 70 percent) of operating costs of beneficiaries, such as rent payments,

water and electricity utilities, transportation costs, fuel, communications, maintenance of

equipment and buildings and cleaning contracts. About 40 percent of the Grant was used

to finance operating costs. The project impact for each sector would not have been

possible without the financing of operating costs by the Grant. Among those, the

provision of fuel was very important, particularly for Gaza hospitals and ambulances and

for water supply.

15

3.2.6 For the Health Sector (which received about half of the funds), the Project

financed the purchase of essential drugs, vaccines, laboratory/blood bank materials,

medical consumables, equipment spare parts, replacement of some damaged medical

equipment, textiles for health care settings, electricity and water. About 27 percent of the

funds for the health sector financed the provision by non-governmental facilities of

emergency treatment services that public facilities in the areas could not provide. That

part of the program supported about 18,000 referrals annually to specialized private and

non-governmental hospitals. The ESSP MDTF financed the purchase of 420 laboratory

material items for hospitals and clinics, 350 items out of MOH‘s basic drug list (which

includes 550 items), and fuel for 120 ambulances and medical service vehicles. When the

additional donor contributions were allocated to fast disbursing items instead of drugs,

the gap was partly covered by donations from many sources. However, there were some

shortages of drugs and other materials because of the difficulties of delivering them,

whether purchased or donated, to health facilities, particularly in Gaza. Altogether, the

Project enabled about 4,000 doctors, more than 5,000 nurses and 3,160 technical

specialists to continue providing essential health services.

3.2.7 For the Education Sector, the Project funded minor school rehabilitation, school

furniture, general high school examinations, stationery and printing materials for schools

(essential in ensuring students were able to take final exams) and district directorates,

cleaning materials, as well as utilities in 1500 schools and 17 MOE directorate offices. In

addition, it provided computers and materials for vocational schools and food and animal

feed for agriculture schools. The project also financed the salaries of 2,000 teaching staff

working in 9 universities.

3.2.8 For the Social Services Sector, the Project financed tools, small machines and

materials and some food for 38 rehabilitation and vocational training centers and shelters.

Another Bank operation financed MOSA‘s activities, and the amount disbursed for social

services under the ESSP MDTF was very modest (about one percent of the total grant).

However, this support enabled MOSA to provide some services to elderly, orphans,

persons with disabilities and youth.

3.2.9 For the Water/Sanitation and Electricity Utilities, the Project financed basic

goods, works and services directly related to the operation and maintenance of the

networks, such as small network rehabilitations, electricity materials, and maintenance of

water wells and waste water equipment.

Other achievements

3.2.10 An important achievement is that the ESSP structure and mechanism are now

considered as a Palestinian-administered mechanism that can be scaled up or downwards

to fund non-salary recurrent expenditures for social sector ministries. Such a mechanism

ensures that key public services are not disrupted and benefit, to a large extent, the poorer

segments of the Palestinian population, particularly those who do not have money to seek

private health care or send their children to private schools.

16

3.2.11 The ESSP approach is a valid concept in a protracted crisis situation. An

Operational and Policy Services (OPCS) review of emergency operations established the

ESSP model and adopted it as a ‗best practice‘ instrument in the Bank for similar country

situations. Such operations address priorities that are particularly important in a time of

crisis, such as the continuity in provision of essential social services for poor and needy

populations, with an added value of safeguarding social cohesion. Together with the

Social Safety Net Reform Project (SSNRP) also financed by the Bank, the ESSP MDTF

was an essential element in preserving the social fabric in WBG. The conflict was

perpetuating an internal cycle of violence, fragmenting social cohesion and affecting

psychosocial well-being. The operation funded operating expenditures for health

facilities, schools, and social centers for disabled, elderly and youth to strengthen the

social fabric and community cohesion. In addition, it has given the Bank a solid platform

to maintain a policy dialogue in the social sectors.

3.2.12 The development and adoption of new contracting modalities for tertiary health

care providers with a competitive and transparent process is another achievement of the

Project.

3.3 Efficiency


3.3.1 The efficiency is rated ―Satisfactory‖. The ESSP MDTF did not finance

investments so that an assessment of economic or financial return does not apply. While

the program aim was to mitigate deterioration in service delivery, it ended up assuring

that these services were operating at the same level or higher.

3.3.2 At the time the ESSP MDTF was being established, the economic and social

implications of the crisis in WBG were evident and a rapid decline was expected. There

was a marked deterioration in performance of the social sectors (health, education and

social services). A shortage of drugs and medical supplies threatened to undermine the

operational capacity of health facilities and hospitals, many services had been

discontinued (e.g., mobile health clinics in some areas) and only urgent surgeries were

performed. The extended closure of border crossings in Gaza was continuing to result in

shortages of food supplies (UN Revised Emergency Appeal, 2006). About one-quarter of

the Palestinian labor force was out of work, with the unemployment rate in Gaza reaching

39 percent. The uncertain security situation with intermittent conflict, closures and

movement restrictions and fiscal deterioration had a profound impact on the lives of

Palestinians. The proportion of people living below the poverty line by end-2006 was 66

percent - a 16 percent increase from the March 2006 figure. Prior to the ESSP MDTF, the

donors‘ response to the crisis had been largely ad hoc.

3.3.3 Since this was an emergency project, it was not able to focus on potential

improvements that might have been undertaken in the efficiency of delivery systems.

However, the PA received value for money: the costs involved in achieving the project

objectives were reasonable in comparison with the benefits to the population. The ESSP

MDTF, which was the largest mechanism to support the majority of social services, was

17

able to prevent a total collapse of the public service delivery system. The cost of

managing the project was very low - about one percent of the total disbursements to

ministries and utilities.

3.3.4 The project design and implementation included special arrangements to control the

use of funds. The spot checks carried out by the external auditor provided assurances that

funds were spent for the purpose intended. In order to follow up on the fuel consumption

and to supervise the fuel distribution, the PCU visited MOH hospitals when deliveries

were made, taking readings of the generators and capacity in order to check consumption.

For the ambulances, the MOH transportation department gave coupons to the ambulance

drivers with their names and the vehicle number; also, lists of names and vehicle numbers

were distributed to the fuel stations to ensure that fuel would be given only to those cars.

Each month, the PCU submitted a report to the Bank monitoring fuel supplies in Gaza.

3.3.5 In addition, the Project did provide some opening for capacity building, particularly

for financial management and procurement, and it introduced a management information

system that has contributed to improving the budget planning process.

3.4 Justification of Overall Outcome Rating


3.4.1 The overall outcome rating is ―Satisfactory‖. ESSP financing was critical for

maintaining some health, education and social services as well as the operations of public

utilities. The channeling of donor funds through the ESSP was supposed to be replaced

by the PA allocating resources received from donors through general budget support, as

the ESSP MDTF was fully disbursed. However, supervision missions have noted that

adequate funding is not available for essential support to key services (including tertiary

health care, education services), substantial arrears are currently accumulating, and often

services provided are supported through personal contribution of time and resources. As

a result, they are operating at a very limited level. This might suggest that when aiming

to maintain a certain level of social services, an instrument which earmarks funds

specifically for these purposes should be used to provide support. Further research

should be dedicated to better understanding this occurrence in order to identify concrete

steps that can be taken to prevent a total decline in social service provision.

3.4.2 Since the beginning of the Project, implementation has been satisfactory. The PDO,

which is to mitigate the deterioration of service delivery to the Palestinian population in

the parts of the WBG under the jurisdiction of the PA, has been achieved. The ESSP

MDTF contributed to maintaining a minimum level of key social and other services,

particularly in Gaza which has been affected by a prolonged crisis. Compared to the

previous two ESSPs, the ESSP MDTF was a more suitable arrangement for mobilizing

and managing large contributions from donors, channeling them quickly to priority areas

in crisis situations. Eleven donors have contributed a total of US$88.04 million

equivalent, and all funds allocated to the Line Ministries and Utilities have been

disbursed to them. The Project was well-managed, with clearly assigned roles for the

MOF and the line Ministries/Utilities. In addition to the usual progress reports, FMRs and

18

annual financial audits, the reporting and auditing requirements included quarterly spot

check reports covering review of procurement procedures/contracting and physical

inspection and counts of quantities received; two transaction reviews were also carried

out. Close supervision and implementation support provided by Bank staff based in the

field contributed to the success of the emergency operation. The success of the ESSP

MDTF is due in part to the fact that it was aligned with the PA‘s strategy to help prevent

a collapse in social service delivery.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

3.5.1 The ESSP MDTF financing, directly or indirectly, benefitted many poor people.

With respect to education and health, project activities were very important for the poorer

segments of the Palestinian population who cannot send their children to private schools

or seek private health care. Particularly noteworthy are the sharp increases in the numbers

of outpatients in the Shefa hospital (plus 40 percent) and the Rafedia hospital (plus 232

percent). Also, the increases in gynecology occupancy (17 percent for Shefa and 8

percent for Rafedia) show that the Project was important for women.

(b) Institutional Change/Strengthening

3.5.2 The Project was an emergency intervention with no institutional development

ambitions beyond the specific improvements that were necessary for successful project

implementation. Country-based Bank staff and consultants provided training to the

counterpart staff on financial management and procurement procedures.

3.5.3 As noted in Section 3.2 under ―Other Achievements‖, an important institutional

change is the establishment and strengthening of an ESSP mechanism for service delivery

and emergency response in the social sectors that can be scaled up or downwards as the

need arises.

(c) Other Unintended Outcomes and Impacts (positive or negative)

3.5.4 See ―Other Achievements‖ in Section 3.2 on achievement of PDO.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

Not applicable.

4. Assessment of Risk to Development Outcome

Rating: Significant

4.1 The ICR rates the overall risk to development outcome - i.e., the risk that

development outcomes will not be maintained – as ―Substantial‖. The Project was

entirely dependent on donors‘ contributions, and could not be sustained in the absence of

19

such financing. The operation was not designed to create or develop sustainable systems,

but aimed to allow for the provision of some essential services in a period of crisis.

Emergency-type budget support to help the PA provide basic social services will continue

to be needed in the short- and medium-term, even under an optimistic scenario.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry

Rating: Moderately Satisfactory

5.1.1 The Bank‘s performance during preparation and appraisal is rated ―Moderately

Satisfactory‖. The ESSP MDTF was the result of close consultations with counterparts

and it built on the implementation experience of the previous ESSPs. As discussed under

Section 2 - ―Key Factors Affecting Implementation and Outcomes‖, the excellent

Concept Note for the Project included a clear presentation of the project design and

implementation arrangements, covering in particular the legal framework, eligible

expenditures and supervision. According to the ESSP IBTF, the overall risk for this trust

fund was rated as ―High‖, but the Task Team had a proven track record and the Country

Management Unit would assist the project team for supervision. The Quality Assurance

Group (QAG) that carried out a Quality at Entry Learning Review in the last quarter of

2007 found the ingenuity and creativity of the project team quite remarkable. It

commented that the Project draws together the resources from a large number of donors

to focus on services that are essential for the welfare of the population. QAG assessed the

Project to be moderately satisfactory overall.

5.1.2 On the negative side, compared to the previous ESSPs, the ESSP MDTF introduced

an additional management layer (the President‘s Office - PO) without any apparent gains

in efficiency or any other type of benefits. In practice, the three-tiered management

structure (the PO, the PCU, and the line ministries and agencies) was cumbersome and

resulted in a lengthier implementation process. Also, the Project Document, the TFGA

and the Operations Manual did not include M&E such as monitoring of key indicators,

but an M&E framework had been provided in the IBTF.

(b) Quality of Supervision


5.1.3 The Bank‘s supervision performance is rated satisfactory. Compared to the previous

ESSPs, efforts were made to simplify the processes and streamline procurement for the

ESSP MDTF (financed by Donors) and the ESSP III (financed by IDA) that were

implemented concurrently. Also, the M&E shortcomings were quickly corrected with the

formal approval in January 2008 of the PDO and intermediate outcome indicators for the

ESSP III that were also monitored for the ESSP MDTF.

20

5.1.4 The challenge for the Bank involved not only operating in a fragile, conflict

environment, but also working in a politically sensitive area. On balance, implementation

arrangements worked well despite all the external difficulties. The environment was one

of continuous conflict and insecurity, with restrictions on movements of people and

goods between West Bank and Gaza because of the closures imposed by Israel. The

strong implementation support provided by the West Bank and Gaza field office staff

helped to mitigate the problems due to the implementing entities‘ limited knowledge of

Bank procedures, and the weak budget management and limited procurement capacity

within the line ministries. Because of the slow disbursements at the beginning of the

Project due to the cumbersome and lengthy procurement procedures for goods

(particularly pharmaceuticals), the Bank and the PA agreed to focus on quick disbursing

items (such as incremental operating costs and higher education salaries), thereby

reducing the share of the Grant allocated to goods. The Project was originally designed to

be disbursed in about 22 months, but the closing date had to be extended by three years.

The complex management structure was a problem, and in September 2007,

implementation responsibility under the Project was transferred from the PO to the

Economic Affairs Department of the PLO.

5.1.5 Overall, the Bank Task Team paid good attention to financial management and

procurement aspects of the project, with extensive coverage in the aide memoires and

ISRs. The Task Team handled well one case of misprocurement and one case of fraud

(sent to INT and followed up with the PA). Management gave high priority to this

project, and invested a great deal of time in assisting the Task Team. Bank management

was proactive in managing expectations of individual donors in this multi-donor trust

fund arrangement implemented under difficult circumstances. For the processing of the

Grant, implementation support and supervision of this difficult project, the budget

financed by the ESSP MDTF Trust Fund was US$1.13 million for the six Bank fiscal

years 2007 to 2012 (Annex 4). Many technical staff and sector managers were deeply

involved in the preparation and appraisal of the Project, so that US$0.60 million (about

half of the total) was spent in FY2007 alone. There has been excellent continuity in

staffing with the original task team members remaining involved in the Project. In aide

memoires and ISRs, the candor, degree of detail, and meticulous reporting of project

progress or lack thereof were of high quality.

5.1.6 The project experience confirms that, under a complex emergency situation, it is

beneficial to have the Bank Task Team based in the field. PA staff had easy access to the

Bank team which is resident in WBG; this facilitated close monitoring of implementation

progress and quick response to the changing political and economic environment facing

the Government and affecting its priorities. It is because of the field-based Task Team

that implementation issues were identified early on and the Bank was able to respond

quickly. Because of the short original project period, no formal mid-term review was

planned, and none was carried out despite the three-year extension of the project period.

However, the reality is that the Project was always ―under review‖. Given the field

presence, supervision took the form of a continuous dialogue and/or coaching of

implementing agencies. The Bank team also facilitated regular quarterly meetings

between the donors and the PA to review progress.

21

(c) Justification of Rating for Overall Bank Performance


5.1.7 Since the ratings for the quality at entry and the quality of supervision are both in

the satisfactory range, the rating for the overall Bank performance is also satisfactory.

The success of the ESSP MDTF Trust Fund is reflective of the close relations between

the PA, the donor community and the Bank. In 2011, the Bank ESSP team was the

recipient of a Vice Presidency Unit (VPU) – Team Award for MENA8 in recognition of

the program impact and the team‘s ability to seek and understand the client‘s views and

needs and to respond promptly to those needs, basically putting the client first. The good

quality at entry and the close supervision and implementation support provided by Bank

staff based in the field contributed to the success of this emergency operation.

5.2 Recipient Performance


5.2.1 This section on recipient performance will review first the performance of the PA

and MOF (including the PCU) which managed the Project, and second the performance

of the implementing ministries (MOH, MOEHE and MOSA) and utilities.

(a) PA and MOF Performance


5.2.2 During preparation and appraisal, the PA was constructively engaged in the

dialogue with the Bank on ensuring effective implementation arrangements. The success

of the ESSP MDTF is due to the fact that it was aligned with the PA‘s strategy to help

prevent a collapse in social service delivery.

5.2.3 In a difficult emergency context, the PCU and MOF budget department managed

the Project in an efficient and proactive fashion, including identifying capacity gaps in

procurement and financial management in line ministries. There were clearly assigned

roles for the MOF/PCU and the line Ministries/Utilities. The PCU had the overall

responsibility for day to day Project implementation and management9, including

handling the follow-up tasks with implementing ministries and utilities. With Israel‘s

restrictions on movements between West Bank and Gaza, PCU staff based in Gaza

8 Strictly speaking, the award was related to the ESSP III but, obviously, it applied also to the ESSP MDTF.

9 The PCU also has responsibility for day-to-day implementation and management of the ESSP III; it

participates in all Bank-financed projects through attending agreement negotiations, reviewing the related

withdrawal applications and preparing all the necessary processes for hiring the external auditors for each

project funded through IDA. It is also providing financial, procurement and management assistance to other

PA ministries.

22

worked under extremely difficult circumstances with limited fuel and severe power

outages.

5.2.4 Steps were taken to enhance project management and the implementation process.

These included regular updates of the procurement plan, the use of a financial monitoring

system to follow up the disbursement process within the PM and to ensure accuracy of

transactions and promptness of payments, and a contract monitoring system at the PCU

and within the ministries to ensure that contracts were signed promptly upon approval.

At one point, donors complained that they were not kept well informed, so the PA took

measures to improve its communications strategy vis-à-vis donors. In addition to the

usual progress reports, FMRs and annual financial audits, the reporting and auditing

requirements included quarterly spot check reports covering review of procurement

procedures/contracting and physical inspection and count of quantities received. The spot

check audits were a positive factor because they monitored closely the delivery of

essential goods and services and provided assurances to donors regarding the use of their

contributions.

(b) Implementing Ministries and Utilities Performance


5.2.5 Line ministries and utilities implemented the Project under difficult circumstances.

They ―made it happen‖: they were able to procure materials and equipment and deliver

the services in a manner that ensured a minimum of disruption despite the conflict

situations. Thanks to the PCU capacity building efforts under the previous ESSPs and the

support provided by the Bank‘s Task Team, the implementing entities had gained

experience, but budget management remained weak and procurement capacity was still

limited.

(c) Justification of Rating for Overall Recipient Performance


5.2.6 Overall Recipient performance is rated satisfactory. The Recipient implemented the

Project under difficult conditions and had to deal with extraordinary challenges

associated with the emergency situation. Based on the satisfactory progress of the Project,

several donors increased their contributions. The ESSP team has played a significant role

during the war in Gaza, particularly by providing fuel to the Shifa and other main

hospitals which enabled them to continue to operate.

6. Lessons Learned

6.1 A fast disbursing operation without any conditionality, reform requirements,

cumbersome procurement procedures, or explicit capacity building component is an

efficient and effective vehicle for responding to emergency and crisis situations. The

ESSP approach is a valid concept in a protracted crisis situation; the ESSP‘s strength is

that it can be designed to provide fast disbursements to maintain essential services.

23

6.2 A multi-donor trust fund is a more suitable arrangement for managing large

donor-financed operations than single donor trust funds. It reduces the burden on the

Bank teams administering the trust funds. Also, with donor resources pooled in a single

trust fund, it may be easier to entice donors not to earmark their financing.

6.3 Close supervision and flexibility to respond to urgent needs and changing

requirements through reallocation of resources are important to ensure that the

program remains responsive to the emergency situation. The project experience

confirms that under a complex emergency situation, it is beneficial to have the Task

Team based in the field. PA staff had easy access to the Bank team, and implementation

issues were identified early on and the Bank was able to respond quickly. Given the field

presence, supervision took the form of a continuous dialogue and/or coaching of

implementing agencies.

6.4 The Bank can mitigate risks for its program by having the external auditor

carry out spot checks of activities financed by the Grant. These spot checks are

particularly useful in monitoring physical implementation of the Project and in verifying

that funds are spent for the purpose intended and in accordance with Bank rules.

6.5 Some scheduling of budget assistance among donors would have facilitated the

PA’s task. Funding of the ESSP MDTF was unpredictable and erratic from year to year.

6.6 The ESSP approach of providing targeted emergency budget support is more

appropriate than the alternative of general budget support to ensure that essential

services continue to receive their share of scarce resources. Although the channeling

of donor funds through the ESSP was intended to be replaced by the PA allocating

resources received from donors through general budget support, the reality is that many

beneficiaries of the ESSP MDTF are no longer receiving funds following the end of the

ESSP MDTF and are accumulating substantial arrears.

6.7 In a multi-donor trust fund arrangement, Bank management has an important

role to play in managing expectations of individual donors, in order to reduce the

stress on the Bank Task Team and enable them to concentrate on project implementation

support.

6.8 The Bank must take great care to ensure that the Recipient complies with both

the Bank’s and the Recipient’s financial management control mechanisms and

guidelines to avoid potential misuse of funds.

7. Comments on Issues Raised by Grantee/Implementing Agencies/Donors

(a) Grantee/Implementing agencies

None

24

(b) Co financiers/Donors Comments received from donors on a draft of the ICR have been incorporated in this

final version of the ICR.

(c) Other partners and stakeholders None

25

Annex 1. Project Costs and Financing

(a) Project Cost by Component (in US$ Million)

Components Appraisal

Estimate

(US$ Million)

Actual/Latest

Estimate *

(US$ Million)

Actual/Latest

estimate as a

percentage of

Appraisal

Component 1 – Financing

Non-Salary Recurrent

Expenditures

Part A – Education 18.97 29.20 154%

Part B – Health 28.87 42.65 148%

Part C – Social Welfare 1.00 0.80 80%

Part D – Other Key Sectors 6.50 7.96 122%

Sub-Total Component 1 55.34 80.61 146%

Component 2 – Project

Management and Monitoring

Part E 0.41 0.71 173%

Total Baseline Costs 55.75 81.32 146%

Physical Contingencies 0.00 0.00 -

Price Contingencies 0.00 0.00 -

Total Project Costs 55.75 81.32 146%

Project Preparation Costs 0.00 0.00 -

Total Financing Required 55.75 81.32 146%

*Disbursements to PA Ministries and Utilities. The actual/latest estimate exceeded the

appraisal estimate due to additional donor contributions throughout the project.

(b) Financing

Source of Funds Type of

Cofinancing

Appraisal

Estimate

(US$ Million)

Actual/Latest

Estimate

(US$ Million)

Percentage of

Appraisal

Government N/A 0.00 0.00 0.00

ESSP Multi-Donor Trust

Fund

N/A

55.75

81.32

146%

26

(c) Actual/Latest Estimates of Project Costs in US$ Million (disbursements to PA

Ministries and Utilities)

Components / Subcomponents Actual/latest

estimate

(US$ Million)

Actual/latest

estimate

(US$ Million)

% of

total

Component 1 – Education Services

Part A

(i) MOE Small Works 0.63 1

(ii) Goods 4.50 5

(iii) MOE Incremental Operating Costs 7.89 10

(iv) HE Salaries 14.48 18

(v) HE Incremental Operating Costs 1.70 2

Sub-Total Education Services Part A 29.20 29.20 36

Component 1- Health Services

Part B

(i) Goods 10.86 13

(ii) Incremental Operating Costs 19.45 24

(iii) Tertiary Health Care 11.65 14

(iv) Food 0.69 1

Sub-Total Health Services - Part B 42.65 42.65 52

Component 1 – Social Welfare

Part C

(i) Goods 0.15 0

(ii) Incremental Operating Costs 0.47 1

(iii) Food 0.18 0

Sub-Total Social Welfare – Part C 0.80 0.80 1

Component 1 – Other Key Sectors –

Utilities - Part D

(i)Small Works 0.91 1

(ii) Goods 3.99 4

(iii) Incremental Operating Costs 3.06 5

Sub-Total Other Key Sectors – Part D 7.96 7.96 10

Sub-Total Component 1 80.61 80.61 99

Component 2 – Project Management and

Monitoring

0.71

Sub-Total Component 2 0.71 0.71 1

GRAND TOTAL 81.32 81.32 100

27

(d) Disbursements per year and per sector (in US$ Thousands)

Entity

MOEHE MOH Utilities MOSA MOF Total

2006 7,061 1,077 -- 108 61 8,307

2007 6,216 16,323 1,643 306 227 24,716

2008 11,536 14,512 4,247 296 102 30,692

2009 2,837 7,446 839 104 129 11,355

2010 1,549 2,930 1,203 -8 121 5,796

2011 -- 362 26 -- 68 455

Total 29,199 42,650 7,959 806 708 81,322

(e) Disbursements per year and per sector (in GBP Thousands)

Entity

MOEHE MOH Utilities MOSA MOF Total

2006 3,703 554 0 56 32 4,346

2007 3,087 8,136 820 153 115 12,311

2008 5,933 7,713 2,226 150 55 16,077

2009 1,802 4,693 523 68 84 7,170

2010 1,016 1,944 764 -5 79 3,798

2011 -- 220 17 -- 42 279

Total 15,541 23,260 4,349 423 408 43,981

NOTE ON THE TABLES OF PROJECT COSTS

In this ICR, there are discrepancies between the grant amount expressed in Pounds

Sterling and the disbursed amounts in US Dollar equivalents – those discrepancies are

due to exchange rate fluctuations during the project life. Also, the figure for the original

commitment in the datasheet is greater than the amount of the Grant in the TFGA signed

on September 18, 2006 because donors had already pledged to provide a greater amount.

The Trust Fund Grant Agreement (TFGA) shows the grant amount and the category

allocations in Pounds Sterling. However, actual disbursements to the line ministries and

utilities were in multiple currencies (e.g., Israeli Shekels, Jordanian Dinars and US

Dollars). The Bank‘s Disbursement Department converted those disbursements into US

Dollars at the exchange rate when withdrawal applications were processed and

expenditures were charged to the pound sterling expenditure categories. On that basis, the

total disbursements to the line ministries and utilities were US$81.32 million equivalent.

The figure of US$81.32 million equivalent does not include the fees paid to the Bank by

the donors for administering the ESSP MDTF. Annex 10 shows the total contributions of

donors to the ESSP MDTF. The 11 donors paid their contributions in their own

currencies (Euros, Pounds Sterling, Swedish Krona, etc.). In the table in Annex 10, their

28

contribution amounts have been converted into US Dollars based on the exchange rates

on the dates their contributions were received by the Bank, showing a total of US$88.04

million equivalent. The difference of US$6.72 million (donor contributions of US$88.04

million minus disbursements to Ministries and Utilities of US$81.32 million) is due to the

fees paid to the Bank by the donors for administering the ESSP MDTF but also to

exchange rate fluctuations in the conversions to US Dollars.

29

Annex 2. Outputs by Component

For each sub-component or Part, this annex will first present the actual disbursements in

British Pounds and US Dollars, and then provide some general information on the sector

and discuss the outputs for the various expenditure categories. As shown in Table C

(Estimate of Project Costs) in Annex 1, about half of the US$81.32 million went to

health, about one third went to education, and ten percent was spent for utilities. Less

than one percent of the total was used for project management and monitoring. These

percentages are very much in line with the appraisal estimates.

Part A – Education Services

Actual Disbursements

(in GBP Million)

Actual disbursements

(in US$ Million)

MOE Small Works 0.32 0.63

MOE Goods 2.42 4.50

Sub-total MOE 2.74 5.13

HE Salaries 7.59 14.48

MOE & HE Incremental

Operating Costs

5.21

9.59

Total MOE & HE 15.54 29.20

MOEHE

MOEHE administers a total of 1,500 schools and 17 MOE directorates serving about

800,000 students (50 percent of them are females). Of these, 2,654 students study in 17

vocational secondary schools also managed by MOE in 5 Palestinian cities and camps,

namely Gaza, Beit Hanoun, Doura, Qalqilya, and Aroub. Schools are distributed through

13 directorates in the West Bank and 5 in Gaza. The total number of MOE teachers is

21,431.

MOEHE Small Works

ESSP MDTF provided US$0.63 million for the rehabilitation (US$0.44 million) and

maintenance (US$0.18 million) of schools in West Bank and Gaza. In the West Bank, 7

contracts were signed for 42 schools, benefitting 16,000 students, and in Gaza, 4

contracts were signed to benefit 8,600 students in 14 schools but only 2 contracts were

completed. The works included pavement of yards, retaining walls and boundary walls,

roof repairs, rehabilitation of classrooms and health units, and construction of sheds.

Some packages were canceled before tendering because the MOE did not provide the

required information. Also, some works were delayed and canceled due to the

30

unavailability of building materials in Gaza. Apart from these cancelations, 100 percent

of the small works procurement packages were awarded and completed.

MOEHE Goods

Stationery and Printing for schools and district directorates and for general

examination: Twenty five contracts, with a total value of US$1.57 million, were

completed, providing stationery for WBG schools and district offices, including the

purchase of computers and printers, accessories, printed papers, office supplies and

stationery. The estimated number of students served by MOEHE during the academic

years of 2007-2008 was 800,000. The ESSP MDTF covered their needs for stationery,

blackboards, photocopying papers, ink, chalk, and erasers. It also covered MOE expenses

for stationery, exam notebooks, printing of exam papers, and enrollment forms for the

final high school examinations (Tawjihi). The number of high school students who took

the final exam in all fields in 2007 was around 60,000 students (60 percent in the West

Bank and 40 percent in Gaza).

Cleaning materials and consumables: The ESSP MDTF funded cleaning materials for

22,830 classrooms and 1,800 utility facilities, serving about 800,000 students (US$0.74

million). It also funded food (US$0.02 million) and animal feed (US$0.08 million) for

agricultural schools. The ESSP MDTF financed nine contracts for cleaning materials and

consumables. By the end of October 2011, the amount disbursed under this item was

US$0.84 million.

Learning Materials and Sports Equipment: The ESSP MDTF financed 29 contracts for

the provision of raw materials (for vocational and agricultural schools), lab equipment

and teaching aids as well as computers for vocational students and sports equipment. By

the end of October 2011, the amount disbursed under this item was US$1.31 million,

enough for a one-year period.

Furniture: The ESSP MDTF financed the purchase of school furniture, including 4,600

tables and 9,300 chairs, benefitting about 9,000 students. By the end of October 2011, the

amount disbursed under this item was US$0.78 million.

Higher Education (HE) Salaries

The number of academics at Palestinian universities supported through ESSP MDTF is

2,000 teaching staff working in 9 universities (2 in Gaza and 7 in the West Bank). The

average basic monthly salary for university academic staff is US$1,000 for 8

months/year. An amount of US$14.48 million was paid to university academic staff.

31

Incremental Costs for MOE&HE

As of October 31, 2011, the ESSP MDTF contributed US$9.59 million to cover part of

the incremental operating expenses for the MOE offices, schools and universities,

including the following items:

General Examination Controllers: An amount of US$1.93 million was paid to cover the

expenses of the final high-school exam (Tawjihi) for the academic years 2006-2007 and

2008-2009 for about 6,000 controllers/observers in Gaza, who performed their duties for

11 days with an average payment of 60 NIS/day for each controller.

Rent: By the end of October 2011 the amount disbursed reached US$1.30 million for

1,500 schools and 17 MOE directorate offices.

Electricity and Water: By the end of October 2011, an amount of US$4.04 million had

been disbursed to cover utility consumption of 1500 schools and 17 MOE directorate

offices.

Communication: By the end of October 2011, an amount of US$1.24 million had been

disbursed to cover communication bills of MOEHE facilities in West Bank and Gaza,

including administrative offices, school premises and universities.

Fuel for heating: The total amount disbursed under this item by the end of October 2011

reached US$0.46 million.

Maintenance and Cleaning Contracts: The total amount disbursed under this item by the

end of October 2011 reached US$0.54 million.

Advertising: The amount disbursed under this item by the end of October 2011 was

US$0.01 million.

Transportation and car insurance: The amount disbursed under this item by the end of

October 2011 was US$0.01 million.

Other related costs: The amount disbursed under this item by the end of October 2011

was US$0.002 million.

Insurance: The amount disbursed under this item by the end of October 2011 was

US$0.05 million.

32

Part B – Health Services (MOH)

MOH Actual Disbursements

(in GBP Million)


(in US$ Million)

MOH Goods 5.63 10.86

MOH Incremental

Operating Costs

11.15 19.45

MOH Tertiary Health

Care

6.14 11.65

MOH Food 0.35 0.69

Total MOH 23.26 42.65

MOH runs 22 governmental hospitals (12 in West Bank and 10 in Gaza, with a total

capacity of 2,815 beds), in addition to 430 primary health care centers, as well as 146

laboratories (4 central laboratories, 19 hospital laboratories and 123 laboratories in

primary health care centers). The hospitals and centers serve 5 million Palestinians (1.3

million in Gaza and 3.7 million in West Bank) with an annual average number of hospital

admissions of 300,000. Total medical staff serving in MOH hospitals/facilities is: 4,017

doctors, 5,065 nurses, 3,160 technicians, and 226 midwives. In four governorates

(Jericho, Nablus, Gaza Mid Zone, and Rafah) the MOH is the only service provider.

MOH is also the sole service provider of secondary health care in Salfit, Jericho, Mid-

Zone and Rafah Governorates. Immunization is provided by MOH and UNRWA; NGOs

and private physicians do not regularly offer routine immunizations to children. MOH‘s

recurrent budget was estimated at US$57.5 million. Actual disbursements for the MOH

under the ESSP MDTF were US$42.65 million, i.e., 74 percent of the MOH budget.

The availability of drugs is the main issue that MOH faced. Therefore, the ESSP MDTF

was very timely; it relieved the pressure on MOH due to budget shortages and closures.

MOH Goods

The ESSP MDTF provided a total of US$10.86 million to cover all goods, including

pharmaceutical drugs, vaccines, nutrition supplements, medical disposables, lab

materials, and other items.

Pharmaceutical Drugs and Vaccines: Out of MOH‘s basic drug list, which includes 550

items, the ESSP MDTF financed the purchase of 350 items for a total of US$6.32 million

(amount disbursed as of October 31, 2011). These drugs were delivered to MOH stores

and distributed among 22 MOH hospitals and 430 primary health care centers. This was

enough to cover MOH needs for the first 7 months. About 167,250 patients benefited

from these pharmaceuticals in hospitals and 444,542 individuals benefited from

medicines in the outpatient clinic services. About 400,000 patients benefitted from drugs

in the primary health care centers.

33

Medical Supplies and Disposables: About 650 needed medical supplies items were

purchased through 61 contracts for a total of US$2.08 million. They were delivered to

MOH stores and distributed to hospitals and clinics. MOH hospitals conduct an average

of 90,000 surgical operations every year. It is estimated that about 30,000 surgery

patients and 1,100,000 patients of primary health care centers, outside clinics, and

emergency units benefited from the medical supplies.

Lab Materials and Blood Bank Disposables: The ESSP MDTF financed the purchase of

420 lab material items for hospitals and clinics at a cost of US$1.49 million. With these

items, MOH was able to conduct 1.2 million medical tests serving 480,000 beneficiaries.

Medical Gases: For a total cost of US$0.15 million, medical gases were delivered to

MOH stores and distributed to hospitals and clinics, benefiting 250,000 patients at both

surgical and emergency units.

Nutrition Supplements: Nutrition items purchased at a cost of US$0.19 million were

delivered to MOH and benefitted 114 patients suffering from nutrition complications

with regular food due to genetic disorders.

Textiles: MOH needs textile to provide coats for it staff and bed cloths and curtains for

patients. Textiles were provided at a cost of US$0.09 million which covered 81 percent of

the Ministry‘s textile needs for 4,017 doctors, 5,056 nurses, 3,160 technicians, 226

midwives, and 2,815 beds.

Spare Parts and Replacement of Damaged Equipment: To ensure better standards of

medical treatment, the ESSP MDTF supported MOH at a cost of US$0.24 million to

purchase 65 percent of various spare parts for 6,000 pieces of medical and lab equipment.

These spare parts were needed for vital equipment such as X-Ray machines, CT scans,

hemodialysis machines, physiotherapy and vocational therapy equipment, computers, and

other items.

Cleaning Materials: ESSP MDTF provided US$0.05 million for cleaning materials. The

cleaning materials were delivered to MOH stores and distributed to the various hospitals

and clinics. This covered the cleaning materials (including bed cloths, covers, coats,

towels, curtains, etc.) for around 60,000 overnight cases using 2,815 beds and 9,000

technical staff.

Office Supplies: The ESSP MDTF provided US$0.25 million for administrative printing

and supplies related to medical reports, stationery for 22 hospitals and 416 primary health

care centers, as well as for MOH administrative offices for a period of four months.

34

MOH Incremental Operating Costs

The ESSP MDTF contributed US$19.44 million to cover part of the incremental

operating expenses of MOH, including rent, fuel, electricity and water, cleaning

contracts, maintenance, communication, and advertising and transportation. As a result,

all health services in 120 laboratories and blood banks, 430 primary health care centers,

23 hospitals and 17 MOH Directorate offices have been maintained.

Rent: By the end of October 2011, an amount of US$1.12 million was disbursed under

this item.

Fuel: According to MOH statistics, MOH funded fuel for 120 vehicles (ambulances and

medical services vehicles; these vehicles‘ average monthly consumption was 250

liters/car with a total of US$0.15 million covering a period of 44 months), and 59

generators (with a monthly average fuel consumption of 100,000 liters) for hospitals and

medical clinics. The total cost of fuel was US$4.39 million.10

In order to follow up the

fuel consumption and to supervise the fuel distribution, the PCU visits MOH hospitals on

a weekly and daily basis when deliveries are made; the PCU takes readings of the

generators and capacity in order to check consumption. For the ambulances, the MOH

transportation department gives coupons to the ambulance drivers with their names and

the vehicle number; also, lists of names and vehicle numbers are distributed to the fuel

stations so that they can check that fuel is given only to those cars. ESSP also supplied

MOH facilities with cooking gas for a total of US$27,000/year. Each month, the PCU

submitted a report to the Bank monitoring fuel supplies in Gaza.

Electricity and Water: By the end of October 2011, the amount disbursed under this item

was US$10.29 million for all MOH facilities in West Bank and Gaza, including hospitals,

primary health care centers, stores, laboratories, administrative buildings, etc.

Cleaning Contracts: By the end of October 2011, the amount disbursed under this item

was US$1.87 million to contract cleaning firms for hospitals and primary health care

centers.

Maintenance: By the end of October 2011, the amount disbursed under this item was

US$0.39 million.

Communications: By the end of October 2011, the amount disbursed under this item was

US$1.37 million.

Advertising and Transportation: By the end of October 2011, the amount disbursed under

this item was US$0.01 million.

10

In addition, the Ministry of Finance through the ESSP III Additional Financing has provided US$0.94

million for fuel for West Bank and Gaza Hospitals (of which US$0.39 million was allocated to MOH Gaza

hospitals and ambulances in Gaza).

35

MOH Tertiary Health Care

The capacity of MOH hospitals is limited vis-à-vis the increasing population, especially

in light of the geo-political situation in WBG where internal closures and checkpoints

make access within the West Bank very difficult for emergency cases such as birth

deliveries. As a result, non-governmental institutions are contracted by MOH to provide

services, including those related to heart diseases, nephrology, oncology, kidney diseases,

birth deliveries, ocular diseases, treatment for cancer patients, blood diseases, as well as

radiology services, etc.

The ESSP MDTF provided US$11.65 million to finance tertiary healthcare contracts with

45 health institutions (US$4.229 million for 32 institutions in the West Bank, US$1.879

million for 8 institutions in Gaza and US$5.534 million for 5 institutions in East

Jerusalem) for a period of 8 months. These treatments in private/non-governmental

institutions benefitted 16,654 patients (10,264 in Gaza and 6,390 in West Bank).

MOH Food

According to MOH statistics, the average length of patients‘ admission to the hospital is

2.5 days, i.e., MOH provides at least 5 meals for each patient. The ESSP MDTF provided

US$0.69 million to finance 22 contracts for the supply of food, including dry food, frozen

meat, dairy products, eggs, bread, fruit and vegetables benefiting 61,300 overnight cases

for a period of 6 months.

Part C – Social Affairs (MOSA)

MOSA Actual Disbursements

(in GBP Million)


(in US$ Million)

MOSA – Goods 0.08 0.16

MOSA - Incremental costs 0.25 0.47

MOSA – Food 0.09 0.18

Total MOSA 0.42 0.81

MOSA runs a total of 38 centers/shelters in the West Bank and Gaza (21 in West Bank

and 17 in Gaza). These provide services, including overnight stays, meals and vocational

training for juveniles, elderly, and persons with disabilities. Vocational rehabilitation

centers provide training in carpentry, blacksmith, sewing, tailoring, plumbing, pottery,

furniture upholstering and straightening, aluminum work, electricity, radio maintenance,

computer maintenance and car maintenance. Training courses for women are usually

organized at MOSA‘s women development centers in vocational fields such as

embroidery, food production, and cosmetology; these courses aim at empowering women

and helping them take part in supporting their households. MOSA has provided shelter

and rehabilitation and training services to 2,150 beneficiaries.

36

MOSA Goods

The ESSP MDTF provided US$0.16 million to finance the purchase of tools, raw

materials and small machines for training centers, office supplies and stationary, textile

and cleaning materials.

Tools, Materials and Small Machines for Training Centers: This item covered the needs

of 12 vocational training centers (in carpentry, blacksmith, sewing, plumbing, pottery,

furniture upholstering and straightening, aluminum work, electricity, radio maintenance,

computer maintenance and car electricity), benefitting 100 beneficiaries in Gaza and 150

beneficiaries in the West Bank. By the end of October 2011, the amount disbursed under

this item was US$0.05 million.

Office Supplies/Stationery: This item covered the expenses of printing checks for social

welfare beneficiaries over 6 months (approximately 50,000 beneficiaries), and stationery

for both MOSA educational institutions and MOSA administrative units. By the end of

October 2011, the amount disbursed under this item was US$0.06 million.

Textiles: This item covered some of the raw materials needs of MOSA vocational

training centers for women. By the end of October 2011, the amount disbursed under this

item was US$0.02 million.

Cleaning Materials: This item covered some of the cleaning needs of MOSA‘s 38

rehabilitation centers/shelters, 2 headquarters and 16 directorate offices for the period of

3 months. By the end of October 2011, the amount disbursed under this item was

US$0.02 million. Due to the developments in the Gaza Strip, many of these centers have

closed.

MOSA Incremental Costs

The ESSP MDTF provided US$0.47 million to cover incremental operating expenses of

MOSA‘s facilities, including rent, water and electricity bills and fuel expenses.

Rent: Most of MOSA‘s premises are rented; MOSA rented 53 buildings in West Bank

and Gaza. By the end of October 2011, the amount disbursed under this item was

US$0.38 million.

Water and Electricity: By the end of October 2011, the amount disbursed under this item

was US$0.05 million.

Car insurance: By the end of October 2011, the amount disbursed under this item was

US$0.006 million.

Fuel: By the end of October 2011, the amount disbursed under this item was US$0.01

million.

37

Maintenance: By the end of October 2011, the amount disbursed under this item was

US$0.02 million.

MOSA Food

The ESSP MDTF provided US$0.18 million to assist MOSA in securing food for the

residents of the shelters and daily care centers, elderly, juveniles, and persons with

disabilities who benefit from the MOSA‘s in-house services for several months: 3-meals

a day for 330 overnight beneficiaries (elderly and juveniles), and one meal a day for 620

beneficiaries from the daily care centers for a period of 4 months for centers in Gaza and

11 months for centers in West Bank.

Part D – Other Key Sectors -- Utilities


(in GBP Million)


(in US$ Million)

CMWU 0.44 0.84

PWA 1.94 3.39

PEA 1.97 3.73

Total Other Key sectors –

Utilities

4.35 7.96

Since 2006, the utility sector was included as a beneficiary of the ESSP MDTF because,

in the prevailing situation, it was perceived as an emergency sector.

Coastal Municipalities Water Utility (CMWU) (Gaza)

CMWU serves 1.5 million inhabitants in Gaza through providing drinking water and

carrying out wastewater collection and treatment. CMWU runs 130 water wells, 4

desalination plants, 6 water pumps, 3 water treatment stations, one sewage treatment

plant and 38 wastewater pumps. The ESSP MDTF provided US$0.84 million to finance

small works, some goods and incremental operating costs. The financing provided by the

ESSP MDTF was very timely because: (i) there was deterioration in the quality of the

water being provided by existing wells, in addition to the increasing levels of salinity and

nitrate concentration which exceeds the World Health Organization (WHO) standard; and

(ii) the repeated Israel incursions in Gaza had destroyed the wastewater networks.

38

CMWU Small Works

Small works carried out by CMWU aimed at improving the living conditions and public

health for the Gaza population, and also helping the CMWU to maintain better control

over the water resources. By the end of October 2011, the amount disbursed for small

works was US$0.16 million, including:

Replacement of water and wastewater networks and connections (US$0.07 million) in

Magazi refugee camp, contributing to improving living conditions for 2,500 inhabitants;

and Equipping three emergency water production wells (US$0.10 million; this package

included supply and installation of 3 pumping units as well as 3 electrical control

switchboards) in Sabra, Zitoon, and Shijaiya areas in Gaza Strip, areas known for their

heavy population density.

CMWU Goods

By the end of October 2011, the amount disbursed for goods was US$0.28 million.

CMWU purchased special chemicals for disinfection and to operate small scale

desalination pumps (US$0.10 million) and electromechanical spare parts for preventive

maintenance for 5 pumps and 2 vertical pumps (US$0.19 million).

CMWU Incremental Operating Costs

CMWU is responsible for maintaining the generators at the water and wastewater

facilities. In addition, CMWU has about 50 vehicles exclusively used for field trips by

the CMWU technical staff/engineers to visit locations and supervision. By the end of

October 2011, the amount disbursed for incremental operating costs was US$0.40

million, including:

Water, Electricity, Rent and Advertising: US$0.12 million;

Fuel for CMWU Vehicles: US$0.06 million;

Vehicles and Equipments Maintenance: US$0.0 million; and

Power supply generator maintenance (2 contracts for a period of 6 months): US$0.21

million

Palestinian Water Authority (PWA) (West Bank)

ESSP MDTF contributed to the improvement of the water situation in West Bank.

39

PWA Small Works

The ESSP MDTF provided US$0.75 million to finance two procurement packages for the

rehabilitation of the water networks in Hebron and Bethlehem areas in the West Bank.

The impact of these projects included: (1) improvement in the accessibility of piped

water supply services for municipal and rural communities in Hebron and Bethlehem,

through water conservation/water demand management actions (reduction of water

losses); (2) improvement in the equitable use of municipal or village water supply within

the respective distribution zones (re-configuration of networks allowed for improved

zoning of systems); (3) improvement in the efficiency of the existing networks, by

adequate sizing of internal distribution mains and replacement of worn-out sections; and

(4) improvement in public health and environmental conditions in general in the targeted

municipalities/villages. In Samu‘ (population 7,000), which has severe water shortages,

the PWA provided water through a piped transmission system (at 45m3/hr).

The rehabilitation and expansion of the Al Ubedia Network aimed to improve village

water network efficiency in the Bethlehem district and to reduce the current losses which

had reached more than 35 percent through replacement and expansion of the piped

distribution system. With the system having deteriorated and being of limited capacity,

and residents suffering from insufficient quantities of water, the ESSP fund has helped

replace and expand the piped system to increase water consumption and improve public

health. The network efficiency has improved from 65 percent to 73 percent. The pipe

system will benefit a population of 8,500.

PWA Goods

The ESSP MDTF provided US$0.03 million to assist PWA in purchasing

electromechanical spare parts for water utilities in the West Bank.

PWA Incremental Operating Costs

The ESSP MDTF provided US$2.62 million for maintenance, fuel and electricity, as

follows:

Maintenance (General Vehicles and equipments): US$0.01 million;

Fuel for water wells, wastewater pumps and vehicles: US$1.72 million; and

Electricity and Advertising: US$0.89 million.

Palestinian Energy Authority (PEA)

The objective of the ESSP MDTF for the electric utilities is to cover the operating and

maintenance costs of the main utilities in West Bank and Gaza serving 730,000

inhabitants, to ensure continuous electricity services to consumers‘ households, firms and

40

workshops, and to maintain or increase quality of services and supply to consumers and

within acceptable limits in health care services, water supply, and other commercial and

industrial sectors. The ESSP MDTF provided a total of US$3.72 million under 7

contracts.

The electric utility companies supported in this project are:

a) Gaza Electricity Distribution Company (GEDCO) serving 250,000 inhabitants;

b) Jerusalem (Central) District Electricity Company (JDECO) serving 250,000

inhabitants; and

c) Southern Electricity Distribution Company (SELCO), and Hebron Power Company

(HEPCO) serving 230,000 inhabitants.

The deterioration in the economic situation in WBG resulted in a dramatic shortage of

capital and thus very poor collection rates in the utility sector. This affected the utility

institutions‘ ability to ensure maintenance and quality of services provided to consumers.

PEA Goods

Many feeders are overloaded. The electricity networks need rehabilitation and

enhancement in order to avoid an increase in losses (which, in 2006, were estimated at

20-30 percent of the total electricity purchased), and to increase the quality of supply to

the consumers and reduce the network outages. The ESSP MDTF provided US$3.68

million to finance the purchase of urgently needed items for operation and maintenance

of the networks for the first half of 2007. Goods included transformers, medium voltage

and low voltage cables, conductors, switches, and insulators.

PEA Incremental Operating Costs

By the end of October 2011, the amount disbursed for incremental operating costs was

US$0.04 million for the following:

Transportation, Advertising and Bank charges: US$ 0.01 million;

Fuel: US$0.03 million; and

Utility Bills (Maintenance): US$0.004 million.

41

Part E – Project Management (PM) and Monitoring (PCU)


(in GBP Million)


(in US$ Million)

PM Services 0.39 0.67

PM Goods 0.01 0.02

PM Incremental

Operating Costs

0.01

0.02

Total PM 0.41 0.71

The ESSP MDTF provided US$0.71 million to finance the Project Management and

Monitoring Component. There were three categories of expenditures, and the main one

was for services.

PM Services

By the end of October 2011, the amount disbursed for services was US$0.67 million.

Services include the contracts of the ESSP-PCU team and a few consultants (a local

lawyer and two international consultants to provide support to MOH for the tertiary

health care services, and the financial auditor).

The ESSP PCU team consisted of a financial officer, a procurement officer, a

disbursement officer, and four accountants responsible for following with line ministries.

The team was selected on a sole source basis since comprised the same staff members

who had been working on the previous phases of the ESSP and who were experienced

and knowledgeable about the program.

The auditing contract was extended several times after incorporating some changes in the

TORs, such as focusing on the quality of the spot check report and increasing the number

of samples to cover all the expenditure categories, including the incremental operating

costs. The auditor submitted 16 spot check reports to the MOF which forwarded them to

the Bank.

PM Goods

By the end of October 2011, the amount disbursed was US$0.02 million for computers

and accessories and some stationary and office supplies.

PM Incremental Operating Costs

By the end of October 2011, the amount disbursed for incremental operating costs was

US$0.02 million for communication, transportation, electricity, maintenance, fuel,

advertising and miscellaneous expenses.

42

Annex 3. Economic and Financial Analysis

(including assumptions in the analysis)

Not applicable.

The ESSP MDTF did not finance investments. It was an emergency operation that

financed only non-salary recurrent expenditures.

43

Annex 4. Grant Preparation and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/

Specialty

Grant Preparation/Appraisal

David Craig Country Director MNCA4 Management

Faris Hadad Zervos Program Manager MNCA4 Management

Sima W. Kanaan Sr. Operations Officer MNSHD TTL

Nicola S. Renison Trust Funds Coordinator MNACS VPU – Funding

Coordinator

Markus Kostner Country Program

Coordinator MNCA4 Operations

Claus Astrup Sr. Country Officer MNCA4 Operations

Hege Hope Wade Operations Officer MNCA4 Operations

Akiko Maeda Health Sector Manager MNSHD Health

Samira Hillis Operations Officer MNSHD Operations

Jean-Jacques Frère Sr. Public Health Specialist MNSHD Health

Adriana Jaramillo Sr. Education Specialist MNSHD Education

Imad Dweik Consultant MNSHD Health

Hyacinth Brown Sr. Financial Management

Specialist LOAFC Finance

Siaka Bakayoko Sr. Financial Management

Specialsit MNAFM Finance

Thao le Nguyen Sr. Finance Officer LOAG2 Finance

Adel Odeh Financial Management

Analyst MNC04 Finance

Antonio Cittati Sr. Procurement Specialist OPCS Procurement

Frederick Kranz Sr. Procurement Specialist MNACS Procurement

Ahmed Merzouk Sr. Procurement Specialist MNACS Procurement

Afaf Abbasi Procurement Specialist MNACS Procurement

Ali Awais Counsel LEGMS Legal

Saadat Siddiqi Consultant CFPTP TFO Clearance

Officer

Maha Bali Program Assistant MNC04 ACS

Huda Skaik Program Assistant MNC04 ACS

44

(a) Task Team members (continued)

Supervision/ICR

Samira Ahmed Hillis Senior Operations Officer MNSSP TTL

Adel Fahed J. Odeh Financial Management

Analyst MNC04 Operations

Adriana Jaramillo Sr Education Specialist MNSHE Education

Afaf Khalil Abbasi Procurement Specialist MNAPR Procurement

Akiko Maeda Lead Health Specialist MNSHD Health

Ahmed Merzouk Senior Procurement

Specialist SARPS Procurement

David J. Steel Consultant OPCRX Operations

Eileen Murray Country Manager MNCTN Operations

Faris H. Hadad-Zervos Program Manager OPCFC Operations

Firas Raad Zaid Al-

Hussein Senior Health Specialist MNSHH Health

Francisco Sarno Consultant AFTEN Procurement

Frederick P. Kranz Consultant SARPS Procurement

Hjalte S. A. Sederlof Consultant SASDU Operations

Khairy Al-Jamal Senior Infrastructure

Specialist EASIS Infrastructure

Laura McDonald Consultant MNSHD ICR

Lina Tutunji Procurement Specialist MNAPR Procurement

Maha Muhammad Bali Program Assistant MNC04 ACS

Majd Laisoon Consultant MNAFM Finance

Markus Kostner Sector Leader, Social

Development EASER Social

Md. Khaled Jahangir Procurement Assistant MNSSD Procurement

Paul Geli Consultant MNSHD ICR

Samir B. Sahhar Consultant MNAFM Finance

Sana Kh.H. Agha Al

Nimer Sr Water & Sanitation Spec. MNSWA Infrastructure

Siaka Bakayoko Sr. Financial Management

Specialist MNAFM Finance

Somin Mukherji Sr Financial Analyst AFTEG Finance

Suhair M. Saah Financial Specialist MNAFM Finance

Surat F. Nsour Operations Officer MNSSP Operations

45

(b) Staff Time and Cost – Bank Budget Only

Stage of Project Cycle

Staff Time and Cost (Bank Budget Only)

No. of staff weeks US$ Thousands (including

travel and consultant costs)

Lending

FY06

Total: 0.00 0.00

Supervision/ICR

FY07 1 5.89

FY08 1.34

FY09

FY10

FY11

FY12

Total: 1 7.23

(c) Staff Time and Cost – Trust Fund

Bank Fiscal Year

Staff Time and Cost (Trust Fund)

No. of staff weeks US$ Thousands (including

travel and consultant costs)

FY07 134 602.37

FY08 33 119.07

FY09 22 81.25

FY10 35 173.29

FY11 16 131.57

FY12 5 18.41

Total: 245 1,125.96

46

Annex 5. Beneficiary Survey Results

Not applicable

47

Annex 6. Stakeholder Workshop Report and Results

Not applicable

48

Annex 7. Summary of Recipient’s ICR

IMPLEMENTATION COMPLETION REPORT

EMERGENCY SERVICES SUPPORT PROJECT, ESSP

November 2011

PROJECT BACKGROUND

In response to recent fiscal crisis emerged from the Palestinian legislative elections in

January 2006, the World Bank and other donors (EC, DFID , Austria, Norway, Sweden,

Belgium , Spain , Swiss Development Cooperation , France) has re-lunched ESSP MDTF

as a window of Temporary International Mechanism (PEGASE) administrated by

International Development Association, the grant agreement was signed between Office

of the President and International Development Association in September 18, 2006 with

total a accumulative budget amount GBP 44,024,793 to finance non-salary recurrent

expenditures of the Palestinian Authority social sector ministries(MOH, MOEHE, and

MOSA) and the three utility sectors (Palestinian Water Authority, Palestinian Energy

Authority and Coastal Management Water Utility).

The main concept behind launching ESSP-MDTF was to ensure the continuation of flow

of essential services under the status quo, through helping the PNA in covering the non-

salary recurrent expenditures in the social sector; including health, education and higher

education, social services, and the three utility sectors by providing required funds for

sustaining essential supplies in drugs and medical supplies, covering the tertiary health

care expenses, maintaining availability of school supplies, paying the university's

academic staff salaries and sustaining utility services such as fuel, maintenance,

electricity and water.

The first phase of the Emergency Services Support Program (ESSP) was launched in

2002 to mitigate the impacts of the economic crisis through financing of non-salary

recurrent expenditures of the ministries of health, education and higher education and

social affairs, the total budget was provided by World Bank and others donors through

two phases of ESSP around 176 million USD to finance non-salary recurrent

expenditures of the Palestinian Authority social sector ministries. Almost 100% of the

planned budget for these ministries could be reported covered if we exclude some

uncovered components of the emergency budget, such as the social safety net for

hardship cases program at MOSA, and abroad tertiary health care at MOH.

Although the MOLG component was excluded in the second phase of the ESSP and in

the ESSP-MDTF as it is covered under special bank financing program (EMSRP) due to

its particular nature. Instead, three additional components were added to the MDTF. The

first was to the benefit of Palestinian Water Authority. The second component was to the

benefit of Palestinian Energy Authority. The third component was to the benefit of and

Coastal Management Water Utility.

49

SCOPE AND OBJECTIVES

ESSP-MDTF was launched to mitigate the deterioration of social, education, health and

utility sector services by financing the tertiary health care expenses, essential drugs,

school supplies and university teaching staff salaries, food for social centers, utility sector

services, thus, the main components under the MDTF-Trust Fund of the project consisted

of providing fund to the social sector ministries which are MOH, MOEHE, MOSA, in

addition to a particular component designed for providing support to the three utility

sectors to cover emergency projects in these sectors such as water network rehabilitation,

supplying electric materials, spare parts, fuel and chemicals solid waste, water, waste

water, electricity, and roads.

On 2006 the governmental financing became increasingly fragmented leaving the

government unable to cover current and recurrent expenses of its ministries including the

universities thus it was deemed necessary to increase the special component for the

universities to reach the amount of USD 16 million, to provide financial support to

universities and its teaching staff.

The project objectives were to provide non-salary budgetary support to key social sector

ministries and utility sectors with the aim of mitigating further deterioration of basic

social services and the continued rise in poverty rates brought about by Israeli‘s

continuous policy of withholding PNA clearance revenues and Border‘s closure and trade

restrictions, especially in Gaza. This was accomplished by bridging the shortfall in

budget financing available to the ministries particularly in the field of social sectors such

as education, health, and welfare to enable them to sustain their services and respond to

the new emerging needs of the population. The project had a strong development

objective of keeping those institutions responsible for development from collapsing

through support to their non- recurrent costs budgets.

DESCRIPTION BY COMPONENT

ESSP-MDTF included the following components; Education, Health, Social Welfare and

Utility Sector Services.

I. Education Services

This component covered the following operating budget items of the MOEHE.

a) Recurrent Expenditure: This sub-component included expenditures such as:

a) Rent payments of school buildings

b) Transportation expenses, including fuel, vehicle maintenance, licensing and

insurance

c) water and electricity for schools, directorates and the Ministry's headquarters

d) Communication costs, including telephones and mail

e) Consumables

f) Maintenance

g) Office supplies

h) Heating fuel

50

b) Learning Materials: This sub-component included expenditures such as:

i) Tools& Materials For School Lab.

j) Teaching Aid For Schools

k) Sport Tools For Schools

l) Computers For Vocational Schools

m) Raw Materials for Vocational & agricultural Schools

c) Furniture's For Schools: This sub-component included routine replacement of

furniture and equipment in existing schools.

d) Consumables Materials: This sub-component included Cleaning Materials, Food

for Agric. Schools, and Animal Feed for Agric. Schools.

e) Printing& Stationary: This sub-component included Printed Administrative

Forms, G .Examination Stationary, Printing for G .Examination Stationary for

Schools.

f) Small works: This sub-component included Rehabilitation Of Schools and Urgent

Maintenance Of Schools

g) Universities academic staff salaries.

II: Health Services

This component covered the following operating budget items of the MOH:

a) Essential Drugs and Medical Consumables: This sub-component included the

procurement of essential drugs, vaccines, laboratory and blood bank materials and

other medical consumables.

b) Non-medical Recurrent Expenditure: This sub-component included non-medical costs

of operating and maintaining health facilities, including maintenance, spare parts,

communications, fuel, water and electricity utilities, rent for health facilities, cleaning

services, cleaning material, transportation, hospital linens, uniforms and stationary.

c) Treatment in private/Non Governmental Clinics: This sub-component included

contracts with private/non-governmental medical institutions for providing

emergency services that are not available by public facilities in the area.

d) Hospital Food Contracts: This sub-component covered the cost of food for hospitals.

51

III: Social Assistance Services

This component covered the recurrent operating budget of MOSA and its shelters,

rehabilitation and training centers. It also upgraded some of the essential equipment used

in the shelters and vocational training centers. These centers provide school dropouts

with labor market technical skills and rehabilitation and reintegration services to

dysfunctional youth, the elderly and the disabled.

a) Recurrent Expenditures: This sub-component financed expenditures such as: rent,

transportation, fuel, vehicle rental, insurance, licensing and insurance, water and

electricity utilities, and communication including telephones and mail, office

supplies, maintenance of equipment and buildings, and heating fuel.

b) Equipment for shelters / Rehabilitation and Training Centers. This sub – component

covered procurement of Tools, Materials and Small Machines for Training Centers,

as well as Office Supplies, Textile and Cleaning Materials,.

c) Food: This sub-component covered the cost of food for the residents of the shelters

and daily care centers, elderly, juveniles, and handicapped who benefit from the

MOSA‘s in-house services.

IV: Support to the Utility sector :

This component covered the following operating budget items for PWA,PEA and

CMWU:

a) Replacement of water& wastewater Networks

b) Water well replacement& rehabilitation

c) Water Network rehabilitation

d) Electromechanical generator

e) Chemicals for water disinfection& water treatment

f) Electromechanical supplies

g) Electricity Material

h) Recurrent Expenditures: This sub–component financed expenditures such as: rent,

transportation, fuel for water cars and wells, vehicle rental, insurance, licensing and

insurance, water and electricity utilities, maintenance of equipment and buildings,

and Repair& maintenance of stand by for generator, oils, filters.

V: Project Management and Capacity Building:

This component included the following:

a) Project management and monitoring: This sub-component supported the project

management structure as well as consultants contracts to support and monitor

project implementation and also finance audits

b) Equipments and furniture: This sub-component supported the project management

through providing Computer & other office equipments as well as furniture and

office supplies.

52

c) Capacity building for key ministries and utilities sector: This sub-component

included support to the line ministries or utilities to improve their

Procurement operations related to the project activities and financial

management.

d) Project Audit Cost.

PERFORMANCE INDICATORS The particularity of the emergency nature of the project, plus the complicated

circumstances under which the ESSP-MDTF has been functioning, implies less

measurable performance indicators per se to evaluate the achievements and outcomes

brought about by the project implementation, which could primarily be attributed to the

specific character of such outcomes and achievements, being more of an abstract-value

oriented rather than a assessable product.

The following performance indicators were however identified in the Project Appraisal

Document for monitoring of Project Outputs:

1. Increased availability of essential drugs and rehabilitation services through financing:

(i) essential drugs and medical consumables; and (ii) non-medical recurrent

expenditures, such as costs of operating and maintaining health facilities including

communication, fuel, water and electricity utilities, rent for health facilities, cleaning

services and materials, transportations, uniforms and stationary; (iii) contracts with

NGOs to provide unavailable health services; (iv) nutrition services and hospital food

contracts.

2. Improving and sustaining educational facilities for students and sustain educational

services at all levels through supporting (i) recurrent expenditures such as rent or

school buildings, transportation (including fuel) and vehicle maintenance, water and

electricity utilities for schools, communication, maintenance of equipments and

buildings; (ii) Learning Materials; (iii) general examinations including financing of

stationary, printing of examinations; (iv) financing materials required for school

activities such as sports, arts, science, home economics, and other summer school

activities; (v) financing furniture's for Schools (vi) vocational and commercial

education schools; (X) Rehabilitation Of Schools and Urgent Maintenance Of

Schools and (vi) support for higher education institutions.

3. Implementation of projects structured to improve utility sectors component(PWA,

PEA and CMWU) services in the fields of water and waste water and electricity

sector, and thus improvement of life quality of people through providing emergency

support for (i) Water sector; (ii) Water Networks; (iii) electricity sector.

4. Having better equipped MOSA shelters facilities and increasing number of benefited

inhabitants from these centers and providing better quality of services through

covering (i) recurrent operating budget of MOSA and its shelters/rehabilitation and

training centers; (ii) upgrading essential equipment used in shelters and vocational

53

training centers; (iii) covering minor rehabilitation works on shelters/rehabilitation

and training centers and (iv) food for the residents of the shelters

ESSP MDTF BUDGET

By end of October 2011, the budget of ESSP MDTF totaled GBP 44,024,793, of which

the amount of GBP 44,024,733 was disbursed by line ministries and the amount of GBP

25.20 was not received. The average monthly disbursement from the beginning to the

deadline date of the project is GBP 898,450 per month.

The amount of GBP 44,024,768 was disbursed by IDA, and the amount of GBP 34.42

will be refunded to World Bank during November 2011 and all remaining funds under

the project will be closed.

ESSP MDTF started with commitments from several donors for a total amount of GBP

24.3 million and the project budget has been increased to reach GBP 44.02 million after

new commitments from other donors. Therefore the project agreement has been amended

five times to reflect the new donor‘s commitment. These amendments were signed

respectively as follows: first amendment on December 14, 2006 with total amount of

GBP 29.3; third and fourth amendment's on December, 2007, March 2008 with total

amount of GBP 39.2; and the Fifth Amendment was on 16 April 2009 with total amount

of GBP 44.02 million.

PROJECT IMPLEMENTATION

Overall management of the ESSP MDTF was at the first stage the responsibility of the

President office through a Project Coordination Unit that was especially established for

this project however after the second amendment dated on September 30, 2007, the

implementation responsibility under the project transferred from Office of the President

of Palestinian Authority to Economic Affairs Department of Palestine Liberation

Organization through MOF and the same PCU. The actual implementation of the various

project components was handled by both line ministries and PCU.

I. Project Coordination Unit (PCU) The PCU is staffed with project coordinator, procurement officer, disbursement officers,

Financial Officer, two junior accountants and secretary. The PCU acts as a liaison

between MOF and the participating line ministries. It reported to the Head of the

International Relations and Projects Department, who was responsible for ensuring

timely submission of project monthly statements and quarterly reports.

Implementation arrangements between the recipient and implementing agencies:

While the physical implementation of the project components was the responsibility of

the line ministries concerned (MOEHE, MOH, MOSA, MOF, PEA, PWA and CMWU),

implementation according to Bank rules and procedures was supervised and monitored

on a daily basis by the Ministry of Finance based on regular records and book keeping.

The MOF provided on-the-job training for the line ministries‘ employees to improve their

54

capacity and familiarity with the World Bank‘s procurement and disbursement

procedures and regulations. A Procurement consultant has been contracted by DFID to

provide assistance in procurement related matters to the PCU and the beneficiary

ministries, including assisting in the evaluation process, support with preparation of

technical specifications for medical equipment, etc

II. World Bank Involvement

Bank staff maintained close and continuous cooperation, especially staff in the regional

office that were available to provide support and advice around the clock, and even in

holiday times. The understanding of the Bank staff to the special nature of this project

and of the circumstances through which the Palestinian people and Authority were going,

helped simplify the application of the procurement guidelines, and in many events MOF

got waivers from the Bank for various procurement processes. The World Bank raised the

authorized allocations and accelerates the replenishment process as a response to the

increased number of submitted WA and the delays of its delivery due to the closures.

III. Monitoring and Evaluation

Execution of the project was continuously monitored at different levels. Day to day and

regular monitoring was done by MOF, under the supervision of the International

Relations and Projects Department and through the Project Coordination Unit. MOF

maintained policies and procedures adequate to enable it to monitor and evaluate the

project on an ongoing basis. MOF was responsible for the preparation of the summarized

quarterly progress reports and FMRs, which included a detailed breakdown of

expenditures incurred under the Project during the preceding period.

IV. Audit Arrangements

As per the Bank‘s regulations, an independent Auditor was selected and contracted based

on a competitive process from a short list of qualified firms. The selection method criteria

were Least Cost Based Selection (LCS). ―Talal Abu Ghazala& Co.‖ was chosen to be the

external auditor for the ESSP MDTF (three extension requests took place for the auditor

contract to continue auditing the project). The audits were to be performed on a quarterly

basis. The Terms of reference prepared by MOF and cleared by IDA, were used to

require the auditor to operate under international auditing standards on the project

financial statements (including an SOE statement) and a statement of Special Account.

The financial statements are audited and presented to IDA within six months of the end

of each fiscal year. IDA has also requested that the External Audits be supplemented with

physical spot audits that confirmed the physical delivery of goods and their well

maintenance. Physical Audits are provided quarterly in a separately documents.

The first contract with Talal Abu Ghazala& Co. for ESSP MDTF was signed on May 1,

2007. Since the starting date of the contract, Talal Abu Ghazala& Co. submitted to MOF

& IDA the following reports:

1. Spot check report up to June 2007.

2. Financial Auditing report up to June 2007

3. Spot check report up to September 2007

4. Spot check report up to December 2007.

55

5. Financial Auditing report up to December 2007.

6. Spot check report up to March 2008.


8. Spot check report up to September 2008.


10. Financial Auditing report up December 2008.










20. The final check report up to October.

21. The final auditing report in preparation and will issue shortly.

In its reports, Talal Abu Ghazala& Co stated that they conducted their audit in

accordance with International Standards on Auditing. In their opinion, the financial

statements presented by the project‘s management present fairly, in all material respects,

the financial position of the ESSP MDTF and its cash receipts and expenditures and cash

flows, i.e. no material findings and the reports were all unqualified.

As a result of extending the closing date of the grant agreement ―June 30, 2010‖, the PLO

has sent a request to the World Bank to extend the auditor‘s contract to be valid till June

30, 2010, and thus a new contract was signed with the auditor. The auditor‘s contract has

also been extended twice to be valid till the application deadline of the project (31

October 2011).

In addition to the external Audits, IDA conducted procurement and financial ex-post

reviews. While these reviews generally assessed the performance of the ministries as

adequate and that, by and large, most transactions were done in accordance with the

Bank‘s procedures and guidelines, few transactions were identified whereby project

funds were used for ineligible items. These were small in amounts and the MoF were

asked to reimburse the project for their total value. These reviews were extremely helpful

in terms of providing an opportunity for the Bank to supplement technical assistance to

the line ministries to improve their capacity in handling financial and procurement

transactions.

DIFFICULTIES AND OBSTACLES

Internal closures represented the biggest constraint on the project implementation,

particularly during the first year. The closures not only affected the procurement of goods

and works, but also affected the movement of goods and personnel between cities, towns

and villages. This had a big negative impact on the fulfillment of the commitments by

56

different suppliers and contractors, and consequently on the commitments of the different

line ministries. The current strict siege on Gaza Strip and the absence of the official

employees at the Gaza Ministries; adds further obstacles and problems in the

implementation process. Sine Nov. 2008, No fuel was allowed to enter Gaza strip from

Israel accordingly the quantities of fuel available in Gaza were very limited and were not

enough to supply the hospitals and clinics.

ESSP-PCU is based in Gaza which has been closed off since June 2007. ESSP PCU staff

have been working under extremely difficult circumstances and have been dealing with

severe power outages in addition to the Limited fuel quantities in Gaza caused a lot of

obstacles to both PCU and the Beneficiary ministries in terms of transportation and

providing services.

To assist in overcoming some of the physical constraints faced due to closures, IDA

allowed in some cases for the operation of sub-accounts for some ministries. This was

however subject to ex-post review and amounts of transfers were limited to certain

thresholds.

Some difficulties related to the Procurement of the Goods and Works for the benificiary

ministries were faced in the beginning of the ESSP MDTF, which slowed down the

implementation during the first year of the project. Such difficulties were a result of the

huge number of procurement transactions that is subject for prior review and the low

capacity of line ministries in dealing with procurement guidelines at that stage. On the

other hand a few persons were assigned at the bank side for reviewing and following the

procurement packages which results in an additional delays.

Derived from the PNA‘s lack of experience in handling international biddings, delays in

the tendering process used to occur in the beginning of the project.

ESSP IMPACT

Despite the continued closures and curfews imposed on many areas in the Gaza Strip and

West Bank, the functional capacity and structure of ESSP MDTF has been positively

established and developed vis-à-vis its outlined goals, and ESSP MDTF has helped

maintaining basic public services related to education, health, Utility sector and social

affairs. The project managed to support essential needs to line ministries as follows:

MOE: The ESSP MDTF helped the MOE to meet the demands of 1500 schools and

education and 17 MOE directorate offices and to keep its operation going and to improve

its capabilities.

MOH: Funding essential drugs and other incremental operating expenses have helped the

ministry.

MOSA: Under both the social shelters program and rehabilitation and training centers

program, ESSP helped MOSA provide adequate equipment, furniture, and learning

materials.

57

PWA: ESSP is contributing to the improvement of the water situation in the West

Bank, through covering Water Systems Rehabilitation Packages in Hebron and

Bethlehem areas with the total amount of USD 748,475.

CMWU: ESSP comes in the time where there is deteriorating in the quality of the water

being provided by existing wells in addition to the increasing levels of salinity and nitrate

concentration which exceeds the WHO standard, in addition to the destroyed wastewater

networks from the repeated Israel incursions in Gaza.

PEA: ESSP funds been utilized to provide utility providers with the main goods needed

to maintain the electricity networks in order to increase the quality of supply to the

consumers and reduce to network outage for the benefit of the Palestinian people.

LESSONS LEARNT

Success of emergency projects is based on close supervision, and readiness to be

flexible in adopting the project to domestic realities, in addition to the quick response

from financer and implementing agency to the urgent needs and changed

requirements through reallocations.

The broad success of ESSP-MDTF is primarily due to the fact that it is aligned with

the PA‘s strategy to help prevent a collapse in social service delivery.

The ESSP -MDTF was the result of close consultations with the counterparts

and consensus, the PCU faced little difficulties in implementation.

Although the centralization of all procurement and financial transactions at the PCU

and MOF may cause some delays it has gained the PCU with a rich experience in

dealing with all accepts of procurement and financial issues. Also it has allowed the

PCU to track and monitor all contracts related to the project. In addition the PCU was

able to obtain and gather all types of information need for reporting and presentation

purposes.

Given the nature of budgetary support operations and compared to other programs,

the implementation rate of emergency projects is quicker; therefore disbursement and

procurement procedures should be simplified.

The later simplification in the design of ESSP-MDTF has allowed faster

disbursement than has been possible under previous ESSP phases as there is not

any procurement of goods, works, or drugs.

58

Another positive lesson stems from the accessibility of the Bank‘s task team which is

resident in the WB&G country office. It also enabled close monitoring of and

response to the ever-changing political and economic environment facing the

government and affecting its priorities.

Using three different currencies in dealing with the project financial management

under Trust Fund has caused some pressure on the financial management team

at the PCU in terms of managing and tracking budget and contract management.

Donors at the first stage of the ESSP MDTF have fulfillment their commitments

toward Funding the project however funding the program has been unpredictable and

erratic in the last years

59

Financial Progress:

Summary:

Total allocated budget of ESSP MDTF is GBP44.024 million, become GBP 43.99

million after the refunded amounts, the total budget was fully disbursed at the deadline

date of the grant "October 31, 2011".

Analysis:

The following tables summarize and compare the allocated budget commitments and

expenditure report for each of the line ministries in end October 2011.

Explanations Allocated Budget Disbursement by IDA Disbursement by Ministry

GBP USD GBP USD GBP USD

MOE 15,592,377 29,442,925 15,540,995 29,360,591 15,540,995 29,198,789

Small Works 420,000 786,479 320,054 626,326 320,054 626,326

Goods 2,520,000 4,669,575 2,415,737 4,502,504 2,415,737 4,502,504

Incremental 5,053,786 9,329,841 5,213,442 9,585,673 5,213,442 9,585,673

Un. Staff Salaries 7,598,591 14,495,227 7,591,762 14,484,285 7,591,762 14,484,285

Exchange R. Disc. 161,802 161,802

MOH 23,196,676 42,932,533 23,259,640 43,033,427 23,259,640 42,649,832

Goods 6,166,710 11,725,135 5,628,091 10,862,052 5,628,091 10,862,052

Services 6,093,318 11,583,190 6,135,043 11,650,051 6,135,043 11,650,051

Food 350,000 693,598 349,858 693,371 349,858 693,371

Incremental 10,586,648 18,547,014 11,146,648 19,444,358 11,146,648 19,444,358

Exchange R. Disc. 383,595 383,595

Utility Sectors 4,298,411 7,983,775 4,349,357 8,065,410 4,349,357 7,958,983

Small Works 512,000 925,649 503,618 912,217 503,618 912,217

Goods 2,322,966 4,340,355 2,104,990 3,991,071 2,104,990 3,991,071

Incremental 1,463,446 2,611,344 1,740,749 3,055,695 1,740,749.03 3,055,695

Exchange R. Disc. 106,427 106,427

MOSA 436,360 827,249 422,936 805,739 422,936 805,739

Goods 78,825 155,312 78,824 155,311 78,824 155,311

Food 93,023 183,845 93,022 183,843 93,022 183,843

Incremental 264,512 488,092 251,090 466,585 251,090 466,585

MOF 457,120 787,123 408,015.42 708,437.79 408,015.42 708,437.79

Goods 30,975 53,281 11,513 22,095 11,513 22,095

Services& Training 400,145 690,090 387,951 670,551 387,951 670,551

60

Explanations Allocated Budget Disbursement by IDA Disbursement by Ministry

GBP USD GBP USD GBP USD

Incremental 26,000 43,751 8,552 15,792 8,552 15,792

Exchange R. Disc. 112,464 112,464

Total 43,980,944 82,086,068 43,980,944 82,086,068 43,980,944 81,321,781

MOEHE

Description Allocated Budget Actual

GBP USD GBP USD

MOE&H.E

MOE

Small works

Rehabilitation Of School 225,568.46 442,345.04 225,568.46 442,345.04

Urgent Maintenance Of School 94,485.72 183,981.33 94,485.72 183,981.33

Unallocated 99,945.82 160,153.18

Total Small Works 420,000.00 786,479.55 320,054.18 626,326.37

Goods

Learning Materials 731,368.16 1,309,430.96 731,368.16 1,309,430.96

Tools & Materials For School

LAe. 230,630.95 395,284.28 230,630.95 395,284.28

Teaching Aid For Schools 186,355.43 323,777.00 186,355.43 323,777.00

Sport Tools For Schools 72,835.50 145,221.50 72,835.50 145,221.50

Computers For Vocational

Schools 90,842.29 177,596.43 90,842.29 177,596.43

Raw Materials for Vocational &

agricultural Schools 150,703.99 267,551.75 150,703.99 267,551.75

Furniture‘s For Schools 482,712.29 783,715.36 482,712.29 783,715.36

Consumables Materials 413,701.72 836,679.43 413,701.73 836,679.45

Cleaning Materials 363,428.65 737,285.99 363,428.66 737,286.01

Food For Agric. Schools 8,248.50 16,849.44 8,248.50 16,849.44

Animal Feed For Agric. Schools 42,024.57 82,544.00 42,024.57 82,544.00

Printing& Stationary 787,954.40 1,572,678.03 787,954.40 1,572,678.03

Printed Administrative Forms 15,903.87 31,094.50 15,903.87 31,094.50

G. Examination Stationary 120,165.66 242,297.65 120,165.66 242,297.65

Printed For G. Examination 30,835.28 61,896.60 30,835.28 61,896.60

Stationary For Schools&

District Office 621,049.59 1,237,389.28 621,049.59 1,237,389.28

Unallocated 104,263.43 167,071.72

Total Goods 2,520,000.00 4,669,575.50 2,415,736.58 4,502,503.80

61

Description Allocated Budget Actual

GBP USD GBP USD

Incremental

G. Examin. Controllers 1,105,677.25 1,934,503.53 1,105,677.25 1,934,503.53

Rent 674,074.39 1,281,975.93 674,074.39 1,281,975.93

Transportations 2,026.82 4,007.83 2,026.82 4,007.83

Electricity & Water 1,792,861.93 3,208,238.01 1,792,861.93 3,208,238.01

Communications 539,335.34 963,241.99 539,335.34 963,241.99

Maintenance 136,331.16 261,079.20 136,331.16 261,079.20

Miscellaneous 865.68 1,609.27 865.68 1,609.27

Insurance 23,945.89 47,356.91 23,945.89 47,356.91

Fuel 88,797.99 174,571.15 88,797.99 174,571.15

Advertising 5,345.19 10,470.94 5,345.19 10,470.94

Unallocated (159,655.88 -255,832.58)

Total Incremental 4,209,605.76 7,631,222.18 4,369,261.64 7,887,054.76

Total MOE 7,149,605.76 13,087,277.23 7,105,052.40 13,015,884.93

HE

Salaries Salaries 7,591,762.30 14,484,285.23 7,591,762.30 14,484,285.23

Unallocated 6,828.70 10,942.31

Total Salaries 7,598,591.00 14,495,227.54 7,591,762.30 14,484,285.23

Incremental

Water& Electricity 411,490.92 827,301.16 411,490.92 827,301.16

Communications 139,429.78 280,706.46 139,429.78 280,706.46

Rent 9,705.38 19,523.78 9,705.38 19,523.78

Transportations& Car

Insurance 3,592.60 7,263.80 3,592.60 7,263.80

Fuel 142,990.46 286,459.54 142,990.46 286,459.54

Maintenance& Cleaning

Contract 136,971.10 277,363.89 136,971.10 277,363.89

Total Incremental 844,180.24 1,698,618.63 844,180.24 1,698,618.63

Total H.E 8,442,771.24 16,193,846.17 8,435,942.54 16,182,903.86

Exchange R. Disc. 161,802

Total- MOE&H.E. 15,592,377.00 29,442,925.14 15,540,994.94 29,198,788.79

62

MOH:

Description

Allocated Budget Actual

GBP USD GBP USD

MOH

Goods

Drugs 3,204,657.62 6,322,667.70 3,204,657.62 6,322,667.70

Medical Supplies& Disposables 1,091,679.42 2,082,443.32 1,091,679.42 2,082,443.32

Lab Materials& Blood Bank

Disposables 765,953.89 1,485,017.69 765,953.89 1,485,017.69

Medical Gazez 75,576.50 148,546.55 75,576.50 148,546.55

Nutrition 116,911.28 190,732.01 116,911.28 190,732.01

Stationery & Office Supply 145,742.31 245,188.34 145,742.31 245,188.34


Textile 55,593.32 91,093.00 55,593.32 91,093.00

Spare Parts&Replacement Damage

Equipments 145,598.68 243,510.20 145,598.68 243,510.20

Unallocated 538,618.70 863,082.60

Total Goods 6,166,710.00 11,725,134.99 5,628,091.30 10,862,052.39

Incremental

Rent 689,667.88 1,115,604.09 689,667.88 1,115,604.09

Fuel 2,605,478.21 4,351,455.24 2,632,366.58 4,394,541.17

Communication 800,795.59 1,370,493.16 800,795.59 1,370,493.16

Electricity&Water 5,853,089.58 10,290,012.52 5,853,089.58 10,290,012.52

Maintenance 209,350.96 389,430.48 209,350.96 389,430.48

Cleaning Contract 953,877.82 1,869,392.95 953,877.82 1,869,392.95

Transportations& Advertising 7,499.45 14,883.69 7,499.45 14,883.69

Unallocated (533,111.49) (854,257.85)


Tertiary Care

Tertiary Care 6,133,680.04 11,647,689.48 6,134,324.35 11,648,721.92

Bank Charge Services 718.56 1,329.27 718.56 1,329.27

Unallocated (41,081.07) (65,828.31)

Total Tertiary Care 6,093,317.53 11,583,190.44 6,135,042.91 11,650,051.19

Food Foods 349,857.96 693,370.75 349,857.96 693,370.75

Unallocated 142.04 227.60

63

Description


GBP USD GBP USD

Total Food 350,000.00 693,598.35 349,857.96 693,370.75

Exchange R. Disc. 383,594.90

Total-MOH 23,196,675.53 42,932,532.98 23,259,640.03 42,649,832.39

MOSA:

Description


GBP USD GBP USD

MOSA

Goods

Tools, Materials and Small

Machines for Training Centers 25,392.36 49,708.52 25,392.36 49,708.52

Office Supplies 30,796.93 60,908.51 30,796.93 60,908.51

Textile 10,168.58 19,818.80 10,168.58 19,818.80



Total Goods 78,825.00 155,312.50 78,824.09 155,311.04

Incremental

Rent 207,660.58 382,161.38 207,660.58 382,161.38

Electricity & Water 25,445.30 49,050.24 25,445.30 49,050.24

Communication 0.00 0.00 0.00 0.00

Maintenance 10,182.93 19,952.08 10,182.93 19,952.08

Fuel 4,867.07 9,646.76 4,867.07 9,646.76

Insurance 2,934.39 5,774.10 2,934.39 5,774.10

Unallocated 13,421.73 21,506.98

Total Incremental 264,512.00 488,091.54 251,090.27 466,584.56

Food Food 93,021.80 183,843.13 93,021.80 183,843.13


Total Food 93,023.00 183,845.05 93,021.80 183,843.13

Total MOSA 436,360.00 827,249.09 422,936.16 805,738.73

64

MOF:

Description


GBP USD GBP USD

PM

Goods

Computers & Accessories 10,854.17 20,840.00 10,854.17 20,840.00

Office Equipments 0.00 0.00 0.00 0.00

Vehicle 0.00 0.00 0.00 0.00

Stationery & Office Supply 658.39 1,254.92 658.39 1,254.92

Unallocated 19,462.24 31,186.29

Total Goods 30,974.80 53,281.21 11,512.56 22,094.92

Incremental

Communication 1,342.77 2,339.36 1,342.77 2,339.36

Transportation& Electricity 2,448.97 4,586.02 2,448.97 4,586.02

Maintenance 2,138.91 4,263.50 2,138.91 4,263.50

Fuel 647.34 1,228.30 647.34 1,228.30

Miscellaneous 843.10 1,529.90 843.10 1,529.90

Advertising 1,851.57 3,000.00 1,130.94 1,845.26

Unallocated 16,727.34 26,803.89


Services

Contracts for Consultants 317,418.52 541,624.00 317,418.52 541,624.00

Capacity Building Staff 30,063.91 59,463.81 30,063.91 59,463.81

Training &Conference 0.00 0.00 0.00 0.00

Consulting Services / Auditing 42,521.74 72,753.00 40,468.40 69,462.72

Unallocated 10,140.83 16,249.66

Total Services 400,145.00 690,090.47 387,950.83 670,550.53


Total P.M 457,119.80 787,122.65 408,015.42 708,437.79

65

Utility Sectors:

Description


GBP USD GBP USD

Utility Sectors

CMWU

Small works

Replacement of water& Waste

water services connections 0.00 0.00 0.00 0.00

Replacement of water&

wastewater Networks 35,072.08 65,016.24 35,072.08 65,016.24

Water well replacement&

rehabilitation 47,516.66 98,725.54 47,516.66 98,725.54

Repair& maintenance of CMWU&

water wells 0.00 0.00 0.00 0.00


Goods

Electromechanical spare parts for

repair or replacement 95,429.70 185,427.00 95,262.89 185,159.70

Chemicals for water disinfection&

water treatment 48,291.07 96,473.20 48,291.07 96,473.20

Total Goods 143,720.77 281,900.20 143,553.96 281,632.90

Incremental

Vehicles &equipment maintenance 0.00 0.00 0.00 0.00

Water and Electricity& Rent&

Advertising 71,939.13 124,326.35 71,939.13 124,326.35

Repair& maintenance for

electromechanical work, water

wells 0.00 0.00 0.00 0.00

Repair& maintenance of stand by

for generators oils filters 106,275.06 208,866.54 106,275.06 208,866.54

Fuel For water cars 32,470.80 64,586.35 32,470.80 64,586.35


Total CMWU 436,994.50 843,421.22 436,827.69 843,153.92

PWA

Small works

Network rehab. Samua Beit Ula

Net. 306,522.73 539,112.18 306,522.73 539,112.18

Network rehab. South Bethlehem 0.00 0.00 0.00 0.00

Network rehab. Ubaidia-

Bethlehem 114,506.37 209,363.25 114,506.37 209,363.25

Network rehab. Beit Amra 0.00 0.00 0.00 0.00

Repair Maintenance of Civil

Works 0.00 0.00 0.00 0.00


Goods Electromechanical spare parts for

repair and replacements 14,001.52 27,723.00 14,001.52 27,723.00

Total Goods 14,001.52 27,723.00 14,001.52 27,723.00

66

Description


GBP USD GBP USD

Incremental

Maintenance (G.

Vehicle,Equipment) 6,250.00 12,000.00 6,250.00 12,000.00

Wells Fuel 981,946.98 1,717,281.25 981,946.98 1,717,281.25

Electricity& Advertising 520,911.62 887,507.21 520,911.62 887,507.21


Total PWA 1,944,139.22 3,392,986.89 1,944,139.22 3,392,986.89

PENRA

Goods Electricity Material 1,966,156.93 3,711,715.52 1,947,435.01 3,681,715.52

Total Goods 1,966,156.93 3,711,715.52 1,947,435.01 3,681,715.52

Incremental

Utility Bills(Maintenance) 2,075.12 4,212.49 2,075.12 4,212.49

Transportations& Advertising&

Bank Charge 5,189.15 10,181.09 5,189.15 10,181.09

Fuel For cars 13,691.17 26,733.41 13,691.17 26,733.41


Total PENRA 1,987,112.37 3,752,842.51 1,968,390.45 3,722,842.51

unallocated

Small works 8,382.16 13,431.57

Goods 199,086.36 319,015.98

Incremental (277,303.03) (444,350.38)


Total Utility Sectors 4,298,411.58 7,983,774.81 4,349,357.36 7,958,983.32

Grand Total 43,980,943.91 82,086,068.42 43,980,943.91 81,321,781.02

67

Annex 8. Comments of Co financiers and Other Partners/Stakeholders

Comments received from donors on the draft ICR have been incorporated in this final

version of the ICR.

68

Annex 9. List of Supporting Documents

a) Implementation Completion Report – No.: 32356 – for an Emergency

Services Support Project – June 3, 2005

b) Implementation Completion Report – No.: 32357 – for a Second

Emergency Services Support Project – June 3, 2005

c) ESSP MDTF – Concept Note – draft dated June 28, 2006

d) Initiating Brief for Trust Fund (IBTF) – ESSP MDTF – Request Number:

1891 (Approved) – Clearance Date: 7/31/2006

e) Emergency Services Support Program – Program Document – Undated

f) Trust Fund Grant Agreement – Emergency Services Support Program –

TF 057315 – Dated September 18, 2006

g) ESSP – Additional Instructions: Disbursements – Dated September 18,

2006

h) ESSP Operating Manual (OM) – Undated

i) Administration Agreements (AA) and amendments between IDA and

individual countries (Australia, Austria, Belgium, France, Italy, Norway,

Spain, Sweden, Switzerland and the United Kingdom) and three

Administration Agreements (AA) between IDA and the European

Commission (EC).

j) Interim Evaluation of the Temporary International Mechanism (TIM).

Draft Final report – Volume 1, Main report – European Union / Gruppo

Soges S.p.A. – July 2007.

k) Supplemental Letter (Performance Monitoring Indicators) to the Trust

Fund Grant Agreement for ESSP III – January 17, 2008.

l) Emergency Services Support Program – Evaluation Report – Undated

m) ESSP – MDTF – TF 057315 – Progress Reports – Quarterly.

n) Supplemental Letter - TF Grant No. TF090212-GZ – Third Emergency

Services Support Project – Performance Monitoring Indicators.

o) Aide memoires

p) Implementation Status and Results (ISRs)

q) Spot-Check Audit Reports – quarterly

r) IDA - Program Document for a Proposed Grant (US$40 million

equivalent) to the PLO for a Palestinian National Plan Development

Policy Grant IV – July 2011 - Report No. 63157-WG

69

Annex 10. Contributions of Donors to the ESSP MDTF

Donors Amount

(US$

Million

equivalent )

Administration Agreement

(AA) / Amounts

Sectors

1. Australia

3.60

AA dated 10/1/2007,

Countersigned 10/9/2007

Australian Dollars

AUD 4,000,000

Not earmarked

2. Austria

1.26

AA dated 8/4/2006,

countersigned on 9/1/2006

Euro 1,000,000

96% for Health Services

4% for Project Management

3. Belgium

3.28

AA dated 9/20/2006,

countersigned on 10/24/2006

Euro 2,500,000

Not earmarked

4. European

Commission

27.44

AA dated Aug. 14, 2006

Euro 10,000,000

Health Sector Components

AA dated Dec. 7, 2007

Euro 5,000,000

Health Sector, and fuel for

electricity generators in the

health and water sectors

AA dated Dec. 14, 2008

Euro 5,000,000

Incremental operating cost

for the health sector,

including fuel as well as

referral costs to local NGOs

and private hospitals in Gaza

and the West Bank

(including East Jerusalem),

running costs for the

education sector, and fuel

costs, maintenance and

rehabilitation related to the

provision of water supplies

5. France

3.98

AA dated 12/6/2006,


Euro 3,000,000

Not earmarked

6. Italy

3.24

AA dated 3/26/2007,

countersigned 4/30/2007

Euro 2,277,000

Social Welfare Services and

Health Services Sectors

70

Annex 10. Contributions of Donors to the ESSP MDTF (continued)

Donors Amount

(US$

Million)

Administration Agreement

(AA) / Amounts

Sectors

7. Norway

3.53

AA dated 11/13/2006

Norwegian Kroner

15,000,000

Not earmarked

AA amended 12/15/2006


Norwegian Kroner

6,696,711

Not earmarked

8. Spain 19.50 AA dated 1/8/2007

Euro 15,000,000

Not earmarked

9. Sweden

6.53

AA dated 10/17/2006,


Swedish Krona 45,000,000

Not earmarked

10. Switzerland

4.30

AA dated 12/20/2006,


US$ 2,000,000

Education Services Sector

AA amended 12/10/2007,

Countersigned

US$ 2,300,000

Education Services Sector

11. United

Kingdom

11.38

AA dated 8/4/2006,


GBP 3,000,000

Health Services Sector

AA amended 11/2/2006,


GBP 3,000,000

Health Services and Water,

Electricity and Sanitation

Sectors

TOTAL 88.04

Note: The 11 donors paid their contributions in their own currencies (Euros, Pounds

Sterling, Swedish Krona, etc.). In the above table, their contribution amounts have been

converted into US Dollars based on the exchange rates on the dates their contributions

were received by the Bank, showing a total of US$88.04 million equivalent.

However, the Trust Fund Grant Agreement shows the grant amount and category

allocations in Pounds Sterling; but, actual disbursements to the line ministries and

utilities were in multiple currencies (e.g. Israeli Shekels, Jordanian Dinars and US

Dollars). The Bank‘s Disbursement Department converted those disbursements into US

Dollars at the exchange rate when withdrawal applications were processed and

expenditures were charged to the pound sterling expenditure categories. As shown in

Annex 1, the total disbursements to the Line Ministries and utilities were US$81.32

million equivalent. The difference of US$6.72 million (donor contributions of US$88.04

71

million minus disbursements of US$81.32 million) is due to the fees paid to the Bank by

the donors for administering the ESSP MDTF and to the exchange rate discrepancies in

the conversions to US Dollars.

72

Annex 11. Context at Appraisal

Country and Sector Background

The Economy

11.1 More than five years after the outbreak of the second intifada in 2000, the West

Bank and Gaza (WBG) remained in a state of protracted economic crisis, as the volatile

political and security situation continued to block conditions for economic revival.

Intermittent conflict and Israeli security measures severely restricted movement of goods

and people between and within Palestinian territories, fragmenting the economy and

imposing significant transaction costs that reduced its growth potential.

11.2 The decision by Israel, taken in early 2006, to suspend the transfer of clearance

revenues that it collected on behalf of the Palestinian Authority (PA) led to a severe fiscal

crisis that undermined public institutions and the delivery of essential public services.

Clearance revenues usually account for some 60 percent of PA revenues. Since the

advent of the Hamas led-government on March 29, 2006, the flow of funds to the

Palestinian Authority (PA) has dropped by roughly over 80 percent. As a result, monthly

revenues and external financing fell from US$135 million in 2005 to roughly US$30

million; the PA had full control over only US$15-20 million per month. As a result, PA

salaries to the estimated 160,000 personnel had not been paid since early March 2006.

11.3 The PA faced the impact of spending policies introduced under the Hamas

government that dramatically increased the public sector wage bill, and the fiscal impact

following the expulsion of Fatah from Gaza that brought economic activity there to a

virtual standstill. Consequently, the Government‘s capacity to provide basic services

remained severely compromised. Available funds were allocated across ministries for

critical needs, including urgent medical care abroad, food assistance and some utility

payments. The resulting economic and social implications of the crisis were already

evident and could get worse quickly. A shortage of drugs and medical supplies was

threatening to undermine the operational capacity of health facilities and hospitals. In

Gaza, extended closure of border crossings continued to result in shortages of food

supplies. According to the UN‘s Revised Emergency Appeal, poverty among PA

employees had risen from 37 percent in 2005 to 46 percent in 2006. 11

11.4 Economic performance was poor. Real GDP was estimated to have fallen by 5 to 6

percent in 2006 and, at US$1,000, average per capita income was some 40 percent below

its 1999 level. About a quarter of the Palestinian labor force was out of work, and there

was large-scale underemployment with significant regional differences - the situation was

particularly severe in Gaza, where the unemployment rate was 39 percent in 2006

compared to 28 percent in the West Bank. The labor force participation rate was 41

percent, indicating that a significant number of working age individuals had altogether

11

UN Revised Emergency Appeal May 31, 2006; joint survey by the UN Office of the Coordinator of

Humanitarian Affairs (OCHA) and the Institut Universitaire d‘Etudes du Développement (IUED),

University of Geneva, 2006.

73

stopped looking for a job. Only increased donor support prevented the economy and

household incomes from falling even more rapidly.

11.5 The uncertain security situation with intermittent conflict, the closures and

movement restrictions, and economic and fiscal deterioration had a profound impact on

the livelihoods of ordinary Palestinians. As a result of declining incomes and precarious

employment, the proportion of people living below the poverty line by end-2006 was 66

percent, an increase of 16 percent over the March 2006 figure. Again, the situation in

Gaza was worse, with over 75 percent of the population living below the poverty line

(compared to 59 percent in the West Bank). With public resources stretched, essential

services had been lagging, and this was reflected in key health and nutrition indicators.

There was a reversal of trends in infant mortality in 2006, as infant mortality increased by

4.5 percent that year compared with 2004, from 24.2 deaths per thousand births to 25.3

per thousand. Mortality rates were noticeably higher in Gaza than in the West Bank.

While strong community and family ties pre-empted acute household hunger, chronic

malnutrition was rising, and micro-nutrient deficiencies were an increasing concern. The

FAO/WFP estimated that some 45 percent of the population was either vulnerable to

becoming, or already was, food insecure – that is, unable to access an essential food

package.

The Social Sectors

11.6 The economic and social implications of the crisis were evident in deteriorating

performance in the social sectors – health, education, and social services. Insufficient

domestic revenues squeezed operating budgets and caused disruptions and decline in

service provision; limited mobility between the West Bank and Gaza reduced the scope

for allocating resources where they were most needed while also raising transactions

costs. While the large wage bill reduced the resources available for operations and

maintenance, salary budgets were also insufficient, causing intermittent strikes and

absenteeism by civil servants, which further disrupted services. Donors played a key role

in helping maintain services, but assistance was insufficient to maintain an adequate level

of service delivery in the public sector. A sharp re-focusing of both domestic and donor

resources on a selected subset of essential social services was needed to avoid a collapse

of public provision.

11.7 Health. With the sharp drop in domestic revenues over the past fifteen months, the

health system service standards had deteriorated and health indicators had worsened.

Restrictions on movement of goods and services had aggravated shortages of medical

supplies and drugs disrupting services; intermittent health worker strikes exacerbated the

situation. Public sector facilities were often under-staffed and mostly under-equipped,

and in most instances operated at levels significantly below capacity. While other health

providers – UNRWA, NGOs, and the private sector – played an increasingly important

role, they were not able to fully compensate for public sector declines. Drug shortages

were frequent as the PA had yet to establish a reliable procurement and funding

mechanism and thus had to rely on ad-hoc donor support. In addition, drug storage

facilities were limited. Lack of funding for the health care system resulted in the

74

disruption of essential public health functions and of a substantial part of the delivery of

basic health services. Early indications of the negative impact of the crisis could be seen.

In some health facilities (e.g., Gaza European Hospital and PHC facilities in the West

Bank), some staff had stopped coming to work as they could not afford to pay

transportation costs. Many hospitals and PHCs were lacking essential drugs; e.g., 22

items were out of stock in Al-Shifa hospital, and anesthetics and oncology drugs were out

of stock at the Gaza European hospital. As a result, only urgent surgeries were

performed. Some health directorates, like in Hebron, had discontinued the operation of

their mobile health services, including home visits, health inspections and vaccinations at

74 village health rooms. Meanwhile, the UN Office of the Coordinator of Humanitarian

Affairs (OCHA) reported that the number of in-patients and out-patients attending

Ministry of Health facilities had increased significantly in the last three months compared

with the same period last year as patients could no longer afford private service

provision12

. Donors provided significant funding for operations and maintenance, which

helped slow down the deterioration of services. The key challenge for the immediate

future was to ensure that sufficient resources were available to maintain public services at

some minimum acceptable level, while at the same time leveraging complementarities

between public and private provision.

11.8 Education. In the short term, the education sector faced problems similar to those in

the public health sector – a shortage of financial resources to keep the school system

operational and a large wage bill limiting resources for operating expenditures. Both

needed to be dealt with. An adequate salary budget would avoid disruptive strikes, and

would reduce the number of teachers leaving the public school system. With the

beginning of every new school year, the system faced growing demands on non-salary

operating resources, including the need to cope with new entrants into the system. In

addition, the situation over the years had not been conducive to ensure proper upkeep of

education facilities and thus a number of schools required rehabilitation. The PA runs 76

per cent of all schools, accounting for 72 per cent of total student enrollment. Many

schools ended the 2005-2006 school year early due to funding shortages. Also, UNRWA

reported a substantial increase in the number of applications received for teaching posts

in the West Bank (5,000 in 2006/07 compared to 3,328 in 2005/06), suggesting that

teachers were looking for opportunities outside the PA. Again, donors played an

important role as providers of resources for essential goods and services, and in

facilitating stronger interaction between public and private provision.

11.9 Social Welfare. Given the limited financial resources and the large social assistance

requirements as a growing number of households and individuals fell below the poverty

line, or became at risk, it was critical that available resources target those most in need.

This required priority-setting among ongoing, under- or un-funded programs, and

focusing resources on a few high profile interventions, including the cash payments to

poor households, and shelters, rehabilitation and training centers for youth, handicapped,

elderly and women‘s development. These shelters and centers are run by the Ministry of

Social Affairs (MOSA), providing vocational training, social support, meals and

overnight residence to vulnerable individuals. As in the case of the public health and

12

OCHA, Humanitarian Monitor, May 2006.

75

education sectors, public resources for spending on services beyond salary payments

were severely constrained. Still, maintaining these programs, which cater to some of the

most vulnerable individuals and households, was an essential element in preserving the

social fabric in the West Bank and Gaza. The PA‘s Ministry of Social Affairs (MOSA)

had not been able to pay cash assistance to the beneficiaries of its Social Hardship Case

Program since December 2005. Similarly, people hired through the Ministry‘s

Unemployment Program had gone without any salary payments. The Ministry reported a

250 per cent rise in applications for its Special Hardship Case Program. WFP also

reported a significant increase in demand at their food distribution points. A WFP/FAO

food security update (May 2006) noted a 14 percentage point increase in food

insecurity—51 percent in June 2006 as compared to 37 percent at the end of 2005.

Donor Response to the Emergency

11.10 The Emergency Services Support Program (ESSP) was launched in 2002 to

mitigate the impacts of the economic crisis through financing of non-salary recurrent

expenditures of the PA social sectors ministries (health, education and higher education,

and social affairs). The total budget (about US$176 million) was provided by the World

Bank and others donors through two phases of ESSP. Until June, 2006, the donors‘

response to the existing fiscal and humanitarian crisis had been ad hoc. A few countries

responded to the PA‘s appeal for budget support through one-time transfers. Several

others provided emergency financial and in kind support in the health sector. A number

of UN organizations also stepped up their programs to expand their delivery of services

to a larger number of beneficiaries.

11.11 In response to a request by the Quartet, the EC proposed a Temporary International

Mechanism (TIM) for providing direct delivery of assistance to the Palestinian

population. The TIM envisaged three windows of assistance, as follows: (1) Window I

ensured the provision of essential supplies and other recurrent costs in the areas of health,

education, social services, electricity, water and sanitation The TIM envisaged the World

Bank‘s administered Emergency Services Support Program (ESSP), as an appropriate

mechanism for Window I. (2) Window II aimed at ensuring the continued provision of

essential public utilities to the Palestinian population, such as electricity, via the provision

of fuel. This window was entirely funded by the EC through its ―Interim Emergency

Relief Contribution‖ (IERC). (3) Window III would provide social allowances to public

service providers and vulnerable Palestinians in the occupied Palestinian territory. This

window was funded by the European Commission, EU Member States and other donors.

As of July 2006, Window II had been well underway, with the EC financing the cost of

fuel and electricity in the health, water and sanitation sectors. On July 27 2006, the EC

made the first payment of allowances to health sector workers in the form of direct

transfers to the accounts of 300 doctors and nurses. Meanwhile, through a transfer of

US$50 million from the Arab League, the President‘s Office was able to make a partial

salary payment for civil servants at the end of July 2006. In response to the fiscal crisis

resulting from the Hamas election victory in January 2006, the World Bank and other

donors launched the ESSP MDTF as a window of the Temporary International

Mechanism (TIM) administrated by the International Development Association (the

76

Grant Agreement was signed between Office of the President and IDA on September 18,

2006 with an original grant amount of GBP 24.34 million to finance non-salary recurrent

expenditures of the Palestinian Authority social sector ministries (MOH, MOEHE, and

MOSA) and the three sector utilities (Palestinian Water Authority - PWA, Palestinian

Energy Authority – PENRA, and Coastal Management Water Utility - CMWU).

Rationale for Bank Assistance

11.12 The Bank has been asked by the Palestinian Authority and several donors to

administer a mechanism for providing financing to sustain the delivery of basic services.

The Bank responded to the request by agreeing to extend its Emergency Services Support

Program (ESSP) which started in 2002 with the objective of mitigating the deterioration

in service delivery resulting from the economic crisis. As of August 2006, the ESSP

continued to be operational through a Swedish Grant.

11.13 Between 2002 and 2006, the ESSP mobilized a total budget of US$ 176 million.

During 2003 and 2004, it financed up to 85 percent of the non-salary recurrent

expenditures of the ministries of health, education and higher education and social affairs,

in addition to providing financial support to municipalities and covering the operational

expenditures of a few other PA ministries. The ESSP was, therefore, instrumental for

sustaining the PA‘s social service delivery system at a time when the PA‘s own resources

were scarce and the social ministries were forced to cut back on services due to lack of

funding. As an existing mechanism, the ESSP could be effectively revived to prevent

against a collapse of the public service delivery system and further deepening of the

humanitarian situation.

77

Annex 12. Detailed Program/Project Description (From Schedules 1 and 2 of the Trust Fund Grant Agreement and pages 4 to 6 of the

Program Document)

Program/Project Objective

According to the Trust Fund Grant Agreement13

, the objective of the Project is to

mitigate the deterioration of service delivery to the Palestinian population in the parts of

the West Bank and Gaza under the jurisdiction of the Palestinian Authority.

Program/Project Description

Component 1: Financing Non-Salary Recurrent Expenditures

Part A. Education Services (Appraisal estimate - in Grant Agreement: GBP 7.91

million)

This subcomponent covers the following expenditures:

(i) Recurrent Expenditures of MOEHE, including schools, directorates and Ministry

headquarters, covering (a) rent payments; (b) transportation costs, including fuel, vehicle

maintenance, licensing and insurance; (c) water and electricity, (d) communications

including telephones and mail; (d) consumables; (e) maintenance of equipment and

buildings; and (f) heating fuel and other items.

(ii) Costs of General Examinations: stationery, printing of examinations; and the payment

of per diem expenses to examination monitors and reviewers.

(c) Support for Schools and Vocational Training Centers: learning and teaching tools and

materials, stationery, and materials for school activities (sports, arts and home economy

classes).

(e) Support to Higher Education Institutions: salaries of the staff of High Education

Institutions (who are not PA civil servants) and University operating expenses.

(f) Minor Rehabilitation of School Buildings: small works for the rehabilitation of school

buildings.

Part B. Health Services (Appraisal estimate - in Grant Agreement: GBP 12.61 million)

This sub-component covers the following expenditures:

13 In the Program Document, the wording of the PDO is slightly different, as follows: The Program‘s

objective is to mitigate the deterioration of basic services brought about by the inability of the Palestinian

Authority to meet its budget requirements by providing financing for non-salary operating expenditures in

key social and service delivery sectors.

78

(i) Non-medical recurrent expenditures: non-medical costs of operating and maintaining

Ministry directorates and health facilities, including selected hospitals, covering (a) rent

payments; (b) transportation costs, including fuel, vehicle maintenance, licensing and

insurance; (c) water and electricity bills, (d) communications including telephones and

mail; (d) consumables, including textiles, office supplies, stationery, and cleaning

materials; (e) maintenance of equipment and buildings, including financing of spare parts

for medical and non-medical equipment; (f) fuel for heating and generators; and (h)

cleaning services.

(ii) Provision of Essential Drugs, Supplies and Medical Consumables: provision of

essential drugs, vaccines, laboratory and blood bank materials and other medical

consumables.

(iii) Treatment in Private/Non-Governmental Clinics: cost of contracts with non-

governmental and private medical institutions for providing services that are not available

by public facilities.

(iv) Nutrition Supplements: provision of supplementary milk formulas and iron

supplements to public clinics.

(v) Hospital Food and Cleaning Contracts: provision of food for hospital patients and

financing of cleaning services for hospitals and other health facilities.

Part C. Social Welfare Services (Appraisal estimate - in Grant Agreement: GBP 0.42 million)

This sub-component will cover the recurrent operating expenditures of the Ministry of

Social Affairs (MOSA) and its shelters, rehabilitation and training centers, as follows:

(i) Recurrent Expenditures: recurrent costs covering (a) rent payments; (b) transportation

costs, including fuel, vehicle maintenance, licensing and insurance; (c) water and

electricity, (d) communications including telephones and mail; (d) consumables; (e)

maintenance of equipment and buildings; (f) fuel for heating and generators; and (g)

office supplies.

(ii) Support to Shelters/Rehabilitation and Training Centers: provision of work tools,

equipment and materials, and of minor rehabilitation work to maintain the operation of

centers.

(iii) Food: provision of food for residents of Shelters and non-residents of vocational

rehabilitation centers.

Part D. Recurrent Expenditures in Other Key Sectors (Appraisal estimate - in Grant

Agreement: GBP 3.18 million)

Recurrent Expenditures in Electricity, Water and Sanitation sectors consisting of (a) rent

payments; (b) transportation costs, including fuel, vehicle maintenance, licensing and

79

insurance; (c) water and electricity, (d) communications including telephones and mail;

(e) maintenance and equipment and buildings; (f) office suppliers and consumables and

(g) fuel for heating and generators.

Component II – Part E: Project Management and Monitoring (Appraisal estimate –

in Grant Agreement: GBP 0.22 million)

This component finances costs related to project management, including (i) short term

consultancies to support the management capacity of the President Office and the Project

Coordination Unit; (ii) the provision of technical assistance to improve the capacity of the

participating ministries in managing contracted services; (iii) provision of essential

equipment; (iv) project operating costs; and (v) external financial and physical spot

audits.

80

Annex 13. Other Significant Changes

13.1 Other significant changes included two extensions of the project closing date, five

amendments of the TFGA and five reallocations of the proceeds of the Grant.

Extensions of closing date

13.2 The original closing date of the ESSP MDTF was June 30, 2008. The closing date

was extended twice (on June 26, 2008 and on June 30, 2010) for a cumulative extension

of three years.

13.3 On June 26, 2008, the ESSP MDTF was extended the first time for two years from

June 30, 2008 to June 30, 2010. The reasons for the extension were to enable the PA to

fully disburse the ongoing contracts (border‘s closure and trade restrictions, especially in

Gaza, were causing a lot of delays to the delivery of most supply contracts) and the new

funds provided by the EC and the Swiss required an additional period to be disbursed.

Also, at that time, the EC had issued a document outlining their emergency strategy for

West Bank and Gaza where the ESSP was singled out as the preferred mechanism to

provide emergency funding to key social sector ministries.

13.4 On June 30, 2010, the closing date was extended a second time from June 30, 2010

to June 30, 2011. The reason for the extension was that the EC had committed to provide

an additional Euro 10 million for the ESSP MDTF. That additional funding would

finance priority emergency items, such as fuel for hospitals and water wells which cannot

be disbursed in one large installment, thus the need for the extension. Also, the PA was

keen on ensuring that the ESSP MDTF remained open due to its prominent role in the

management of the PA‘s emergency response.

Amendments of the Trust Fund Grant Agreement

13.5 The TFGA was amended five times: December 2006, September 2007, December

2007, March 2008, and April 2009. One amendment was because of a change in

implementation responsibility; all the others were mainly because of increases in donor

contributions.

13.6 The first amendment on December 14, 2006 - countersigned on December 17, 2006

- increased the total amount of the Grant by GBP 4,978,000, reallocated the proceeds of

the Grant, and included provision of goods and incremental operating costs and carrying

out of works under Part D (Other Key Sectors - Utilities) of the Project. In Schedule 1, all

references to ―recurrent expenditures‖ were deleted and replaced with ―incremental

operating costs.‖

13.7 The second amendment on September 13, 2007 – countersigned on September 30,

2007 – transferred implementation responsibility under the Project from the Office of the

President of the Palestinian Authority to the Economic Affairs Department of the

81

Palestine Liberation Organization. In the whole agreement, ―PO‖ was replaced by

―Economic Affairs Department.‖

13.8 The third amendment on December 14, 2007 – countersigned on December 30, 2007

– increased the total amount of the Grant by additional donors‘ contributions of GBP

5,140,000 and reallocated the grant proceeds. The additional contributions were allocated

towards the fast disbursing items that do not require lengthy procurement procedures,

such as consultants‘ and other services, incremental operating costs and higher education

salaries. The reallocation reduced the current amounts for civil works and goods in favor

also of the fast disbursing categories.

13.9 The fourth amendment on February 21, 2008 – countersigned on March 5, 2008 –

increased the total amount of the grant by GBP 4,828,000 based on additional donor

contributions, and allocated the new contributions towards the expenditure categories.

13.10 The fifth amendment on April 16, 2009 – countersigned on April 23, 2009 -

increased the total amount of the grant by GBP 4,759,433 based on an additional

contribution of Euro 5 million from the EC and allocated the new contributions towards

the expenditure categories.

New Allocations/Reallocations of the Proceeds of the Trust Fund Grant

13.11 In addition to the four reallocations of the proceeds of the Grant in connection with

the amendments to the TFGA mentioned above, there was another reallocation on

October 5, 2009. Following the findings of the PA Attorney general and the Bank INT

regarding the case of the Al-Jalaa Pharmaceutical Company - AJPCO (see section on

procurement and Annex 14), the PLO‘s Economic Affairs Department requested that

most of the funds committed for this contract (GBP 1,833,290) be reallocated from the

―goods‖ category to the ―incremental operating costs‖ category. This amount was still be

for the benefit of MOH, and covered fuel and utility charges for MOH hospitals and

clinics in Gaza.

82

Allocation and Reallocations of the Proceeds of the Grant (in GBP thousands)

Category Original

Allocation

9/18/06

New

Allocation of

12/17/06

New

Allocation of

12/30/07

New

Allocation of

3/05/08

Civil works 634 1,700 1,150 1,150

Goods 12,564 14,694 12,723 12,723

Consultants and

Other Services

2,268

3,259

5,274

6,074

Incremental

Operating Costs

5,197

5,578

9,203

11,847

Food 507 507 507 507

Higher Education

Salaries

3,170

3,580

5,580

6,964

Canceled* - - 21* 21*

Total 24,340 29,318 34,458 39,286

Increase over

previous allocation

-

4,978

5,140

4,828

Category New

Allocation of

4/23/09

New

Allocation of

10/05/09

Final

Allocation**

Final

Allocation as a

% of original

Allocation

Civil works 932 932 824 130

Goods 12,953 11,120 10,239 82

Consultants and

Other Services

6,537

6,537

6,523

290

Incremental

Operating Costs

15,561

17,394

18,360

353

Food 443 443 443 87

Higher Education

Salaries

7,598

7,598

7,592

239

Canceled 21* 21* 21* --

Refunded amount 44***

Total 44,045 44,045 43,981 181%

Increase over

previous allocation

4,759

-

-20

* Canceled under category 2 (Goods) as of July 16, 2007.

** These are actual disbursement figures.

***This amount refunded to World Bank on December 15, 2011 under Category 3

(Consultants and Other Services).

83

Annex 14. Safeguards and Fiduciary Compliance

Project Management (PM)

14.1 On the recipient side, the project team (ESSP PCU) consisted of a project

coordinator, a financial officer, a procurement officer, a disbursement officer, and four

accountants responsible for handling the follow-up tasks with implementing ministries

and utilities. The team was selected on a sole-source basis since it included the same staff

members who have been working on the previous phases of the ESSP, and were well

experienced with the ESSP approach and procedures. Following the Donors‘ and the

Bank‘s approval to extend the project‘s closing date, the contracts of the PCU staff

members have been renewed accordingly. The Project was well managed, with clearly

assigned roles for the MOF and the line Ministries/Utilities.

Procurement

14.2 The procurement arrangements for the Project and the procedures to be followed

were described in the Trust Fund Grant Agreement, the Program Document (Technical

Annex) and the OM. Since the Project was to be implemented through three line

ministries (MOH, MOEHE and MOSA) and the PO of the PA under separate budgets, it

was decided to operate the Project under four separate procurement plans for the initial

six months of financing. The procurement arrangements were largely based on the

findings and recommendations of the Country Procurement Review for WBG published

in December 2004, unless specified otherwise because of the emergency project

conditions, the issues resulting from the recurrent crisis in the territories and/or the

specific issues affecting the sectors assisted by the Project (in particular, the health sector

and the conditions of the local market for drugs and health services).

14.3 In July 2006, the appraisal included an assessment of the procurement capacity of

implementing entities. It identified a number of issues and risks, such as the limited

knowledge and understanding of procurement methods, procedures and practices and the

limited knowledge of local and international markets and suppliers. As a corrective

measure, it was agreed that the Project would include technical assistance in the form of:

(i) one international Pharmaceutical Procurement Specialist to assist MOH in the

preparation of bidding documents, bid evaluation and development of efficient and

economic procurement strategies; (ii) one international Health Service Contracting

Specialist to assess the conditions of health services market, review present contracting

practices and assist the MOH in developing an appropriate contract document for health

services; and (iii) one or more procurement specialists to be hired as necessary by the

implementing ministries.

14.4 At the beginning of the Project, procurement delays (delays in the preparation and

approval of bidding documents, and delays in bid evaluations) contributed to slow

disbursements. This was particularly true for the procurement of pharmaceuticals for the

Health Sector. A Procurement Due Diligence Review was carried out by an independent

84

consultant in March 2008. It confirmed that the Bank had done its part in terms of

transparency and efficiency, and that the ESSP was not the suited vehicle for adopting

complex procurement procedures for works, goods and services in general and the

procurement of pharmaceuticals in particular. To avoid delays, the proceeds of the Grant

were reallocated towards fast disbursing items, such as incremental operating costs and

higher education salaries, reducing the amounts for civil works and goods that require

lengthy procurement procedures.

Misprocurement

14.5 In July-August 2007, the Bank declared misprocurement of contracts using the

shopping method (MOSA G-G-3) for the procurement of materials for training centers in

Gaza. The amount of GBP 20,640 (i.e., US$ 40,000 equivalent) allocated for three

contracts which were not procured in accordance with the legal agreement and the

procurement plan, was cancelled from the Grant proceeds, and the previously disbursed

amounts against these contracts were refunded to the SA in November 2007.

Additionally, the cancelled amount of GBP 20,640 was reflected in the fourth amendment

to the TFGA dated March 5, 2008 and was then returned to the main Trust Fund account.

The Contracts with the Al-Jalaa Pharmaceutical Company - AJPCO

14.6 All contracts for drug packages were delivered to MOH stores and distributed to the

various hospitals and clinics, except two contracts with the Al Jalaa Pharmaceutical

Company (AJPCO). AJPCO, a pharmaceutical supply company based in Gaza, was

awarded two contracts valued at US$3.6 million to deliver pharmaceuticals to the MOH

drug stores in the West Bank and Gaza. These contracts were signed between the AJPCO

and the PO in June and July 2007. The case was first perceived as a dispute between the

MOH and the AJPCO over issues related to compliance with contract conditions. Being

unable to deliver the drugs within the period specified in the contract, the AJPCO

invoked the force majeure situation in view of the deteriorating security conditions and

tight closure of Gaza; whereas, at a later stage, the MOH suspected the company of being

involved in fraudulent practices by smuggling the drugs into the Palestinian territory. In

March 2008, the MOF terminated AJPCO‘s contracts and made an official announcement

in local newspapers that AJPCO was under investigation for smuggling pharmaceuticals

while serving as a supplier under a Bank-financed project. In April 2008, the Bank‘s

project team reported the case to INT. In October 2009, the INT released its final

investigative report, which concluded that: (i) AJPCO improperly sought to use the Bank

project as justification to seek financial and administrative privileges not permitted under

PA and Israeli laws (it did not receive those privileges); (ii) AJPCO committed fraud in

order to reduce or avoid costs and time delays associated with pharmaceutical

registration, fees and customs duties; and (iii) the PA and the PCU in the MOF did not

manage AJPCO‘s contract properly. Based on these findings, the INT report

recommended seeking sanctions against AJPCO and its owners for fraud, and referred its

findings to the Israeli and Palestinian authorities. The case remains under both judicial

and administrative investigations by the PA‘s Attorney General, and pending the final

decision by the PA‘s Supreme Court. Following a PA‘s request, the Bank reallocated the

85

amount of about US$3 million related to AJPCO contracts to be used for urgent expenses

under the MOH component, such as fuel and electricity bills for hospitals and clinics in

Gaza. At the Bank‘s request, MOF returned the amount of US$72,556 which had been

paid directly by the Bank to AJPCO.

Service Delivery Contractors – Tertiary Health Care

14.7 In the past, specialized medical services that could not be provided in public

facilities (either because they were not available or because of insufficient capacity) were

provided by MOH through annual contracts with private or NGO clinics awarded on a

Direct Contracting basis. Past attempts by IDA to introduce competitive selection were

not successful, mainly because the number, specialization and location of existing service

providers did not lend themselves to competitive selection. A review of the fees charged

to MOH under ongoing contracts has shown that they were well below the fees for the

same services provided to private patients. The conditions of contract, however, were

found lacking in the definition of the minimum quality standards for the services

required, and of suitable provisions for monitoring and enforcement of minimum quality

standards. Therefore, it was agreed that the Project would finance the ongoing service

contracts for the first six months from the signature of the Grant Agreement, provided

that within six months of the signature of the Grant Agreement a form of contract,

satisfactory to IDA, and a detailed tracking system for these contracts would be

developed and adopted for all contracts to be entered into for the subsequent duration of

the Project.

14.8 At the beginning of the Project, 39 tertiary health care contracts were entered under

the Direct Contracting method, with 22 health institutions in West Bank, 12 health

institutions in Gaza and 5 health institutions in Jerusalem. The total amount was US$10.3

million which was committed and spent. In December 2007, the Bank gave its no

objection to a new version of the request for proposal (RFP) for tertiary health care based

on a competitive and transparent selection process. MOH received back 36 RFP from

local bidders, and prepared an initial draft of the evaluation report to be submitted to the

Bank for review. In order to obtain a better quality of the evaluation report, the MOF

contracted with an International Consultant to assist MOH in finalizing the Evaluation

Report which was submitted in a format that meets Bank requirements. An evaluation

report was prepared and approved by the Bank. There were delays and implementation

problems with the new contracting modalities (including difficulties in forecasting the

number of cases to be treated/financed) but, in the end, the competitive and transparent

process was satisfactory; this is one of the Project‘s achievements.

Financial management and disbursements

14.9 The TFGA dealt with the withdrawal of the proceeds of the Grant, and the financial

management procedures were described in the Program Document (Technical Annex)

and the OM.

86

14.10 An assessment of the ESSP PCU financial management capacity was completed

during appraisal in July 2006. The assessment review concluded that PCU had the

adequate expertise to support the implementation of the Project and to process the

transactions of the ESSP MDTF in a satisfactory manner. However, given the large

volume of transactions and the multiplicity of participating agencies, the review also

recommended that the staffing of the PCU be strengthened.

14.11 The ESSP MDTF would run over a period of 22 months, ending on June 30, 2008.

However, since contributions were expected to be provided in tranches, the Project

Budget was prepared covering six months of expenditures (estimated initially at

US$55.75 million), to be updated on a regular basis in line with the Grant Agreement and

the Procurement Plans based on donor additional contributions.

14.12 The ESSP PCU would be responsible for the overall financial management aspects

of the Project; it would prepare the financial monitoring reports (FMRs) and other reports

on the basis of information and data provided monthly by the line ministries. In addition,

it would contribute to the preparation, by the PO, of the withdrawal applications and the

related SOEs for replenishment of the Special accounts or just for direct payments. The

PO would be responsible for managing the Project‘s Special Accounts (SAs) and for

issuing and signing all checks and bank transfers. There would be four SAs, consisting

of: (i) SA ―A‖ for Health Services; (ii) SA ―B‖ for Education covering all eligible

expenditures including non-salary operating costs; (iii) SA ―C‖ for eligible recurrent

expenditures necessary to sustain the delivery of electricity, water and sanitation services;

and iv) SA ―D‖ for eligible expenditures in other sectors including (a) eligible

expenditures under Social Affairs, b) non-salary operating costs in the health sectors; and

(c) capacity-building and project management costs of the PO. To facilitate the

monitoring of the project-financed activities, each SA would be maintained as a separate

identifiable account to be used exclusively for eligible project expenditures financed

under the Grant. These arrangements were very useful for tracking the channeling of

funds to the beneficiary Ministries and Utilities. The line Ministries would process all the

transactions based on the budget of eligible expenditures as agreed to in the Grant

Agreement. They will prepare the complete documentation supporting the transactions

processed for transmission to the MOF-ESSP/PCU for eligibility compliance and

completeness review, before clearance and submission to the PO for validation and

payment. In September 2007, implementation responsibility under the Project was

transferred from the PO of the PA to the Economic Affairs Department of the PLO.

14.13 In addition to the usual progress reports, FMRs and annual financial audits, the

reporting and auditing requirements included quarterly spot check reports14

covering

review of procurement procedures/contracting and physical inspection and count of

14

The External Auditor‘s TORs included the following: ―In addition to the end of year full-fledged audit,

the auditors are expected to carry out quarterly spot-checks on a representative random sample of

expenditures categories in each implementing agency as well as service delivery activities supported under

the project in order to ascertain the achievement of physical and other progress in the implementation of the

Project. A report covering the expenditures review and the physical inspections shall be produced on a

quarterly basis, 30 days after the beginning of the auditors‘ intervention, and should be made available to

the PM for transmission to IDA in a timely manner‖.

87

quantities received. The Bank made some comments to improve the quality of the

quarterly spot check auditing process (essentially to provide more details and specific

information on inspected contracts and to improve the selection process for the sample of

contracts showing an equitable coverage to the West Bank and Gaza). These reports

confirmed the eligibility of expenditures incurred and claimed under the Project. Sixteen

spot check reports were submitted for the project period up to March 31, 2011 (final spot

check report for the period ended June 30, 2011 yet to be submitted). Two transaction

reviews were also carried out by financial management consultants.

14.14 The appointment of the auditor was under a competitive process15

from a short list

of qualified firms. The External Auditor contract was signed on May 1, 2007. It was

extended twice; first to extend the audit period until December 31, 2010, and second to

extend the audit period until December 31, 2011. Since the beginning of the Project, five

annual financial audit reports were submitted; the final audit report for 2011 is due by

December 31, 2011. The financial audit reports were submitted on time and were all

unqualified.

14.15 There was a long standing issue for the 2008 audit report because of missing

documents that were lost when the MOF premises were destroyed during the Gaza war

(December 2008 - January 2009). The issue was resolved by the External Auditor

providing a supplemental letter highlighting that the missing documents had been verified

during the spot check review process.

14.16 The ESSP PCU put in place systems to expedite reviews and payments. Special

arrangements were made to control the financing of incremental operating costs. In order

to follow up the fuel consumption and to supervise the fuel distribution, the PCU took

readings of the generators and capacity in order to accurately calculate the consumption.

For the ambulances, coupons were given to the ambulance drivers with their name and

the vehicle number. Also, a list of names and vehicle numbers were distributed to the fuel

stations in order to ensure that fuel is given only to those eligible vehicles. Each month,

the PCU submitted a monthly report to the Bank to monitor fuel supplies in Gaza. These

reports were crossed check with the EU periodical site visit reports.

Safeguards

14.17 Not applicable.

14.18 The ESSP MDTF did not finance investments. It was an emergency project that

financed only non-salary recurrent expenditures and did not trigger any safeguards.

15

The selection method criteria were Least Cost Based Selection (LCS).

Tall AsurTall Asur(1,022 m) (1,022 m)

(1,020 m) (1,020 m)

Mt. 'EvalMt. 'Eval(940 m) (940 m)

Abu 'AwdahAbu 'Awdah(105 m) (105 m)

W e s tW e s t

B a n kB a n k

JENINJENIN

NABLUSNABLUS

BETHLEHEMBETHLEHEM

HEBRONHEBRON

TUBASTUBASTULKARMTULKARM

SALFITSALFIT

RAMALLAHRAMALLAH JERICHOJERICHO

JERUSALEMJERUSALEM

QALQILYAHQALQILYAH

El BureijEl Bureij

AnaptaAnapta

Ya'badYa'bad

QabatiaQabatia

TammunTammun

ZoharZohar

YattahYattah

KaffeenKaffeen

YamounYamoun

JeninJenin

NablusNablus

BethlehemBethlehem

HebronHebron

TubasTubasTulkarmTulkarm

SalfitSalfit

RamallahRamallah

JabalyaJabalya

RafahRafah

KhanKhanYunisYunis

JerichoJericho

QalqilyahQalqilyah

JERUSALEMJERUSALEM

Beit Lahia

El Bureij

Nusejrat

Anapta

Ya'bad

Qabatia

Tammun

Zohar

Yattah

Kaffeen

Yamoun

Gaza City

Jenin

Nablus

Bethlehem

Hebron

TubasTulkarm

Salfit

Ramallah

Deir el Balah

Jabalya

Rafah

KhanYunis

Jericho

Qalqilyah

JERUSALEM

GAZA CITY

JENIN

NABLUS

BETHLEHEM

HEBRON

TUBASTULKARM

SALFIT

RAMALLAH

DEIR EL BALAH

JABALYA

RAFAH

KHANYUNIS

JERICHO

JERUSALEM

QALQILYAH

ISRAEL

ARABREP. OFEGYPT

JORDAN

JORDAN

Jord

an R

iver

DeadSea

M e d i t e r r a n e a n

S e a

To Tel Aviv

To Tel Aviv

To Tel Aviv

To Beersheba

To Beersheba

To Elat

To El Arish

To Zofar

To Amman

To Amman

To Amman

To Um Qais

To Nazareth

To Haifa

To Netanya

To Ramla

To Ashqelon

To Ashdod

W e s t

B a n k

Gaza

Tall Asur(1,022 m)

(1,020 m)

Mt. 'Eval(940 m)

Abu 'Awdah(105 m)

32°00'N

32°30'N 32°30'N

31°00'N

32°00'N

31°30'N

31°00'N

35°00'E34°30'E

34°30'E

35°30'E

35°00'E 35°30'E

WEST BANKAND GAZA

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

0 5 10

0 5 10 15 Miles

15 Kilometers

IBRD 33512R1

JUNE 2007

WEST BANKAND GAZASELECTED CITIES AND TOWNS

RIVERS

MAIN ROADS

RAILROAD

ARMISTICE DEMARCATION LINES, 1949

NO-MAN’S LAND AREAS,ARMISTICE DEMARCATION LINE, 1949

JERUSALEM CITY LIMIT, UNILATERALLYEXPANDED BY ISRAEL JUNE 1967;THEN ANNEXED JULY 30, 1980

GOVERNORATE BOUNDARIES

ADMINISTRATIVE BOUNDARY

INTERNATIONAL BOUNDARIES