Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 54462-PG

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 10.1 MILLION

(US$ 15.8 MILLION EQUIVALENT)

TO THE

INDEPENDENT STATE OF PAPUA NEW GUINEA

FOR AN

URBAN YOUTH EMPLOYMENT PROJECT

December 6, 2010

Papua New Guinea Sustainable Development

Sustainable Development Department

East Asia and Pacific Region

This document has a restricted distribution and may be used by recipients only in the

performance of their official duties. Its contents may not otherwise be disclosed without World

Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit = PNG Kina (PGK)

1 Kina = US$ 0.38

1US$ = Kina 2.6

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AGI

AGO

AOP

BLS

Adolescent Girls Initiative

Auditor General‘s Office

Annual Operations Plan

Basic Life Skills for Employment

CAS Country Assistance Strategy

CCF

CSO

Community Consultation Framework

Civil Society Organization

DfCD

DPLGA

DoE

DoL

DoLIR

DoNPM

DoW

EU

Department for Community Development

Department for Provincial and Local Level Government

Department of Education

Department of Labor

Department of Labor and Industrial Relations

Depart for National Planning and Monitoring

Department of Works

European Union

FM

FMIS

Financial Management

Financial Management Information System

GDP Gross Domestic Product

GoPNG Government of Papua New Guinea

ICR Implementation Completion and Results Report

IDA International Development Association

IFC

ILO

International Finance Corporation

International Labor Organization

LLG Local Level Government

MIS

MoIGR

MOU

Monitoring and Information System

Ministry for Inter-Government Relations

Memorandum of Understanding

M&E

MTR

NCD

NCDC

NSTB

Monitoring and Evaluation

Mid Term Review

National Capital District

National Capital District Commission

National Skills Testing Board

NYC National Youth Commission

OJT

PAC

On-the-Job Training

Project Advisory Committee

PAD

PET

PDO

PIC

PMU

Project Appraisal Document

Pre-Employment Training

Project Development Objective

Pacific Island Country

Project Management Unit

PNG Papua New Guinea

PSC

RFP

SA

SAC

SBD

SDR

Project Steering Committee

Request for Proposal

Social Analysis

Strategic Advisory Committee

Standard Bidding Document

Special Drawing Rights

SDES

SIL

Skills Development and Employment Scheme

Specific Investment Loan

SMS

TA

TYK

UNDP

USAC

UYEP

WAF

YJC

YLM

Short Message Service

Technical Assistance

Tingim Yut Kompetisen

United Nations Development Programme

Urban Safety Advisory Committee

Urban Youth Employment Project

Withdrawal Application Form

Youth Job Corps

Yumi Lukautim Mosbi Projek

Vice President: James W. Adams

Country Director: Ferid Belhaj

Sector Director John A. Roome

Country Manager Laura E. Bailey

Sustainable Development Leader: Charles M. Feinstein

Task Team Leader Ingo Wiederhofer

Papua New Guinea

Urban Youth Employment Project

Table of Contents

I. STRATEGIC CONTEXT AND RATIONALE ..............................................................1

A. Country and Sector Issues ..............................................................................................1

B. Rationale for Bank involvement .....................................................................................2

C. Higher Level Objectives to Which the Project Contributes ..............................................3

II. PROJECT DESCRIPTION.............................................................................................3

A. Lending Instrument ........................................................................................................3

B. Project Development Objectives and Key Indicators .......................................................4

C. Project Components .......................................................................................................5

D. Lessons Learned and Reflected In the Project Design .....................................................8

E. Alternatives Considered and Reasons for Rejection ...................................................... 10

III. IMPLEMENTATION ................................................................................................... 10

A. Partnership Arrangements ............................................................................................ 10

B. Institutional and Implementation Arrangements ............................................................ 11

C. Monitoring and Evaluation of Outcomes/Results .......................................................... 12

D. Sustainability ............................................................................................................... 13

E. Critical Risks and Possible Controversial Aspects......................................................... 16

F. Loan/Credit Conditions and Covenants ........................................................................ 18

IV. APPRAISAL SUMMARY ............................................................................................. 19

A. Economic and Financial Analyses ................................................................................ 19

B. Technical ..................................................................................................................... 19

C. Fiduciary ..................................................................................................................... 20

D. Social .......................................................................................................................... 21

E. Environment ................................................................................................................ 22

F. Safeguard Policies ....................................................................................................... 23

G. Policy Exceptions and Readiness ................................................................................. 23

Annex 1: Country and Sector or Program Background ............................................................. 24

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ......................... 28

Annex 3: Results Framework and Monitoring .......................................................................... 29

Annex 4: Detailed Project Description ..................................................................................... 37

Annex 5: Project Costs ............................................................................................................ 51

Annex 6: Implementation Arrangements .................................................................................. 52

Annex 7: Financial Management and Disbursement Arrangements........................................... 69

Annex 8: Procurement Arrangements ...................................................................................... 82

Annex 9: Economic and Financial Analysis ............................................................................. 90

Annex 10: Safeguard Policy Issues .......................................................................................... 97

Annex 11: Project Preparation and Supervision ...................................................................... 105

Annex 12: Documents in the Project File ............................................................................... 106

Annex 13: Statement of Loans and Credits ............................................................................ 107

Annex 14: Country at a Glance .............................................................................................. 108

Annex 15: Maps .................................................................................................................... 110

PAPUA NEW GUINEA

URBAN YOUTH EMPLOYMENT PROJECT

PROJECT APPRAISAL DOCUMENT

EAST ASIA AND PACIFIC

EASNS

Date: December 6, 2010 Team Leader: Ingo Wiederhofer

Country Director: Ferid Belhaj

Sustainable Development Leader: Charles M.

Feinstein

Sectors: Adult literacy/non-formal education

(30%); Other social services (30%); Roads and

highways (20%); General water, sanitation and

flood protection sector (20%)

Themes: Social risk mitigation (29%);

Participation and civic engagement (29%);

Education for all (14%); Conflict prevention

and post-conflict reconstruction (14%); Social

analysis and monitoring (14%)

Project ID: P114042 Environmental category: Partial Assessment

Lending Instrument: Specific Investment Loan Joint IFC:

Joint Level:

Project Financing Data

[ ] Loan [X] Credit [ ] Grant [ ] Guarantee [ ] Other:

For Loans/Credits/Others:

Total Bank financing (US$m.): 15.80

Proposed terms: Standard IDA terms: Total maturity of 35 years including a grace period of 10

years.

Financing Plan (US$m)

Source Local Foreign Total

BORROWER/RECIPIENT 1.58 0.00 1.58

International Development Association

(IDA)

0.00 15.80 15.80

KOREA, Govt. of 0.00 0.60 0.60

Total: 1.58 16.40 17.98

Recipient:

Ministry for Treasury and Finance

Vulupindi Haus

P.O. Box 542

Waigani

NCD

Papua New Guinea

Responsible Agency:

National Capital District Commission

P. O. Box 7270

Boroko

NCD

Papua New Guinea

Estimated disbursements (Bank FY/US$m)

FY 2011 2012 2013 2014 2015 2016 2017

Annual 0.50 2.00 2.50 3.00 3.00 3.00 1.80

Cumulative 0.50 2.50 5.00 8.00 11.00 14.00 15.80

Project implementation period: Start January 31, 2011 End: April 30, 2016

Expected effectiveness date: January 31, 2011

Expected closing date: April 30, 2016

Does the project depart from the CAS in content or other significant respects?

Ref. PAD I.C. [ ]Yes [X] No

Does the project require any exceptions from Bank policies?

Ref. PAD IV.G.

Have these been approved by Bank management?

[ ]Yes [X] No

[ ]Yes [X] No

Is approval for any policy exception sought from the Board? [ ]Yes [X] No

Does the project include any critical risks rated ―substantial‖ or ―high‖?

Ref. PAD III.E. [X]Yes [ ] No

Does the project meet the Regional criteria for readiness for implementation?

Ref. PAD IV.G. [X]Yes [ ] No

Project development objective Ref. PAD II.C., Technical Annex 3

The Project's development objectives are to provide urban youth with income from temporary

employment opportunities and to increase their employability.

Project description [one-sentence summary of each component] Ref. PAD II.D., Technical

Annex 4

The Project consists of three main components:

Component 1) Youth Job Corps (YJC). This component will support: i) the identification and

selection of 17,500 disadvantaged, unemployed youth from the NCD area; ii) life skills for

employment training; and iii) public works job placement. These youth will complete basic life

skills for employment training. Approximately 13,500 of these youth will then undertake a two

month work placement on a public works sub-project.

Component 2): Skills Development and Employment Scheme (SDES). This component will

provide On-the-Job Training (OJT) and work experience for around 4,000 participating youth.

The SDES will consist of two Pre-Employment Training (PET) programs followed by On-the-

Job Training (OJT). One of the PET programs will provide opportunities for about 2,000 youth

and focus on trade, industrial and commerce related employment. The other will provide

opportunities for another 2,000 youth and focus on basic bookkeeping, data entry, business

practices, and information technology.

Component 3) Project Management: This component will finance the incremental operating

costs of the Project Management Unit, goods and staffing for the PMU, training of key

personnel, technical assistance and other Project support costs.

Which safeguard policies are triggered, if any? Ref. PAD IV.F., Technical Annex 10

OP/BP 4.01 and 4.10.

Significant, non-standard conditions, if any, for:

Ref. PAD III.F.

Board presentation:

None

Loan/credit effectiveness:

i) That the Project Steering Committee shall have been established in a manner, and with

composition and powers, satisfactory to the Association;

(ii) That the Project Operational Manual, including the annex on financial management and

accounting, shall have been adopted by NCDC, in form and substance satisfactory to the

Association; and

(iii) That the Subsidiary Agreement shall have been entered into by the parties thereto, in

form and substance satisfactory to the Association

Covenants applicable to project implementation:

i) The NCDC shall, not later than thirty (30) days after the Effective Date, establish a

financial management and information system to manage Project accounting and reporting

satisfactory to the Association;

ii) The NCDC shall, not later than sixty (60) days after the Effective Date, conclude written

arrangements with a commercial bank and a telephone operator, in each case under terms and

conditions satisfactory to the Association, setting forth the bank‘s and the operator‘s respective

obligations to assist in the payment of Stipends and the setting up of bank accounts and to

comply with the fiduciary requirements of the Project, including the obligation to abide by the

Anti-Corruption Guidelines and to allow for audits to be performed as needed;

iii) The NCDC shall, not later than sixty (60) days after the Effective Date, appoint an

internal audit advisor with qualifications and experience satisfactory to the Association; and

iv) The NCDC shall, not later than ninety (90) days after the Effective Date, establish, and

thereafter maintain throughout the implementation of the Project, a Project Management Unit

within NCDC, with powers and staffing satisfactory to the Association and set forth in the

Project Operational Manual.

1

I. STRATEGIC CONTEXT AND RATIONALE

A. Country and Sector Issues

1. Notwithstanding a fourth successive year of economic growth, PNG‘s GDP per capita is

estimated to be US$677; one of the lowest values in the Pacific region.1 The UNDP‘s Human

Development Index ranks PNG 145th out of 177 countries, well below the average for most

countries in the region, and only slightly higher than the average for Sub -Saharan Africa.2 It is

estimated that more people in PNG are living in poverty now than a decade ago. The creation of

jobs and other livelihood opportunities are not keeping up with the employment needs of a

rapidly growing population.

2. Increasing urban poverty. While overall poverty in the rural areas is high (estimated at

37.5 percent compared with 16.1 percent in the urban areas3), the burden of poverty in urban

centers is on the increase and may be rising at a faster rate than in rural areas.4 This has been

exacerbated by rapid in-migration.5 Young people, in particular, continue to migrate to urban

areas for social and economic reasons. The Government (GoPNG) and city authorities are

struggling to cope with the growing demands on infrastructure and service provision. The

majority of urban migrants find themselves living in informal settlements and slums without

basic services such as running water, sewer and sanitation systems. In Port Moresby, about 40

percent of the population lives in settlements; 80 percent of which are unplanned.6 The unclear

demarcation of land and property has led to disputes over ownership and fuelled tensions among

migrants, land owners and local indigenous groups. As a consequence, social ties between and

within communities are under considerable strain. Rates of crime and violence are high.

3. Young people constitute a disproportionate part of the urban poor. In Port Moresby,

the largest city in PNG, youth between the ages of 15 and 29 represent about 35.1 percent of the

total population as compared to 28.5 percent nationally. It is estimated that the youth cohort will

grow by at least another 13 percent by 2015 due to natural population increases and in -

migration.7 The combination of rapid demographic growth and urbanization also creates

tremendous pressures for employment generation. In 2002, the International Labor Organization

(ILO) estimated that while around 50,000 youth reach working age and look to enter the

workforce in PNG each year, the absorptive capacity of the formal economy was limited to only

about 5,000 people per year.8 In this very constrained labor market, youth of working age are

greatly disadvantaged by unequal access to jobs and services because they lack the necessary

qualifications to obtain formal employment or to compete effectively in the informal sector. For

1 Human Development Report, 2006. http://www.socialwatch.org

2 UNDP, 2008, 2007/08 Human Development Index Rankings, http://hdr.undp.org/en/statistics/

3 ADB, 2002, Priorities of the Poor in Papua New Guinea, Manila.

4 Based on the 2000 National Census, Port Moresby and Lae were identified as the two largest cities in PNG, followed by

Mount Hagen and Goroka. 5 According to the 2000 PNG Census, Port Moresby‘s migrant population, for example, was estimated to have increased from

48percent in 1990 to 58percent in 2000. However, since internal migration is not closely monitored or controlled, it is difficult

to estimate the exact level of urbanization. 6 NCD, NCD Settlements Strategic Plan, 2007-2011, Port Moresby.

7 National Statistical Office, 2000 Census; and UN Population Prospects, 2006 Revision.

8 ILO, 2002. Employment Opportunities for Papua New Guinea Youth reports that formal employment has increased by only

1.5percent since 1996

2

instance, in the National Capital District (NCD), the overall unemployment rate stood at 21.2

percent for men and 12.8 percent for women. However, unemployment rates rose to over 50

percent for males and 30 percent for females between the ages of 15 and 24, while they declined

to under 20 percent for men aged 25-29 and to under 10 percent for women in that same age

group.9 Recent studies indicate that increasing subsets of urban youth are being socially and

economically marginalized.10

Three underlying issues pose significant challenges for the socio-

economic prospects of these marginalized groups: i) their lack of equity in and access to the

formal primary and secondary education system; ii) their lack of equity in and access to the labor

market; and iii) their increasing involvement in urban crime and violence.

4. Government response. The GoPNG‘s Vision 2050 launched in 2009 prioritizes a

number of economic growth and social development activities that include young people as

beneficiaries. The adoption of the National Youth Policy (NYP) 2007-2017 reaffirms the

increasing importance the GoPNG is placing on youth development in its national development

planning. The GoPNG has recognized the importance of general education, skills training, life

skills training and transition to gainful employment. For the last ten years, a number of youth

programs have been funded and implemented in both urban and rural environments.

Unfortunately, most youth employment programs, including those supported by development

partners and non-state actors have not been of a sufficient scale to have a significant impact on

poverty reduction and employment rates.

B. Rationale for Bank involvement

5. The Bank‘s Country Assistance Strategy (CAS) recognizes the importance of

empowering youth as a cross-cutting theme.11

In particular, it highlights the need to support the

GoPNG‘s broader agenda of promoting income generation opportunities as well as the

development of a youth strategy to address the problems of youth unemployment and exclusion.

The Project will contribute to the NYP priorities that support livelihood promotion, poverty

reduction and healthy behaviors by supporting the growing segment of disadvantaged youth who

have not completed school and lack the basic competencies required to compete in the labor

market. The Project will offer such youth an opportunity to become economically productive and

more socially integrated. This will complement planned and ongoing education sector reforms

that seek to stem the future flow of young people leaving the education system before

completion.

6. The Bank is well placed to support the GoPNG‘s youth priorities. The Bank‘s annual

Tingim Yut Kompetisen (TYK), which supports and awards youth entrepreneurship and

innovation, has generated substantial goodwill amongst youth groups, as well as from the

GoPNG and development partners. At the request of the GoPNG, the Bank supported a Rapid

Youth Assessment in Port Moresby in 2008.12

The assessment provided an analysis of the

challenges that urban youth face, including the underlying factors that contributed to their

9 National Statistics Office, 2000, PNG National Census and Department of Education statistics.

10 World Bank, 2008, Rapid Youth Assessment, Lorraine Blank, Washington D.C.

11 World Bank, 2007, IBRD Country Assistant Strategy for PNG for FY08-FY11. The CAS focuses on two pillars in support of

the MTDS: (i) promoting and maintaining sound economic and natural resource management; and (ii) improving livelihoods

and service delivery, especially for the rural poor. 12

World Bank, 2008, Rapid Urban Youth Assessment, Lorraine Blank, Washington, D.C.

3

alienation; circumstances that facilitated their involvement in crime and violence; and a profile

of actors working on urban youth issues. The resulting analysis highlighted the potential benefits

of labor market insertion programs for poor youth who are not in the formal school system.

7. The National Capital District Commission (NCDC) has demonstrated considerable

interest in working with the Bank to expand and further institutionalize its ongoing labor market

insertion and employment generation schemes. In a context of rapid urbanization, the UYEP

may also provide lessons that would enable the Bank to engage more effectively on broader

urban poverty reduction and social protection activities in the future.

C. Higher Level Objectives to Which the Project Contributes

8. The Bank‘s CAS focuses on two pillars in support of the MTDS: i) promoting and

maintaining sound economic and natural resource management, and ii) improving livelihoods

and service delivery. The CAS recognizes the importance of empowering women and youth as a

cross-cutting theme. It is expected that the Project will contribute to the second pillar of the CAS

as well as support the GoPNG‘s MDTS priorities of the rehabilitation and maintenance of

transport infrastructure; promotion of income earning opportunities; and the development -

oriented informal adult education.

9. In particular, the Project will seek to address four key issues: poverty, employment,

human capital development and social stability. The Project is designed as a poverty reduction

and skills development program for poor youth, which invests significantly in human capital

development. The GoPNG seeks to decrease the level of poverty and inequality endured by a

rapidly growing youth population. In PNG, poverty is broadly defined as a lack of access to

basic fundamental needs and services. As noted in the CAS, recent improvements in

macroeconomic performance have not yet had a tangible effect on overall poverty rates. This

Project will provide short-term employment to substantial numbers of youth in the NCD area and

will offer several training programs that will improve their employment and livelihood skills and

their understanding and transition to gainful employment. The Project also provides a second

chance for a segment of youth, some of whom may be at-risk of engaging in anti-social or

criminal activities as a means of survival.

10. Furthermore, the GoPNG has a higher level objective to increase the availability of well-

trained public and private sector manpower, to support its national development goals and

economic growth. The Project‘s market-oriented labor market insertion scheme will foster

innovative public–private partnerships necessary to provide access to the labor market through

the development of an integrated set of on-the-job skills development and life-skills training for

poor urban youth that will enhance their competitiveness.

II. PROJECT DESCRIPTION

A. Lending Instrument

11. The Project will be financed as a Specific Investment Loan (SIL) in the equivalent

amount of US$15.8 million (m). Total Project costs are estimated at US17.98 million (including

4

physical and price contingencies). Additional financing includes: the NCDC (US$1.58m); and

the Republic of Korea (US$0.6m). The use of IDA resources is consistent with the GoPNG‘s

development strategy, which prioritizes pro-poor spending in support of promoting income

earning opportunities; and development-oriented informal education.

B. Project Development Objectives and Key Indicators

12. The objectives of the Project are to provide urban youth with income from temporary

employment opportunities and to increase their employability.13

13. The Project includes indicators to measure two primary outcomes and three secondary

outcomes. The primary outcomes of the program are to: (i) provide youth with income from

temporary employment opportunities, and (ii) increase youth employability.

14. The secondary outcomes are to: (i) successfully target disadvantaged youth, (ii) reduce

participants‘ crime-related indicators, and (iii) improve maintenance of selected urban

infrastructure.

15. Outcomes and impacts will be measured through a set of surveys that would include pre-

and-post interviews of selected participants, selected non-participant controls, and community

leaders. A Management Information System (MIS), which will capture key beneficiary

information and track implementation, will track project inputs and outputs.

16. Target Groups: the Project will focus on disadvantaged urban youth between the ages of

16 and 25 that neither work nor study and who have limited social and economic opportunities,

including inter alia: a) those that have never accessed or not completed the formal school system;

and b) those that may have completed their formal education but have still not been integrated

into the labor market. The reasons for targeting these two segments are as follows:

17. Youth who are neither working nor studying and who have not completed secondary

school/higher studies: these youth frequently lack the basic life skills and employment

experience to escape poverty. Many of them are unable to return to formal secondary school due

to financial constraints, the exclusive structure of the secondary school system, and family

obligations. The Project would give such youth a second chance by equipping them with basic

skills and placing them in a more productive environment. Similar programs in other countries

have demonstrated that such programs can have a bridging effect, helping to reduce youth

poverty and supporting their acquisition of basic life skills required in the work place.

18. Slightly more skilled and educated youth who have not yet been able to access the labor

market: Youth in this group frequently lack the work experience, habits, confidence and

relationships to secure employment in the formal sector. Potential employers, on the other hand,

are reluctant to recruit and invest in new labor without some form of prior screening and basic

work behavior training. They also tend to lack confidence in the reliability of secondary school

13

―Employability‖ in this context refers to a set of achievements--skills, personal attributes, techniques and

experience--that are acquired by trainees, to assist them in obtaining training that will increase their prospects of

salaried employment, self-employment, their monthly earnings, and their self-confidence in the labor market.

5

certification. The Project would seek to bridge this gap by providing such youth with basic life

skills and pre-employment training, and reducing the risk to employers by subsidizing initial

employment and providing active follow-up.

19. Screening Criteria: Youth will be screened against the following criteria: a) aged

between 16 and 25 years; b) out of school or work for at least six months; c) living in the POM

area for at least 12 months; d) prepared to undertake one week of basic life skills training; and e)

assessed as healthy enough to participate in the program. Due consideration will be paid to

geographic, ethnic and gender inclusion. It is also expected that at least 33 percent of

participants will be women. Opportunities will also be made available for Motu-Koita youth

(given their vulnerability to exclusion) to promote their participation.

20. Poverty Targeting: The Project proposes to enhance targeting through: i) self-selection

by setting the YJC and OJT stipends slightly lower than the minimum and market -clearing wage

for unskilled and semi-skilled work; ii) a Proxy Means Test through a baseline and enrollment

survey which would be positively correlated with the target group; ii i) focusing the

communications campaigns and the public works in geographically poorer neighborhoods; and

iv) a gender quota to ensure that at least a third of participants are female. Furthermore, if the

Project is oversubscribed, a randomized lottery method will be instituted, building on lessons

from good international practice.

C. Project Components

21. The Project would comprise three components: 1) a Youth Job Corps; 2) a Skills

Development and Employment Scheme, and 3) Project Management. A detailed description is

included in Annex 4.

22. Component 1: Youth Job Corps (YJC) (US$6.9 million): This component will consist

of: i) carrying out of a communication and community awareness campaign addressed to

disadvantaged urban youth in the NCD on the requirements and procedures for participation in

the Project; ii) identification and selection of approximately 17,500 eligible urban youth for

training under component 1 of the Project and /or employment under components one and two of

the Project; iii) training of eligible urban youth on basic life skills for employment and

understanding of the working environment; iv) the testing of numeracy and literacy levels of

eligible urban youth; and v) provision of short-term employment opportunities for approximately

13,500 eligible urban youth in infrastructure maintenance under subprojects.

23. Sub-Component 1 (a): The Project will carry out community awareness and information

programs prior to supporting each round of youth identification, screening and interviews. The

information campaigns, identification and assessment process will occur in or very close to

poorer communities throughout the NCD area so as to facilitate access for potential trainees.

Upon successful entry, each trainee will be issued with a Youth Identificat ion Card and

information on each trainee accepted by the Project will be entered onto a Monitoring and

Information System (MIS) database located in the Project Management Unit (PMU). The

communication campaign will also continue throughout the implementation of the Project and

help to support the dissemination of the Project‘s results.

6

24. Sub-Component 1(b): The YJC will provide approximately 17,500 trainees with a 40

hour Basic Life Skills for Employment (BLS) training. The training will develop the trainee‘s

life skills and understanding of the working environment; appropriate ―on the job‖ behavior,

personal presentation, health and hygiene, occupation, road safety management and working as a

team. Trainees undertaking the BLS training will be further assessed and counseled by youth

facilitators to obtain a better understanding of trainees‘ socio-economic profile, skills, previous

experience and aspirations. Trainees will also be given basic financial literacy training to set up

their own bank accounts before moving on to public works employment or further pre-

employment training. This training will be provided by consultant organizations under the

supervision of the PMU. The training will take place in rented community halls and churches as

closely as possible to the beneficiaries‘ locations.

25. Each trainee will be expected to complete the BLS prior to moving onto work placement

opportunities. Upon completion of the BLS training the Project will compensate trainees for up

to a maximum 8 hours per day for the five days of training. Subject to approval by the PMU,

payments to trainees will be effected through the training contractor. Following the BLS

training, trainees will have the opportunity to undergo a basic numeracy/literacy test, which will

help to better determine their work placement options.

26. Subsequently, the Project will provide short-term employment opportunities for trainees

in the public works sector. The skill-augmenting labor-based public works scheme (Component

1 also known as the ―Youth Job Corps‖) will be implemented in two phases. The initial scope of

work for this component has been determined in accordance with the maintenance needs of the

NCD‘s road network and NCDC‘s environmental conservation priorities. Currently there are 917

kilometers of roads that are currently not receiving routine maintenance in the NCD, in

particular, the feeder and community access roads that lead into poorer neighborhoods. While

the NCDC has operated similar schemes (e.g., street cleaning and waste collection), the Project

will use a different implementation model, which is more labor intensive, transparent and

inclusive and include additional training and value-added services. The routine maintenance

scheme will cover all 60 Wards in the District and demonstrate the benefits of utilizing a labor

intensive approach in the urban transport sector. Project activities will focus on simple road

maintenance, cleaning and environmental protection activities, including vegetation control and

drain cleaning. Roads that are not currently being maintained either under the NCDC funded

programs implemented by the Parks and Gardens Unit and the Works Unit are eligible for

inclusion. The PMU will manage and administer the civil works contracts under this component,

in close collaboration with the NCDC‘s Works Maintenance Unit.

27. Each trainee will be expected to complete two months of work placement. Trainees will

be paid by the PMU who will keep appropriate time and performance records. The Project will

compensate trainees up to a maximum of six hours per day for 39 days of work. Payments to

trainees will be effected through a SMS banking platform on a fortnightly basis.

28. Once the NCDC has demonstrated its capacity to implement the initially-planned public

works activities, the second phase of the public works roll-out could expand on the initial set of

activities. While the road maintenance scheme would continue, the second phase would: i) seek

to build on and strengthen NCDC's existing urban renewal and environmental and social

7

protection programs; ii) incorporate higher skilled activities and minor works (e.g., tree planting,

brick making, market cleaning, the rehabilitation of the City‘s footpaths using interlocking tiles,

market cleaning and other waste management / environmental protection activities) that will

benefit youth and increase their chances for graduating from the Project with skills that will

enable them to escape poverty; and iii) strengthen community participation in service delivery.

An expansion of the scope of sub-projects will be contingent upon a) the Project demonstrating

satisfactory management and disbursement rates in the first full year of implementation (end of

calendar year 2011); b) the activities showing satisfactory labor-intensity rates; and c) the

activities maintaining a reasonable duration or period of work in order to ensure a reasonable

transfer of knowledge, skills and income. A joint review will be conducted during an IDA

supervision/implementation support mission.

29. Component 2: Skills Development and Employment Scheme (SDES) (US$5.4

million): This component will consist of: i) the provision of pre-employment training to eligible

urban youth, and to prepare them for jobs in the private or public or civil society sectors; and ii)

on-the-job training placements for approximately 4,000 eligible urban youth. These youth will

be selected based on a) their performance in the initial BLS training, and b) their performance on

literacy and numeracy tests. The SDES will consist of two Pre-Employment Training (PET)

programs followed by On-the-Job Training (OJT). One of the PET programs will provide

training for about 2,000 youth and focus on trade, industrial and commerce related employment.

The other will train approximately another 2,000 youth and focus on basic book keeping, data

entry, business practices, and information technology. It is anticipated that the latter program

would be of particular interest to females.

30. Sub-Component 2(a): Once selected, each trainee will enter a 20 day (160 hour) pre-

employment training program. This program will be designed to provide basic information and

skills that are required to join private sector, public sector and not for profit organizations as

trainees. The training program will consist of the following types of training elements: a) Basic

literacy, b) Basic numeracy and shop mathematics (e.g.; measurement skills; reading

mechanical/civil drawings and sketches; personal finances for handling money--personal and on

the job; importance of saving), c) Expectations of employers, d) Use of timecards and other work

time documentation, e) On the job relations with co-workers supervisors and employers, f) Work

safety; g) Orientation to the use of hand tools and/or office equipment; h) Creativity and

innovation on the job; and i) How to stay employed, and j) What makes a successful employee.

31. Sub-Component 2(b): Following the successful completion of the above training

program, trainees will be placed in an OJT program with an employer in the NCD area. Each

trainee will be expected to complete 20 days of pre-employment training prior to commencing

their five months of work placement training. Trainees will be paid by the Project Management

Unit (PMU) who will keep appropriate time and performance records for later project

reimbursement of some or all of these costs. Upon completion of the OJT period, participating

employers will have the option of retaining the respective trainees, either full or part time, or

releasing them to seek employment elsewhere.14

14

The PMU will monitor retention rates with a view to encouraging retention and discouraging labor substitution

behavior among participating employers. Employers who demonstrate a pattern of replacing all trainees with new

8

32. At completion, trainees will receive a competency-based certificate from the NCDC

which will specify the types and levels of skills that the trainee has attained. Furthermore, in

order to facilitate linkages to national systems, each person who has completed training will have

the option to take the certification examinations offered by the National Skills Testing Board

(NSTB); if such certification is available in their area of skill and employment.

33. Component 3: Project Management (US$4.4 million): A Project Steering Committee

(PSC) consisting of key government, private sector and civil society stakeholders will oversee

implementation of the UYEP. The role of the PSC would be to provide guidance on policy

matters, review progress, work programs and budgets, and facilitate high-level coordination

among key stakeholders. The Project‘s practical implementation will be the responsibility of the

Project Management Unit (PMU) to be established in the NCDC. The PMU will be responsible

for the following activities: i) preparation of annual workplans, procurement plans, and budgets,

and submission of semi-annual progress reports; (ii) provision of training and technical

assistance to support, inter alia, the design and implementation of a Management Information

System (MIS), internal audit, evaluations, financial management and procurement; (iii) the

preparation of tender documents for public works sub-projects; (iv) supervision of consultants

and contractors tasked with the implementation of various YJS and SDES activities, including

communication, public works sub-projects, baseline survey and screening, BLS and OJT

activities; (v) oversight of monitoring and evaluation efforts; (vi) ensuring adherence to social

and environmental screening and mitigation measures outlined in the ESMF and the POM,

including establishment of a feedback and complaints handling mechanism; and (vii)

coordination with and outreach to Project stakeholders. Detailed responsibilities and procedures

of the PMU are documented in the POM.

D. Lessons Learned and Reflected In the Project Design

34. Large-scale development projects in the social services sector have had a poor record of

sustainability in PNG. The Project will mitigate this risk by focusing on four important areas: i)

aligning demand-driven training with labor market needs, thereby enhancing the prospects for

the sustainable integration of youth into the labor market; ii) building on lessons learned from

established labor-market insertion projects in PNG; iii) strengthening the capacity of local

contractors in the design and execution of labor-based small public works; and iv) investing in a

comprehensive baseline study, MIS and M&E systems to assess progress and allow for

corrections to be designed during implementation and for lessons to be learned in a systematic

manner with a view to informing decisions on whether and how to continue such activities

following the closing of the UYEP.

35. The Project also seeks to build upon the ground-level experience gained through the

implementation of smaller training, labor market insertion, public works and social protection

activities in PNG. These activities have been implemented by a range of state, donor and civil

society actors and include the City Mission, Ginigoada Foundation, Yumi Lukautim Mosbi

Projek, NCD Beautification and the ADB‘s Employment Oriented Skills Development Project.

trainees in subsequent rounds without reasonable grounds will be excluded from further participation in the

Project.

9

In several respects, the Project will seek to combine and scale up some of these initiatives. Key

lessons the Project will adopt include: i) modifying the scope of works to increase the labor-

intensity of programs (e.g., the Project‘s menu of sub-project activities will involve maintenance

rather than new construction); ii) adapting contracts into customized packages to prioritize the

use of local procurement/sourcing where possible; and iii) strengthening the engagement with

communities or settlements in the selection and implementation of works sites and activities and

mobilization of labor. The Project will engage communities by incorporating the development of

a strong communications and sensitization campaign prior to the commencement, and during

implementation of the Project; recruiting three full-time Youth Facilitators who will be

responsible for strengthening the Project‘s outreach to community and settlement groups; and

establishing complaints handling and grievance mechanisms to ensure beneficiary concerns are

taken into account, including working through the Ward Councilors and Community Leaders to

mediate any disputes that arise from the Project.

36. In addition, the Project will draw lessons from relevant experience in other countries that

have adopted “workfare” programs to provide work for the unemployed/underemployed, to

augment low incomes and to reduce poverty (e.g., India, Bangladesh, Nepal, South Africa, etc;);

and labor market insertion schemes, (e.g., Dominican Republic, Chile, Jamaica, Nigeria, Sri

Lanka, etc.,) that have helped in the empowerment of disadvantaged youth.15

Furthermore,

international experience has shown that programs that take significant numbers of young people

off the streets most often offer incentives and interventions that effectively transition youth into

existing education programs (where possible) or into short-term training and/or employment

programs. The following factors are key to the success of such programs:

Project Recruitment Systems that provide sufficient numbers of participants to meet

established goals;

Information and Counseling Systems that reach the youth segments targeted;

Employer Coordination Schemes that will effectively bring in employers who are

committed to support the various training and employment programs;

Basic Life Skills Training schemes that enable participants to better cope with the

demands of independent living and integration into mainstream society;

Employment Skills Training schemes that provide opportunities for disadvantaged youth

to gain the cognitive, affective and psycho-motor skills necessary to enter into gainful

employment;

Transparent and Effective Management capable of strategic planning, revenue

generation, funds allocation, and reporting; and

Monitoring and Evaluation that provide the information and an understanding of program

strengths and weaknesses necessary for an informative and summative assessment of

progress. Such information should allow for timely adjustments in program activities and

resource allocations, and facilitate the development of an evidence base to inform future

decision-making about investments in youth development programs.

37. Key lessons adopted by the Project include: i) developing clear objectives, tasks and

keeping the project design and implementation arrangements simple; ii) building on services and

15

World Bank, 2009, A Draft Paper: How to Make Public Works Work: A Review of the Experiences.

10

actors that are already in place to facilitate execution (including delegating out contract

management services); iii) supporting transparency and leveraging partnerships to deliver results,

by drawing upon the implementation capacity of the private sector and civil society

organizations (CSOs); iv) focusing on providing demand-driven skills development through

market-oriented job training in order to enhance the prospects for a sustained integration of youth

into the labor market; and v) bundling a package of services that includes skills training, life

skills, on-the-job learning, and job search assistance.

38. Finally, a study of the Bank‘s Implementation Completion and Results (ICRs) reports of

previous urban operations in the Africa, Latin America and Caribbean, and South Asian Regions

have emphasized the importance of maintaining design simplicity, particularly in countries that

lack strong institutions. In such environments, the ICRs have recommended that projects should

focus on a few key areas; secure strong political commitment from the Government and

development partners; maintain close supervision and technical assistance during the start -up

period; and design robust mechanisms for the Monitoring and Evaluation (M&E) and for

disclosing results.

E. Alternatives Considered and Reasons for Rejection

39. Two alternative approaches to addressing economic and social exclusion were

considered. The first was the establishment of a micro grant scheme for youth to access credit

and/or secure the provision of grants to support the development of small business and other

youth-led enterprises. This option was rejected as such a social fund/grants program could

potentially duplicate existing grant programs, including the TYK and the EU‘s Women and

Youth Grants Program; as well as an initiative led by PNG Microfinance (and supported by the

IFC, PNG Sustainable Development Program and Small Business Development Council), to

strengthen mechanisms for improving access to credit through microfinance. The second

approach would be to design a youth development scheme using a community driven-

development approach that would involve the participation of youth in local development

planning activities and processes. However, this option was rejected after consultations with

government entities and development partners suggested that the approach would be difficult in

light of the contested status of land ownership and service delivery in a number of informal

settlements, the absence of significant relevant experience or institutional capacity that could be

built upon, the expressed priorities of youth, and the low levels of skills and social integration

among the youth in question.

III. IMPLEMENTATION

A. Partnership Arrangements

40. The Republic of Korea is co-financing the Project through a Recipient-executed trust

fund managed by the NCDC. This Grant is financing recipient project preparation costs, initial

setup costs for the PMU, the salaries of the Project Coordinator, the Chief Financial Officer and

the M&E/MIS specialist through June 30, 2011, a mid-term review consultant, and south-south

learning exchange visits. Additional financing for a Bank-executed preparatory gender study was

provided by the Australian Agency for International Development (AusAID) through the

11

Adolescent Girls Initiative (AGI). The task team is still exploring the possibility of

supplementary financing from the AGI and from other partners.

B. Institutional and Implementation Arrangements

41. The NCDC will serve as the Project‘s Implementing Agency and will assume

responsibility for implementation and coordination of the Project. NCDC will recruit dedicated

staff to implement Project activities in accordance with the terms of the Project Operational

Manual, within the NCDC‘s Department of Community and Social Services. This Department is

already managing a number of youth and urban safety initiatives. The PMU will be managed by

a Project Manager and consist of approximately 12 personnel covering all technical and fiduciary

skills necessary for managing project implementation. The PSC will to provide guidance on

policy matters, review progress, work programs and budgets, and facilitate high-level

coordination among key stakeholders.

42. The Project would aim to build capacity and utilize the NCDC‘s own personnel and

systems to the extent possible. For Component 1 (YJC): The PMU will work closely with the

Department for Community Development (DfCD), Department of Labor and Industrial Relations

(DoLIR), Department of Works (DOW) and Department of Education (DoE) to ensure that

sectoral linkages are made. For Component 2 (OJT), the PMU will build on the experience the

NCDC has acquired through the YLM skills reintegration scheme that was launched in 2005. It

will seek to partner with the various chambers, associations and councils; and work closely with

employers in the public and private sectors who will agree to provide significant on-the-job

training opportunities to participants. In addition, the Project will sign a M emorandum of

Understanding with a local bank and a mobile telephone operator to effect trainee payments and

establish a link to the formal banking system. Finally, the Project will seek to promote linkages

between these trainees and existing micro-finance/credit providers, such as the PNG Small

Business Development Corporation and PNG Microfinance. In all components, the Project will

draw upon the implementation capacity of public and private agencies and CSOs to execute

subprojects and training activities.

43. A Subsidiary Agreement will be signed between the Recipient and the NCDC by Project

Effectiveness. The NCDC is established through an Act of Parliament (2001). There are two

financing agreements for the Project: 1) a Korean Trust Fund Grant Agreement signed with the

Grantee for USD$0.6m in October 2009; and 2) an IDA Credit Financing Agreement to be

signed with the Recipient in the amount of $15.8m. A separate Trust Account, which will be the

Designated Account, will be opened for the latter Financing Agreement. In addition, the NCDC

will finance the 10 percent counterpart funding element of the IDA credit directly from its own

budget.

44. The NCDC will prepare financial statements for the UYEP in accordance with generally

accepted cash accounting principles. The financial statements will be signed by the Management

and the Board of the NCDC and will be audited by the office of the Auditor-General (through a

contracted independent audit service provider). The financial statements are tabled in Parliament

(by Minister of Inter-Governmental Relations and Minister of Finance) and are subject to

scrutiny by the Public Accounts Committee.

12

C. Monitoring and Evaluation of Outcomes/Results

45. Baseline data and indicators will be utilized to monitor progress and outcomes related to

youth employment, skills levels, and workplace competencies and attitudes. Baseline data will

be collected during the beneficiary selection and registration process. Indicators will be used to

document progress and the level of final success attained for each of the Project Development

Objectives (PDOs). The Project indicators will also reflect the Project‘s desire to understand

outcomes for the key subgroups, including the poor, females, and those living in especially

disadvantaged communities and geographic areas.

46. The Project‘s beneficiary outcomes and impacts will be measured using four surveys:

i) The first will be a pre-program screening survey administered to program applicants

when they apply for the program. It will consist of about 30-45 multiple choice questions

patterned after questions in the Household Income and Expenditure Survey (HIES),

designed to ascertain baseline measures of socioeconomic status, household members‘

primary activity, and demographic characteristics. Indicators of socioeconomic status

include: household demographic information, housing characteristics, school attendance

of household children aged five to 15. This survey will be used to determine beneficiary

eligibility for Project participation.

ii) The second survey will be a short-run impact survey for participants and controls. The

survey will be given to the both public works and training graduates in year two and year

four of the Project, three months after their exit from the training program. Its primary

purpose will be to assess the labor market outcomes of public works graduates and

controls shortly following graduation from the program.

iii) The third survey will be an annual community survey of 60 youth/community leaders,

one from each administrative zone in the National Capital District area. This survey will

occur one month after the program begins. In years two, three and four of the Project,

Zone leaders will also be asked about 10 treatment and control youth from the second

year‘s cohort. The zone leaders will provide information on whether these youth have a

job, what kind of job it is, and whether they are at risk of being victims of or engaged in

anti-social or criminal acts.

iv) The fourth survey will be a long-run impact survey. This will seek to re-contact year

two graduates in year four of the Project, roughly two years after their graduation from

the Projects. A sample of students that have moved will be tracked, in order to address

concerns that non-random attrition of youth from the sample will lead to biased results.

47. A consultant firm to be supervised and co-located within the PMU will be responsible for

establishing and administering the Monitoring and Information System (MIS). This will capture

key beneficiary information and track Project implementation. Implementation progress on

indicators will be shared with the PSC and through regular meetings with media, civil society

and youth groups to reinforce social accountability. Lastly, the Project will commission a final

evaluation to provide a comprehensive review of the Project implementation process, including

aspects of efficiency, capacity-building, partnership and sustainability dimensions.

13

D. Sustainability

48. The Project provides a first step towards a longer engagement on social protection in

PNG. The NCDC is the officially designated government authority for the provision of

municipal services in the NCD. The NCDC has placed a high priority on youth development,

and has established and financed a number of youth development programs in concert with

partners within the public and private sectors.

49. The Project itself is designed as a poverty reduction and skills development program for

youth, which invests significantly in human capital development, and is therefore a public good.

As such, the Project has the potential for generating substantial social benefits for Papua New

Guinea in addition to enhancing the maintenance of urban infrastructure. The Project is

expected to achieve the following key outcomes:

It will impact approximately 15 percent of the poor working age population in the NCD;

reach 17,500 beneficiaries; and produce more than one million work days over the

Project duration. Eighty-eight percent (88%) of the Project‘s budget will be invested

directly into the economy in the form of training, stipends, goods and works. The Project

will have a substantially larger impact on poverty than many other interventions because

it is designed to provide opportunities for the largest segment of the poor–unemployed

youth–and help to raise them above the poverty line.

It will provide a short-to-medium-term ―income bridge‖ to help ensure social stability,

create temporary employment opportunities and alleviate poverty as well as deliver other

value-added employment and identification services before long-term investments begin

to generate visible benefits for the wider population. This will be accomplished through

labor-based and skill-augmenting public works projects, which will help to generate

income opportunities, strengthen livelihoods and provide important secondary benefits,

which include investments in social and economic infrastructure.

It will strengthen human capital development, the supply of labor, and support the youth

transition from unskilled into semi-skilled work. Employers in Port Moresby indicate

that they struggle to fill vacancies in the formal sector with reliable staff that have the

basic technical skills and life skills (e.g., discipline, reliability) required to perform the

work, even for semi- and relatively low-skill requirement jobs. This feedback is

consistent with a recent report of skill development needs in the Pacific Island Countries

(PICs), which show that while unemployment levels are high, the PICs continue to

import semi-skilled and skilled workers from overseas to fill jobs for which the people in

the region do not have the skills or the experience to perform. The Project includes

significant investments in employment training and knowledge through the provision of

financial literacy and banking services for youth, job placements, identification and job

intermediary services, employer-based skills training, professional counseling and peer

mentoring—all of which will help to increase their chances for graduating from the

Project, and escaping from poverty. The YJC, as it is currently designed, will invest one

day of training for every 4 days worked.

14

It will scale up and refine NCDC‘s YLM through the expansion of labor-insertion

activities that are envisaged under Component 2. The OJT, which includes 25 days of

classroom-based and 110 days of practical employer-based training, optimizes the

chances of graduation through the additional value-added services it will provide. The

Project will also link into other donor-financed social safety schemes, which provide the

basis for such continued support. The OJT has already generated substantial support

from the private sector, and key organizations have committed to providing training and

on-the-job work experience in addition to other forms of in-kind support.

During implementation, the NCDC will have a reasonable degree of latitude to strengthen

linkages to similar initiatives sponsored by the GoPNG, such as the Community Colleges

or the National Trade and Testing Board, which could provide avenues /outlets for youth

interested in undertaking further studies after their participation in one of the two

program components. The prior review procedures allow for further dialogue with the

Bank for corrective measures to be undertaken during implementation.

It provides a second chance for a segment of youth, some of whom may be at -risk of

engaging in anti-social or criminal activities as a means to survive. In the absence of an

adequate safety net, in situations where they lack education, legitimate incomes and

occupations, and the necessary social support between leaving school and finding work,

an increasing number of young people have turned to crime and violence. A recent

regional comparative study by the Secretariat of the Pacific Community noted that among

the Pacific islands countries, the most extreme case of an apparent escalation in youth

crime is evident in the urban areas of PNG. In this regard, the Project will help to inform

and strengthen the NCDC‘s urban safety initiatives, such as the YLM and other crime

prevention activities in the Law and Justice Sector, which are being funded by donors and

the Government, and provide the basis for such continued support.

It will also demonstrate the benefits of utilizing a labor intensive approach in the urban

transport sector. Currently, three other World Bank-financed projects have components

that focus on rural road maintenance: the Smallholder Agriculture Development Project

(SADP), the Productive Partnerships for Agriculture Project (PPAP), and the Road

Maintenance and Rehabilitation Project (RMRP). Both the SADP and PPAP projects

have large (in the case of SADP, over 65% of the IDA financing) commitments to

rehabilitate and implement community-based maintenance of agricultural feeder/tertiary

roads. Given that the Bank is engaged in both rural and urban road reconstruction and

maintenance, it has the experience to draw lessons from the various approaches.

50. The NCDC‘s contribution of 10 percent equivalent of the IDA credit amount confirms

its strong commitment. However, sustainability will ultimately be determined by the availability

of recurrent budget, the economic and social situation in the NCD, results accomplished by the

Project, and the commitment of the GoPNG to expand these types of activities. In addition, the

Project has generated substantial support from a number of private sector organizations, as well

as local chambers, associations and councils who have expressed their commitment to provide

15

key aspects of the financial literacy and on-the-job training as an in-kind contribution to the

Project.

51. At the macroeconomic level, the Bank envisages that greater labor market demand and

more governmental resources associated with Liquid Natural Gas investments (LNG) will create

more conducive environment for sustaining and expanding such programs. There has been

considerable progress reported on the domestic economy, which has resulted in higher levels of

domestic and foreign investment; and this is also expected to lead to positive gains in

employment. However, attention will need to be paid to encouraging the private sector by

addressing challenges such as maintaining law and order, establishing a level playing field for

access to resources, and continuing to strengthen the general investment climate. To this end, the

IFC is looking to strengthen these areas through its Access to Finance Project. Together, these

projects may provide effective solutions for addressing both the demand and supply side

constraints.

52. Given these favorable circumstances, the potential for sustaining and replicating the

Project into other urban (and rural) areas in PNG is therefore significant. Based on the

experiences of the YLM, other city authorities, including in Hagen, Madang and Lae have

already expressed interest in an extension of the Project. The Project‘s outcomes will be shared

with other provinces and local level government authorities. The experience in other countries

around the world, such as South Africa‘s Expanded Public Works Program (EPWP), has shown

positive impacts on poverty. In South Africa, a R6.4 billion multi-year EPWP was launched in

2004 and is funded entirely by Government. The National Youth Scheme, which forms part of

the Program invests significantly in training and public works for youth, has created a million

work days and benefited 19,000 youth. While the program‘s technical support is coordinated by

the Department of Public Works, conditional grants are allocated by its Treasury to sector

ministries to finance six months of training in a range of artisan trades followed by six months of

labor-intensive works. Additional measures including training for officials and contractors were

put in place to encourage the use of labor-intensive methods. The success of the project has

recently resulted in Cabinet approving a phase two of the program in 2009 and an additional

investment of R10 billion, which will be used to finance a wider range of public works activities

that will also include social, cultural and non-state programs.

53. In addition, India‘s National Rural Employment Guarantee Scheme and Ghana‘s

Opportunities Project provides compelling evidence that workfare programs supported by

training services are effective in reducing poverty and also mitigating rural-to-urban migration.

Should the Project demonstrate results in Port Moresby, the Government could extend similar

labor-based public works and training schemes to other locations. However, in the case of PNG,

the Project‘s private-sector oriented activities in Component Two would not be necessarily

relevant in subsistence agriculture environments.

54. Over the long term, the Bank would also be open to supporting the Government to look

more systematically at developing a national social protection scheme that could include the

promotion of labor-based works as well as address urban development issues. Earlier this year,

the World Bank responded to a request from the Ministry for Community to prepare a briefing

note on Social Protection and indigenous populations drawing on a range of social safety net

16

schemes from other countries. The Project‘s experience and results cou ld be used to inform the

development of such a policy.

E. Critical Risks and Possible Controversial Aspects

55. The Project would manage general risks through the following design features: a)

mechanisms of youth and community participation in decision making; b) consultations with

civil society and private sector council and associations; c) culturally appropriate grievance

redress and communications mechanisms; d) investing in technical assistance and strengthening

key areas (e.g., financial management and procurement as well as contract management systems

and procedures); e) financial and procurement monitoring and independent auditing; and f)

oversight and policy guidance to fine-tune approaches to risk management through the PSC.

Risk

Risk

Rating

Analysis and Mitigation Measures

To Project Development Objective

The Project‘s beneficiary

targeting methods may not

effectively reach poor urban

youth.

S The Project will enhance targeting through i) a Proxy Means Test

which will be established through a baseline screening survey and

will be positively correlated with target groups; ii) self-selection by

setting the stipends slightly lower than the minimum wage; iii)

focusing the works in geographically poorer neighborhoods; iv) a

gender quota to ensure that at least a third of participants are female.

If the Project is oversubscribed, a randomized lottery method will be

instituted.

The high degree of social

stratification and persistence of

traditional patronage systems

create a substantial risk of elite

capture and political

interference in the process of

project preparation and the

selection of subproject

activities and beneficiaries.

S Significant investments will be made to ensure that transparent and

inclusive planning and tender processes are established. Local

participatory planning, public campaigns and socialization

mechanisms will be established to announce Project activities and

rules of participation. These processes would be augmented by

complaints handling and grievance mechanisms to allow for bottom-

up feedback on corruption and misuse of resources. In addition,

controls exist through the PSC and regular IDA supervision.

Payments to trainees are not

made in a timely manner and

which could also result in

significant reputational risks to

the NCDC and IDA.

S Arrangements for the flow of funds will be documented in the POM.

Initial training to the NCDC's Financial Controller was provided by

the Bank. The Project's DA has already been set up and the NCDC is

already started preparing WAFs against the Korean Trust Fund. A

transaction-based disbursement method is recommended. This

method allows up to six months of funding to be available in the

Designated Account in order to enable the cash flow that is required

to support trainee stipends.

The Project could attract further

rural to urban migration.

M The Project itself is not expected to have a significant additional

impact on urban in-migration. Mitigating measures incorporated

into the project design include: (a) the low stipend which will ensure

the self-selection of poor urban youth, and at the same time, is

unlikely to be high enough to attract further in-migration; and (b) the

proxy means test, which will screen and verify youth eligibility. In

addition, evaluations will assess community perceptions of whether

the Project is attracting youth from outside the target areas.

Urbanization and urban unemployment are already established

trends that will continue with or without the Project. It will be

17

Risk

Risk

Rating

Analysis and Mitigation Measures

critical for the Government to be proactive and address key policy

issues around this transition. Furthermore, most development

assistance in PNG is geared towards the rural areas. However, in

this same regard, the needs in the NCD and other urban cities are

clear; and this Project will help to provide an effective response.

Similar labor-intensive public works activities could be expanded to

rural areas if additional funding were to become available.

To Component Results

The NCDC‘s capacity to

support the Project‘s fiduciary

responsibilities is weak and is

therefore unable to oversee, and

quality-assure preparation and

implementation of all intended

sub-project activities, given

their current staffing and

capacity.

H A dedicated PMU will be charged with project implementation. The

start-up phase and geographic scale of the Project have been kept

modest. Additional risks will be mitigated by: i) identifying gaps

through fiduciary and capacity building assessments; ii) investing in

technical assistance; and strengthening key areas (e.g., financial

management, procurement, contract management systems,

operational procedures and internal controls); iii) undertaking

quarterly procurement supervision in the first year of the Project; and

iv) drawing upon the implementation capacity of private sector and

CSOs in frontline service provision; and encouraging competition

amongst service providers. In addition, the CFO, Project Manager

and NCDC's own Financial Controller are all certified accountants.

Ownership of the Project may

wane if there is a change in

political leadership in 2012.

M A PSC will be established and be comprised of various development

stakeholders from the Government, civil society and private sector to

oversee and guide the Project and maintain continuity. In addition,

the Project has been designed with the involvement of the NCDC‘s

Executive Management Committee, which is the technical arm of the

NCDC.

Enrollment of ―ghost workers.‖ S The Project will strengthen internal controls. Verification of

payments will involve review of approvals of payments given by

Works Contractors and employers and feedback from trainees

themselves. Trainee signatories contained on the payment forms will

need to match the signatures provided on their application forms.

There may be insufficient

absorption capacity in the

formal economy and uptake to

meet labor demands.

S The interest of potential employers has been confirmed during

Project preparation. Employer based subsidies are expected to help

increase the interest of private sector companies to participate in the

SDES component of the Project.

It may be difficult for youth to

exit Component 1 due to

expectations among some youth

that the Project will guarantee

long term employment. This

could potentially lead to

demands for monetary

compensation by disgruntled

youth upon their exit from the

Project.

M It is difficult to predict whether or not this will become an issue of

concern during implementation as this issue was not raised by youth

groups themselves during consultations. However, Project would be

to actively monitoring whether this issue arises in the first year of

project implementation. The current implementation schedule aims

to take a conservative approach in year 1 of the project, targeting

only 400 beneficiaries compared with an annual average of 3450 in

subsequent years in order to give NCDC the time and space to

correct implementation issues.

Employers may

substitute/displace exiting labor

leading to a net result of lower

benefits to youth workers.

M The risk is likely to be low given the relatively small scale, dispersed

and short term nature of the public works program and OJT. The

Project will also produce clear guidelines prohibiting labor

substitution/displacement, include monitoring of the turnover of

18

Risk

Risk

Rating

Analysis and Mitigation Measures

workers to this effect; and exclude employers who demonstrate a

pattern of dismissing trainees to hire new ones.

Projects do not generate the

expected number of labor days

or efficiency is below targeted

level of 50 percent minimum--

i.e., sub-project cost of

unskilled labor is 50 percent or

more of total cost of sub-

project.

M Rigorous preparation in unit rate analyses, phasing in of contracted

activities will allow for appropriate adjustments or the cancellation

activities if found ineffective; and early monitoring to assess

effectiveness and efficiency. Setting eligibility criteria for project

inclusion such as expected labor ratio minimum 50 percent of total

project costs and rewarding parallel funding of projects by improved

ranking due to better labor ratio cost efficiency.

Sub-project selection

contributes to inter-communal

tension.

S The Project will allow for an equitable distribution of works in the

three electorates in the NCD, with preferential access to youth

residing in communities where the public works activities will take

place; as well as the inclusion of an extensive Project awareness

campaign; broad based consultations with communities and

stakeholders including the Motu-Koita (and its Assembly) prior to,

and during implementation, and the development of a grievance

redress and communications mechanism for beneficiaries.

There may be inadequate

gender equity and

representation in subproject

activities.

M The Project has set a general target of having up to a third of trainees

be young women. This target will achieved through the following

means: i) ensuring that the Project‘s socialization campaign and

training encourages young women‘s participation and explains the

types of benefits the Project will provide them; ii) allowing for at

least 20 percent of the public works activities to be undertaken by

women‘s only labor groups; iii) locating the works activities in

communities in order to allow for close proximity to households and

greater inclusion; iv) arranging for crèches and/or child care

facilities to be made available at work sites; v) establishing

partnership arrangements with employers who offer the type of work

that would interest young women (e.g., textiles and garment

production; health and beauty; hospitality, office and administrative

support, etc); and vi) ensuring that one of the two civil society

groups selected to participate on the Project Steering Committee has

the knowledge and experience to represent women‘s issues.

Overall S Substantial

Note: Risk Rating: H = High Risk, S = Substantial Risk, M = Modest Risk, N = Negligible Risk

F. Loan/Credit Conditions and Covenants

56. Conditions of Effectiveness.

i) That the Project Steering Committee shall have been established in a manner, and

with composition and powers, satisfactory to the Association;

ii) That the Project Operational Manual, including the annex on financial

management and accounting, shall have been adopted by NCDC, in form and

substance satisfactory to the Association; and

iii) That the Subsidiary Agreement shall have been entered into by the parties thereto,

in form and substance satisfactory to the Association.

19

57. Legal Covenants.

i) The NCDC shall, not later than thirty (30) days after the Effective Date, establish

a financial management and information system to manage Project accounting

and reporting satisfactory to the Association;

ii) The NCDC shall, not later than sixty (60) days after the Effective Date, conclude

written arrangements with a commercial bank and a telephone operator, in each

case under terms and conditions satisfactory to the Association, setting forth the

bank‘s and the operator‘s respective obligations to assist in the payment of

Stipends and the setting up of bank accounts and to comply with the fiduciary

requirements of the Project, including the obligation to abide by the Anti-

Corruption Guidelines and to allow for audits to be performed as needed;

iii) The NCDC shall, not later than sixty (60) days after the Effective Date, appoint an

internal audit advisor with qualifications and experience satisfactory to the

Association; and

iv) The NCDC shall, not later than ninety (90) days after the Effective Date,

establish, and thereafter maintain throughout the implementation of the Project, a

Project Management Unit within NCDC, with powers and staffing satisfactory to

the Association and set forth in the Project Operational Manual.

IV. APPRAISAL SUMMARY

A. Economic and Financial Analyses

58. While a full economic analysis was not feasible during project preparation given the

limited available baseline data and in-country capacity for rapid collection and analysis

(precluding a cost-benefit analysis), both the public works and training components of the

proposed Project will improve youth labor market outcomes and result in important secondary

benefits for Port Moresby. Participation in the public works program will provide a valuable

income transfer; and classroom and on-the-job training will provide work experience that should

help to increase participants‘ future employability. Secondary benefits will accrue from the

improved quality of public facilities being maintained, a limited amount of training and work

experience, access and exposure to the formal banking system and mobile telephony, a reduction

in potentially risky or criminal behavior, and potentially, a limited amount of training and work

experience. Data will be collected during implementation to assess the actual benefit outcomes.

The impact evaluation for this Project will provide the first evidence on the effect of public

works and training programs in PNG, and one of the first evaluations of this type in a low-

income context.

B. Technical

59. The World Bank has found that labor based public works activities, if designed and

implemented well, can serve as an effective transition and/or safety net for vulnerable groups.

The proposed addition of short-term classroom and on-the-job training that targets both skills

and behavior is also considered technically appropriate in urban Port Moresby. Such training has

20

shown to be effective in improving immediate on-the-job performance (in particular for youth

who have less experience with the formal economy), and to contribute subsequent livelihood

opportunities. To this end, the NCDC has a sufficient technical base for implementation of a

youth employment program in the NCD, in partnership with key government and development

agencies, including the NYC and the DfCD, who play a role in supporting women and youth

issues at the policy level. The Project‘s technical base will be further strengthened through the

involvement of a number of experienced civil society and community-based organizations as

well as private sector companies that are already actively supporting youth programs. In

addition, the PMU‘s corporate and operational capacity will be enhanced in the areas of

procurement, financial management, M&E and technical supervision (e.g., labor engineering,

skills development, etc.)

C. Fiduciary

60. Financial Management (FM) Assessments of the NCDC were initiated in June 2009 and

completed in February 2010. The Project‘s FM arrangements have been designed to meet the

minimum requirements stipulated in OP/BP10.02. The financial management system will meet

the financial management requirement as stipulated in OP/BP subject to implementation of

agreed actions and mitigating measures. The assessed financial management risk of the Project

is considered ―Substantial.‖ Mitigating measures are proposed in the FM Action Plan.

61. The key mitigating measures to be put in place by NCDC are: i) the recruitment of a

qualified CFO who will report directly to the Project Manager and be responsible for overseeing

the FM and procurement areas; ii) the preparation of a Project Operations Manual that will

include Project FM and Accounting procedures before effectiveness; iii) the implementation of a

separate Financial Monitoring and Information System (FMIS) for the Project‘s financial

records; and iv) the implementation of appropriate internal audit arrangements through

contracting of an appropriately qualified consultant to provide technical assistance and build

capacity within NCDC. Details of the Bank‘s financial management assessment are in Annex 7.

62. Procurement Assessments of the NCDC‘s capacity were undertaken in July 2009 and a

final assessment was undertaken in December 2009. The overall Risk Assessment is rated as

High. This is consistent with the Country Procurement Assessment Report, dated June 2006. The

main issues/risks concerning the implementation of procurement activities have been identified

as: i) the NCDC‘s lack of centralized procurement capacity; and ii) the NCDC‘s limited

experience with IDA procurement guidelines, procedures and processes. An action plan has

been adopted to mitigate these risks, including: a) initial training in Bank procurement

guidelines; b) recruitment of an international Procurement Advisor for the Project; c) preparation

of procurement plans and documentation of specific procedures to be applied under the Project;

d) contracting of short-term technical advisory services to support the contract administration

process for the training services and works contracts; and e) detailed procurement processes

described in the Project Operational Manual, including sample bid/proposal documents agreed

with IDA. Quarterly supervision and training support would be provided by a World Bank‘s

Procurement Specialist in the first year of the Project. Details of the Bank‘s procurement

assessment are in Annex 8.

21

D. Social

63. A Social Assessment was commissioned by the NCDC and completed in April 2010.

The overall social impacts of the UYEP are expected to be positive as it is expected that the

Project will help to increase the social capital of youth and strengthen engagement between

youth, the Government and civil society.

64. Indigenous Peoples (OP/BP 4.10). Although the project area (NCD) is urban, the Motu

and Koita peoples are recognized as having a collective attachment to the land and as being the

customary landowners of the NCD. The Motu peoples migrated to the NCD about 200 years ago

and the Koita people were Motu trade partners who over time settled within these villages. The

Motu and Koita peoples are tightly intermarried and ethnic distinctions are virtually irrelevant.

However, the Motu-Koita identity is not monolithic. There are variations of Motu-Koita identity

including assimilation through marriage and mixed descent. These distinctions play an

important role in the NCD where identity, inclusion and exclusion concerns feature prominently

among its residents. In addition, the Motu-Koita self-identify is distinct (and are recognized by

others as such); they have separate customary institutions and a system of local government—the

Motu-Koita Assembly, (which was established through the Motu-Koita Assembly Act, 2007)16

—

and their own language (Hiri Motu).

65. Currently, the population of the Motu-Koita in the NCD is estimated at 30,000 out of a

population of at least 250,000.17

While the Motu-Koita actually comprise a relatively small

percentage of the total population (less than 12 percent), given their special status, the Social

Assessment provides background information on the recent history of the Motu-Koita, (which

saw them move from an educated community to a disenfranchised one), the aspirations of Motu-

Koita youth today, and the challenges that Motu-Koita youth face. In addition, as part of the

Assessment, community consultations were carried out to ascertain the extent of support within

the Motu-Koita community. It is on this basis that the Assessment determined that there is

enthusiasm for the Project and support from community members and representatives.

66. In an effort ―to avoid creating unnecessary inequities for other poor and marginal social

groups‖ (OP 4.10, FN 12), and therefore to reduce the risk of social conflict between ethnic

groups within the project area, the Project‘s design does not include a separate IP Plan. In

accordance with OP4.10, the elements of an IP Plan have been integrated into the Project design.

The main measures adopted, detailed in Annex 10, are:

i) Free, prior, and informed consultation leading to broad community support was

conducted during project preparation. As part of the Social Assessment, community

consultations were carried out to ascertain the extent of support for the project within the

Motu-Koita community. The Assessment‘s consultations and written materials were

translated into Tok Pisin and Hiri Motu. The Social Assessment documents enthusiasm

for the project. There is no documentation of dissent against the project from community

members or representatives. However, the Social Assessment did note general concerns

16

The Motu-Koita Assembly serves to protect their identity, their customary l and, and their natural resources. 17

The last Census was conducted in 2000. However, more recent estimates by the NCDC indicate that the

population is closer to 500,000.

22

over unfulfilled expectations from previous projects undertaken by government or non-

governmental actors;

ii) A framework for free, prior and informed consultation during project

implementation. By Credit Effectiveness, a Community Consultation Framework (CCF)

will be incorporated into the final Project Operations Manual;

iii) Measures to ensure culturally-appropriate benefits. These will include targeted

awareness raising, communications, screening and recruitment efforts in Motu-Koita and

other neighborhoods. There will be a review of Motu-Koita youth participation in

Component 1 to ensure that disproportional participation is identified, examined, and

measures put in place to resolve it in subsequent communication and recruitment efforts

(as relevant). In addition, mechanisms and benchmarks for monitoring, evaluating, and

reporting on the inclusion of the Motu-Koita in the Project will be put in place;

iv) Measures to ensure that adverse impacts are mitigated. These will include a

culturally appropriate grievance redressal mechanism and a robust communication

campaign to ensure that there is widespread understanding of the project, its objectives,

the target group it hopes to reach, and the criteria and procedures for participation; and

v) Measures for disclosing key Project documents. The Social Assessment will be

translated into Tok Pisin and Hiri Motu and disclosed in three locations of the NCDC

(City Hall, Lakatoi Haus and Tarport) for public viewing, the NCDC‘s website and at the

offices of the Motu-Koita Assembly.

E. Environment

67. An Environmental Assessment was commissioned by the NCDC. The UYEP will not

pose any significant risks to the environment. Notwithstanding this assurance, Component 1 will

provide job experience opportunities through the funding of labor-based activities in the road

maintenance sub sector. These activities are likely to be limited to road repairs/maintenance, foot

path maintenance, cleaning of storm drains, garbage collection and grass cutting. These activities

if not properly planned and executed, may lead to some modest adverse environmental impacts,

which will be local, site specific and can be avoided or effectively mitigated through widely

used, readily available and simple management measures.

68. Environmental Assessment (OP/BP 4.01). To ensure that these small scale and low

intensity adverse impacts are effectively managed in compliance with the GoPNG‘s own

environmental management requirements and the Bank‘s Environmental Assessment OP 4.01,

the NCDC commissioned an Environmental and Social Management Framework (ESMF) which

has been approved for use during project implementation and has also been disclosed locally in

Port Moresby and the World Bank‘s Infoshop. Also, using the provisions of OP4.01 and

commensurate with the relatively low environmental risks, the project has been assigned an EA

category of ―B‖. The ESMF contains proposed mitigation measures corresponding to the types of

impacts anticipated for each type of activity and guidelines on how these measures are to be

incorporated into a simple Environmental Management Plan (EMP) which are to be included

into the civil works contracts to ensure these measures are paid for and carried out.

69. As part of the preparation of the ESMF, meaningful and participatory consultations were

held with relevant stakeholder groups in and around Port Moresby, and the issues raised and how

they are being addressed have been documented in the project records. Additionally, the ESMF

23

also has a consultation matrix to ensure that during implementation, subsequent consultations are

held at the more local level when sub-project activities are being planned.

F. Safeguard Policies

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment (OP/BP 4.01) [x] [ ]

Natural Habitats (OP/BP 4.04) [ ] [x]

Pest Management (OP 4.09) [ ] [x]

Physical Cultural Resources (OP/BP 4.11) [ ] [x]

Involuntary Resettlement (OP/BP 4.12) [ ] [x]

Indigenous Peoples (OP/BP 4.10) [x] [ ]

Forests (OP/BP 4.36) [ ] [x]

Safety of Dams (OP/BP 4.37) [ ] [x]

Projects in Disputed Areas (OP/BP 7.60) [ ] [x]

Projects on International Waterways (OP/BP 7.50) [ ] [x]

G. Policy Exceptions and Readiness

70. No Policy Exceptions and Readiness requirements are required for this Project.

24

Annex 1: Country and Sector or Program Background

PAPUA NEW GUINEA – URBAN YOUTH EMPLOYMENT PROJECT

Country

1. Papua New Guinea (PNG)‘s recent macro economic growth has yet to lead to an

improvement in the lives of many poor citizens. Notwithstanding a fourth successive year of

economic growth, PNG‘s GDP per capita is estimated to be US$677; one of the lowest values in

the Pacific region.18

The UNDP‘s Human Development Index ranks PNG 145th out of 177

countries, well below the average for most countries in Asia and only slightly higher than the

average for Sub-Saharan Africa.19

In a context of rapid population growth, it is estimated that

more people in PNG live in poverty today than a decade ago. The creation of jobs and income-

earning opportunities are not keeping up with the needs of a growing population.

Urban and Social Services

2. Although overall poverty in the rural areas is high (estimated at 37.5 percent compared

with 16.1 percent in the urban areas20

), the burden of poverty in urban centers is on the increase

and may be rising at a faster rate than in rural areas.21

This has been exacerbated by rapid in-

migration, which has typically followed a pattern of chain migration and local clustering of

ethnic groups.22

Young people, in particular, continue to migrate to urban areas for social and

economic reasons. The escalation has been so rapid that the Government (GoPNG) and urban

authorities are struggling to cope with the increasing demands on infrastructure and service

provision. The majority of urban migrants find themselves living in informal settlements and

slums without basic services such as running water and sewage and sanitation systems. In Port

Moresby for instance, about 40 percent of the population live in settlements, 80 percent of

which are unplanned.23

The unclear demarcation of land and property has also led to disputes

over ownership and fuelled tensions among migrants, land owners and local indigenous groups.

3. In Port Moresby, the largest city in PNG, youth between the ages of 15 and 29 constitute

about 35.1 percent of the total population as compared to 28.5 percent nationally; and it is

estimated that the youth cohort will grow by at least another 13 percent by 2015 due to natural

population increases and anticipated in-migration.24

This rapid demographic growth and

urbanization creates tremendous pressures for service delivery and for employment generation.

Recent studies indicate that increasing subsets of urban youth endure inequality, exclusion and

poverty and are vulnerable to engaging in risky behaviors.25

Three underlying issues pose

18

Human Development Report, 2006. http://www.socialwatch.org 19

UNDP, 2008, 2007/08 Human Development Index Rankings, http://hdr.undp.org/en/statistics/ 20

ADB, 2002, Priorities of the Poor in Papua New Guinea, Manila. 21

Based on the 2000 National Census, Port Moresby and Lae were identified as the two largest cities in PNG, followed by

Mount Hagen and Goroka. 22

According to the 2000 PNG Census, Port Moresby‘s migrant population, for example, was estimated to have increased from

48percent in 1990 to 58percent in 2000. However, since internal migration is not closely monitored or controlled, it is difficult

to estimate the exact level of urbanization. 23

NCD, NCD Settlements Strategic Plan, 2007-2011, Port Moresby. 24

National Statistical Office, 2000 Census; and UN Population Prospects, 2006 Revision. 25

World Bank, 2008, Rapid Youth Assessment, Lorraine Blank, Washington D.C.

25

significant challenges for the socialization of these marginalized groups: i) their lack of equity

in and access to the education system; (ii) their lack of equity in and access to the labor market;

and iii) their increasing involvement in urban crime and violence.

Education

4. School enrollments, accessibility, relevance and retention rates remain low across the

board despite ongoing reforms.26

PNG‘s combined gross enrolment ratio for primary,

secondary and tertiary education is 40.7 percent, which compares with the regional average for

the Sub-Saharan region.27

National statistics indicate that only 53 percent of children have

completed primary school, 30 percent are not attending school, and as many as 33 percent never

attended school. Only about 5 percent of the population has completed secondary school, with

slightly higher figures (13.6 percent) for urban populations. Moreover, a higher proportion of

girls have never attended school, and a lower number complete grade 12.28

Low retention and

high rates of school leaving can be attributed to a number of factors, including high school fees,

inadequate education facilities, a shortage of qualified teachers, lack of teaching and learning

materials, poor parental attitudes towards the value of education, and the opportunity costs

faced by some poor families for sending working age youth to school. Similarly, enrollments in

education equivalency programs (vocational and technical) have decreased; and the high cost

and limited reach of second chance education also puts them out of reach for most families.

Labor Market

5. The transition from school to work is the greatest challenge for urban youth in PNG, and

is especially difficult for those who have not completed secondary school. The employment

challenge is basically two-fold: a rapidly expanding urban labor force and chronic

unemployment and underemployment, with a limited number of wage jobs available through

the public and private sectors.

6. In 2002, the International Labor Organization (ILO) estimated that while around 50,000

youth reach working age and look to enter the workforce in PNG each year, the absorptive

capacity of the formal economy was limited to only about 5,000 people per year.29

In this very

constrained labor market, youth of working age are greatly disadvantaged by unequal access to

jobs and services because they lack the necessary qualifications to obtain formal employment or

to compete effectively in the informal sector. For instance, in the National Capital District

(NCD), the overall unemployment rate stood at 21.2 percent for men and 12.8 percent for

women. However, unemployment rates rose to over 50 percent for males and 30 percent for

females between the ages of 15 and 24, while they declined to under 20 percent for men aged

25-29 and less than 10 percent for women in that same age group.30

Low school completion

rates and a lack of adequate skills are a major factor contributing to their social alienation and

26

World Bank, 2006, Opportunities to Improve Education Sector Performance Summary Report, Washington D.C. 27

UNDP, 2008, 2007/08 Human Development Index Rankings, http://hdr.undp.org/en/statistics/ 28

National Statistics Office, 2000, PNG National Census and Department of Education statistics. 29

ILO, 2002. Employment Opportunities for Papua New Guinea Youth reports that formal employment has increased by only

1.5percent since 1996 30

National Statistics Office, 2000, PNG National Census and Department of Education statistics.

26

lack of employability. Another factor affecting their marginalization is the lack of information

regarding job and training opportunities because employment services are very limited.

7. Recently there has been considerable progress reported on domestic economic growth,

which has resulted in higher levels of domestic and foreign investment. However, in order to

translate these investments into broader-based benefits for the population of PNG, increased

attention will need to be paid to strengthening the supply and quality of the domestic labor

force, establishing a level playing field for access to resources, and encouraging the private

sector by addressing challenges such as maintaining law and order, and strengthening the

general investment climate.

8. In this regard, employers in Port Moresby indicate that there is difficulty in filling

vacancies in the formal sector with reliable staff that have the basic technical skills and life

skills (e.g., discipline, reliability) required to perform the work, even for semi- and relatively

low-skill requirement jobs.31

This feedback is consistent with a recent report of skill

development needs in the Pacific Island Countries (PICs), which show that while

unemployment levels are high, the PICs continue to import semi-skilled and skilled workers

from overseas to fill jobs for which the people in the region do not have the skills or the

experience to perform.32

The report also describes the gaps between supply and demand for

vocational skills and the need to develop and invest in effective employer-based skills training

among other strategies to address the skill gaps.

Crime and Violence

9. In the absence of an adequate safety net, in situations where they lack education,

legitimate incomes and occupations, and the necessary social support between leaving school

and finding work, an increasing number of young people have turned to crime and violence.33

A

recent comparative study noted that among the Pacific islands countries, the most extreme case

of an apparent escalation in youth crime is evident in the urban areas of PNG.34

Rapid urban

growth, poor living conditions, unemployment and the erosion of traditional systems of social

support feed a sense of disenfranchisement, unfulfilled expectations and alienation among

youth. The rise of criminal youth gangs, commonly called ―raskols‖, is the most visible

manifestation of this. A survey by UNHABITAT reported that almost 70 percent of males in

Port Moresby who considered themselves ―unemployed‖ were earning a living through criminal

activities, including armed robbery, home invasions, murder, and drug dealing.35

In Lae, the

growth of youth gangs and crime patterns tend to follow those of NCD, although victimization

levels have been reported to be even higher, and crime and violence levels are escalating .36

31

PNG National Training Council, Human Resource Requirements and Training Needs for Papua New Guinea

2007-2009, 2008, 32

ADB, 2007, Skilling the Pacific: Technical and Vocational Education and Training in the Pacific, Manila. 33

Dinnen, S., 1998, Urban raskolism and criminal groups in Papua New Guinea. In: Hazelhurst K, Hazelhurst C, eds. Teams

and youth subcultures: international explorations, New Brunswick, NJ. 34

UNICEF/SPC/UNPF/NZAID, 2005, The State of Pacific Youth, Suva. 35

UNHABITAT, 2004. Youth and Crime Survey, Port Moresby. 36

Government of PNG, 2005, Community Survey of Lae: Extended Summary, Law and Justice Sector. 78percent of households

reported that they had been the victim of crime at least once in the last year; compared to 61percent in Port Moresby.

27

10. While the dynamics underlying crime and gang membership are complex and cannot be

reduced to a lack of employment opportunities and a breakdown in social support and control

mechanisms, it is reasonable to believe that these factors contribute to youth‘s alienation and

attraction to alternative sources of identity, community and security. Given that a significant

number have no realistic prospects for reintegration into the education system due to their age

and the state of the education system, efforts to strengthen their social inclusion could start with

expanding their ability to access to the labor market so that they have the opportunity to gain the

basic skills, experience and knowledge required to earn a living in a productive manner.

Gender

11. Historically, young women‘s participation in community programs have been weak as a

result of the cooptation of community processes by men, token representation of women

without necessary training, cultural barriers to effective engagement on issues, and increasing

tension between customary versus common law for the protection of women‘s rights. For

example, on average across the region, female educational attainment rates are much lower than

for males; female access to labor market opportunities and credit are also much lower; and

while more males are prone to substance abuse and are likely to instigate petty and/or violent

crimes, many young women are increasingly susceptible to teenage pregnancy, domestic

violence and exploitation.37

In terms of enhancing young women‘s access to the labor market,

the Project will seek to ensure equity in participation and reduce the transaction costs incurred

by women, who are typically disadvantaged by the geographic distance to worksites from

households, lack of childcare facilities, and lack of social and household-level support.

Coordination with Other Sectors

12. The Bank is moving forward with a number of operations which may strategically

complement the UYEP. The GoPNG‘s universal basic education plan will be submitted to the

global EFA-Fast Track Initiative which will likely result in Bank-facilitated funding aimed at

keeping more school-aged youth in school and improving the quality of their education. The

Flexible and Open Distance Education (FODE) Project for PNG, the development objective of

which is to increase the number of out-of-school youth who complete recognized secondary

diploma and certificate equivalency programs, will be implemented simultaneously. While

these projects build on different institutional models, they offer positive examples of how the

Bank can work productively with the GoPNG to cater to the range of needs of young people in

PNG. Within the NCD, the FODE Project and UYEP will provide services to different segments

of the same broad beneficiary group – youth in the 15-29 age range. FODE will provide some

assistance to encourage interested youth to resume formal education. UYEP will provide

support those youth who would be unable to return to the formal system. Efforts will be made to

cooperate closely in the monitoring and evaluation of these two interventions.

37

UNICEF/SPC/UNPF/NZAID, 2005, The State of Pacific Youth, Suva.

28

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies

PAPUA NEW GUINEA – URBAN YOUTH EMPLOYMENT PROJECT

Sector Issue

Project

Latest Supervision

(PSR) Ratings

(Bank-financed projects only)

1. Bank-financed

Implementation

Progress (IP)

Development

Objective

(DO)

Secondary/Adult Education

Basic Education

Flexible Open Distance

Education

Fast Track Initiative

Under

Preparation

Under

Preparation

2. Other development

agencies

Asian Development Bank Employment-Oriented Skills

Development Project

Completed

AusAID

Yumi Lukautim Mosbi Projek

Ongoing

AusAID Community Development

Scheme Phase 2

Completed

AusAID Democratic Government Program

Ongoing

IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly

Unsatisfactory)

29

Annex 3: Results Framework and Monitoring

PAPUA NEW GUINEA – URBAN YOUTH EMPLOYMENT PROJECT

Results Framework

Project

Development

Objective

Project Outcome Indicators Use of Project Outcome

Information

To provide urban

youth with income

from temporary

employment

opportunities and to

increase their

employability.

1. At least 480,000 days of workfare

completed by youth on the Youth Job

Corps over the course of the Project. 38

2. At least 50 percent of OJT

beneficiaries receiving project funds

increase their income by at least 20

percent with reference to a control

group.39

3. Three months after graduation, the

percentage of On-the-Job beneficiaries

with a job (salaried or otherwise) is 10

percentage points higher than

comparable controls.

At the Project‘s Mid-Term

Review (MTR), targeting

strategies will be redesigned if

found not to be achieving the

stated objectives.

Intermediate

Outcomes

Intermediate Outcome Indicators Use of Intermediate Outcome

Monitoring

Result 1: Provide

youth with short- term

employment.

1. Number of direct Project beneficiaries.

Assess the Project‘s

Intake/demand and take

corrective action if numbers

are significantly less than

targets

Result 2: Increase the

general skills and

knowledge of

beneficiaries through

market-oriented job

training.

2. At least 2,400 youth certified to have

completed the On-the-Job training over

the course of the Project.

3. Percentage of employers and

contractors who report that the BLS

and PET are relevant to general work

place needs and are satisfied with

trainee performance.

4. Percentage of beneficiaries that report

an increase in knowledge, skills and

confidence to participate in the labor

market.

Indicates the extent to which

training delivered meets

market demand.

Review BLS and PET training

if trainees‘ performance is not

satisfactory and/or if attrition

rates in the OJT is high.

38

This represents approximately 60 percent of the total number of labor days to be supported by the Project. 39

The control group to evaluate the on the job training program will be established through literacy and numeracy

testes and will comprise a portion of the public works beneficiaries.

30

Result 3: Successfully

target disadvantaged

youth.

5. Percentage of participants whose

estimated economic welfare falls in the

bottom 40 percent of the NCD.

6. Percentage of beneficiaries that are

female.

7. Percentage of beneficiaries that are

Motu-Koita

Assess the Project‘s targeting

of women and Motu-Koita,

and analyze constraints if

numbers are significantly less

than anticipated.

Result 4: Reduce

participants‘ crime-

related indicators.

8. Percentage of community leaders who

report that participating youth are less

likely to be engaging in criminal

activity or anti-social behavior as a

result of the Project.

Indicates the extent to which

the Project is successful in

generating secondary social

benefits.

Result 5: Improve

maintenance of

selected urban road

infrastructure.

9. Percentage of routine road

maintenance plan that is achieved and

certified as completed.

Indicates the extent to which

the Project is successful in

generating secondary

infrastructure benefits.

Result 6: Improved

capacity in Project

Management and

Monitoring and

Evaluation

10. Annual work plans, budgets and

procurement plans are prepared and

submitted to IDA in a timely and

satisfactory manner.

11. Semi-annual project progress

reports are submitted to IDA in a

timely and satisfactory manner.

12. SBDs and RFP‘s are prepared and

awarded in a timely manner in

accordance with the schedule

specified in the procurement plan.

Project planning,

implementation, monitoring

and reporting capacity of

NCDC improved.

31

Results Framework Monitoring Arrangements

No. Target Values Data Collection and Reporting

Project Outcome Indicators

Baseline YR1 YR2 YR3 YR4 YR5 Frequency and

Reports Data Collection

Instruments Responsibility for Data Collection

1 Number of labor days completed by beneficiaries

0 80,000 120,000 260,000 400,000 480,000

Data collected within two weeks of end of YJC program for each intake.

MIS, Quarterly and Annual Reports

M&E coordinator of PMU/NCDC to prepare semi-annual reports based on data gathered by Baseline Screening Survey and MIS firms.

2 % increase of OJT beneficiary incomes relative to control group

Data to be collected as part of the beneficiary registration process 40

-- -- 10% increase

-- 20% increase

End of year 2 and 4. Reports two months after survey data collected and processed.

Baseline Screening Survey, MIS

Short and long term impact study firm (External Consulting Firm).

3 % of OJT beneficiaries with a job (salaried or otherwise) relative to comparable controls.

Data to be collected as part of the beneficiary registration process

-- -- 5% -- 10%

End of year 2 and 4.

Baseline Screening Survey, Short and Long run Impact Surveys.

External Consulting Firm

Intermediate Outcome Indicators

External Consulting Firm

4 Number of direct Project beneficiaries. 0 480 3030 5820 8490 1050041

Quarterly MIS Baseline Screening Survey and MIS firms

5 Number of beneficiaries graduating from On-the Job Training.

0 240 720 1440 2040 2400

Data collected within two weeks of end of YJC

MIS, Quarterly and Annual

M&E coordinator of PMU/NCDC to prepare semi-

40 The Baseline will be established through the implementation of the Project’s screening survey (conducted during the enrollment process). The survey will be developed and pre-tested before its full application for the first intake of Project beneficiaries. 41 This represents 60 percent of total number of beneficiaries to be supported by the Project.

32

program for each intake.

Reports annual reports based on database maintained by Baseline Screening Survey and MIS firms.

6 % of employers and contractors who report that the BLS and PET are relevant to their work and are satisfied with trainee performance.

0 25% 40% 50% 60% 60%

Quarterly MIS Skills Development Coordinator of PMU/NCDC

7 % of beneficiaries who report an increase in knowledge, skills and confidence to participate in the labor market.

0 20% 30% 40% 50% 60%

End of year 2 and 4.

Short and Long run Impact Surveys

External consulting firm

8 % of participants whose estimated economic welfare falls in the bottom 40 percent of the NCD.

N/A 40% 50% 60% 60% 70%

End of year 2 and 4.

MIS External consulting firm

9 % of beneficiaries who are female. 0 15% 25% 30% 30% 33%

Quarterly MIS Baseline Screening Survey and MIS firms

10 % of beneficiaries who are Motu-Koitabuan 0 2% 4% 6% 8% 10%

Quarterly MIS Baseline Screening Survey and MIS firms

11 % of community leaders who report that youth are less likely to be engaging in criminal activity or anti-social behavior.

0 20% 30% 40% 45% 50%

Annual Community Leaders‘ Survey

External consulting firm

12 % of target routine road maintenance plan achieved and certified as completed.

0 60% 60% 70% 75% 80%

Quarterly

MIS

Public Works Coordinator of PMU/NCDC

33

13 Annual work plans, budget s and procurement plans are prepared and submitted to IDA in a timely and satisfactory manner;

0 50% 70% 85% 85% 85%

Annual work plans, budgets and procurement plans

Annual work plans, budgets and procurement plans

PMU/NCDC

14 Semi-annual project progress reports are submitted to IDA in a timely and satisfactory manner.

0 50% 70% 85% 85% 85%

Semi-annual; Semi-annual project progress reports

Semi-annual project progress reports

PMU/NCDC

15 SBDs and RFP‘s are prepared and awarded in a timely manner in accordance with the schedule specified in the procurement plan.

0 50% 70% 85% 85% 85%

Ongoing. SBDs and RFP‘s

Procurement plans; Semi-annual project progress reports; SBDs and RFP‘s; and Procurement post-reviews

PMU/NCDC and World Bank (for post procurement reviews only)

34

Monitoring and Evaluation Description

1. The Project‘s secondary objectives include: Successfully targeting disadvantaged youth,

reducing participants‘ crime-related indicators and improving maintenance of selected urban

infrastructure. 42

2. A Monitoring & Information System (MIS) will contain all information on program

participants. It will be maintained by a contracted survey firm housed in the Project

Management Unit, using Microsoft Access software. Information on outputs will come from

training contractors, public works contractors, and private firms engaged in on-the-job training.

This will include: Participation and successful completion of the program, hours worked, trainee

payments, and maintenance projects completed.43

The MIS will also contain information from

four surveys used to measure outcomes and impacts.

3. The first survey will be a pre-program baseline screening survey administered to

program applicants when they apply for the program.44

It will require approximately 30 minutes

to administer, and will consist of approximately 30 questions. The survey will obtain re-contact

information, as well as household demographic characteristics, household assets, location of

residence, simple indicators of literacy and numeracy, and program eligibility requirements. 45

42

Targeting performance will be assessed by comparing predicted per capita consumption to the NCD distribution of

predicted per capita consumption in the forthcoming HIES. Predictions will be generated using the HIES, based

on household demographics and asset ownership questions common to both surveys. To assess the effect of the

program on crime, there will be four main indicators. First, respondents will be asked whether they hang out with

friends on the streets at night, and if so, how many nights per week they do so. Second, respondents will then be

asked if their best friend hangs out at night with their friends on the streets, commit crimes, drink steam, or smoke

pot. During the follow-up survey, respondents will be asked whether the behavior of that friend has changed, and

whether that friend joined the program. Third, respondents will also be asked whether they themselves have

experience crime during the past year. Finally, zone youth leaders will be given annual community surveys where

they will furnish information on a sample of participant and control youth that live in their zone. Zone leaders will

report on the jobs that youth have, and on the perceived likelihood that particular youth in their zone are engaged

various types of crime. Future aspirations will be ascertained by asking youth their expectations about their

primary activity, type of job, and subjective economic well-being in five years. Alternative measures of job

quality include sector, reported job satisfaction, and occupation. Finally, decision-making power will be measured

through participation in household decisions on purchasing clothing, spending on medicine, taking on paying a

debt, and the education of siblings. 43

Indicators of program participation include the number of participants in each program, the percentage of

participants that complete the initial week of training, the percentage of OJT participants that complete one month

of training, and six weeks of on-the-job training, and the percentage of YJC participants that complete 3 weeks of

public works. Indicators of payment include the percentage of authorized payments that are paid and confirmed as

received, and the percentage of beneficiaries reporting payment delays. Indicators of projects include the number

and type of projects completed, and the number of maintenance plans in place. 44

The screening survey will be administered in a publicly accessible location, near the location of an upcoming

public works program, over the course of a week. Program applicants will be apportioned to interview days based

on their position in a queue on the first day. 45

Program eligibility requirements are based on age, the length of time since the applicant attended school or held a

salaried job, and the length of time they have resided in the Port Moresby area. The latter will be ascertained using

questions on the baseline screening survey requiring local knowledge. Household demographic characteristics will

include: Number of Children 0-4, Number of children 5-15, Number of adults 16 and above, marital status of

worker, presence of mother in household, mother‘s occupation, the presence of father in household, father‘s

occupation. Housing characteristics include the type of dwelling, the number of rooms in the house, the floor type,

the main source of drinking water, and the main source of light. Other indicators of well-being include the

35

Several questions will exactly match those in the Household Income and Expenditure Survey. 46

We assume that the cost to administer this survey and enter the data will amount to

approximately $5 per respondent. The baseline screening survey will be used to select

applicants for the program. Eligibility will be determined based on an eligibility score based on

a subset of questions in the baseline screening survey. This score will consist of three

components. First, a poverty score will be computed based on a formula using either the

forthcoming Household Income and Expenditure survey, or the 1996 Living Standards

Measurement Survey. Second, a residential poverty score will be constructed using NCD

employees‘ qualitative perceptions of the perceived level of poverty in the applicants‘ area of

residence. Finally, applicants that score well on numeracy and literacy questions in the baseline

screening survey will be given additional consideration, in order to ensure that a sufficiently

large number of participants qualify for the SDES training program.

4. Baseline screening survey interviews will be carried out by the Baseline Screening

Survey and MIS firm in conjunction with community leaders. The eligibility formula will be

determined by the baseline survey development consultant and jointly reviewed by the PMU.

The firm will calculate the eligibility score and rank applicants accordingly. Community leaders

will review applicants‘ reported eligibility requirements, location of residence, and their

calculated poverty score, and will flag blatant misrepresentations or errors.

5. The second survey will be a short-run impact survey for selected participants and

controls. The impact survey will interview control and participant youth close to the program

eligibility threshold, and participants whose numeracy and literacy scores are close to the SDES

acceptance threshold. The survey will be administered to both public works and training

graduates in year 2 and year 4, three months after exit from the program. Its primary purpose

will be to assess the labor market outcomes of public works graduates and controls, shortly

following graduation from the program. Respondents will be provided with cell -phone credit

after completing the interview. Including this financial incentive, we estimate that this survey

will cost $15 per participant.

6. The third survey will be an annual community survey of youth leaders. This survey will

occur six months after the exit of each intake (cohort of participants). For each intake,

community leaders from the appropriate areas will be asked about several treatment and control

youth. The community youth leaders will provide information on participant and control youth

that they know. The leaders will be asked whether these youth have a job, what kind of job the

youth have, and whether the youth is likely to be engaging in crime. We assume that the cost of

constructing and administering this survey will come to roughly $1000 per intake. This covers

ownership of a mobile phone, and number of household children 5-15 in school. These measures will be

combined to construct a measure of predicted per capita household consumption based on data from the 2009

Household Income and Expenditure Survey. 46

Eligibility will be determined based on a poverty score. The poverty score will be constructed using a subset of

the baseline questions, with weights obtained from regressions of per capita income on individual and household

characteristics, using the HIES or the 1996 LSMS. This will be combined with a perception-based rating of the

poverty level of the applicant‘s residence, constructed by NCDC or the Department from Community

Development. Principal components analysis can be used to construct an asset index based on household

demographic and asset information.

36

the cost of designing and printing the survey, transport and food for respondents, a small stipend

for respondents, and paying interviewers to administer the survey and entering the data.

7. The fourth survey will be a long-run impact survey. This will seek to re-contact year 2

graduates and controls in year 4, roughly two years after their short-run impact evaluation

survey. Youth that have moved will be re-contacted, in order to address concerns that non-

random attrition of youth from the sample will lead to biased results. We estimate the cost of

this survey to be about $20 per participant.

8. The estimated base unit costs for each of the surveys, by year, are summarized below:

Year 1 Year 2 Year 3 Year 4 Year 5 Total

1. Screening Baseline Survey

Treatment 2,300 4,400 4,400 4,400 2,200 17,700

Controls 2,300 4,400 4,400 4,400 2,200 17,700

Total 4,600 8,800 8,800 8,800 4,400 35,400

Assumed per person cost $5 $5 $5 $5 $5 $5 2.Short-run impact surveys

YJC 2,030 2,030 4,060

OJT 970 970 1,940

Controls 1,000 1,000 2,000

Total 4,000 4,000 8,000

Assumed per person cost $15 $15 $15

3. Community surveys

Intakes 3 6 6 6 6 27

4. Long-run impact survey

YJC 2,030 2,030

OJT 970 970

Controls 1,000 1,000

Total 4,000 4,000

Assumed per person cost $20 $20

37

Annex 4: Detailed Project Description

PAPUA NEW GUINEA – URBAN YOUTH EMPLOYMENT PROJECT

1. The Project will be carried out over a period of five years, from 2011–2015. The

Project will focus on marginalized urban youth in Port Moresby between the ages of 16

and 25 with limited social and economic opportunities, including a) those that have not

completed the formal school system; and b) those that have completed their formal

education but have still not been integrated into the labor market. Given that each of

these segments have different initial conditions and needs, the Project design will ensure

that activities are appropriately tailored to each segment.

2. The Project will follow two main tracks. These are: a) support for labor market

integration of economically disadvantaged male and female youth by providing them

with occupational and life skills that are valued by employers in the public and private

sectors; and b) provision of short-term employment opportunities and life-skills training

in the public and private sectors.

Component 1: Youth Job Corps (YJC) (US$6.9 million)

3. This component will consist of: i) a major communication and community

awareness campaign that targets disadvantaged urban youth in the NCD on the

requirements and procedures for participation in the Project; ii) the screening and

selection of 17,500 eligible youth for training and/or employment under the Project; iii)

training of eligible urban youth in basic life skills for employment; iv) the enrollment of

eligible urban youth (who complete the life skills training) in a micro savings/SMS

banking program; v) the testing of numeracy and literacy levels for eligible urban youth;

and vi) provision of short-term employment for approximately 13,500 eligible urban

youth in infrastructure maintenance.

Sub-Component 1 (a): Youth Identification and Screening

4. Youth Identification, Socialization and Sensitization. The Project will carry

out community awareness and information campaigns supporting each round of youth

identification and screening. The Project will finance a communications consultant firm

to design and implement a sufficiently robust media program alerting youth, communities

and relevant CSOs that the UYEP is seeking to identify suitable youth for work-skilling

and possible job placement training. Particular attention will be paid to communities

inhabited by Motu-Koita youth. For example, the communications campaign will ensure

comprehensive coverage in these areas, and the communications contractor will work

closely with civil society groups working in these areas and with the Motu-Koita

Assembly. Activities for the media program will be drawn from a communications plan

which is developed in close collaboration with the PMU and contains specific

deliverables and performance targets.

38

5. Baseline Screening Survey and Enrollment. The identification, screening and

enrollment of youth will be undertaken by a consultant firm financed by the Project; and

take place in or very close to communities and settlements throughout the NCD to

facilitate access for the potential trainees.47

The consultant firm will be required to

consult and involve community leaders in the enrollment process.

6. Screening Criteria. Youth will be screened against the Project‘s eligibility

criteria: a) aged between 16 and 25 years; b) out of school or work for at least six months;

c) living in the POM area for at least 12 months; d) prepared to undertake one week of

basic life skills training; and e) assessed as healthy enough to participate in the program.

Due consideration will be paid to geographic, ethnic and gender inclusion. It is expected

that at least 33 percent of participants will be women. Opportunities for equitable

inclusion will also be made available for youth to provide input to the Project‘s design as

well as to support their participation. To this end, opportunities will be made available

for Motu-Koita youth (given their vulnerabilities to exclusion) to promote their

participation in the Project. Detailed procedures for the identification and screening of

individual candidates will be further refined in the course of project preparation with a

view to ensuring fairness, transparency and practicality.

7. Poverty Targeting. The Project proposes to enhance targeting through: i) self-

selection by setting the YJC and OJT stipends slightly lower than the market -clearing

wage for unskilled work; ii) a Proxy Means Test through a baseline and enrollment

survey which would be positively correlated with the target group; ii) focusing the

communications campaigns and the public works in geographically poorer

neighborhoods; and iv) a gender quota to ensure that at least a third of participants are

female. Furthermore, if the Project is oversubscribed, a rationing mechanism

(randomized lottery method) will be developed, building on lessons from good

international practice.

8. Gender. A separate Adolescent Girls Initiative Scoping Study was completed in

January 2010 and provided the basis for the Project to undertake a broader situational

analysis of key issues and constraints affecting labor market access of young women.

Among a number of recommendations, the Project will adopt the following: i) setting a

general target of having at least a third (33 percent) of trainees be young women; ii)

ensuring that the socialization campaign will highlight and address the need for young

women‘s participation, and explain the types of benefits the Project will provide them.

This will involve a robust information and dissemination campaign and regular grass

roots engagement and communications; iii) allowing for at least 20 percent of the public

works activities to be undertaken by women-only labor groups; iv) arranging crèches

and/or childcare facilities to be made available at work sites; and v) establishing

partnership arrangements with employers (particularly in the On-the Job Training sub-

component) who offer the type of work that would interest young women (e.g., textiles

and garment production; health and beauty; hospitality, office and administrative support,

etc); and v) ensuring that one of the two civil society groups selected to participate on the

47

The scope of the training contracts will cover the following key aspects: a) registration and screening;

basic life skills training; and (one of two) pre-employment training programs.

39

Project Steering Committee has the knowledge and experience to represent women‘s

issues.

9. Youth Identification. Upon acceptance into the program, trainees will be issued

a Youth Identification Card provided by the Project. The card will provide basic trainee

data, which includes details of the trainee that is verified during the

registration/enrollment process.

10. Total Project Enrollments and Participant Flow. The number and frequency

of these intakes will depend upon the availability and timing of job placement

opportunities in the public works sector. However, preliminary projections envisage

approximately 26 intakes over the Project‘s 4.5 year implementation period

(approximately once every two months). Information on each trainee accepted by the

Project will be entered into the MIS. Table A4.1 below provides the total planned

enrollments by year. In order to enable the Project to ramp up, a smaller number of

trainees will be processed during the first year of the Project. This is due to the

requirements to first select, employ and stage contractors for the training activities, and

the prior requirements to promote, identify and recruit participants into the program.

However, over the course of the remaining four years, the participant flow is expected to

increase and be slowly scaled down towards Project closing.

Table A4.1: Total Project Enrollments

Project

Enrollments

Year

1

2011

Year

1

2011

Year

2

2012

Year

2

2012

Year

3

2013

Year

3

2013

Year

4

2014

Year

4

2014

Year

5

2015

Year

5

2015

TOTAL

0 800 2125 2125 2325 2325 2325 2125 2125 1225 17500

Note: Each period is the equivalent of about 6 months. Approximately 26 intakes over the course of the Project are

envisaged. (An average of one every 2 months or 6 per year). Each intake will accommodate between 470-750 trainees.

Sub-Component 1(b): Basic Life Skills for Employment

11. Following the screening and registration process, the Project will finance a 40

hour Basic Life Skills for Employment (BLS) training to all eligible youth. The BLS

training will be designed and implemented by a training consultant firm financed by the

Project. The objective of the training will be to develop trainee‘s life skills and

understanding of the work environment; appropriate ―on the job‖ behavior; personal

presentation and attitudes and working as a team. Trainees undertaking the life skills

training will be further assessed and counseled, as required, by the Project‘s youth

facilitators to ensure that training content, support materials and delivery are appropriate

and to obtain a better understanding of trainee‘s skills and previous experience.

12. The 40 hour training will provide trainees with life skills and understanding of

work environments; appropriate ―on the job‖ behavior; personal presentation and

attitudes and working as a team. While it is expected that the training content can be

sourced from existing ―of-the shelf‖ materials, the Training Contractors may be required

to adapt some of the content to meet the needs of disadvantaged youth who will

40

participate in the program. The required content will be agreed upon during contract

negotiation. An indicative curriculum is listed in Box A4.2.

13. Maintaining the Focus on Employer-Based Training Needs. The skills training

that is being proposed in the following sections are indicative of the types of training that

local employers have identified as being relevant to their needs; and draw on good

practice and lessons from other similar projects that have been implemented in the Latin

America and Caribbean region. In addition, the training contractors will be selected based

on their knowledge and experience with non-formal training and education approaches.

It is assumed that contractors will be locally-based with direct relevant experience

working with the target groups. Contractors will also be required to demonstrate links to

employers and to involve them in the development of the training curriculum.

Box A4.2 Proposed Framework for the Basic Life Skills Training:

14. Numeracy/Literacy Test. At the end of the BLS training, trainees wishing to

move into more advance pre-employment and on-the-job training will be required to pass

a numeracy/literacy test administered by a training consultant firm.

15. Basic Life Skills Training Stipend. During training, participants will receive the

equivalent of PGK1 per hour (for transportation and food per day) over 5 (8 hour) days;

and be compensated at the end of the training. As an added incentive, upon satisfactory

completion of the training program, they will receive a small lump-sum stipend of

PGK20.48

The training consultant firm(s) will be responsible for the payment of these

funds to trainees.

16. Micro Savings and SMS Banking. As a part of the Project‘s “Save Your

Future” scheme, at the completion of the BLS training, trainees will be enrolled a micro

savings/SMS banking program. The program will offer basic financial literacy training

and involve setting up electronic banking accounts for each of the trainees that are

48

Each participant receives a total of PGK60. The total amount is equivalent to about PGK1.50 per hour.

Basic Life Skills for Employment

Personal attributes: (e.g. managing emotions, cooperation with others [men and women],

accepting personal responsibility, developing confidence, respect for self and others, tolerance,

and personal saving)

Solving problems: (e.g. managing conflicts, reducing intimidation and decision making)

Good work habits: (e.g. job interviews, workplace protocols, time management, working as a

team and workers’ responsibilities and rights)

Healthy lifestyle: (e.g. alcohol and substance abuse prevention, healthy eating, STD/HIV/AIDS

prevention, and healthy relationships)

Living environment and community awareness: (e.g. clean, healthy living environment,

respecting communities and caring and preserving for community living spaces)

Managing diversity: (e.g. respecting different peoples, values and religions)

Learning to serve: (e.g. civic responsibility, community, service, volunteering)

Occupational Health and Safety: (e.g. Road safety, occupational health and safety in

construction)

41

eligible for the public works and On-the-Job Training. The SMS banking platform is

intended to enable youth to monitor their stipend payments and balance through a mobile

phone start-up kit procured by the Project and transfer money in/out of their accounts.

While the phones and initial credit will be financed by the Project, trainees will be

expected to continue to purchase additional phone credits through the local mobile phone

operator.

17. The NCDC will sign a MOU with a local banking/financial institution and mobile

operator. The MOU will document the intent of each institution to cooperate in carrying

out activities conducive to supporting the proposed SMS banking and savings program

for youth beneficiaries of the Project. The areas of collaboration in the program may

include, but are not limited to the provision of SMS and other banking services, access to

knowledge (including basic financial literacy training) and mobile phone units.

Sub-Component 1(c): Public Works Job Experience

18. Youth Job Corps Trainee Enrollments. Given the target of 13,500 youth to be

in a job for three months, the planned flows of trainees in the YJC over the 4.5 year

implementation period is depicted in Table A4.3. Information on each trainee accepted by

the Project will be entered in the MIS for planning and monitoring purposes.

Table A4.3: YJC Trainee Enrollments

YJC

Enrollments

Year

1

2011

Year

1

2011

Year

2

2012

Year

2

2012

Year

3

2013

Year

3

2013

Year

4

2014

Year

4

2014

Year

5

2015

Year

5

2015

TOTAL

0 400 1725 1725 1725 1725 1725 1725 1725 1025 13500

Each period is the equivalent of about 6 months.

19. Scope of Work. The proposed scope of work for this component has been

identified in collaboration with the NCDC Works Unit. The work plan is in accordance

with the needs of the NCD‘s road and drainage networks and open space reserves, the

current and anticipated NCDC- funded road and drainage maintenance program, and

meets the objective of the Project to provide work experience for a maximum number of

unskilled youth. Considering these factors, the following routine maintenance scheme has

been developed.

20. Vegetation Control (Grass Cutting): Vegetation control, comprising grass

cutting and tree and shrub trimming will be performed annually along approximately 600

kilometers of suburban roads and associated drainage and open space reserves in Port

Moresby. It is estimated that up to twenty four (24) groups of 11 persons (10 laborers and

a leading hand) will cut grass and trim trees and shrubs. The teams will work 6 hours

per day, with each intake being employed continuously for 39 days. The anticipated

grass-cutting production rate per worker is 10 square meters per hour. While it is

assumed that there are 3 meters of vegetation on each side of the road, it is anticipated

42

that the width of vegetation will vary considerably. Work programs will be developed for

each contract based on the actual condition of the vegetation in the areas to be

maintained. The roads to be maintained by each intake will depend on the suburb selected

and list of eligible roads.

21. Environmental Conservation and Drain Cleaning: Maintenance of the public

storm-water drainage network will be performed by cleaning drains, storm-water pipes

and culverts. The tasks to be performed include removing silt and debris from lined and

unlined drains and cleaning culverts. The drain cleaning will be performed concurrently

with the vegetation control activities described above. Drain cleaning will be performed

adjacent to suburban roads and along drainage reserves located in urban areas. The scope

of drain cleaning for each contract will be based on the actual condition of the drainage

network and budget constraints. It is estimated up to twenty four (24) groups of 11

persons (10 laborers and a leading hand) will annually clean drains adjacent to 600

kilometers (km) of minor roads and 60 km of drainage reserves in Port Moresby.

22. Selection of Poverty-Focused Road Works. The infrastructure to be maintained

will be selected by the NCDC Works Unit in collaboration with the PMU. The NCDC

currently provides routine maintenance for the main roads within the NCD. However, a

number of the tertiary and feeder roads into the poorer settlement areas are currently not

receiving routine maintenance. Roads that are not currently being maintained either

under the NCDC-funded programs or implemented by the Parks and Gardens Unit and

the Works Unit will be eligible for inclusion.

23. While the Project intends to cover the entire City, the road maintenance plan will

attribute a higher priority to poorer neighborhoods. This will be verified through a

conditions survey (and quantification of works), which will be undertaken by a local

engineering firm. Details of the maintenance status of NCD roads are provided in Table

A4.4. Currently there are 917 km of roads that are currently not receiving routine

maintenance in the NCD. To facilitate planning, the roads currently not being maintained

have been subdivided into nine (9) sections. The average length of the road network in

each section is approximately 100 kilometers. Each civil contract will include all

vegetation and drain cleaning activities for a particular section. It is estimated that

maintenance will be performed on each section approximately every 21 months.

Table A4.4: Current Maintenance of NCD Roads By Contractors

24. Youth Job Corps Works Stipend. Each trainee, subject to continuing to

demonstrate good work ethic and behavior, will be expected to complete 39 days (2

Description Length (Kms)

Roads currently being maintained under Contract 128 National roads 41 Suburban roads receiving no maintenance 917 Total 1086

43

months) of unskilled public employment training. Trainees will receive their payments

through the Project‘s SMS banking platform. However, the payment verification

procedures will require Works Contractors to maintain appropriate time and performance

records. The Project will finance the training stipends up to a maximum 6 hours per day.

An hourly rate of PGK2 will be paid.

25. Additional Public Works Activities. From the second year of implementation

onwards, a number of additional public works activities that involve labor intensive

approaches may be considered by the PMU for funding. The menu of sub-project

activities will seek to build on and strengthen NCDC's existing urban renewal and

environmental protection programs; ii) transition the Project‘s public works focus to

higher skilled activities (e.g., tree planting, brick making, the rehabilitation of the City‘s

footpaths using interlocking tiles, market cleaning and other waste management /

environmental protection activities) that will benefit youth and increase their chances for

graduating from the Project with skills that will enable them to escape poverty; and iii)

strengthen community participation in service delivery. While there would not be a

specific menu of sub-projects dictated as these would be decided on a demand basis,

eligibility criteria will be established to reject or accept candidate sub-projects. Sub-

projects that would not be accepted include: activities with low labor intensity; private or

individual activities, unless they are determined to be a ―public good‖ in nature or are

expected to yield considerable benefits to the community; activities that may have an

adverse social or environmental impacts (as described in the ESMF); salaries, wages or

allowances of staff or elected representatives; and political and religious activities.

Project funds allocated for these activities will be ring-fenced and specific criteria and

procedures for selection will be detailed in the POM.

Component 2: Skills Development and Employment Scheme (US$5.4 million)

26. This component will consist of: i) the provision of pre-employment training to

eligible urban youth, and to prepare them for jobs in the private or public or civil society

sectors; and ii) on-the-job training placements for approximately 4,000 eligible urban

youth. These youth will be selected based on a) their performance in the initial BLS

training, and b) their performance on literacy and numeracy tests. The SDES will consist

of two Pre-Employment Training (PET) programs followed by On-the-Job Training

(OJT). One of the PET programs will provide training for about 2,000 youth and focus

on trade, industrial and commerce related employment. The other will train another

2,000 youth and focus on basic bookkeeping, data entry, business practices, and

information technology. It is anticipated that the latter program would be of particular

interest to females.

27. The SDES will engage youth in activities that are designed to build knowledge

and skills leading to job readiness and gainful employment in the public and private

sectors. Trainees will participate in one of two PET programs which will be designed and

implemented by training consultant firms financed by the Project. The first (Industrial

Technology-IndTec) will prepare youth to work in occupational fields associated with

industrial/technical businesses and industries. The second (Business Services-BusSvs)

44

will prepare interested youth to work in occupational fields associated with secretarial

services, business services, computer operations/applications and basic bookkeeping.

Both programs will subsequently lead to trainees being placed in OJT for a period of

about 5 months, which the PMU will coordinate with employers situated in the public

and private sectors and civil society. Diagram A4.5 depicts the operational flow.

Diagram A4.5: Operational Flow of Component 2.

Sub-Component 2(a): Pre-Employment Training

28. Trainees will be selected from the pool of persons who have applied for the YJC.

During the initial BLS training, the PMU will work with the training consultant firm(s) to

identify and select eligible trainees (in that program) to be invited to join the O JT

program. Trainees will also be required to pass a basic numeracy/literacy test.

29. Both PET programs will offer selected youth about 20 days of pre-employment

training followed by 110 days of OJT. The PET will comprise elements of life skills

training coupled with basic employment skills training necessary to support

disadvantaged youths‘ transition into OJT with public and private employers.

30. SDES Intake. It is expected that about 4,000 youth will receive training over the

duration of the Project. Table A4.6 provides the planned flows of trainees in the two PET

programs. Upon completion of the PET, each trainee will be immediately recommended

and processed for OJT with a selected employer.

45

Table A4.6: SDES Trainee Enrollments

OJT

Program

Year 1

2011

Year 1

2011

Year 2

2012

Year 2

2012

Year 3

2013

Year 3

2013

Year 4

2014

Year 4

2014

Year 5

2015

Year 5

2015

TOTAL

IndTec 0 200 200 200 300 300 300 200 200 100 2000

BusSvs 0 200 200 200 300 300 300 200 200 100 2000

TOTAL 0 400 400 400 600 600 600 400 400 200 4000

Each period is the equivalent of about 6 months.

31. SDES-IndTec will train youth for employment in industry, technical and

commercial enterprises. SDES-BusSvs will train youth for employment in business

related occupations, including basic bookkeeping, secretarial services, business services,

and data entry.

32. Pre-Employment Training Curriculum. The PET is designed to prepare

trainees for increased success during on-the-job training and later employment in either

the public or private sector. Training will focus on a combination of life-skills training

and employment-related skills training modules. While the two PET programs will share

common curricula for the basic life skills content, they will customize their training

content to reflect their specific employment focus. The programs will also differ some in

their training venues, content, pedagogy and training contractors.

33. The common curricula will seek to deepen and broaden the life-skills training

offered in the YJC and include the following types of training elements: i) basic literacy;

ii) basic numeracy and shop/business/personal mathematics (e.g., measurement skills;

reading mechanical/civil drawings and sketches; personal finances and handling

money−personal and on the job; importance of saving; iii) expectations of employers; iv)

use of timecards and other work time documentation; v) on the job relations with co-

workers supervisors and employers; vi) work safety; vii) orientation to the use of hand

tools and/or office equipment; viii) creativity and innovation on the job; ix) how to stay

employed; and x) what makes a successful employee. This last activity will include a

seminar activity where actual employers will interact with the trainees to answer

questions and give advice about employee attitudes, behaviors and workmanship that

leads to successful employment.

34. The IndTec training will design training modules that cover the participants‘

needs for working on industrial job sites; safety training; and hand tool usage, etc. Youth

who seek careers in industry will be trained more in industrial settings with a focus on

industrial safety, reading of drawings and blueprints, industrial measurements, and the

other demands of that occupation. The BusSvs contractor will focus more on the use of

information technology and office protocols, etc. Youth who aspire to work in business

occupations will be trained in a more typical business setting with a focus on business

standards, working with business processes and equipment, use of computers, and the

other demands of that occupational area. Table A4.7 below provides an indicative content

outline for the Pre-Employment Training.

46

35. It is expected that each pre-employment class will be taught by a single trainer;

however the contractor will have the option to use specialized trainers for different

modules within the course. If this last approach is chosen, a team of trainers may teach

several classes at one time, rotating the specialized trainers into each class at an

appropriate time. Each qualified trainer will have demonstrated experience in a

classroom working with disadvantaged youth.

36. Each trainee will also have access to the services of a counselor. The training

consultant firm may choose to use existing teachers or administrative personnel to

support this function, however the function will need to exist and be active on a part -time

to full-time basis throughout the duration of the contract. This counselor will be focused

on the identification and alleviation of personal issues and dysfunctional attitudes, values

and behaviors that could be a barrier to success in the RES and sustainable employment.

Table A4.7: Content Outline for Pre-Employment Training

Personal o managing expectations and emotions

o admitting one’s own faults o seeking cooperation with others

o taking personal responsibility for one’s behavior

o developing confidence o respect for self and others

Health o substance abuse prevention

o importance of nutrition o STD/HIV/AIDS prevention

o healthy relationships with spouses, children and

others o one’s right to decide about health issues

Problem solving o making decisions in life

o short and long-term goal setting o managing conflicts

o reducing bullying

Gender and Diversity o respect for differences

o tolerance o values

o sexual harassment – your rights and options

Community and environmental awareness o environmental awareness o importance of maintaining quality

o home and community living space

Community Service o importance of civic responsibility o community service and volunteering

Financial skills and management o importance of saving - use of savings and checking

accounts

o how to get out of debt

Seeking Employment o how do you get a job - applying and interviewing for

employment

o appearances are important - dressing for the interview

o workplace protocol

Workplace Safety

(industrial/technology program only)

o understanding the use of safety zones around dangerous equipment and activities

o use of safety clothing & equipment o handling dangerous liquids and other materials

o importance of maintaining clean and tidy work stations

o personal security (one the job, coming to and leaving

work

Supervisor – Employee Relations o importance of teamwork

o taking pride in a job well done o understanding and respect for authority

o effective time management o anger management and problem resolution

o workers’ responsibilities and rights o understanding reasons why workers are dismissed

Basic Training in the Use of Hand Tools

(industrial/technology program only)

o tool names, nomenclature and use

o practical exercise in the use of hand tools o handling hand tools safely

o tool maintenance, security and storage

Basic Training in the Use of Office Technology

(business and office program only)

o use of computers and printers

o use of copy machines o use of calculators and other small office

tools/equipment o office security procedures

47

37. Pre-Employment Training Stipend. Consistent with the YJC stipend, during the

training (20 days), each trainee will receive PGK1 per hour to support the cost for

transportation and meals over 20 (8 hour) days; and be compensated on a fortnightly

basis. As an incentive, upon satisfactory completion of the training program, they will

receive a small lump-sum stipend of PGK120.49

Trainees will receive their payments

through the Project‘s SMS banking platform.

Sub-Component 2(b): On-the-Job Training

38. Once the PET has been completed, trainees will be enrolled into OJT with

employers that have been identified and selected by the PMU.

39. Partnerships with Public, Private and NGO Organizations. The PMU will

advertise, identify and select employers who are able and willing to participate in the

OJT. It is envisioned that the OJT will have to recruit employers on a rolling basis. The

PMU will provide program guidelines to potential employers. Selected employers will

sign a MOU with the PMU that sets out responsibilities within the program, timelines,

compensation requirements, and the necessary data collection and documentation

requirements for both the trainees and employers.

40. Upon enrolling, each participating employer will agree, in writing, to abide by the

program‘s implementation procedures and objectives. Furthermore, each participating

employer will be provided with an implementation booklet that clearly describes the

agreed upon procedures, rules and remedies for both the participating employer and the

OJT participants enrolled by that firm. Each trainee will also be provided with this

manual, and the orientation and use of the manual will be included in the pre-

employment training. Participating employers will then be asked to interview and to

select an agreed number of OJT participants into OJT programs sponsored by their

organizations. Should any OJT participant not be selected, the PMU will determine

whether it is best to continue to seek placement into OJT, or to move that person back

into the YJC Program where they will be able to receive paid employment.

41. OJT Stipend. Once placed in work, all participants must arrange their own

transportation. Upon commencement of the OJT, the Project will finance a training

stipend of PGK2 per hour for each trainee; with an additional supplement of PGK1 per

hour for transportation and food; bringing the total to PGK3 per hour (at 8 hours per

day) over a five month period (110 days).50

Trainees will receive their payments through

the Project‘s electronic banking system. Interested employers will also be encouraged to

supplement this amount from their own resources if such actions would recognize high

performance of individuals or better reflect the payroll standards within their respective

firms.

49

Each participant receives a total of PGK240. The total amount is equivalent to about PGK1.50 per hour. 50

The amounts have been reviewed with the National Training Council and National Apprenticeship

Training Board.

48

42. Monitoring. Trainees will be monitored by the PMU, and every effort will be

made to address issues (of employers or trainees) before they become serious enough to

pose a risk to the Project or the trainees‘ progress. Upon completion, employers will have

the option of employing their trainees, either full-or-part time, or releasing them to seek

employment elsewhere.

43. Certification. At completion of the OJT, trainees will receive a competency-

based certificate from the Project, which specifies the types and levels of skills that the

trainee has attained; signed by the employer and Project‘s Program Coordinator. This

gives a level of certification to each trainee. The trainees may use these certificates when

they later seek full or part-time employment with other firms. At this time, trainees will

receive a competency-based certificate from the NCDC which will specify the types and

levels of skills that the trainee has attained. The employer and the PMU will sign each

certificate. However, in order to facilitate linkages to national systems, each completing

trainee will also be encouraged to take the certification examinations offered by the

National Skills Testing Board (NSTB), if such certification is available in their area of

skill and employment. If successfully completed, the NSTB will provide that trainee

with a recognized National Skills Certificate in their respective skill area.

44. More generally, during implementation, the NCDC will have a reasonable degree

of latitude to strengthen linkages to similar initiatives sponsored by the GoPNG, such as

the Community Colleges or the NSTB, which could provide avenues /outlets for youth

interested in undertaking further studies after their participation in one of the two

program components. The prior review procedures allow for further dialogue with the

Bank for corrective measures to be undertaken during implementation. Substantive

changes will need to be reflected in the POM and would be subject to IDA no objection.

Summary of Trainee Stipends

45. A summary of the trainee stipends are detailed in Table A4.8.

Table A4.8: Training Stipends

Activity Hourly

Rates

(Kina)

Hours

Reimbursed

(Daily)

Total

Days

Trained

(Number)

Payment

Schedule

Bonus Indicative

Amount

Paid to

Trainee (At

Completion)

Payment

Agency

Basic Life

Skills 1 8 5

At

completion

Completion

bonus of

PGK 20

PGK 60

Training

Contractor

SDES Pre-

Employment 1 8 20 Fortnightly

Completion

bonus of

PGK 60

PGK 220

PMU

Youth Job

Corps

2 6 39 Fortnightly -- PGK 468

PMU

SDES/OJT 3 8 110 Fortnightly -- PGK 2640 PMU

49

Component 3: Project Management (US$4.4 million)

46. The Project‘s overall implementation will be the responsibility of the Project

Management Unit to be established in the NCDC. The PMU will be responsible for the

following activities: i) preparation of annual workplans, procurement plans, and budgets,

and submission of semi-annual progress reports; (ii) provision of training and technical

assistance to support, inter alia, the design and implementation of a Management

Information System (MIS), internal audit, evaluations, financial management and

procurement; (iii) the preparation of tender documents for public works sub-projects; (iv)

supervision of consultants and contractors tasked with the implementation of various YJS

and SDES activities, including communication, public works sub-projects, baseline

survey and screening, BLS and OJT activities; (v) oversight of monitoring and evaluation

efforts; (vi) ensuring adherence to social and environmental screening and mitigation

measures outlined in the ESMF and the POM, including establishment of a feedback and

complaints handling mechanism; and (vii) coordination with and outreach to Project

stakeholders. Detailed responsibilities and procedures of the PMU are documented in the

POM.

47. PMU Staffing and Management Structure. Consultant personnel will be hired

to staff the PMU and financed by the Project. The Project will also finance the PMU‘s

incremental operating costs, including a range of goods and services to support the

Project‘s management and implementation. The PMU will be situated in the NCDC‘s

Department for Community and Social Services and consist, at a minimum, of the

following personnel and consultants: i) Project Manager; ii) Chief Financial Officer

(CFO); iii) Program Development Specialist (Marketing, Communications and Program

Placement); iv) M&E Coordinator; v) Public Works Coordinator (Component 1); vi)

Skills Development Coordinator (Component 2); vii) Procurement Advisor; viii) Youth

Facilitators (3); ix) Receptionist; and x) Clerk. Additional technical assistance to support

procurement and the preparation of tender documents for the training and works

maintenance contracts will also need to be procured. PMU personnel/consultants will

report to the Project Manager on a day-to-day basis, and s/he will in turn report to the

Project Steering Committee (PSC). The CFO will report directly to NCDC‘s Director for

Community and Social Services and Financial Controller.

48. Institutional Strengthening and Capacity Building. The Project will finance

and make investments in building the capacity of the PMU and NCDC through training,

and the mobilization of technical assistance, where needed. The internal audit, for

instance, will include a significant focus on strengthening the capacity of the NCDC‘s

internal audit unit. Regular fiduciary training will also be provided by IDA.

49. Monitoring and Evaluation. Significant monitoring and evaluation efforts are

envisaged under the Project with a view to ensuring timely monitoring as well as rigorous

evaluation of results. A consultant firm, collocated within the PMU, will be responsible

for establishing and administering the Monitoring and Information System (MIS), which

will be critical to capture key beneficiary information, trainee payments, and track Project

50

implementation. Each trainee will be given a Youth Identification Card. In addition,

Project data will be sourced from training consultants, employers, trainees, and youth

facilitators. The data from the MIS will be used to inform the Project‘s quarterly

reporting.

50. Complaints Handling. The Project will seek to mitigate social tension and

conflict that could result over perceptions of exclusion or disproportionate advantage. To

this end, the PMU will establish a culturally appropriate grievance redress mechanism

with several access channels (e.g. Moto-Koita Assembly, Youth Facilitators, etc.) to

provide an opportunity for community members and participants to communicate

complaints to the PMU. This mechanism will include the following activities: a)

strengthening outreach and program information (e.g., objectives, target groups,

beneficiary selection criteria, etc.) to beneficiaries and communities through a robust

awareness campaign across NCD; b) facilitation and socialization measures; and c)

implementation of a grievance redress system. Youth Facilitators will be responsible for

carrying out the follow-up to check on the progress of employed youth; and will provide

early identification of program issues and worker/employee conflicts. Quarterly reports

will be submitted to the PMU for review and action. Their inputs will become part of the

MIS. The Youth Facilitators will be responsible for managing the complaints handling

process under the overall guidance of the Project Manager and NCDC‘s Director for

Community and Social Services. Should it be determined that additional assistance is

required, the PMU may recruit a dedicated Community Liaison Officer.

51. Furthermore, the Project will support the establishment of a number of

mechanisms that will allow trainees to formally lodge eventual concerns or complaints.

They include structured knowledge-sharing workshops organized by the Youth

Facilitators, and a help desk where trainees can formally lodge complaints and/or through

their community leaders who will assist the PMU in mediating community-level disputes.

In addition, Youth Facilitators will assist beneficiaries in completing a Grievance Redress

Form which documents their complaints. This will facilitate consistency in terms of

diagnosis, reporting and analysis of complaints. The Grievance Form would be entered

into the MIS to prompt further action as necessary. Further details can be found in the

Project Operations Manual.

52. Supervision and Mid-Term Review. The Project will be visited by a World

Bank supervision team on a quarterly basis in the first year, and subsequently every 6

months thereafter. A Mid-Term Review (MTR) of the Project will be financed by the

Project and scheduled before the end of 2013. The Project‘s short term impact studies

will be used to inform the MTR. Quarterly progress reports will be prepared for IDA

review and comment following an agreed upon format.

51

Annex 5: Project Costs

PAPUA NEW GUINEA – URBAN YOUTH EMPLOYMENT PROJECT

Project Cost By Component and/or Activity Local

US$ million

Foreign

US$ million

Total

US$ million

1. Youth Job Corps 4.8 2.1 6.9

2. Skills Development & Employment Scheme 5.4 0.0 5.4

3. Project Management 3.6 0.8 4.4

Total Baseline Costs

Physical Contingencies 0.4 0.0 0.4

Price Contingencies 0.7 0.1 0.8

Total Project Costs 14.9 3.0 17.9

Project Cost By Expenditure Category Local

US$ million

Foreign

US$ million

Total

US$ million

1. Consultant and training services, goods and

works

5.5 2.9 8.4

2. Training Stipends

3. Incremental Operating Expenses

7.6

0.7

0

0

7.6

0.7

Total Baseline Costs

Physical Contingencies 0.4 0.0 0.4

Price Contingencies 0.7 0.1 0.8

Total Project Costs 14.9 3.0 17.9

Note: US$ amounts to be converted into SDRs.

IDA Credit Financing by Disbursement Category

Category Amount of the

Financing Allocated in

Credit

(expressed in US$)51

Percentage of

Expenditures to

be Financed

Exclusive of

Taxes

(1) Consultant and training services, goods and

works, stipends and incremental operating costs 15,800,000 100%

TOTAL AMOUNT

15,800,000

51

US$ to be converted into SDRs.

52

Annex 6: Implementation Arrangements

PAPUA NEW GUINEA – URBAN YOUTH EMPLOYMENT PROJECT

1. The diagram below illustrates the Project‘s management structure.

Table A6.1: Project Management Structure

2. Project Steering Committee (PSC). The PSC will be chaired by the either the

NCDC City Manager or the Deputy City Manager, and is expected to comprise of

representatives from the following agencies: i) Department for National Planning and

Monitoring; ii) Department of Treasury; iii) National Capital District Commission; iv)

National Youth Commission; and v) Department for Provincial and Local level

Government. The PSC Chair will also nominate at least one private sector and at least

one CSO representative.52

The PSC will meet at least on an annual basis throughout the

Project‘s implementation period, and will fulfill the terms of reference set out in the

52

The CSO representatives will need to comply with the following criteria: a) be affiliated with a nationally

recognized youth organization or association; b) have a history of involvement on youth and gender

issues and understanding of the challenges youth face; and c) not be an active member of any political

party.

53

POM. The agenda and documentation for the PSC meetings will be prepared by the

PMU in close consultation with the PSC Chair. A quorum will be needed to meet and

enforce decisions.

3. The PSC will maintain meeting records that will be supported by the Project

Manager, who will report to and serve as Secretary to the PSC meetings. The PSC will:

Provide guidance to the PMU and NCDC on policy issues;

Review and endorse annual work plans and budget allocations;

Review and endorse annual project progress reports;

Discuss and facilitate critical decisions for the implementation of various

components;

Review and where necessary act on annual audit reports and audit

recommendations;

Review and act on World Bank supervision reports;

Support media events; and

Facilitate partnerships with other stakeholders.

4. Project Management Unit (PMU). The PMU‘s capacity will be strengthened

prior to Project Effectiveness through the recruitment and training of a national Project

Manager, a Chief Financial Officer, and a number of technical staff and project

specialists. Core functions for which the PMU will be responsible are summarized

below:

Management

a) Develop and ensure adherence to the Project Operations Manual (POM);

b) Prepare TORs and oversee and support the work of the PMU

consultants/personnel;

c) Oversee and support the work of the project‘s short term technical

consultants;

d) Review, monitor, and follow-up on contracts and their assignments;

e) Coordinate among other institutions involved in the Project, including the

supervision of contractors involved in project implementation;

f) Maintain regular communication with the World Bank team;

g) Review and endorse key decisions arising from recommendations made by the

project‘s short term technical consultants; and support activities/decisions for

implementation; and

h) Advise and report to the PSC.

Fiduciary

a) Prepare and update the project‘s Financial Management, Procurement and

Disbursement Plans and ensure adherence to IDA guidelines;

b) Form and convene a Tender Committee to short list and evaluate consultants

applications for the Project in accordance with IDA guidelines;

c) Manage the technical negotiations of contracts in accordance with the NCDC

and IDA guidelines;

54

d) Follow up on contract preparation and initiate contracts with project

consultants;

e) Review and address issues arising from the project‘s procurement and

contract processes, including:

Advertising, short-listing and evaluation;

Contract negotiations53

;

Contract supervision and payments to consultants and suppliers;

Monitoring of the project‘s Designated Account and managing

replenishments based on the Interim Financial Reports (IFRs) and annual

Procurement Plan.

f) Prepare documentation and payment requests/withdrawal applications to DoT

to authorize payment for project activities against invoices and work plans;

and

g) Support preparation of the quarterly IFRs for submission to the IDA.

Work Plans

a) Prepare budgeted annual work plans by program component for the PSC and

IDA‘s approval;

b) Guide the implementation of tasks against work plans and targets; and

c) Prepare Project Progress Reports for the PSC and IDA review and approval.

Monitoring and Evaluation (M&E)

a) Prepare and update the project‘s M&E Framework;

b) Supervise the establishment and management of a simple and functioning MIS

and collect and monitor data against the M&E framework;

c) Plan and supervise the project‘s M&E surveys and analysis;

d) Administer and supervise formative/exit evaluations for the Project‘s trainees;

e) Prepare regular Project progress reports for the PSC and NCDC Executive

Board;

f) Plan and supervise the Project‘s MTR; and

g) Plan and supervise the Project‘s Impact Assessment.

Environmental and Social Management/Safeguards Framework (ESMF)

a) Administer, update, monitor and appraise sub-projects against the Project‘s

ESMF; and

b) Manage the Complaints Handling System.

Component 1: Youth Job Corps

5. The works activities under the YJC will be managed by a designated Public

Works Coordinator (who reports to the Project Manager). S/he will be supported by other

PMU staff, including the Program Development Specialist (who will supervise the

Project‘s communications), M&E Coordinator (who will supervise the Baseline

53

All contracts must be signed by the NCD Governor, and/or in his/her absence, the Deputy Governor. For

contracts under PGK300,000, the NCD Governor can delegate signatory authority to line management.

55

Screening Survey and monitoring), Skills Development Coordinator (who will supervise

the Basic Life Skills for Employment Training) and Youth Facilitators (who will be

responsible for supervising the complaints handling systems).

6. This component will be implemented by several consultants. The Project‘s

socialization will be managed by a communications consultant firm. The design of the

Project‘s screening instrument and MIS will be handled by individual consultants; and

the implementation of the Project‘s Baseline and Screening Survey will be managed by a

consultant firm. The Project‘s Basic Life Skills and Pre-Employment Training programs

will be designed and implemented by training consultant firms. The conditions survey

and quantification of the works contracts will be prepared by a local engineering design

consultant firm; and the management, implementation and supervision of the works

activities outsourced to Small Works Contractors.

Sub-Component 1 (a): Youth Identification and Screening

7. Youth Identification, Socialization and Sensitization. The Project will engage

the services of a communications consultant experienced in raising awareness to manage

the information dissemination and sensitization of the Project on an ongoing basis; with

at least six campaigns each year, in and around the NCD. The consultant firm will consult

with Youth Councilors reporting to NCDC, Ward-level Youth Officers, and other

community service organization leaders to plan and conduct road shows, job fairs or

information-fair style promotions in accordance with a deliberate strategic

Communications Plan, which targets specific areas, communities, partners, includes the

design of media spots and information and dissemination materials associated with the

Project, and draws on the Project‘s Community Consultation Framework (CCF). The

Project will provide additional financing for associated media and material reproduction

costs.

8. Youth identification, socialization and sensitization will also ensure that the

Motu-Koita communities in the NCD are fully aware of the Project. Efforts to ensure

their inclusion consist of: communication campaigns in Motu-Koita neighborhoods, the

use of the Motu-Koita Assembly and civil society groups working with the Motu-Koita in

socialization efforts, and the dissemination of material (audio, verbal, etc.) in Motuan. A

review of Motu-Koita participation will be undertaken after the first three intakes. If the

review reveals that Motu-Koita participation is disproportionately low, consultations will

be undertaken to revise the socialization, application procedures, and any other design

features in an effort to ensure the participation of Motu-Koita youth.

9. Selection and Management of Communications Consultant Firm. A Request

for Proposal (RFP) will be prepared by the PMU. A communication consultant will be

engaged on a five year consultant firm contract. Consultant performance will be reviewed

on an annual basis in accordance with established performance indicators outlined in the

scope of works. The PMU will have the option to cancel a contract in the event of poor

performance.

56

10. Targeting, Screening and Registration. The Project will recruit individual

consultants to design the Baseline and Screening Survey and set up the MIS; as well as a

consultant firm to implement the Survey. The Baseline Screening Survey and MIS

consultant firm will be expected to use existing community facilities to conduct the

screening and registration of interested participants. This will allow easier access for

local youth. The development of a simple application form and training for administering

staff will be essential.

11. The Project will ensure that screening also occurs in areas inhabited by Motu-

Koita youth to ensure that they are provided with an opportunity to enroll in the Project.

The Baseline Screening Survey and MIS firm will utilize the Motu language, as

necessary, in these areas to ensure that the process is accessible to Motu-Koita youth. To

this end, the firm will design a MIS (Microsoft Access) database which will contain

trainee enrollment data, as well as other Project-related information associated with the

Project‘s daily operations.

12. The number and frequency of youth trainee intakes will be based on the number

and timing of confirmed of job placements. The final intake is expected to occur about 6

months before the scheduled completion of the Project. The final criteria for youth

participation will be detailed in the Project Operation Manual (POM); and the database is

expected to include: name, age, sex, work experience, months out of work, family status

(homeless, shelter characteristics, orphaned), poverty indicators and number months of

residence in the NCD.

13. While the Project aims to enroll 17,500 trainees, the screening is expected to

involve more than double this number. In addition to screening youth, the Baseline and

Screening Survey is expected to rank each of the participants and determine their

eligibility into the program. It is expected that the NCD will be divided along its present

three electoral districts; and that intakes will be cycled around these districts to ensure

that there are equal opportunities for participation. Depending on youth response to each

intake and the rate of job placements available, the Project estimates a schedule of 6

intakes per year (over a five day period in each selected area) for a total 26 intakes over

the duration of the Project. Depending on the level of response and uptake in the first

year of the Project, the possibility of re-enrolling trainees in subsequent years will be

considered.

14. Selection and Management of the Baseline and Screening Survey Design and

MIS Consultant Firm. A Request for Proposal (RFP) will be prepared by the PMU. The

consultant firm will be competitively engaged on a five year contract. The firm

(preferably with experience in PNG) will be required to have experience in conducting

surveys and in screening, enrolling (and training) marginalized youth. Consultant

performance will be reviewed on an annual basis in accordance with established

performance indicators outlined in the bidding document. The PMU will have the option

to cancel the contract in the event of poor performance. Prior to commencement of the

screening, individual M&E and MIS consultants will be hired by the PMU to develop the

57

survey instrument, set up the MIS and prepare the RFP for the Baseline and Screening

Survey Consultant. Terms of References (TORs) will be prepared by the PMU.

Sub-Component 1(b): Basic Life Skills for Employment

15. Basic Life Skills Curriculum: A training consultant firm will be recruited to

design and implement the BLS training and the numeracy and literacy tests. While a

number of national organizations were found to have adequate capacity and relevant

youth training experience, a panel of experts will be convened by the PMU to review and

assess the appropriateness of the curriculum and testing instruments. Given the low rates

of functional literacy, it is expected that there will be a strong focus on the use of oral and

visual instructional materials and communication methods.

16. Scope of Work. This will include the design of a core curriculum and

development of instructional materials for the Basic Life Skills training; the design of the

numeracy/literacy testing instrument; facilities and venues for training, counseling and

testing, scheduling and coordination of trainees in the program; the provision of support

to the PMU during OJT participant selection; counseling services to trainees; training

services with concurrent classes scheduled on demand basis; and regular monitoring and

evaluation of the program. In addition, the contractor will be required to have the

administrative capacity to process trainee payments. The payments will be set by the

PMU and incorporated into the selected contractor‘s bid.

17. Basic Life Skills Training Locations. The training will be provided as close as

possible to community locations. About 35 to 40 trainees will be the maximum number

permitted in each class.

18. Skills Assessment and Placements. Once the training is completed, Youth

Facilitators will interview each trainee to gain further understanding of their skills

inventory and career interests. These will be recorded in the ―job ready‖ database for

later use by the Project and prospective job placement organizations

(agencies/contractors) to better determine job suitability and possible entry to the On-the-

Job Training (OJT) provided under Component 2. (Trainees wishing to move onto the

Pre-Employment Training and OJT will also be required to take a basic

numeracy/literacy test administered by the BLS consultant). These interviews will also

provide trainee feedback to the PMU on the suitability of the training content, delivery

and materials. Upon the full completion of training, each trainee will receive an ―end of

training‖ payment and an NCDC Certificate signed by the Governor recognizing this

training.

19. Verification of Payments to Trainees. The stipend payments will be disbursed

through the Basic Life Skills Training consultant firm at the end of the training program.

As a condition for authorizing payment, the Training consultant firm will be required to

provide evidence of training completion to the PMU. The trainee will also be required to

co-sign the training completion forms. Upon the trainee receiving payment, the

58

signatures will be matched with the application form signatures. This is a mitigating

action to reduce the risk of ghosting.

20. Selection and Management of Basic Life Skills Training Consultant Firm

and Basis of Payment. A RFP will be prepared by the PMU. The training consultant will

be engaged on a five year consultant firm contract. Consultant performance will be

reviewed on an annual basis in accordance with established performance indicators

outlined in the scope of work. Approval of payment will be conditional on a review of the

quality of outputs (e.g., relevance of the training curriculum and instructional design),

which are satisfactory to the PMU and IDA. The PMU will have the option to cancel a

contract in the event of poor performance.

21. Micro Savings and SMS Banking. Towards the completion of the Basic Life

Skills Training, trainees will be enrolled in a micro savings/SMS banking program. The

PMU will sign a MoU with a local mobile operator and bank to set up bank accounts for

work placement trainees.54

At the completion of the Basic Life Skills training, trainees

will be trained in basic financial literacy and educated on how to access and use the SMS

banking platform. The Project will finance the procurement of the mobile phone start -up

kits, which includes an initial phone credit of PGK3 per phone. However, trainees will

be expected to use their stipends to finance additional mobile phone credit or ―top -up‖

cards.

Sub-Component 1(c): Public Works Job Experience

22. NCDC’s Current Works Maintenance Management Structure. The current

management of the NCDC Works Maintenance program is structured into three teams.

Each team is responsible for one of the three districts of the city. The districts are

Moresby North East, Moresby North West and Moresby South. Each team consists of a

Council Manager, a Supervisor and three maintenance teams. Two of these teams

perform minor pavement repairs (e.g., repairs of potholes) while the third is responsible

for drain cleaning. In 2009 the total maintenance budget for the city was PNG Kina 6

million. Vegetation control on key main roads is generally the responsibility of the Parks

and Gardens Unit and has been, for the most part, outsourced through private contract. In

addition to the routine maintenance teams mentioned above, the NCDC outsources

periodic maintenance, and some routine maintenance, through competitively bid

performance contracts. With the exception of emergency maintenance, the NCDC does

not fund ongoing vegetation control and drain cleaning for suburban roads. As such, the

NCDC Works Maintenance Manager‘s current workforce is fully employed

implementing the NCDC road maintenance program; and it has been determined that

there is no spare capacity to either manage or monitor additional works. The NCDC‘s

Works Maintenance Unit currently maintains a list of approved small contractors with the

capacity to perform minor road maintenance activities. These contractors are assessed on

their financial and technical capacity to provide construction management services, labor,

and construction related tools and vehicles.

54

The draft MoU has been reviewed and will be included in the Project‘s Financing Agreement.

59

23. There remains a number of suburbs in which routine road maintenance is not

being provided by the NCDC through its existing programs. The location of roads being

proposed to receive funding through the Project is listed in Table A6.2 below.55

24. Proposed Management Structure. Given the limited capacity of the NCDC‘s

Works Maintenance Unit, the PMU will manage and administer civil works contracts

under this component. The Public Works Coordinator, supported by two Works

(Engineering) Supervisors will be responsible for the management and supervision of the

road maintenance scheme. The Works Supervisors would be individuals with the

required technical and administration skills to monitor the performance of a number of

Works Contractors to ensure that they fulfill their contractual obligations. In order to

ensure that the Project‘s routine maintenance program is harmonized with the NCDC‘s

ongoing schemes, the Public Works Coordinator and Works Supervisors would be

contracted as individuals by the PMU but will work out of the NCDC‘s Works

Maintenance Unit. The management structure is provided in Figure A6.3.

Figure A6.3: Proposed Civil Works Contract Management Arrangements

Department of Community

Development and Social

Services

Project Manager

Public Works

Coordinator

Works

Supervisor

Works

Supervisor

Civil Works

Contractor

Maintenance

Manager,

Works Unit

Civil Works

Contractor

Trainees (16

groups of 11

persons)

Trainees (16

groups of 11

persons)

Civil Works

Contractor

Trainees (16

groups of 11

persons)

25. Role of (Civil) Works Contractors. In the proposed set up, the PMU will engage

Civil Works Contractors to provide core/key construction resources, materials as well as

equipment and supervise the maintenance activities of non-skilled labor (trainees

assigned). Standard Bidding Documents (SBDs), satisfactory to IDA, will be prepared;

and relevant criteria and procedures will be specified in the POM. The Contractors

would be selected through a competitive bidding process and will provide transport,

small tools and equipment, drinking water supplies for trainees, and construction

55

See ―City Roads: Asset Management‖ for the full list of eligible roads and their estimated lengths.

60

managers to supervise the trainees who will be allocated by the PMU. While the trainees

would be paid direct by the PMU, the Contractors would have the power to terminate

trainees, after two written warnings have been issued, for poor performance or non-

attendance.

26. By value, the biggest component of the Works Contractors‘ input will be the hire

of equipment and vehicles followed by an assumption on the productivity and supervision

of labor. They will be requested to provide fixed lump sum bids on this basis. The Works

Contractors will be responsible for supplying construction inputs, with the exception of

the unskilled trainees. The average value of the contracts is expected to be slightly less

than K300,000; (approximately USD100,000).

27. The Works Contractors would submit a lump sum cost bid for payment, excluding

the trainee stipends, to complete the scope of work detailed in the bid documents. The

main advantages of this option are that it is sustainable, cost effective and provides the

trainees with experience in private sector work practices. The structure of the option

closely follows the NCDC method for procuring contractors for routine maintenance.

This option therefore will promote future employment prospects for the trainees by

strengthening the capacity of the private sector to participate in the NCDC maintenance

program. As the option closely follows the current NCDC contracting model there is

existing capacity in the private sector to bid and perform these types of contracts.

28. In addition, the Works Contractors will provide construction management

services to the groups of trainees. One of the main tasks of the Works Contractors will be

to manage trainees they are allocated from the PMU. It is expected that their place of

residence will be a key element in the selection of trainees.

29. Each Works Contractor will manage approximately sixteen (16) groups of

trainees to deliver the construction outcomes while providing a safe working

environment. The Contractors will provide personnel to manage and direct the groups

and associated construction resources to achieve the contractual outputs in an efficient

manner. The Works Contractors will ensure all works are completed in accordance with

the required specification and in a timely manner. The Works Contractors will directly

supervise the groups, be responsible for their safety and certify trainee attendance

records.

30. Safety. Since trainees will be undertaking tasks in a medium risk environment,

special attention will need to be given to their safety. The main hazards they will face are

accidents involving motor vehicles and the hand tools they will be using. There are

regulations concerning working in a road corridor and the work place with which the

project will need to comply. For safety reasons, trainees they will not be permitted to use

any power driven tools while working on the project. Safety vests will also be provided

by the project. The relevant work safety legislations are the Occupational Health and

Safety provisions of the Labor Act.

61

31. The following safety related activities have been included in the Project: i) work

place safety instruction is included in the BLS training course; and ii) compliance with

work place legislation will be included in the maintenance contracts. The contractor will

need to comply with a Traffic Management Plan while working in the road corridor and

will be required to provide safety equipment to all trainees. The contractors will provide

First Aid Kits to each group of workers.

32. Gender Equity. In addition, the Project will adopt measures to ensure that female

youth are included in the works activities.56

To encourage women to participate, in the

Project will permit up to 20 percent of all groups to comprise women only and will

provide crèches or childcare services at worksites. To facilitate the uptake and retention

of female youth in the Project, gender sensitizing training will be included in the BLS

training provided to all trainees.

33. Payments of Trainees. The Project will utilize the electronic banking system to

facilitate payments to trainees. All trainee payments will be overseen by the PMU and

will be paid electronically on a fortnightly basis. A precondition of the stipend payment

will be a fortnightly timesheet signed by the trainee, the trainee‘s Foreman and relevant

Vegetation Control or Drain Cleaning (Works) Supervisor.

34. Trainee Completion Certification. At the end of the public works job

experience, trainees will be given a completion certificate and invited to participate in an

awards program organized by the PMU. The top earning group will be given a

performance award, which is also intended to reward excellence in attitudes and

endeavor. Possible criteria to be used are punctuality, initiative, considerate behavior and

good productivity.

35. Supervision of Works Contractors. Regular construction supervision and

monitoring of the Works Contractors will be performed by the Works Supervisors. Each

Supervisor will monitor the performance of up to two Works Contractors. The Works

Supervisors will monitor the delivery of contractual outputs by the Contractors; and will

assist the Contractors to resolve implementation issues e.g., social impacts, and technical

and design issues. It is anticipated there will be up to four Contractors operating at any

time.

36. Conditions Survey, Quantification of Works and Bills of Quantity (BOQ). In

order to finalize the SBDs, the PMU will outsource the conditions survey, quantification

of works and BOQ to a national engineering firm. In addition, the consultant firm will

consolidate the information into a work plan which indentifies the priority neighborhoods

56

Traditionally, road maintenance is a male dominated activity and therefore special attention will be

required to ensure women receive an equitable portion of the Project benefits. The participation rate for

women in vegetation control and drain cleaning is generally low but participation rates for women in

vegetation control activities in Morobe and the Eastern Highlands Provinces on the AusAID Key Roads

for Growth Maintenance Project has averaged 35 percent over the last 2 years. The maintenance was

performed in rural areas where workers were employed in their traditional areas. The expected female

participation rate where the activity is based in urban areas and participants are young is unknown at this

stage.

62

that will receive routine maintenance based on the established technical criteria that is

agreed to by the PMU. The consultant firm will be retained for at least the first year

(approximately 30 days) and be expected to work closely with the NCDC‘s Works

Maintenance Unit. The consultant firm will also be expected to implement a five to

seven day training program for potential contractors to inform them about the Project and

associated tendering processes for the works contracts. During the second year of

operations, it is expected that the NCDC will be able to undertake some, if not all, of this

work directly. Should the NCDC not be able to support this, then the consultant firm‘s

contract will be extended.

37. Selection and Management of Works Contractors. The PMU will prepare and

adopt SBDs for the civil works contracts that are satisfactory to IDA. Contracts will

incorporate vegetation control and drain cleaning tasks for a defined area of the city.

Each contract package will cover an area encompassing approximately 100 kilometers

(km) of the total 917km or roads to be maintained under the Project‘s Public Works

Maintenance Program.

38. Basis of Payment for the Works Contractors. The value of the contracts will be

based on the Bills of Quantities to be detailed in the bidding document and Schedule of

Rates to be provided by the contractor in their bid. The items in the Bills of Quantities

will relate to construction outputs that the Contractor completes. Progress payments will

be made monthly, with the value of the progress payment being determined by the

quantity of the scheduled items completed during the month. No retention payments will

be deducted from the Works Contractors‘ payments.

Table: Procedures For Award of Civil Works Contracts:

1

Identification &

Approval

Maintenance tasks identified and agreed with the NCDC Works Maintenance Unit.

Agree the physical boundaries defining the area covered by individual works contracts.

Develop Contract Packages comprising outputs basis of payment. The duration of these contract

packages would be between 5 and 7 months each. NCDC Works Maintenance Unit to design and

document maintenance works for each contract package. Prepare construction cost estimates and

estimates of labor requirements based on the scope of works.

Bidding documents prepared using SBDs for works (satisfactory to the Bank) could be either Lump

Sum (currently ~40 percent), or Bill of Quantities, Day Rates. For most contracts, SBDs include post-

qualifications clauses. The tender documents shall be approved by the NCDC Tender Board and

forwarded to the World Bank in compliance with the prior approval criteria.

PMU Manager and NCDC City Manager approves tender notice.

2

Calling Tenders

NCDC Tender Board designated –Chair to be nominated with 2 senior technical staff from departments

other than that undertaking the procurement e.g. from Works Maintenance Unit and Corporate Services

Departments.

Provide confidential Engineer‘s Estimate to NCDC Tender Board with detailed explanation.

Tender Notice released and published in media such as Post Courier and National including closing

date and time.

Convene pre tender meeting with bidders to explain contractual arrangements and conditions.

Tender period of four weeks. All tender queries will be forwarded to the NCDC Tender Board who will

forward them to the PMU for action.

Tender validity (typically 90 days) to be confirmed in the bidding document.

63

3

Public Bid

Opening

Bids received prior to closing day and/or time of bid closing are held in a locked tender box. The

majority of bids are usually received just before closing time.

Usually pre-arranged for the NCDC TB to meet for public bid opening ~ 10-15 minutes after bid

closing time on day of bid closing.

Record taken of bid opening including those present, price summary, and any other pertinent

information.

4

Bid Evaluation

PMU creates an ad-hoc Tender Evaluation Committee of technical staff, usually Project Manager, CFO,

Public Works Coordinator and NCDC Works Maintenance Manager in compliance with World Bank

and NCDC regulations.

Evaluation undertaken in a locked room in accordance with processes described in Project Operations

Manual (to date evaluation has taken ~ 1 week average).

The bidding document will nominate a date until when bidders can request clarification on the

assignment.

Where required by the World Bank the tender evaluation report shall be forwarded to the World Bank

for its no objection prior to the tender being awarded.

Where contract value is less than K300, 000 recommendation for award submitted to NCDC Board.

5

Decision to

Award

Minute to NCDC Tender Board to meet with (i) copy of Evaluation Report and cover note from Head of

Department supporting decision, and (ii) contract agreement based on NCDC standard contract.

The decision reached by NCDC Tender Board is regarded as FINAL.

Written minutes record NCDC Tender Board decision.

6

Contract Award

Letter of Award to successful bidder signed by Tender Board Secretary on behalf of the Governor.

Results will be published in accordance with the IDA guidelines.

Standard Bidding Documents will be used satisfactory to IDA.

Performance bonds are not used unless contract is sufficiently large to warrant it – security achieved by

means of retentions that could vary 5 -10 percent of each progress payment including establishment

cost. Performance security of bond is always required in WB Docs, what they can decide not to have is

bid security,

Component 2: Skills Development and Employment Scheme

39. The Skills Development and Employment Scheme (SDES) will be supervised by

the Skills Development Coordinator (who reports to Project Manager). S/he will be

supported by other PMU staff, including the Program Development Specialist (who will

be responsible for marketing and for enrolling employers into the OJT), M&E

Coordinator (who will be responsible for supervising the monitoring), and Youth

Facilitators (who will be responsible for supervising the complaints handling systems).

The Pre-Employment Training (PET) will be designed and implemented by training

consultant firms.

Sub-Component 2(a): Pre-Employment Training

40. PET Trainee Selection. Selected trainees will have successfully completed the

initial 40 hours Basic Life Skills training provided to all YJC participants. Eligibility for

participation in the SDES program will be determined on the basis of eligibility criteria

outlined in Box A6.4 below. During the initial Basic Life Skills training provided in Sub-

Component 1(b), each youth will be assessed, using a) observation methods; b) a

standardized numeracy/literacy testing instrument; and c) and standardized rating

instrument used by the training instructors. Once initially identified, each of the

64

Box A6.4: Selection Criteria for SDES Eligibility:

Interest in pursuing more advance training;

Successful completion and high level of performance in the initial training program;

Consistent demonstrated timeliness;

Strong demonstrated work ethic; and

Perquisite basic literacy and numeracy for the selected program.

These criteria and screening procedures will be reviewed in the course of Project development, in consultation

with local authorities, employers and youth representatives.

candidates will be personally interviewed by the PET training contractor(s) and Skills

Development Coordinator to ascertain whether or not that individual meets the minimum

requirements to participate in one of the two PET programs.

41. Pre-Employment Training Curriculum. Training consultants will be recruited

to design and implement each of the two Pre-Employment Training programs. In

addition to customizing the technical content for the PET programs, contractors will be

required to provide professional counseling and mentoring services to trainees in order to

prepare, coach and encourage them through the completion of the training programs.

42. Selection and Management of Pre-Employment Training Consultants Firms

and Basis of Payment. A RFP will be prepared by the PMU. Consultant firms will be

engaged on a five year consultant contracts and their performance will be reviewed on an

annual basis in accordance with established performance indicators outlined in the scope

of work. Approval of payments will be conditional on a review of the quality of outputs

(e.g., relevance of the training curriculum and instructional design), which are

satisfactory to the PMU and IDA. The PMU will have the option to cancel a contract in

the event of poor performance.

43. Performance of Pre-Employment Training Consultants. The performance of

the Training consultants will be measured through established indicators/criteria. The

following performance indicators will be considered during that process:

a. As compared to the initial enrollments, the number/percentage of persons who

complete the training class;

b. The number/percentage of participants who state that they are satisfied with the

training program, and have demonstrated program success as measured by class

records and a final program questionnaire (administered through an exit

interview);

c. The number/percentage of employers who state that they are satisfied with the

OJT Pre-Employment Training; and

d. As compared to the initial number of identified participants with serious

values/behavior problems, the percentage of those who were successfully

supported through counseling and behavioral modification, retained in the class,

65

and finally enrolled and completed the OJT phase of the OJT Pre-Employment

Training Program.

Sub-Component 2(b): On-the-Job Training

44. OJT Information, Advertisement and Recruitment. The PMU will produce a

general set of guidelines for the OJT, advertize the OJT program, provide TA to OJT

eligible employers and seek out expressions of interest. An individual consultant will be

hired by the PMU to develop the OJT guidelines and reporting formats. The consultant

will work closely with the Skills Development Coordinator, Youth Facilitators and M&E

Coordinator. The PMU will convene a review committee to evaluate applications

submitted by interested employers with recommendations.

45. Memorandum of Understanding. A Memorandum of Understanding (MoU)

will be signed between the PMU, the trainee and the employer which outlines the

program‘s objectives, mutual responsibilities and contributions (in-kind, payments and

M&E) and expected outcomes. The MoU will provide a baseline of understanding for the

discussion and mitigation of grievances between employers and participants, and the

subsequent review of employer performance and program progress. The MoU will clearly

state the planned training/work responsibilities of the participant, the types and amounts

of compensation that will be provided to the OJT trainee by the employer, the elements of

training that will be offered to that trainee, each party‘s responsibilities within the

program, timelines, and the necessary data collection and documentation requirements for

both the participants and the participating employers. Each selected trainee will be

provided with a copy of the MoU.

46. During the Pre-Employment Training and immediately after, each prospective

OJT participant will be interviewed (and hopefully selected) by the participating

employers. If multiple offers are made, the participant may decide on his/her preference.

If any participant refuses or fails to be selected for employment, that participant will be

given the choice to be placed within the public employment program (under Component

1) or to wait for an opportunity to be selected by another employer.

47. OJT Placements. All OJT training placements will be for specific types of

training (entry level occupations) and the employer will agree to pair the trainees with a

skilled craftsmen or workers who will mentor and teach the trainees the skills necessary

for full employability in the selected occupation. The employer will agree that the trainee

will not be used as a long-term laborer during training, unless labor requirements are

typically associated the requirements of the occupation being studied. The extent to

which the trainee is required to serve as a laborer will be monitored by the Project.

During the training period of approximately 5 months (or 110 days), each trainee will be

required to provide their own means of transportation and meals. They will be expected

to arrive at the training site in a timely manner, dressed in a customary manner (as all

other employees), and will work side-by-side with regular employees. Following the

completion of the OJT, employers will have the opportunity to either retain the trainee as

an employee (full/part-time), or to release that trainee to seek employment elsewhere.

66

During this time, the PMU will also review the performance of participating employers.

If necessary, they will deselect those organizations that have not performed in a

satisfactory manner.

48. Certification. During and upon completion of the OJT, each trainee will be

assessed by the employer and the Skills Development Coordinator. The types and levels

of skills learned will be documented and listed in a competency-based certificate of

training completion. The NCDC and employer will sign the certificate which can be used

to seek further employment. In addition, National skill certification will be made

available through the National Apprenticeship Training Board (NATB). Through these

partnership arrangements, the trainee may choose to sit for a national skills certification

test administered by NATB officers. While the PMU will encourage and assist trainees

in this endeavor, participation will be voluntary and all costs for the test will be borne by

the trainee or his/her employer.

49. Verification of Payments to Trainees. Trainee payments will be managed by the

PMU and paid through the Project‘s electronic banking on a fortnightly basis. A

precondition of the stipend payment will be the provision of a timesheet signed by the

trainee and verified by the employer on a fortnightly basis.

50. Opportunities for Self-Employment and Linkages with Microfinance

Operators. Although the OJT is not intended to be a self-employment program, it will

be designed to increase the potential for interested youth to start and effectively manage

self-owned and co-owned, micro to small sized enterprises. The Project‘s micro savings

scheme will give those individuals who intend to seek self-employment a means to

acquire some capital that may be used to support that objective. Interested youth will be

provided with the appropriate referrals by the PMU to existing micro-finance or credit

providers who are already working with the NCDC, such as the Microfinance

Development Bank. Additional partnerships will be sought with FinCorp, the PNG Small

Business Development Corporation and PNG Microfinance. To this end, the Project will

monitor the effectiveness of these partnerships.

Component 3: Project Management

51. Detailed implementation arrangements for the YJC and the SDES are outlined in

the implementation arrangement description for the two components above. The Project‘s

overall implementation will be the responsibility of the Project Management Unit to be

established in the NCDC. The PMU will be responsible for the following activities: i)

preparation of annual workplans, procurement plans, and budgets, and submission of

semi-annual progress reports; (ii) provision of training and technical assistance to

support, inter alia, the design and implementation of a Management Information System

(MIS), internal audit, evaluations, financial management and procurement; (iii) the

preparation of tender documents for public works sub-projects; (iv) supervision of

consultants and contractors tasked with the implementation of various YJS and SDES

activities, including communication, public works sub-projects, baseline survey and

67

screening, BLS and OJT activities; (v) oversight of monitoring and evaluation efforts;

(vi) ensuring adherence to social and environmental screening and mitigation measures

outlined in the ESMF and the POM, including establishment of a feedback and

complaints handling mechanism; and (vii) coordination with and outreach to Project

stakeholders. Detailed responsibilities and procedures of the PMU are documented in the

POM.

52. Recruitment of PMU Personnel. PMU personnel will be recruited as individual

consultants. Twelve positions will be filled for the Project. TORs for each of the

positions and their reporting responsibilities are detailed in the Project Operations

Manual (POM).

53. Monitoring and Evaluation. The Project‘s progress will be monitored through a

well designed MIS (which will be harmonized with the Youth Identification Cards); and

its impacts will be measured through the implementation of four surveys. The M&E

Coordinator will oversee the implementation of the four surveys and MIS data entry.

S/he will work closely with the PMU‘s Youth Facilitators and Program Coordinators and

focus on a) compliance with the M&E section on the POM; and b) supervise regular data

collection; preparing progress reports; monitoring of component performance; and

achievement of development objectives and outcomes against the Project‘s Results

Framework. In addition, the PMU will be required to conduct ongoing internal audits

and annual external audits.

54. Management Information System. Significant monitoring and evaluation

efforts are envisaged under the Project with a view to ensuring timely monitoring as well

as rigorous evaluation of results. A consultant firm, collocated within the PMU, will be

responsible for establishing and administering the Monitoring and Information System

(MIS), which will be critical to capture key beneficiary information, trainee payments,

and track Project implementation. Each trainee will be given a Youth Identification Card.

In addition, Project data will be sourced from training consultants, employers, trainees,

and youth facilitators. The data from the MIS will be used to inform the Project‘s

quarterly reporting. In order to ensure consistency between the data collection and data

entry process, the MIS will be managed by the Baseline and Screening Survey consultant

firm, which will be located within the PMU. The consultant firm will also be responsible

for entering payment data and other monitoring data. The payroll will be linked the

Project‘s SMS banking platform. The CFO will be required to approve the payroll before

it is submitted to the Bank for further processing.

55. Technical Assistance and Capacity-Building. In order to support effective

implementation of the Project, additional short term TA will need to be recruited. The

TA will include M&E, Internal Audit and Procurement Advisors, implementation of the

FMIS, IT Networking Software, technical planning for Components 1 and 2, relevant

tender documents and technical reviews of incoming bids. The Project will finance and

make investments in building the capacity of the PMU and NCDC through training, and

the mobilization of technical assistance, where needed. The internal audit, for instance,

will include a significant focus on strengthening the capacity of the NCDC‘s internal

68

audit unit. Regular fiduciary training will also be provided by IDA. The TA will be

jointly financed by the KTF and the IDA Credit.

56. Measures to ensure that adverse social and environmental impacts are

mitigated. The PMU will ensure that environmental safeguards screening and mitigation

measures provided in the ESMF are respected. In addition, the Project will seek to

mitigate social tension and conflict that could result over perceptions of exclusion or

disproportionate advantage. To this end, the PMU will establish a culturally appropriate

grievance redress mechanism with several access channels (e.g. Moto-Koita Assembly,

Youth Facilitators, etc.) to provide an opportunity for community members and

participants to communicate complaints to the PMU. This mechanism will include the

following activities: a) strengthening outreach and program information (e.g., objectives,

target groups, beneficiary selection criteria, etc.) to beneficiaries and communities

through a robust awareness campaign across NCD; b) facilitation and socialization

measures; and c) implementation of a grievance redress system. Youth Facilitators will

be responsible for carrying out the follow-up to check on the progress of employed youth;

and will provide early identification of program issues and worker/employee conflicts.

Quarterly reports will be submitted to the PMU for review and action. Their inputs will

become part of the MIS. The Youth Facilitators will be responsible for managing the

complaints handling process under the overall guidance of the Project Manager and

NCDC‘s Director for Community and Social Services. Should it be determined that

additional assistance is required, the PMU may recruit a dedicated Community Liaison

Officer.

57. Furthermore, the Project will support the establishment of a number of

mechanisms that will allow trainees to formally lodge eventual concerns or complaints.

They include structured knowledge-sharing workshops organized by the Youth

Facilitators, and a help desk where trainees can formally lodge complaints and/or through

their community leaders who will assist the PMU in mediating community-level disputes.

In addition, Youth Facilitators will assist beneficiaries in completing a Grievance Redress

Form which documents their complaints. This will facilitate consistency in terms of

diagnosis, reporting and analysis of complaints. The Grievance Form would be entered

into the MIS to prompt further action as necessary. Further details can be found in the

Project Operations Manual.

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Annex 7: Financial Management and Disbursement Arrangements

PAPUA NEW GUINEA – URBAN YOUTH EMPLOYMENT PROJECT

Introduction

1. The assessment of financial management arrangements for the Project was carried

out in accordance with the Financial Management Practice Manual, issued by the

Financial Management Sector Board on November 3, 2005 and further rationalized in the

“Principles Based Financial Management Practice Manual” issued by the Board on

March 1, 2010. The objective of the assessment was to determine whether the

implementing entity has acceptable financial management arrangements, which will

ensure that: (1) the project funds will be used only for the intended purposes in an

efficient and economical way, (2) the project financial reporting will be prepared in an

accurate, reliable and timely manner, and (3) the project assets will be safeguarded.

Overall Conclusion

2. Overall, the financial management system will meet the Bank‘s requirements as

stipulated in OP/BP; and subject to implementation of agreed actions and mitigating

measures. The residual FM risk is likely to remain substantial (but could be reduced

to moderate during implementation phase) after all the proposed and existing mitigating

measures described in the FM Action Plan are implemented.

3. The key mitigating measures to be put in place by NCDC are: i) the creation of a

PMU to implement project activities in accordance with the POM; ii) the recruitment of

an international CFO who will report directly to the Project Manager; iii) the inclusion of

a FM and Accounting chapter in the POM; iv) the implementation of a separate Financial

Monitoring and Information System (FMIS) accounting and financial reporting package,

and v) the implementation of appropriate internal audit arrangements through contracting

of an appropriately qualified consultant to provide technical assistance and build capacity

within NCDC.

Country Issues

4. During the last 10 years, GoPNG has been endeavoring to improve its public

financial management (PFM). However, due mainly to capacity constraints has struggled

to make consistent progress. A Public Expenditure Financial Accountability (PEFA)

assessment was carried out in 2005 by the World Bank, which considered concluded that

in some respects the PFM system had deteriorated, noting in particular the failure to

adhere to the PFM legal framework and a permissive culture towards breaches of

financial rules and processes. A further PEFA Assessment, led by the GoPNG

Department of Finance with the assistance from the World Bank, ADB, EC and AusAID

was completed in March 2009. The analysis was carried out for the years 2005 to 2007

and the 2008 budget. The assessment confirmed significant progress has been made in

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several important PFM areas identified under the Public Expenditure Review and

Rationalization Report (PERR) program; however the gains have not been uniform .

There has been progress in improving internal audit at the National level, but weak

capacity remains at the provincial and district levels. The assessment noted that budget

preparation is now more orderly, transparent and consultative and that progress has been

assisted by the implementation of the 2006 Fiscal Responsibility Act. There are also

better linkages between the budget and the Medium Term Development Strategy

(MTDS). The assessment also noted progress on clearing the backlog of Public Accounts

and active engagement by the Public Accounts Committee (PAC) of Parliament but the

PAC is still under resourced and therefore could not properly fulfill its mandated

functions. There has been some improvement in implementation of the Auditor General‘s

Office recommendations but actions taken by many line agencies have been inadequate.

5. The legislative framework for PFM is sound and includes the Fiscal

Responsibility Act. There is a national set of FM policies and procedures that are used

across the public sector at national, provincial and district levels, and these are supported

by the FMIS system (NGAS). While there are administrative inefficiencies in the

policies and procedures, if they were applied consistently they would provide robust

internal control. However, there is a widespread failure to observe rules and management

override is a significant problem particularly at provincial and district level. The

assessment noted that significant weaknesses remain in the GoPNG‘s ability to

implement the budget. Systems and procedures for expenditure and payroll control

cannot be relied on, budget integrity continues to be undermined by unauthorized ad-hoc

diversion of funds for low priority regional projects and administration support costs

including politicians travel. Despite the GoPNG‘s ―Opening the Budget‖ initiative,

transparency in budget execution is weak and comparisons of actual expenditures with

budget figures are difficult to do. Significant extra-budgetary resources are still not

adequately disclosed. While the budget is publicly available once passed its presentation

makes it difficult to follow. Delays in the preparation of the Public Accounts and as a

consequence delays in the external audit process remain. The accountability of statutory

authorities is particularly weak. This mix of institutional and systemic weaknesses imply

that there is potential exposure of project funds to abuse, malpractices and the risk that

IDA funds may not be used for the intended purpose.

6. Failure to adequately address governance issues and corruption is perceived as a

significant hurdle in PNG‘s economic development. PNG was ranked 154th

out of 180

countries in the 2009 Transparency International Corruption Perceptions Index.

However, there is increasing demand for good governance, promoted by a free press,

NGOs and others. The planned new IFMIS with a revised chart of accounts aligning

classification with international standards, if implemented as planned will address some

of the major weaknesses by providing reliable information for monitoring budget

execution by the Department of Finance and line ministries, through reducing data entry

inaccuracies and speeding up data reconciliation. However, there is likely to be

significant slippage in the proposed implementation timetable. The 2009 PEFA

assessment notes that less than 50 percent of development assistance is managed through

country systems, suggesting that budget formulation is yet to be comprehensive.

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Risk Analysis

7. The summary risk analysis is based on the assessment of financial management

arrangements proposed for this project. Table A7.1 identifies the key risks related to the

Project‘s financial management and suggests how they may be mitigated.

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Table A7.1: Key Financial Management Risks and Mitigation Measures

Type of risk

Risk rating Risk mitigating measures Residual risk rating at effectiveness

Condition of Negotiation, Board, Effectiveness

Country Level High High

GoPNG has struggled to make consistent progress with the PFM reforms over the last ten years. The PFM legislative framework is sound There is also a sound set of national FM policies and procedures and if they were applied consistently would provide robust internal control. However, there are substantial capacity weaknesses particularly at the provincial and district levels and a general failure to observe rules. However there is increasing demand for good governance, promoted by a free press, NGOs and others.

The planned new IFMIS with a revised chart of accounts aligning classification with international standards, if implemented as planned will address some of the major weaknesses by providing reliable information for monitoring budget execution by the Department of Finance and line ministries, through reducing data entry inaccuracies and speeding up data reconciliation. There has been slippage in the proposed implementation timetable.

Entity Level Substantial Moderate

NCDC has no experience in implementing IDA financed projects. They do however have experience implementing other development partner projects.

NCDC is established under its own Act of Parliament and the Governor reports to a Board.

NCDC is required to prepare its financial statements in accordance with IFRS. While the NCDC has a very competent financial controller (a consultant) who is responsible for the management of the FM functions there is a high dependence on this person and if he were to leave it may be difficult to recruit another person of similar caliber.

(1) Given the governance and FM capacity concerns, an international CFO has been employed to manage the Project‘s funds. The Project‘s account will be managed separately from NCDC‘s accounts.

(2) The Project FM staff will receive training throughout project based on their training needs under the guidance of the CFO.

(3) The Project will use appropriate FMIS accounting software package and all FM related processes will be independent of NCDC‘s FM processes. However, the project will facilitate capacity building of NCDC staff. The project will also support efforts to strengthen NCDC‘s financial systems.

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There have however been problems with corruption and some FM staff has been suspended/dismissed. This will mean that the NCDC FM capacity will also have to be rebuilt.

The Auditor is Auditor-General‘s Office who contracts out the performance of the external audit to an International Accounting Firm. NCDC also has an Audit Committee to ensure follow up on issues raised through the audit.

There have been delays in audit completion due to technical arguments on the appropriate treatment of the accounting treatment for road infrastructural assets.

Project Level Substantial Substantial

(1)Project Size: The project is to be implemented by a PMU within NCDC. The Project will be US$ 17.9 million: IDA funding of US$15.8 million: NCDC counterpart funding of US$1.58 million and a grant from the Korean Government for US$0.6 million.

(2)Project Complexity: There will be 3 components and a single disbursement category. Given the large number of participants in the program this may cause some complication in ensuring participant costs are accurately recorded in the accounts.

(1) A dedicated PMU within NCDC will be established to implement Project activities in accordance with the Project Operational Manual, which will include an FM manual. This will ensure that the project activities will be properly resourced with adequately qualified staff an access to appropriate IT expertise.

(2) All staff involved in fiduciary aspects will be trained in the use of Project tools (software, procedures manual) and Bank fiduciary procedures.

OVERALL INHERENT RISK Substantial

Substantial

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CONTROL RISKS (risk that the Project’s financial management system is inadequate to ensure funds used economically and efficiently for intended purpose)

Budgeting NCDC‘s own budget preparation processes are reasonable. Each division prepares it budget which is then subjected to prioritization and quality reviews (including the Financial Controllers review) before presentation to the Board and ultimate approval by the Minister of Inter-Governmental Relations and the Minister of Finance. NCDC has its own sources of revenue and controls its own budget execution and therefore it does face difficulties in terms of cash flow problems caused by delays in the release of funds from Treasury.

Moderate

(1) NCDC has committed to provide US$1.58 million in counterpart funding over the life of the Project. This will be allowed for in NCDC‘s budget process and will be financed directly on a transaction basis. (2) The remainder of the Project‘s funding will be from IDA and the Korean Government. The Project will have its own financial planning and budgeting process that will be managed by the Project Manager and CFO. (3) The Bank team and Project staff will work closely to establish comprehensive Project cost tables, detailed work program, and quarterly budgeting for the first 12 months of the Project implementation. (4) Training, mentoring, and hands-on experience will be provided to PMU fiduciary staff in financial planning and budget preparation as considered necessary by the CFO. (5) Regular review /monitoring of Project budget performance, including timely release of Project funds, will be part of the quarterly IFRs to be reviewed by the Project Director and Project Steering Committee.

Moderate

Accounting (1) The Project will not use the existing NCDC FMIS/accounting software to reduce the likelihood of IDA funds being used for NCDC operational activities.. The PMU will use an off the shelf accounting package for FM purposes, thus maintaining a parallel ‗ring fenced‘ system for the project. (2) Financial management and accounting procedures may not be well understood by all involved in implementation.

Substantial (1) PMU to implement project FMIS satisfactory to IDA independent from NCDC FM systems. (2) A POM will be adopted to assist staff understanding the project accounting procedures.

Moderate Dated Covenant. Within 30 days of effectiveness

Internal Control NCDC has an internal audit function but this has very limited capacity and will not be used for the Project.

High (1) The PMU will make separate arrangements for internal audit of the project. This will include strengthening of the existing capacity and recruitment of a consultant to provide technical assistance and facilitate capacity building activities

Substantial Dated Covenant. Within 60 days of effectiveness

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Funds Flow The funds flow arrangements will be described in the Project FM manual including counterpart funding from NCDC (as mentioned above NCDC has its own revenue sources and therefore counterpart funding will not be impacted by cash flow problems caused by delays in the release of funding from Treasury).

Replenishments can be sometimes delayed due to the staff shortages in Treasury which delay processing and signing of WAs.

High (1) The CFO will need to work with the Department of Treasury to ensure Withdrawal Application‘s are processed and signed in a timely manner. (2) Arrangements for the flow of funds that are acceptable to the Bank will be detailed in the Project Financial Management Manual. (3) The Transaction-based disbursement method is being recommended.

High

Financial Reporting The Project FM team has no experience in producing interim unaudited financial reports.

Moderate (1) The IFR guidelines and training will be used by the Project management team over the life of the Project. (2) Training will be provided to financial, accounting, and M&E staff in the use of IFR Guidelines. (3) The format, content, and periodicity of FMR will be discussed during appraisal and agreed upon during negotiations.

Moderate Agreed at Negotiation

Auditing (1) AGO needs to be strengthened. (2) There is a concern about a quality of the audit reports and a risk of severe delays in the production of Project units‘ audit reports by the AGO. The timeliness and quality of audit reporting has improved substantially. (3) There have been delays in NCDC‘s own external audit processes.

Substantial (1)There are ongoing efforts to strengthen AGO and building its capacity under the PFM reform component of the ECP (Enhanced Corporation Program) funded by Australia as well as efforts by the Bank. The Projects audit will be completed by an International Audit Firm under contract to the AGO.

(2)The Project Steering Committee will provide an oversight role on Project funds and follow up on implementation of internal and external audit findings.

(3)The Auditor's TOR will be prepared and agreed upon by IDA.

Moderate

Agreed at Negotiation

CONTROL RISK Substantial Substantial

OVERALL RISK Substantial Substantial

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8. With the mitigation measures in place, the residual risk will remain ―Substantial.‖

In conclusion, the financial management arrangements are acceptable to the Bank subject

to successful implementation of the measures and the action plan below, which addresses

the weaknesses identified.

Budgeting

9. The overall Project budget and disbursement schedule is included in the Project

Appraisal Document. The Annual Work Plans and Budgets will be prepared by the PMU

including the Government counterpart funding. The PMU will monitor the Project‘s

budget.

Accounting

Books of Accounts and Financial Monitoring and Information System

10. NCDC will receive funds from UYEP and will maintain books of accounts

specifically for this Project. The decision to maintain a separate Project account was

made at the request of NCDC both to protect the project funds from potential use by the

NCDC and also as NCDC did not have sufficient resources to maintain the project books

of account without the employment of additional staff. The book of accounts will include

a cash book, ledgers, journal vouchers, a fixed asset register, and a contracts register. A

chart of accounts will be drawn up for the Project, in which the account codes will match

the classification of expenditures and sources and application of funds indicated in the

Financing Agreements. The chart of accounts will be developed in a way that will allow

Project costs to be directly related to specific Project activities and outputs. The Project

will use a FMIS accounting package that will be tailored to meet the Project‘s financial

accounting and reporting requirements. It is likely the Project will use MYOB which is

the accounting package used by NCDC.

Project Financial Management and Accounting Manual

11. The Project‘s FM and Accounting procedures will be developed and documented

in the POM before the Project effectiveness and disseminated at all levels of PMU. The

Project‘s Financial Management and Accounting procedures will describe the internal

control arrangements, accounting system, including the Project‘s major transaction

cycles, funds flow processes, accounting records, supporting documents, computer files,

specific accounts in the financial statements involved in processing transactions, the list

of accounting codes used to group transactions (chart of accounts), the accounting

processes from the initiation of a transaction to its inclusion in the financial statements,

authorization procedures for transactions, the financial reporting process used to prepare

the financial statements and interim financial reports (including significant accounting

estimates and disclosures), financial and accounting policies for the Project, budgeting

procedures, financial forecasting procedures, procurement and contract administration

monitoring procedures, procedures undertaken for replenishing the Designated Account,

and auditing arrangements.

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Staffing Arrangements

12. In addition to its responsibility as an implementing entity for the component of

the project NCDC will be responsible for overall project management and coordination.

The Project Manager through the Projects CFO will be responsible for preparing the

financial statements for this Project, assisted by local support staff employed specifically

for the project by the PMU.

13. All Project FM staff will receive training in World Bank Financial Management

and Disbursement Guidelines, which will be arranged in consultation with the Country

Financial Management Specialist and the TTL. All PMU staff will also receive

appropriate training on the Project‘s Financial Management and Accounting (that is

included in the POM) as determined by the CFO.

Internal Control and Internal Audit

Internal Control

14. The PMU will establish its own systems of internal control (additional to those

used by NCDC) and these will be annexed in POM, which is to be prepared by the CFO

prior to effectiveness. These internal controls will meet the requirements of the GoPNG‘s

legislative requirements in the Public Finance Act and related instructions as well as the

Banks requirements.

Internal Audit

15. The NCDC Internal Audit function has limited capacity and will not be used by

the PMU. The Project CFO in consultation with the Bank will establish appropriate

internal audit arrangements for the project. This will be undertaken through the

engagement of an appropriately qualified short-term consultant to perform the function

(i.e., Internal Audit Advisor). As a minimum, the Projects systems of internal control will

be reviewed and a report prepared for the PSC (with a copy to the Bank) within six

months of the first disbursement of Project resources.

Funds Flow Arrangements

16. A Subsidiary Agreement would be signed between the GoPNG (the Recipient)

and NCDC which defines the terms and conditions under which the funds under the two

financing agreements are provided.

17. Designated Account: A Designated Account at a commercial bank acceptable

to IDA will be opened to receive the funding under the Financing Agreements .

Signatories for the Designated Account will be documented in the Project Operations

Manual. Upon effectiveness NCDC through the Department of Treasury, will make the

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initial request for the advance from the IDA account into the DA. The currency of such a

designated account will be Kina with an initial designated ceiling of PGK3 million

equivalent to approximately (six) months of the average projected annual expenditure,

excluding the counterpart funded element and likely Direct Payments.

18. The Project will have a single disbursement category:

A7.2: Disbursement Table for IDA Credit

Project Cost by Disbursement Category IDA Credit

(US$ equivalent.)

Percentage of

expenditures to be

financed (exclusive of

taxes)

1. Consultant, training services, goods and

works, stipends and incremental operating costs

15,800,000 100%

Total 15,800,000

Note: US$ to be converted into SDRs.

19. Incremental Operating Costs: These are the reasonable and necessary

incremental expenses incurred on account of Project implementation, support and

management, which would not have been incurred in the absence of the Project. These

costs would included in an annual budget to be approved by the Association, including

communications, utilities, stationary, transportation costs, and accommodation and travel

allowances of Project staff, but excluding salaries of the Recipient‘s civil servants.

20. Although there are no country financing parameters established in PNG the Loans

and Assistance (International Agencies) Act, Chapter No. 132 of the Revised Laws of

Papua New Guinea (the ―Act‖), through its Agreement with the Association, would

mean that any persons, income, matter or thing that is directly engaged in and directly

forms part of this Agreement with the Association, would be exempt from any tax, duty,

or imposition under the revenue laws administered by the Commissioner General of the

Internal Revenue Commission of PNG.

21. Disbursement Methods: The Project has one disbursement category. The

Project could use four disbursement methods: (a) advances into the DA, (b) direct

payment from the IDA account (c) special commitment and (d) replenishment. Where

direct payment and special commitment methods are used, this would be subject to the

IDA‘s no objection prior to signature on the contract; it would only be used for large

payments or when payments are in currencies that the Recipient may have difficulty

obtaining. The most commonly used disbursement method in UYEP will be the advance

method using the DA. This is the most appropriate method for local expenditures

considering capacity issues.

22. Replenishment Arrangements: In the DA advance method, following the initial

advance from the IDA account, NCDC (PMU) will subsequently make requests for

further advances into the DA upon accounting for the equivalent amount advanced and

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used, with appropriate reconciliation in a defined format as per the Disbursement Letter

and Disbursement Guidelines.

23. In requesting disbursements into the DA for expenditures incurred, PMU will

make extensive use of a Statement of Expenditure (SOE) record. The SOE could be used

for (a) civil works contracts to a value less than US$100,000 equivalent each; (b) goods

contracts costing less than $100,000 equivalent each; (c) service contracts for individual

consultants costing less than $50,000 equivalent each and for firms costing less than

$100,000; (d) training, workshops; and (e) operating costs. Disbursements for services

and goods exceeding the foregoing limits would be made in accordance with respective

procurement guidelines and provisions in the Financing Agreement against submission of

full documentation and signed contracts.

24. All withdrawal applications would need to be processed by the Department of

Treasury who will be the authorized signatory for the Withdrawal Application. This

would allow the Department of Treasury to capture the necessary information to update

their Debt Management and accounting systems.

25. If ineligible expenditures are made from the Designated Account, the Borrower is

obligated to refund the same. If the Designated Account remains inactive for more than

six months, the Borrower may be requested to refund to IDA the unexpended amounts

advanced to the Designated Account.

Financial Reporting Arrangements

26. The PMU will monitor and provide a quarterly Interim Financial Report (IFR)

and annual Financial Statements to IDA within 45 days after the end of the quarter to

monitor the use of Project funds. Formats for these reports will be generated from the

FMIS. The information in these reports will be linked with the chart of accounts for the

Project.

27. The following information will be included in the consolidated quarterly IFRs and

Annual Financial Reports that will be produced by the PMU for the Project:

i) A statement of sources and uses of funds for the reported quarter, year to date

and cumulative for the Project from Project inception, reconciled to opening and

closing bank balances;

ii) A statement of uses of funds (expenditures) by Project activity/component,

comparing actual expenditures against budget, with explanations for significant

variances for the quarter, year to date and cumulative for the Project;

iii) A statement of the uses of funds by disbursement category by quarter, year to date

and cumulative for the Project; and

iv) A list of assets purchased by the Project.

28. The quarterly reports will form the basis for the production of the annual financial

statements. All reports will be on a cash basis.

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External Audit Arrangements

29. As per the Public Finance Act, AGO is responsible for auditing all Government

organizations, including local authorities and public corporations and donor funds. The

Auditor General has the power to authorize any firm/person registered as an auditor

under the Auditors and Accountants Act under the Laws of PNG and approved by the

AGO to conduct an audit on his/her behalf and report back to him/her.

30. AGO or a registered auditor approved by the AGO will conduct an annual

external audit of UYEP. The auditors will provide an audit report on the Project financial

statements. The audit will adhere to International Standards on Auditing

(IFAC/INTOSAI pronouncements) and the report will be submitted within six months

after the end of the financial year. In addition, the auditors will provide a detailed

management letter containing their assessment of the internal controls, accounting

system, and compliance with financial covenants in the Financing Agreement. Terms of

reference for the audit will be agreed upon during negotiations.

Financial Management Action Plan: Negotiation Conditions, Effectiveness

Conditions and Financial Covenants

31. Table A7.3 indicates the actions to be taken for the Project PMU to establish its

financial management system and when they will be completed.

Table A7.3. Action Plan to Strengthen Financial Management

Action Date due by Responsible

1 Agree on terms of reference for external auditor Agreed at negotiations AGO and IDA

2 Agree on the TOR for the internal audit Agreed at negotiations PMU CFO

3

Finalize POM (including FM procedures and IFR

formats) satisfactory to IDA By Project Effectiveness PMU CFO

4

Implement agreed FMIS to accommodate Project

accounting and financial reporting requirements.

Dated covenant within

30 days of Effectiveness PMU CFO

5

Appointment of the Internal Audit Advisor is

established in form and substance satisfactory to the

Association

Dated covenant within

60 days of Effectiveness NCDC

Financial Management Supervision Plan

32. A supervision mission will be conducted at least twice a year based on the risk

assessment of the Project. The supervision mission objective is to ensure that strong

financial management systems are maintained throughout the life of the Project. Regular

reviews will also be carried out through the IFRs to ensure that expenditures incurred by

the Project remain eligible for IDA funding. An implementation support plan is proposed,

based on the outcome of the financial management risk assessment (Table A7.4).

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Table A7.4 Financial Management Supervision Plan

FM activity Frequency

Desk reviews

Interim financial reports review (IFRs) Quarterly

Project audit report review Annually

On site visits

Review of overall operation of the FM system

Semiannually, based on the substantial

risk rating

Monitoring of actions taken on issues highlighted in

audit reports, auditors‘ management letters, systems

audit report, and other reviews As needed

Transaction reviews (if needed)

Can be done as needed in case of any

issue arising

Capacity-building support

FM training sessions

Before Project start and thereafter as

needed

Conclusion of the Assessment

33. As noted, a review of the NCDC‘s financial management arrangements assessed

the financial management residual risk is Substantial, but after all the mitigation

measures are undertaken the risk will be reduced to Moderate during the implementation

phase. With the mitigation measures, the financial management arrangements should be

adequate to provide, with reasonable assurance, accurate and timely information on the

status of the Project as required by the Bank. The recommended improvements/mitigation

measures are detailed in the Financial Management Action Plan.

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Annex 8: Procurement Arrangements

PAPUA NEW GUINEA – URBAN YOUTH EMPLOYMENT PROJECT

A. General

1. Procurement for the proposed project would be carried out in accordance with the

World Bank‘s "Guidelines: Procurement Under IBRD Loans and IDA Credits" dated

May 2004, revised Oct. 2006 and May 2010; and its "Guidelines: Selection and

Employment of Consultants by World Bank Borrowers" dated May 2004, revised Oct.

2006 and May 2010 and the provisions stipulated in the Financing Agreement. The

various items under different expenditure categories are described in general below. For

each contract to be financed by the Loan/Credit, the different procurement methods or

consultant selection methods, the need for pre-qualification, estimated costs, prior review

requirements, and time frame are agreed between the Recipient and the Bank in the

Procurement Plan. The Procurement Plan will be updated at least annually or as required

to reflect the actual project implementation needs and improvements in institutional

capacity.

2. Procurement of Works: The Public works/maintenance program, which will

provide on the job training for selected trainees, will consist of several contracts which

entail roads/drainage cleaning, vegetation upkeep/removal grass cutting, and other labor

intensive related activities in the NCD area in accordance with the criteria and procedures

detailed in the Project Operations Manual (POM). It is expected that packages will be in

the average of US$ 100,000. Specific contracts will be identified in coordination with the

NCDC infrastructure program. Design and specifications as well as construction

documents as required will be prepared by a design and documentation consultant firm or

the NCDC‘s own engineering unit.

(a) International Competitive Bidding (ICB): Contracts valued above US$500,000

will be procured by ICB using the World Bank‘s Standard Bidding Documents

(SBD) for all ICB. However, it is not currently envisaged that contracts will be

procured under this method in the Project.

(b) National Competitive Bidding (NCB): Contracts below US$ 500,000 will be

procured under National Competitive Bidding (NCB) procedures. These will

entail the majority of the contracts under the public works/maintenance scheme.

Sample Bidding Documents for NCB will be agreed with IDA and reflected in the

POM. National Competitive Bidding procedures shall be those set forth in the

PNG Country Procurement Assessment Report dated June 2006- Annex 6-

Mandatory Provisions (for Bank/IDA financed contracts.

(c) Shopping: Small Works contracts below US$50,000 equivalent will be procured

on the basis of comparing at least 3 quotations, received from qualified

contractors in response to a written invitation, which will include a detailed scope

of work, specifications and relevant drawings as well as a form of agreement

acceptable to IDA.

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3. Procurement of Goods: Goods procured under this project would include

vehicles, office furniture and equipment, computer hardware and software, identification

cards for trainees, supplies for project promotion activities, as well as goods required for

the media/communication program, mobile phones and related equipment/services for the

micro-savings program and safety gear for trainees in the public works scheme.

i) International Competitive Bidding (ICB): Goods contracts that can be grouped

into bidding packages of more than US$200,000 equivalent will be procured

following ICB procedures and WB SBD;

ii) National Competitive Bidding (NCB): Contracts estimated to cost US$ 200,000

or less are expected to be procured under NCB. Sample Bidding Documents

would be developed and agreed with IDA and reflected in the POM. National

Competitive Bidding procedures shall be those set forth in the PNG Country

Procurement Assessment Report dated June 2006- Annex 6- Mandatory

Provisions (for Bank/IDA financed contracts;

iii) Shopping: Contracts estimated to cost less than US$ 50,000 are expected to be

procured under Shopping; and

iv) Direct Contracting will used for the purchase of the mobile phones from the

service provider who will carry out the SMS banking This method may also be

used for TV and radio spots targeted to youth as well as the youth identification

cards (fingerprint) and proprietary software, All contracts under Direct

Contracting must have prior approval from IDA.

4. Procurement of non-consulting services: This will consist of media and printing

supplies, which will be contracted following shopping or NCB procedures for goods.

5. Selection of Consultants: Consultants services consist of technical assistance for

design and implementation of communication/awareness campaign, curriculum

development and training delivery from qualified training providers/institutions for

public safety enhancement, and Basic Life Skills for Employment; Pre-Employment

Training (Business and Industry subjects), and screening surveys, long and short run

impact studies, database services, engineering and design services, payroll services as

well as the required technical assistance for NCDC project management.

6. Short lists of consultants for services estimated to cost less than $200,000

equivalent per contract may be composed entirely of national consultants in accordance

with the provisions of paragraph 2.7 of the Consultant Guidelines.

7. Individual Consultant services will be required for monitoring and evaluation,

technical as well as project management staff in the PMU required to administrate the

different components of the Project.

a) Quality Cost Based Selection (QCBS): This will be used for the selection of

training providers, surveys, MIS and payroll services to manage the stipends

payable to trainees as well as for impact studies and analysis;

84

b) Selection Based under Fixed Budget; will be followed for the

Awareness/Communication Campaign;

c) Least-Cost Selection (LCS): Contract to be selected under this method

would be for the audit of the project accounts;

d) Selection Based on Consultants’ Qualifications (CQS): Regarding small

assignments (below US$ 200,000) of a routine nature, qualified consultant firms

may be selected through CQS method;

e) Single Source Selection (SSS): Consideration would be given for SSS

regarding assignments meeting the requirements of paragraph 3.10 of the

Consultant Guidelines; and

f) Individual Consultants: International consultants, as well as local ones, may

be appointed by the implementing agency to assist in project implementation and

to provide technical assistance. They should be selected through a comparison of

qualifications of at least three qualified consultants among those who have

expressed interest in the assignments or have been approached directly by the

implementing agency. In addition, with appropriate justifications and after

concurrence by IDA, individual consultants may be selected on a sole-source

basis in exceptional cases, such as: tasks that are continuation of previous work

that the consultants have carried out and for which the consultants were selected

competitively; assignments lasting less than six months; and when the individual

consultant is the only consultant qualified for the assignment.

8. Training: The credit will finance eligible expenditures for study tours,

workshops and seminars as described in the annual training programs submitted by

NCDC-PMU for Bank‘s review.

9. Operating Costs: Incremental operating costs means the reasonable and

necessary incremental expenses incurred on account of Project implementation, support

and management, which would not have been incurred absent the Project, included in an

annual budget approved by the Association, including communications, utilities,

stationary, transportation costs, and accommodation and travel allowances of Project

staff, but excluding salaries of the Recipient‘s civil servants.

10. Other: The Credit will finance the various stipends for the different programs of

approximately US $7.6 m. With the exception of the Basic Life Skills training, these

stipends will be paid to beneficiaries through the PMU in accordance with procedures

described in the POM.

B. Assessment of the agency’s capacity to implement procurement.

11. Responsibility for project implementation lies with the NCDC. According to the

NCDC Act 2001, the Commission a) is a Corporation, b) has perpetual succession and c)

shall have a seal and may acquire, hold and dispose of land, interest in land and property,

sue and be sued in its corporate name, conduct business enterprises and enter into

contracts (subject to the prior written approval of the Minister). Membership consists of

11 members ; Governor, Deputy Governor; members of the National Parliament for the

85

NCDC electorate, 4 appointed members by the Governor, that represent i) women, ii)

youth, iii) trade unions iv) settlement representatives, the Provincial Administrator of the

Central Province and 1 member of the Motu-Koita Assembly.

12. Procurement activities will be carried out under the responsibility and

oversight of NCDC. The assessment reviewed the organizational structure of NCDC,

and particularly the procurement staffing and routing and approval of procurement

actions. NCDC is headed by the City Manager and composed of five management

divisions/departments: DCM Engineering, Regulatory Services, Finance and

Administration, Corporate Services and Community and Social Services. The

procurement function for works, plant and equipment as well as engineering design

consulting services falls under the managerial responsibility of the Engineering dpt. In

terms of Planning at NCDC, an annual plan is prepared by each department, the Financial

Controller consolidates into one for the entity based on priorities, the Board approves it

and the Minister of Inter-Governmental Relations endorses it.

13. Part VIII of the Public Finances (Management) Act applies to the Commission

subject to modifications stated in the Proposed Bill on Organic Law on the National

Capital District Commission. NCDC follows its own rules and regulations regarding

procurement. Contracts above PGK300,000 have mandatory advertisement, and are open

tenders, which follow NCDC internal processes and reviews, and are cleared by their

own NCDC Board. Contracts awarded are advertised in the press and they use pre-

qualification of contractors. For civil works contracts the engineers of the commission

carry out the assessment report of satisfactory completion of the works. For contracts

with a value greater than PGK300,000, the NCDC will be required to convene a tender

committee to review the required documentation and recommendation to the Central

Supplies and Tenders Board for its endorsement and approval prior to award.

14. The key issues and risks concerning procurement for the implementation of the

project relate mostly to the limited capacity of the Community and Social Services

department‘s staff in contracting and administering large training consultant firm

contracts. NCDC staff experience has been dealing primarily with civil works, plants and

equipment and they are not familiar with WB processes and procedures. For the Urban

Youth Employment Project, although contracts have been packaged and identified in the

Procurement Plan, they will generate the need of hiring the required staff (procurement,

financial, engineering and administrative) for the proper management of the Project.

Coordination between the procurement officers with other departments of the NCDC is

essential for the successful implementation of the Project.

15. A Project Management Unit (PMU), set under the Community and Services

department, has started the recruitment of technical assistance under the Korean Trust

Fund. Key positions will include a chief financial officer, Project Manager with expertise

in Procurement and FM. In addition a Procurement Advisor experienced on Bank

procedures will be hired. An operational Manual has been prepared which describes rules

and procedures of NCDC as well as Bank‘s procurement and consultant selection

86

guidelines. A project Launch seminar tailored to the particular procurement activities

carried out under the project will be scheduled for April 2010.

Table A8.1 Procurement Action Plan

Perceived Risk Proposed Action Timeframe Status

NCDC‘ s limited

experience with foreign

funding processes and

procedures.

The Community and

Social Services Dept.,

one of 5 dpt. within

NCDC, is carrying out a

small training program

funded by Aus Aid. The

IDA project will establish

a PMU with the required

expertise to manage all

aspects of the project

Under the Korean Trust

Fund, the Chief Financial

Officer as well as the

project Manager are

already on board.

Other short term and long

term consultants will be

hired as the sequence of

activities are programmed.

TORs for the

Project Manager

and CFO approved.

Both positioned

appointed.

NCDC‘s lack of

knowledge of WB

procurement guidelines,

processes and procedures.

International

procurement advisor and

a national procurement

officer will be hired

under the PMU

To be in place no later

than effectiveness.

TOR agreed at

negotiations.

Large Scale of the

works/maintenance

scheme. The Engineering

dept. within NCDC has

carried out small

programs for unskilled

labor and its

administration has proven

difficult.

The PMU will rely on the

expertise of the Works

Dept. in coordination of

the PMU Project

Manager.

In addition, the PMU will

be staffed with a Public

Works Coordinator and

Technical Supervisors for

the different packages bid

to contractors.

The selection of the

works/maintenance

scheme will be based in

the annual program of

works planned by

NCDC‘s Engineering Dpt.

The project Operational

Manual provides the

required steps and

procedures.

Project Operational

Manual is well

advanced and will

be finalized by

Effectiveness.

It will include a

sample bid

document

satisfactory to IDA.

Large consulting

contracts for training

firms for the main

objectives of the project.

NCDC‘s experience with

managing large scale

training consultancies are

limited to A&E services.

Legal and Public

Relations assignments.

PMU will employ skills /

on the job training

specialist (individual

consultant) to prepare the

Request for Proposals

(RFP).

Detailed RFPs will need

to be prepared for the

different types of

training.

Project Operational

Manual provides the

suggested training as a

guide for the drafting of

the RFPs

Draft TORs for key

TA to be included in

the POM.

Perception of Fraud and

Corruption.

NCDC has its own

Tenders Board.

Regarding tendering and

procurement processes,

the statement of NCDC is

that all transactions are

above board and

corruption and favoritism

is nonexistent. The CFO

will be charged with

compliance with this

mandate.

The National Capital

District Commission Act -

2001- Part 6, states that

the relevant Minister may

appoint a Committee of

Inquiry, when there is

widespread corruption,

mismanagement of funds,

the Commission exceeds

its power. The relevant

Minister shall refer the

report to the National

Executive Council.

The Act is

accessible to the

public and is posted

on the NCDC‘s

website.

87

16. The risk assessment is very high in accordance to the CPAR, as well as list of

High Risk Operations for FY10 and FY11.

C. Procurement Plan

17. The Recipient, at appraisal, developed a procurement plan for project

implementation which provides the basis for the procurement methods. This plan has

been agreed between the Recipient and the Project Team and is available at NCDC

office. It will also be available in the Project‘s database and on the Bank‘s external

website. The Procurement Plan will be updated in agreement with the Project Team

annually or as required to reflect the actual project implementation needs and

improvements in institutional capacity.

D. Frequency of Procurement Supervision

18. In addition to the prior review supervision to be carried out from Bank offices, the

capacity assessment of the Implementing Agency has recommended quarterly

supervision missions in the first year, and subsequently thereafter, one supervision

mission every six months to carry out post review of procurement actions and provide

further training, as needed.

E. Details of the Procurement Arrangements Involving International Competition

1. Goods, Works, and Non Consulting Services

(a) List of contract packages to be procured following ICB and direct contracting:

1 2 3 4 5 6 7 8 9

Ref.

No.

Contract

(Description)

Estimated

Cost

Procureme

nt

Method

P-Q

Domestic

Preferenc

e

(yes/no)

Review

by Bank

(Prior / Post)

Expected

Bid-

Opening

Date

Comm

ents

G Media costs

not included

in Awareness

campaign

contract

$130,000 DC Prior Jan. 2011

88

2. Consulting Services

(a) List of consulting assignments with short-list of international firms. 1 2 3 4 5 6 7

Ref. No.

Description of

Assignment

Estimated

Cost

Selection

Method

Review

by Bank

(Prior /

Post)

Expected

Proposals

Submission

Date

Comments

CS-XXXXX Communication/

Awareness

Campaign

US$200,000 FBS Prior January 2011

CS- XXXX Basic Life Skills

Training, and

Numeracy and

Literacy testing

US$1046736 QCBS Prior

February 2011

Cost of

stipends

will be

included in

the training

contract

CS-XXX Pre-Employment

Trg. (Technical-

Industry)

US$

US$430,549

QCBS Prior February 2011 Cost of

stipends

will not be

included in

the contract

(through

electronic

banking)

CS-XXX Pre-Employment

Trg. (Business-

Service)

US$430,549 QCBS Prior February 2011 Same as

above

CS-XXXXX Baseline and

Enrollment

Screening

Survey

US $ 300,000 QCBS Prior January 2011

CS- XXXX Short and Long

Run Impact

Studies

US$ 312,900 QCBS Prior As program

develops

CS MIS and

Accounting/

Payroll Services

US$130,000 QCBS Prior Trainee

database

and to pay

fees and

stipends

3. Recommended Thresholds for Procurement Methods and Prior Review

Contracts subject to Prior Review will be stated in the Procurement Plan

Expenditure

Category

Contract Value

(Threshold)

US $ thousands

Procurement

Method

Contracts Subject to

Prior Review

(Threshold)

US $ thousands

1. Works >500 ICB All

50-500 NCB Above or equal to 100 as stated

in PP

<50 3 Quotations First 3 contracts regardless of

89

value

2. Goods >200 ICB All

50-200 NCB Above or equal to 100

As stated in Proc. Plan

<50 Shopping First 3 contracts

Regardless of value Direct Contracting All

3. Consulting Services All TORs and TRG. Programs

to be reviewed by Bank‘s TTL

3.A. Firms >100 QCBS,QBS,FBS,LCS,

CQS

Refer to Proc. Plan

<100 ― Refer to Proc. Plan

Regardless of value SSS All

3.B. Individuals Regardless of value Comparison of 3 CVs

in accordance with

Chapter V of the

Guidelines including

5.4

Refer to Proc. Plan

Note: QCBS = Quality- and Cost-Based Selection QBS = Quality-Based Selection

FBS = Selection based on Fixed Budget LCS = Least-Cost Selection

CQS = Selection Based on Consultants' Qualifications

SSS = Single Source Selection

TOR = Terms of Reference

90

Annex 9: Economic and Financial Analysis

PAPUA NEW GUINEA – URBAN YOUTH EMPLOYMENT PROJECT

1. Both the public works and training components of the proposed Project will

improve youth labor market outcomes. The first component of the Project is the Youth

Job Corps (YJC), a three-month public works program, while the second component is

the Skills Development and Employment Scheme (OJT), a classroom and on-the-job

training program. Both components will begin with a one-week life skills training course.

Program eligibility will be limited to youth residing in the National Capital District

(NCD). The program‘s two primary objectives are to provide youth with income from

temporary employment opportunities and to increase their future employability. The

public works component focuses primarily on the provision of temporary employment,

while the job training component is oriented more towards skills training. Nonetheless,

both components are expected to contribute to both program objectives; participation in

the public works program will provide a valuable income transfer; and classroom and on-

the-job training will provide work experience that increases participants‘ future

employability.

2. The public works transfers will help smooth poor households’ consumption

and protect their human capital investments. In addition, the public works programs

will improve the quality of public facilities. Secondary benefits will accrue from a limited

amount of training and work experience, exposure to a micro-savings scheme, a reduction

in potentially risky or criminal behavior, and potentially, a limited amount of training and

work experience.

3. The training component will benefit youth primarily through skills

development that will improve their longer-term employment prospects. It will also

have a beneficial secondary effect of reducing potentially risky or criminal behavior, and

providing positive role models for other poor youth in the community.

4. The stipends provided by the Project are consistent with legal minimum

wages. The Project proposes to provide a stipend of PGK2 per hour for public works and

PGK3 per hour for on-the-job training. These amounts were discussed with youth and

employers during the project‘s design consultations and were considered appropriate, in

order to attract applicants that are not currently employed. The public works stipend

currently falls under the legal minimum wage for unskilled labor, which is PGK2.29 per

hour. Meanwhile, the on-the-job training stipend is equal to the market clearing wage for

semi-skilled labor, which is about PGK3 per hour. However, given the recent increase in

the minimum wage, there is pressure for employers to increase this rate.

5. The proposed stipend amounts are also consistent with the prevailing level of

wages for unskilled and skilled occupations. Table A9.1 gives the 25th

and 50th

percentile of reported typical wages for full time workers, taken from a small number of

firms in NCD, according to a recent ADB survey. All occupations‘ typical wages exceed

PGK2 per hour, although the 25th

percentile of housekeepers and maids is roughly

PGK2.2 per hour. The on-the-job training stipend is roughly equal to the reported median

91

wage for security guards and gardeners. The reported median wages of electricians and

mechanics are PGK4.5 to 5.5 per hour, substantially greater than the training st ipend.

6. More detailed analysis of local labor markets and potential program impacts

can be carried out when new data become available. The most recent household

survey, representative of NCD, that collected income and consumption data was carried

out in 1996. The Household Income and Expenditure Survey, which will provide a

representative sample of approximately 40 NCD communities, is currently in the field

and should be available by late 2010. This data will provide the basis for a more complete

labor market analysis, and simulations of the effects of the program transfer on poverty.

In addition, information collected on the targeting performance of the program can be

used to adjust the wage rate if necessary.

7. Evidence from other developing countries suggests that the public works

component will provide useful assistance to poor households In the absence of

relevant data, the analysis below assesses the potential benefits from public works and

training components, based on impact evaluations of public works and training programs

from other developing countries. The proposed impact evaluation for this project will

provide the first evidence on the effect of public works and training programs in PNG,

and one of the first evaluations for these programs in a low-income context.

8. The impact of public works transfers on household income is substantial but

significantly less than the amount of the transfer. Relative to an unconditional transfer,

workfare programs benefit from better targeting (through the self-selection of low-

income participants) and from the public projects that are completed. Workfare programs,

however, incur an opportunity cost on participants, who could earn additional money in

the absence of a transfer. The best way to assess the extent of this foregone income is to

estimate the percentage of the benefit that participants would have been able to earn in

the absence of the program; this is equal to the portion of the program benefits that do not

contribute to additional income of the household. The studies reviewed in Table A9.2

give widely varying estimates of foregone income, but all are substantial. A study from

Bangladesh estimated foregone income to equal roughly 40 percent of the program

transfer, while several estimates of foregone income in workfare programs in Argentina

range from 50 to 75 percent. Nonetheless, a reasonable approximation is that the net

impact of the transfer is half the amount of the gross transfer.

9. The net benefit of public works programs is likely larger for youth than for

adults. This is because youth tend to earn lower wages due to their inexperience. One

study presents separate estimates of net impacts for youth; it reports that foregone income

was only 40 percent for youth 18-25, versus 60 percent for adults aged 25 and above

(Jalan and Ravallion, 1999).

10. While the ability to reach poor households depends crucially on

implementation, public works programs tend to be much better targeted than

uniform transfers. In Argentina, 80 percent of the beneficiaries of the Trabajar program

in 1997 were in the bottom 20 percent of the per capita income distribution (Jalan and

92

Ravallion, 1999). A successor program to Trabajar, Jefes y Jefes, was adopted in

response to the financial crisis that struck Argentina in 2001. In that program, 80 percent

of the benefits were directed to households whose per capita income fell in the bottom 40

percent. In Bangladesh, approximately 70 percent of benefits went to households whose

per capita consumption fell in the bottom 25 percent, and in Bolivia, 77 percent of public

works beneficiaries had per capita consumption in the bottom 40 percent.

11. The success of public works programs depends critically on program

implementation. In general, key factors explaining the success of public works programs

are the clarity of objectives, the value of completed projects, and the predictability of

funding (Del Ninno and Subbarao, 2009). The few existing studies that examine the long-

term effects of public works programs on participants give varying results. E.g.,, the

heads of household program in Argentina, despite substantial foregone income, reduced

unemployment by an estimated 3 percentage points and lowered the indigence by 1.4

percentage points, to 27.5 percent. (Galasso and Ravallion, 2004). On the other hand, a

rigorous evaluation of a public works transfer program in Ethiopia finds that the program

had a negative effect on subsequent probability of employment and only a small positive

effect on food security, due to implementation problems. (Gilligan, et al, 2009).

12. The road maintenance activities financed by the program are likely to be

cost-effective. Despite the importance of valuing the assets produced by public works in

assessing its effectiveness relative to public works program, few studies do so.

(Ravallion, 1999). A recent analysis of routine road maintenance on the highlands

highway suggests reasons for optimism; routine maintenance relative to minimum surface

repairs reduced costs by over 75 percent. (Toole and Rockliffe, 2009). Public works

programs in Bangladesh, Bolivia, and India show less dramatic but nonetheless

significant benefits, with an estimated rate of return of 20 percent in India. (O‘Keefe,

2005). However, it is worth noting that in India‘s case, the project guaranteed participants

100 days per year, and this similar for Bangladesh.

13. The training program is based on similar programs in Latin America that

have proven to be effective. Table A9.3 reviews evidence gathered by the Inter-

American Development Bank on the labor market effects of these youth training

programs. These programs served as a model for the second component of the project.

They generally offer poor young people access to a training program provided by private

providers. Private providers are required to sign an agreement with private firms to place

their interns. The training program is comprehensive and includes classroom instruction,

on-the-job training, and professional and life-skills.

14. The estimated effects of training programs on earnings vary considerably,

but many show strong and positive effects. Program evaluations from Colombia and

the Dominican Republic use a randomized experimental design, which minimize the

possibility of biased impact estimates due to confounding unobservable characteristics of

participants. Both of these experimental evaluations find substantial and positive effects

on monthly earnings, on the order of 15 percent. The estimates from the Dominican

Republic, however, are imprecise and therefore not statistically significant. Evaluations

93

of other programs show a range of estimates, perhaps reflecting their non-experimental

nature. Programs in Chile and Peru increased earnings by nearly 25percent, while

training programs in Mexico, Argentina, and Panama had small or negligible effects on

earnings.

15. Training programs have a larger effect on formal employment than overall

employment. In the Latin American evaluations, the main measure of job quality is

formal employment. Formality which is typically defined based on the firm‘s payment of

social security taxes, although some studies use access to particular benefits or salaried

worker as a proxy for formality. Table A9.3 indicates that the Colombian and Dominican

programs raised the probability of formal employment by 7 and 9 percentage points,

respectively. Peru‘s program raised the probability of formal employment by 10

percentage points, while the Mexican and Chilean evaluations found a large 20

percentage point effect on formal employment. Only the Panamanian and Argentinean

programs showed small effects on formal employment. In general, effects on the

probability of aggregate employment tend to be much smaller; only in Chile and Peru

were the estimated effects larger than 10 percentage points.

16. Unlike most youth training programs, the recent comprehensive training

programs in Latin America are cost-effective. A meta-analysis of existing impact

evaluations of youth training programs found that only about 1/3 were cost-effective.

(Betcherman et al, 2007). However, the picture improves when considering

comprehensive training programs in Latin America. Of the five Jovenes programs that

included cost-benefit calculations, four found that the program was cost-effective. Only

in Mexico, where the evaluation found zero impact on wages, was the program not cost -

effective. Programs in the Dominican Republic and Colombia, which have the most

credible evaluations due to the use of a randomized control group, were cost effective.

The wage premium earned by Jovenes graduates covered the cost of the program in 2

years in Colombia, and 5 years in the Dominican Republic.

17. If the proposed program earnings premium is in the range of the Latin

American programs, the training component will be cost effective. Table A9.4

presents lifetime discounted benefit calculations for the training component of the UYEP.

They are based on the range of typical salaries reported by a small numbers of firms in

the NCD province from the recent ADB survey mentioned above. We assume that

participation in the job training program confers a 10 percent wage premium for all

participants, which is less than the 13-17 percent reported in Colombia and the

Dominican Republic. We calculate the present value of that premium assuming a 30 year

career and a 5 percent discount rate, for a variety of occupations. Excluding high end

occupations such as professionals and managers, the estimated lifetime premium ranges

from $1,850 for the wages earned by housekeepers, to $4,500 for the wages earned by

technicians. Even for housekeepers, which was the lowest paid occupation according to

the survey, the net present value of the benefit exceeds the per person cost of $1,450 by

$400 per participant.

94

18. This estimate is conservative in several ways. The above calculation fails to

account for the positive effects of the training on the probability of working, as well as

any secondary benefits such as reducing youth crime or providing positive role models.

Finally, it fails to discount the cost of the program, which will be spread over five years.

19. As in similar cost-benefit analyses, there are important caveats. The

evaluations described above do not attempt to measure the indirect general -equilibrium

effects of the program. For example, training programs may lower the lifetime earnings

of non-participants who are competing for jobs with participants. In an extreme

hypothetical case, the training program could create no new jobs but instead replace non-

graduate workers with trained graduates. In this case, the program will have no aggregate

economic benefit, despite its positive effects on participants. These general equilibrium

effects are difficult to measure empirically, although the small size of the program

relative to the NCD labor market suggests that they will be limited. A second caveat is

that the Latin American Jovenes programs on which the estimated impacts are based

were conducted in middle-income countries, overseen by government agencies with

longstanding experience in youth training. Therefore, the results may not be applicable to

a low-income setting such as Papua New Guinea. This underscores the importance of

conducting rigorous monitoring and impact evaluation for this program.

Table A9.1: 25

th percentile, median, and 75

th percentile of wage reported by firms by occupation

(assuming 160 hours per month)

Profession 25

th percentile

(Kina / hr)

Median

(Kina / hr)

NCD firms

Security Guards 2.5 3.1 9

Housekeepers, waiters, etc. 2.2 2.3 6

Laborers, cleaners, gardeners etc. 3.0 3.1 12

Drivers, machine operators 3.1 3.4 11

Store man, packers 2.7 3.1 7

Mechanics, welders, boiler

makers 3.3 4.4 7

Electricians, plumbers, other

tradesman 5.6 5.6 6

Sales people, shop assistants 4.5 5.4 8

Clerks 3.4 4.4 13

Receptionist, Secretaries 3.1 3.1 13

Technicians 4.4 5.6 5

Professionals (e.g. accountants) 6.9 19.2 10

Management 14.7 26.6 16

Other 5.6 7.2 6

95

Table A9.2: Review of Public Work Program Effects

Program Country Paper Months after program completion

Age Exper. Design?

Foregone household income

Household income effect

Effect on probability employed

Other impacts

Workfare

Trabajar Argentina Jalan and Ravallion (1999)

0 15-24 No 40 percent 26percent N/A

Jefes y Jefes Argentina Galasso and Ravallion (2004)

0 Adults No 33 percent 23percent 0.46 Reduced unemployment

Maharashtra Employment Guarantee Scheme

India Datt and Ravallion (1994)

0 Adults No 17 percent

Trabajar Argentina Ronconi (2006) 12 Adults 75 percent 3.7 80 percent of employers willing to hire graduates

Productive Safety Nets Program

Ethiopia Gilligan et al (2009) 18 Adults No -4.1 Promotes household food security, but no asset growth

Table A9.3: Review of Training Programs in Latin America

Program Country Number of months before follow-up

Exper. design?

Effect on wages

Effect on probability of employment

Effect on probability of formal or salaried employment

Definition of formality

Cost-effective? (number of years to recoup cost)

Training

Proyecto Joven Argentina 18 No 3.9percent 1 pp 2.4 pp Social Security N/A

Chile Joven Chile 12 No 22percent 20 pp 20 pp Social Security N/A

Jovenes in accion

Colombia 18 Yes 13percent 4 pp 7 pp Any benefit Yes (2 years)

Juventud y Empleo

Dominican Republic

24 Yes 17percent 1 pp 9 pp Health Insurance

Yes (5 years)

Probecat Mexico 6 No 0 percent 0 pp 18 pp Salaried No

ProCaJoven Panama 20 No 0 percent 4 pp 0 pp Social Security Yes (1 year)

Projoven Peru 18 No 25percent 13 pp 11 pp Social security Yes

96

Table A9.4: Median Wage Reported by Firms by Occupation, and Estimated Lifetime Benefit of Training Programs Assuming 10 percent Annual

Wage Premium

Profession Median typical

firm wage ($ per week)

Number of NCD

firms reporting

Discounted present total

benefit* (US$)

Security Guards 47 9 2,538

Housekeepers, waiters, etc. 34 6 1,843

Laborers, cleaners, gardeners etc. 47 12 2,538

Drivers, machine operators 52 11 2,792

Store man, packers 47 7 2,538

Mechanics, welders, boiler makers 66 7 3,553

Electricians, plumbers, other tradesman

85 6 4,568

Sales people, shop assistants 81 8 4,360

Clerks 66 13 3,553

Receptionist, Secretaries 47 13 2,538

Technicians 85 5 4,568

Professionals (e.g. accountants) 290 10 15,583

Management 402 16 21,615

Other 108 6 5,837 * Calculation assumes payoff over 30 years, discount rate of 5 percent, and a 10 percent wage premium due to training.

Sources for Table A9.3: Alzua and Brassiolo, 2006, Attanasio et al (2009), Card et al (2007), Ibarraran and Rosas (2006), Ibarraran and Rosas (2009), Rosas (2006), Delajara et al (2006)

97

Annex 10: Safeguard Policy Issues

PAPUA NEW GUINEA – URBAN YOUTH EMPLOYMENT PROJECT

1. Overall, the Project will probably have no negative impact on the environment as the

physical investments/activities to be financed will all be small scale, employment generating

labor based civil works which will be limited to road maintenance and repairs, cleaning of storm

drains, garbage collection and grass cutting, at locations in and around Port M oresby.

2. Notwithstanding, implementation of these types of activities tend to have small scale, low

intensity and site specific impacts, which through careful planning and execution, can be avoided

altogether. In some cases, these small sale impacts may be unavoidable. For these situations,

widely used, simple and tangible management measures will be used to either reverse these

impacts or manage them in a whole acceptable way. Therefore, in compliance with the

Government of Papua New Guinea‘s own environmental management requirements and that of

the World Bank‘s own Environmental Assessment OP4.01, the NCDC has prepared an

Environmental and Social Management Framework (ESMF) to ensure guidance is given during

project implementation on how to avoid these impacts or to otherwise provide the required

management measures.

Applicability of World Bank Safeguards Policies

3. The Project has been assigned an Environmental Assessment (EA) Category ―B‖. The

Project triggers the following Safeguards policies: i) Environmental Assessment (OP 4.01); and

ii) Indigenous Peoples (OP 4.10).

Environmental Assessment (OP 4.01)

Environmental Management Process for Component 1

4. The Project‘s potential Environmental Impacts will all come from activities funded under

Component 1. These impacts and their proposed mitigation measures are summarized below:

Table A10.1: Potential Environmental Impacts and Proposed Mitigation Measures for Component 1.

Type of Sub

Project

Activity

Potential Adverse Environmental

Impacts

General Mitigation

Measures

Road repairs and

maintenance

Foot Path track

Maintenance

Poor temporary traffic management

and safety issues.

Inappropriate Spoil Disposal.

Gravel excavation/sourcing at

Prepare basic traffic management

plan with support and assistance of

local police.

Dispose of all spoil material in

approved locations.

Use approved/licensed quarries or

98

inappropriate locations.

Land and surface water pollution

from use of Bitumen.

Dust impacts on air quality.

Loud noise impacts in residential and

commercially sensitive areas

suppliers.

Mix sealant material in approved

locations or camp sites. Rehabilitate

sites after use. No on site mixing

allowed. Clean up onsite locations if

accidental contamination spills occur.

Use periodic water bowsers/spraying

to meet local or acceptable air quality

emission standards.

Restrict activities to normal working

hours during the day and avoid early

morning and late night activities.

Generally adopt good construction

engineering practices. Avoid

spontaneous establishment of

construction/workers camps.

Cleaning of

storm drains

Garbage

Collection

Inappropriate Solid Waste Disposal

(i) Transport to and dispose of

removed solid waste at approved

licensed landfills and dumpsites.

(ii)Burning of solid waste material

not to be approved.(iii) Stock pile top

soil material appropriately for re-use

or sale.

Soft ( grass

cutting) and Hard

City (pavement

laying)

Landscaping

Inappropriate Spoil Disposal

Inappropriate use and handling of

potentially harmful chemical

substances leading to land and water

pollution and human contact.

Stock pile cut grass appropriately for

resale and/or disposal at approved

landfill or dumpsite.

Use of herbicides and other

chemicals must/will not be approved

for use in this project.

Environmental Management Process for Component 2

5. These particular procedures, contained in the ESMF are designed to ensure that this

Project through the OJT activities in Component 2: i) Places participating youth in private sector

companies that comply with all the relevant laws and requirements for operating in Papua New

Guinea, and ii) That the Project will only work with private sector companies that engage in

activities and/or work in sectors that are in the opinion of the Government of Papua New Guinea

and the World Bank meet the highest ethical standard suitable for youth engagement, do not pose

unacceptable reputational risks to the Government and the World Bank, and are not engaged in

activities prohibited by relevant international law for the World Bank to support in any way,

directly or indirectly.

99

6. Therefore, the Project through Component 2 will not support companies that are a)

engaged in illegal activities and b) certain other activities in some sectors (listed in the table

below) even if these activities are legal according to the Laws of Papua New Guinea. To this

end, this negative list of activities and/or sectors in which private sector companies participating

in the OJT cannot be engaged in has to be complied with. This is not an exhaustive and complete

list and is subject to review and change at any time during the life of the Project. The PWC in the

PMU will develop appropriate screening tools using a due diligence approach to ensure full

compliance with this requirement.

Table A10.2: Negative List of Activities/Sectors the Project cannot Support

No. Activities/ Sector

1. Alcohol – activities supporting the production, marketing, distribution and sale of alcoholic beverages

and products.

2. Tobacco - activities supporting the production, marketing, distribution and sale of tobacco products.

3. Radioactive and associated materials

4. Pearls, precious and semi-precious stones, un-worked and worked

5. Nuclear reactors and parts thereof, fuel elements (cartridges, non- irradiated, for nuclear reactors.

6. Jewelry of gold, silver or platinum group metals (except watches and watch cases) and goldsmiths‘ or

silversmiths‘ wares (including set gems)

7 All national and international security firms, with no exception.

Staffing, Implementation and Monitoring

7. NCDC‘s Public Works Coordinator (PWC) will have overall responsibility for

overseeing the screening and monitoring of subproject activities. The PWC will be supported by

two technical field supervisors who will be expected to provide input on the development of the

EMPs and assist with the safeguards monitoring function. In addition, the PWC will develop

appropriate screening tools using a due diligence approach to ensure full compliance with the

safeguards requirements under Component 2. Additionally, the PMU will screen participating

companies for compliance with labor laws, health and safety and for environmental

clearance/certificate requirements.

Stakeholders Consulted

8. A number of key stakeholders were consulted during the Project identification phase as

well as in the preparation of the ESMF. Broad based consultations were designed to seek views

from a range of actors and potential beneficiaries about the proposed Project, including youth,

communities and settlement groups, non-governmental organizations, civil society groups,

employers, government agencies, among others.

100

9. During the early identification phase, specific details of the Project were unknown.

Consequently, the consultations centered on the development of the Rapid Youth Assessment and

Adolescent Girls Initiative referred to the Project in general terms in an effort to balance both

transparency and to avoid raising expectations.

10. During the second preparation (Environmental Assessment) phase, when the Project

concept and design was better defined, more intensive community level consultations were held

in the field. It was important to obtain the views of marginalized youth from a range of

communities, settlement areas and suburbs. Views were also sought from meetings with national

level government officers, local NGO groups as well as officers from the NCDC, Community

Affairs and private business houses. Emphasis was placed on seeking their response to potential

(negative and positive) social and environmental impacts Specifically, the purpose of these

consultations was two-fold: i) to get an understanding of the types of programs and projects

being undertaken in the sector and participation by youth and women‘s groups, and to discuss

linkages or synergies between ongoing programs/projects with the UYEP; ii) to understand

networks as well as systems or processes for consultation in order to prepare a consultation plan

for the UYEP that is based on existing consultative arrangements; and iii) seek broad based

community support for the proposed Project. The results from these consultations and surveys

were used to qualify justification in project development by validating the Project‘s target

groups, their interests in the proposed Project, their perceptions of current problems related to

finding employment and identification of the types of resources they could bring to the

achievement of the goals and objectives of set by the Project.

Consultation Methodology

11. As a part of the Environmental Assessment, random field sampling areas were chosen

from the 3 electorates and the Motu-Koita Council area. At least 4 sites were selected from the

Moresby Northeast and Moresby Northwest electorates while only 2 were from the Moresby

South. This is because settlements in the Moresby South areas are mainly Motu-Koita

communities. Therefore, to minimize duplication; consultations were left to be covered under

the Social Assessment (see below).

12. A variety of participatory methodologies were used to source views from key

stakeholders. This included organizing community meetings, focus groups discussions,

interviewing individual and field observations. The ESMF field sampling was conducted

entirely in “tok pisin.” By using a combination of participatory methodologies that best suit the

situation at hand, targeted groups were encouraged to share their views about the Project.

Community group meetings were usually held at the beginning of the consultations to introduce

the Project and get general reaction and feed-back. The community was then broken into smaller

groups of men, women and youth to allow focus group discussions. This is particularly useful to

draw out gender and youth issues. Further key respondent interviews were conducted to further

substantiate initial findings. Field sampling for Component 1 was also conducted with surveys

of typical roadside vegetations and drains. The ESMF summarizes the scope of these

consultations and the issues, priorities and concerns raised by various stakeholders. A list of

participants is also contained in Appendix 1 of the ESMF.

101

Indigenous Peoples OP 4.10

13. The Project triggers the Bank‘s Indigenous Peoples Policy (OP/BP 4.10). Although the

Project area (the National Capital District, NCD) is urban, the Motu and Koita peoples are

recognized as having collective attachment to the land and being the customary landowners of

the NCD. In addition, the Motu-Koita self-identify as distinct (and are recognized by others as

such); they have separate customary institutions and a system of local government—the Motu-

Koita Assembly (which is entrenched in the Motu-Koita Assembly Act, 2007);57

and they have

their own language (Hiri Motu).

14. The Motu peoples migrated to the NCD area approximately 200 years ago prior to the

arrival of European missionaries. The Motu established a series of coastal villages and engaged

in sea-based trade (the Hiri trade) with a number of communities.58

Over time, the Koita, an

inland group and trading partners of the Motu, settled within the villages of the Motu. The Motu

and Koita people have intermarried and ethnic distinctions have become blurred—they are now

referred to as the Motu-Koita. However, the Motu-Koita identity is not monolithic. There are

different variations of Motu-Koita identity including assimilation through marriage and mixed

descent. These distinctions play a role in the NCD where there are identity, inclusion and

exclusion concerns among residents. The population of the Motu-Koita in the NCD is estimated

at 30,000 out of a population of 250,000.59

15. With the growth of Port Moresby, there has been an influx of migrants from other parts

of PNG. This migration has resulted in population pressure which has been compounded by

inadequate services within settlements in the NCD. The identity of the Motu-Koita has been

strengthened in part because of the influx of migrants and the subsequent pressure this has placed

on land and other opportunities. Given this history, the NCDC commissioned a Social

Assessment to deepen understanding of the impacts that the Project could have on the Motu-

Koita and to identify any necessary mitigation measures.

Social Assessment

16. The Social Assessment included a literature review, a survey with youth in the NCD, and

community consultations.60

The Social Assessment provides background information on the

migration of the Motu-Koita into the Port Moresby area over 200 years ago, the recent history of

57

The Motu-Koita Assembly serves to protect the Motu-Koita identity, their customary land, and their natural

resources. 58

The Hiri trade saw goods such as clay pots, fish, and sago traded from the present day Central Province region to

areas as far as the Gulf of Papua. 59

The last Census was conducted in 2000. However, more recent estimates by the NCDC indicate that the

population is closer to 500,000. 60

The survey was carried out in February 2010 in nine major Motu-Koita villages (Vabukori, KilaKila (1 – 3),

Sogeri, Boera, Baruni, PapaLeaLea, Hanuabada, Tatana, and Elevala). Interviews were also carried out in some

small villages along the Hiritano Highway. The survey interviewers randomly targeted male and female youth. A

total of 67 youth between the ages of 17 and 29 were interviewed. In addition, a community leader and members

of the Motu-Koita Assembly were also interviewed. Interviews started with a brief introduction of the survey and

its purpose (including a description of the project). Interviews were conducted in Tok Pisin and Hiri Motu as

appropriate.

102

the Motu-Koita (which saw them move from an educated community to a disenfranchised one),

the aspirations of Motu-Koita youth today, and the challenges that Motu-Koita youth face. It

reflected the lives of Motu-Koita youth—many of those interviewed were economically

disadvantaged and working in the informal sector. And while they had more formal sector

aspirations, they did not see opportunities to fulfil them.

17. The Social Assessment noted the tensions between Motu-Koita and more recent migrant

groups and the possibilities of tensions arising because of real or perceived favouritism. It noted

that many Motu-Koita youth were concerned about development programming focusing on or

privileging other groups even though the Motu-Koita are the original landowners. Some

interviewees called for scholarships and other opportunities for the Motu-Koita. However, the

Social Assessment also noted that while there was concern that settlers from other communities

were being favoured, there was a recognition that any perceived favouritism of one community

over another (even if the favoured community was the Motu-Koita) would be problematic and

could lead to conflict.

18. The Social Assessment also included the results of the community consultations that

indicate broad community support. These consultations were carried out in March 2010.

Approximately 3,000 people participated in a total of 15 Motu-Koita villages.61

Participants

were both Motu-Koita and non-Motu-Koita youth, non-youth, representatives of civil society

organizations, church groups, and representatives of the Motu-Koita Assembly. The

consultations were attended by more men than women, however local church and NGO leaders

attended and it was thought that they would be able to provide additional outreach.

19. The consultations took the form of community meetings which were open to all

participants. (Prior to the consultations fliers were distributed in the communities—in English,

Motuan, and Tok Pisin—to announce the objectives of the consultations and logistical

information.) The consultations consisted of a presentation of the Project where it was

emphasized verbally that the Project would be open to all Motu-Koita youth62

and a period of

questions and answers. The presentations were in Tok Pisin and translated into Hiri Motu.

20. The results from the consultations were similar to those from the survey. There was

enthusiasm for the project but also concerns about previous exclusion of Motu-Koita youth, a

sense of disappointment over unfulfilled expectations, and a call to share benefits to avoid the

potential of jealousy within the settlements. Recommendations made by community members

during the survey and consultations included the need for a thorough awareness campaign for the

project.

21. Based on the Social Assessment, it can be determined that the Project, overall, will have

positive social impacts. It will increase the social capital of youth and strengthen the

engagement between youth, the Government, and civil society. Other impacts identified by

stakeholders include: the provision of training and up-skilling for youth, temporary employment

61

The locations were: PorePorena, Lahara, Elevala, Gabi, Taora, Larabada, Tatana, Araira, Baruni, Vabukori,

KilaKila, Pari, Taurama, Mahuru, and Korobosea. 62

This emphasis was important in light of the fact that the awareness fliers of the consultation had incorrectly

indicated that the project would only benefit Motu-Koita youth.

103

opportunities, the creation of entry points into the private sector, and second chances for poor

youth who have limited means to complete their high school education and no family or wontok

support.63

22. The Social Assessment also flagged potential negative impacts given the ethnic contours

of the NCDC. Jealousy or social conflict may arise from real or perceived exclusion or

disproportionate advantage given to Motu-Koita youth or youth from other ethnic groups.64

The Project Design and the Indigenous Peoples Plan (IPP)

23. In an effort ―to avoid creating unnecessary inequities for other poor and marginal social

groups‖ (OP 4.10, FN 12), and therefore to reduce the risk of social conflict between ethnic

groups within the project area, the Project‘s design does not include a separate IP Plan. In

accordance with OP4.10, the elements of an IP Plan have been integrated into the Project design,

specifically:

i) Free, prior, and informed consultation leading to broad community support was

conducted during project preparation. As noted above, free, prior and informed

consultations were held with members of the Motu-Koita community. An appraisal

of the results of the consultation as documented in the Social Assessment indicate that

there is broad support for the project evidenced by the fact that the Social Assessment

notes strong support for the project and there is no evidence of dissent against the

project. The consultations were conducted in Tok Pisin and Hiri Motu, and included

community leaders, church leaders, and NGO representatives. None of these groups

expressed concern over or dissent against the Project.

ii) A framework for free, prior and informed consultation during project

implementation. A Community Consultation Framework (CCF) will be incorporated

into the POM. The CCF sketches a mechanism with which the Project Management

Unit can engage with the target community (including the Motu-Koita) throughout

project implementation. It involves the village chiefs and community members in an

effort to share information and receive feedback from community members.

iii) Measures to ensure that the Motu-Koita people receive culturally-appropriate

benefits. The Projects‘ design focuses on ensuring inclusion (both real and perceived)

of the Motu-Koita youth. Measures that have been put in place to achieve this goal

include:

a) Targeted awareness raising and communication efforts in Motu-Koita

neighborhoods to ensure that the Motu-Koita youth are aware of the Project and

those who would be eligible are aware of the participation procedures.

63

Wontok refers to a patronage system based on ethnic/clan affiliation. 64

The Social Assessment noted that the threat of exclusion of Motu-Koita is present because of the increased

numbers of more assertive and entrepreneurial youth from the Highlands.

104

b) Targeted screening and recruitment efforts in Motu-Koita neighborhoods to

ensure that Motu-Koita youth have access to the screening and registration

process.

c) A review of Motu-Koita youth participation in Component 1 after the first three

intakes to ensure that disproportional participation is identified, examined, and

measures put in place to correct it in subsequent communication and recruitment

efforts (as relevant).

d) Mechanisms and benchmarks for monitoring, evaluating, and reporting on the

inclusion of the Motu-Koita in the Project have been established.

e) The disclosure key documents, such as the ESMF and Social Assessment, in Tok

Pisin and Hiri Motu.

iv) Measures to ensure that adverse impacts are mitigated. The project seeks to

mitigate social tension and conflict that may result over perceptions of exclusion or

disproportionate advantage through the following mechanisms:

a) A culturally appropriate grievance redressal mechanism to provide an

opportunity for community members and participants to channel complaints to the

Project Management Unit. The grievance redressal mechanism will include

various uptake points including Motu-Koita organizations such as the Motu-Koita

Assembly; and

b) A robust communication campaign to ensure that there is widespread

understanding of the project, its objectives, the target group it hopes to reach, and

the criteria and procedures for participation.

Staffing, Implementation and Monitoring

24. NCDC‘s Public Works Coordinator (PWC) will have overall responsibility for

overseeing the screening and monitoring of subproject activities. The PWC will be supported by

two technical field supervisors who will be expected to provide input on the development of the

EMPs and assist with the safeguards monitoring function. In addition, the PWC will develop

appropriate screening tools using a due diligence approach to ensure full compliance with the

safeguards requirements under Component 2. Additionally, the PMU will screen participating

companies for compliance with labor laws, health and safety regulations and environmental

clearance/certificate requirements.

25. In addition, the PMU will hire three Youth Facilitators who will be charged with

implementing the CCF, reporting on impacts of the Project on Motu-Koita youth, receiving and

assessing complaints and working on community-related issues. The Project Manager will be

responsible for overseeing the Community Consultation Framework and management of the

complaints handling mechanism. Should the need arise; a dedicated Community Liaison Officer

will be recruited by the PMU to oversee the above procedures.

105

Annex 11: Project Preparation and Supervision

PAPUA NEW GUINEA – URBAN YOUTH EMPLOYMENT PROJECT

Planned Actual

PCN review 9/26/08 11/4/08

Initial PID to PIC 10/3/08 7/10/09

Initial ISDS to PIC 10/4/08 6/25/09

Appraisal 11/2/09 5/13/10

Negotiations 10/18/10 11/18/10

Board/RVP approval 12/21/10 1/11/11

Planned date of effectiveness 1/31/11

Planned date of mid-term review 6/30/13

Planned closing date 4/30/16

Key institutions responsible for preparation of the Project: NCDC

Bank staff and consultants who worked on the Project included:

Name Title Unit

Ingo Wiederhofer Sr. Operations Officer EASER

Sonya Woo Social Development Sp. EASER

Stephen Hartung Financial Management Sp. EAPFM

Evelyn Villataro Sr. Procurement Sp. EAPPR

Robert McGough

Max Blacker

David Locke Newhouse

Consultant

Consultant

Labor Economist

EASER

EASER

HDNSP

Thao Le Nguyen Sr. Finance Officer LOAFC

Mark Walker

Marta Molares-Halberg

Chief Counsel

Lead Counsel

LEGES

LEGES

Angela Khaminwa

Nina Bhatt

James Orehmie Monday

Florian Kitt

Cynthia Dharmajaya

Social Development Sp.

Sr. Social Development Sp.

Sr. Environmental Engineer

Knowledge Management Officer

Program Assistant

EASER

EASER

EASER

EASER

EASER

Bank funds expended to date on project preparation:

1. Bank resources: US$250,000

2. Trust funds: US$190,000

3. Total: US$340,000

Estimated Approval and Supervision costs:

Remaining costs to approval: None

Estimated annual supervision cost: U$120,000

106

Annex 12: Documents in the Project File

PAPUA NEW GUINEA – URBAN YOUTH EMPLOYMENT PROJECT

1. NCDC Act 2001

2. Motu-Koita Assembly Act 2007

3. PNG Public Financial Management Act

4. Rapid Youth Assessment, July 2007

5. Identification Mission Aide Memoire, July 2008

6. Project Concept Note (PCN) and PCN Review Meeting Minutes, November 2008

7. Pre-Preparation Mission Aide Memoire, March 2009

8. Preparation Mission Aide Memoire, July 2009

9. Pre-Appraisal Mission Aide Memoire, February 2010

10. NCDC Request for World Bank Financing, April, 2009

11. Letters of Support from National Youth Commission, Department for

Provincial and Local Level Government, Department of Works, July 2009

12. Korean Trust Fund Grant Agreement, October 2009

13. Institute of National Affairs and ADB Labor Market Survey of NCD, 2009

14. Quality Enhancement Review (QER) Meeting Minutes, November 2009

15. Adolescent Girls Scoping Study, January 2010

16. Pre-appraisal Mission Aide Memoire, March 2010

17. Environmental and Social Management Framework, March 2010

18. Procurement Plan, November 2010

19. Draft Project Implementation Plan for the first 18 months, March 2010

20. Social Assessment, May 2010

21. Draft Project Operations Manual, November 2010

107

Annex 13: Statement of Loans and Credits

PAPUA NEW GUINEA: PNG Urban Youth Employment Project

Original Amount in US$ Millions

Difference between

expected and actual

disbursements

Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev‘d

P079140 2008 PNG-Smallholder Agriculture Development 0.00 27.50 0.00 0.00 0.00 26.50 0.05 0.00

P102396 2008 PG Mining Sector Inst Strengthening TA 2 0.00 17.00 0.00 0.00 0.00 15.34 0.00 0.00

P004397 2002 PG-ROAD MAINT. & REHAB 40.00 37.31 0.00 0.00 0.00 31.68 -6.63 14.68

Total: 40.00 81.81 0.00 0.00 0.00 73.52 - 6.58 14.68

PAPUA NEW GUINEA

STATEMENT OF IFC‘s

Held and Disbursed Portfolio

In Millions of US Dollars

Committed Disbursed

IFC IFC

FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.

2005 PNG MicroFinance 0.00 1.20 0.00 0.00 0.00 0.00 0.00 0.00

Total portfolio: 0.00 1.20 0.00 0.00 0.00 0.00 0.00 0.00

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic.

2005 PNG MicroFinance 0.00 0.00 0.00 0.00

Total pending commitment: 0.00 0.00 0.00 0.00

108

Annex 14: Country at a Glance

109

110

Annex 15: Maps

PAPUA NEW GUINEA – URBAN YOUTH EMPLOYMENT PROJECT