Second Stakeholders Meeting for Amendment to Sindh PPP Act 2010

and Review of AAS Program

Facilitated by Baela Raza Jamil-ITA- Technical Adviser (honorary) and

Reform Support Unit (RSU) November 25, 2013

Under Performing Schools of Sindh

Low Performing Government Schools Functional =41,697 –Closed 5697 - SEMIS

Responsei. Improving Systems and Performance of E&LD

ii. Expanding Partnerships(PPPs) for Systemic Improvement for Quality, Equity & Access (ECE to Secondary levels)

Low Enrolment Low Learning Outcomes

Poor Governance

2

Poor Facilities

National & Sindh Education Profile

(ECE,Primary & Middle) - Table : GER ECE< NER Primary, NER Middle PSLMs 2011-2012

REGION AND PROVINCE

GER ECE, NET PRIMARY and Elementary Level ENROLMENT (PERCENT)

2011-2012GER ECE

2011-12NER Primary (Age 6-10)

2011-12 NER Middle (Age 11-13)

MALE

FEMALE

BOTH

MALE

FEMALE

BOTH

MALE

FEMALE

BOTH

Pakistan 43 41 44 72 63 68 41 33 38

Punjab 49 50 50 77 72 74 43 38 40

Sindh 33 31 32 65 53 59 39 29 34

KPK 39 45 41 72 59 66 41 30 36

Balochsitan 25 41 30 59 36 49 32 14 24

ANNUAL STATUS OF EDUCATION IN SINDH

4

• ..

Key Indicators Sindh- Where we are and Where we want to be?

SOURCE: PSLMs 2011-12

Teacher presence

Student attendance

Functioning facilities

2018 Baseline

2018 Baseline

2018 Baseline

Enrolment (6-10 years) 2018

5 Source: ASER 2012

83%Govt.

60%Govt.

?

?

?

?

Toilet 48 %Water 56 %B.Wall 65 %

59%OVERALL

6

PPPs - mostly with partners’ funds PPPs- with Government FundsLo- autonomy for Partners in: Management Hi - Autonomy for Partners in: Recruitment; transfers; Changes in systems Management; Recruitment /transfers Minimal Transfer of resources (SMCs only) Changes in systems

Partners bringing in resources Transfer of Govt. ResourcesHi to Lo Accountability – performance Hi Accountability – Performance

Adopt a School Sch. Imp. Partnerships School Consolidation Sindh Educ. Foundation NGOs/Donors through E&LD RSU/Partnerships-SEF as Tech. Facilitator + AAS program

Types of PPPs for School Improvement

One off” PartnershipsBased on Powerful linkages SMB- IRC KhairpurEndowments Not scalable

More autonomous modelsFinancial transfersfrom govt. to partnersUnder PPP Act 2010 AAS-Charters/ Academies

Low learning

outcomes

Poor Facilities

Poor Governan

ce

Low enrolmen

t

Sub-Optimal Public Sector Schools

Continuum of PPPs – Low to High in Sindh

Low learning outcomes Insufficient and Poor Facilities Poor Governance Low enrolment (esp. girls)

LO- AutonomyHi Responsiblity

Hi- AutonomyHi Responsiblity

91% Primary Schools 5% Middle Schools 3% Second. Schools .3% Higher Sec.Schools Low transition rates

7

School Partnerships Models – Triggered by:

SEF (Facilitator/Capacity

building partner)E&LD Provincial

Director E&LD District

Adopters (Many)

E&LD Provincial

District SIP – Partner

Adopter(All SIP programs

through partnerships-

INGOs/NGOs - SMB-)

District Government

EDO –DEO District Adopter

(IRC)

We have 3-4 models with different agencies – volume small – what is desirable ?

AAS Agreement SEF 2012 –

Part IParties – School/s

Preamble – purpose

Part II Roles and Responsibi

lities

Part III Governanc

e and Duration .

Part IVIndemnificat

ion & Adopters

cannot sub-contract

Key Actors Provincial Govt. E&LD

Director –Division DEO- District

Adopter

Duration Up to 10 years Performance based Exit with 3 months notice

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Suggestions to Improve Agreement for AAS

Parts of the Agreement

• AAS Agreement has 4 parts• Part I (Pg. 1) relates to the parties and the

preamble stating the purpose of adoption and the specific school with SEMIS code

• Part II about the ’obligations’ of the a) Govt. b) Adopter, c)District Govt. (as enabler) and d) SEF(facilitator)

• Part III about the composition and purpose of the Steering Committee and duration of the agreement

• Part IV covers Indemnification (of Govt. E&LD) for loss or damage and Responsibility of the adopter not to assign any part of the agreement to a ‘third party”

Suggestions for Amendment Part I: needs to have terms amended and defined viz. ‘upgrade”, means something specific as education vocabulary; Schools will be “developed” by the adopter needs to be defined as a menu of options AAS- Objective is improving student learning outcomes through SDP-.may need to be rephrased /elaborated - Part II. 1.1-1.4. Govt. provincial: all strategic tasks assigned to the province whereas the school may be very distant – some reworking is needed with strategic principles assigned and closer district level responsibilities –1.1 SDP is not the driver of capital expenditure – only minor op-ex ones- so a rethink there too; 1.2 amend ‘the adopter is ‘allowed entry to government schools’ – it is a defensive statement, -the tone and wording must change in an official government’s scheme 2.1 gives the impression that Supervisor /ADEO are off the hook so reword this sentence too 2.2 Have the SMC rules been amended to ensure that “adopted schools have a Patron’ if not this may be important to amend too 2.10- can be done in the rules for 25 A Sindh Compulosry Free Education Act 2013 3.1-3.3 Some of the operational responsibilities be reassigned to district level from 1.1-.to-1.4 (Provincial) 4.1-4.9 SEF is a technical facilitator of many important areas – Part III – 5.1 Steering Committee does not have Special Secretary (schools) and not the relevant Director /Division and DEOs. From the districts where schools are adopted . 5.4 should read as Coordinator AAS- SEF and the District E&LDSignatures to include: Adopter; Director of Schools; EDO/DEO’ SEF and Special Secretary and Secretary E&LD s •

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Suggestions on Institutional Modalities

• School Improvement Programs through a variety of PPPs – AAS – through SEF, District E&LD;Provincial E&LD – SIP through NGOs/INGOs/Donors through E&LD– Special SIPs – with other modalities through E&LD-

• Institutional Modalities – – A) SEF -RSU (SEMIS) with other line depts. – B) RSU & E&LD– C) PPP Node in the E&LD working with RSU to engage with the PPP unit if needed with transparent and responsive mechanisms in place.

• PPP Node establishment a must within E&LD for implementation of the PPP Act 2010

• SEF M.D’s strong advice for a coherent modality with Govt. in the driving seat- SEF seeks to continue with the AAS with buy in from partners/donors to upgrade more govt. schools at each level and expansion beyond Karachi (annex SEF Note on AAS recommendations)

Decisions at Stakeholders 2nd meeting November 25 2013 • SEF AAS to remain with goodwill and confidence of adopters; why shift a good practice – improve it. • EFS- a section 42 Company may step into other/new School Improvement Programs (SIP) through PPPs (UK 40 mill.

facility) • Draft Policy for AAS to be designed for consideration – flexible and accountable • Agreement of AAS to be amended as more proactive – balanced; increased responsibility of district office • Small AAS schemes can be stand alone and not be part of the PPP Act 2010 – larger programs of AAS – above a certain

funding ceiling may qualify or chose to be part of the PPP Act • Innovative programs of adopters to be considered and shared across SEF and PPP Node in E&LD for PPP Act 2010

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2ND MEETING OF STAKEHOLDERS NOVEMBER 25TH 2013

PPP Act 2010 Proposed Amendments

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Definition of PPPs in the PPP Act 2010 “A partnership carried out under a Public-Private Partnership Agreement between the public sector represented by an Agency and a private party for the provision of an infrastructure facility, management functions and / or service with a clear allocation of risks between the two parties”

Task: To align and amend the PPP Act 2010 with the definition above- services marginalized in a largely infrastructure driven act with a bias towards mega projects

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PPP Act-Policy- Governance, Institutional & Financial Arrangements

• Each PPP Project to have an Agreement- & Project Implementation Unit in

• PPP Node in Department- Not in place-

• PPP Unit in Finance Dept.

• PPP Board

PPP Act2010

PPP Policy 2011 (rules embedded

here )

Viability Gap Fund

Project Development Facility Fund

PPP Unit – Objectiveshttp://www.pppunitsindh.gov.pk

In particular the PPP Unit was established to achieve following objectives:• Promoting social development and inclusive economic growth through development

of infrastructure;• Ensuring sustainable long-term funding for infrastructure development through

mobilization of private investments;• Ensuring technical, economic and financial viability of infrastructure projects through

adequate project preparation;• Improving the efficiency of management, operation and maintenance of infrastructure

facilities through introduction of modern technology and management techniques;• Achieving a larger scope and better quality of infrastructure services for end users

through the additional financial and human resources mobilized from the private sector;

• Ensuring financial sustainability of infrastructure services through full cost recovery supplemented by viability gap funding (VGF), if necessary; and

• Protecting the best interests of all stakeholders including end users, the Government and the private sector. 13

PPP Unit- a happening Unit! http://www.pppunitsindh.gov.pk

• Legal Framework – Law- Policy – (Rules)

• Institutional Framework– PPP Unit/ Finance-Dept.– PPP Node- Line Depts.

• Regulatory Framework– PPP Board

• Financial Support– Project Development Facility (PDF) Fund – Viability Gap Fund (VGF) – VGF Guidelines- Sindh – 4.6 (p.9): VGF can be financed through the

budgets, gifts, grants, transfers or by any other means the Finance Dept. deems appropriate -

– some donors can provide grants for VGF

•

•

14

•Projects under PPP Act 2010 •2 operational rest in pipeline •Hyderabad MirpurKhas Dual Carriageway (HMDC) Project •Jhirk Mulla Katiar Bridge and Link Road •NICH Safety & Security •Sindh Nooriabad Power Project •Run-of-the-River Hydro Power Project at Rohri Canal RD-15 •Karachi Thatta Dual Carriageway •Food Storage - Silos •Five (5) 20MW Solar Power Projects •Existing Gas Based Power Projects •Bus Rapid Transit System (BRTS) Karachi •Khairpur Khajoor Mandi (KKM) Project •Hyderabad Tando Muhammad Khan (HTMK) Dual Carriageway

15

PPP Cycle of

Procurements

Source: VGF Guidelines 2012 –GoSindh p.7

Financing http://www.pppunitsindh.gov.pk/site/index.php?pid=25

Project Development Facility Fund

To enable departmental PPP Nodes to undertake feasibility tudy and related project preparation Project Development Fund has been created. Furthermore, to support the execution of projects of socio-economic significance, which the government agencies would otherwise either not initiate or be able to complete, Viability Gap Fund has been created. Both of these funds would encourage the agencies/departments to pursue the government’s objectives regarding PPPs.

16

For the PPP Nodes to undertake feasibility study and related project preparation Project Development Fund has been created. Furthermore, to support the execution of projects of socio-economic significance, which the government agencies would otherwise either not initiate or be able to complete, Viability Gap Fund has been created. Both of these funds would encourage the agencies/departments to pursue the government’s objectives regarding PPPs.

Viability Gap Fund (VGF) Guidelines 2012– Sindh • 2.1The VGF will provide the funds for those projects approved by the Government that

are economically viable but financially unviable. The funds shall be disbursed to the private sector operator/ project company which has been contracted to carry out the project under any PPP variants mentioned in the Sindh PPP Act, 2010.

• 2.2 The VGF will therefore cover all of the contractual payment where the users or beneficiaries are not required to pay. Alternatively, the VGF will pay the difference between the contractual payment necessary for the Developer to recover his costs and to meet his agreed return on investment and the estimated amount that will be recovered from the users. This will entice the interest of the private sector in important public infrastructure projects as they will be satisfied that there are sufficient funds to allow successful project implementation. It will also provide the necessary reassurance to the lenders of the project company by enhancing the creditworthiness of the project.

• ( Dept of Finance GoSindh: p. 6)

17

4.6 (p.9): VGF can be financed through the budgets, gifts, grants, transfers or by any other means the Finance Dept. deems appropriate -

some donors can provide grants for VGF

PPP Act 2010- Comprises

18

• Chapter I: Preliminary • Chapter II: Organizational Framework • Chapter III: Project Delivery Process• Chapter IV: Procurement • Chapter V: Finance • Chapter VI: Other Issues • Schedule I

“Services” – to be consistently added to the PPP Act 2010

• Definition Proposed for Review and Finalization• Option A Preferred Definition by Stakeholders – Generic to All sectors • Service: Service means any of professional activities concerning imparting of

public benefits in publicly owned institution/facility and/or programme related or ancillary to the objective of that facility (s) and institution (s).

• Option B• Service means an act of support that may be intellectual, technical or strategic in nature required to

ensure quality of a project, programme, facility or institution. • Examples of services in education may include intangible products such as technical assistance,

consultancy, planning, expertise, content development, training, strategy development, marketing, transportation, procurement, incubation ideation units etc.

• Sectors listed in Schedule I will have domains of work for which specific professional services may

be required.• By Amima Saiyid- TRC/PCE and Naveed Sheikh

19

“Services” as defined to be consistently added to the PPP Act 2010 for amendment

• Definition Proposed and Finalized by Stakeholders • Service means “any of professional activities concerning

imparting of public benefits in publicly owned institution/facility and/or programme related or ancillary to the objective of that facility (s) and institution (s) (as per list in Schedule 1) .

– Amima Saiyid- TRC/PCE and Naveed Sheikh

20

Amendments Proposed A. Add services as agreed and defined by stakeholders throughout the Act where deemed appropriate - to be considered by the Board /Law Dept.

B. Chapter I – Preliminary – Definitions: clauses to be considered for amendments p) Local Govt. reference to be updated t) Add services after infrastructure x) ..community facilities and services for improving access, quality and equityAfter z) insert and reorder alphabets aa) “Service” means any of professional activities concerning imparting of public benefits in publicly owned institution/ facility and/or programme related or ancillary to the objective of that facility (s) and institution (s)- as per list in Schedule I

bb) Sindh Public Procurement Rules

cc) “Viability Gap Fund” means the funds from the Government which are made available to the private party to cover revenue and human resource/capacity/materials shortfalls where the users or beneficiaries are not required to pay for socio-economic benefits through grants, subsidies or guarantees;

21

Amendments cont... • C. Suggestions on the

Board-Governance • 1. The composition is not balanced

to reflect PPPs in true spirit; majority members from public sector headed by the CM

• 2. CM may be over-worked political representative with potential conflict of interest

• 3. Instead of the CM, CS to select the 3 Private sector members and sector specialist

• 4. Private sector and sector specialists must be represented with the right generic profiles across all sectors- especially social sectors

• D. Chapt 3 PROJECT DELIVERY PROCESS Article 16 – (3) The draft Public-Private Partnership Agreement shall include but not be limited to the following provisions, as applicable:

• An additional clause be added after XXI • XXII: Type and amount of service

relevant to the sector ensuring baseline, midterm and end of term target/s assessment for outcomes based performance

• •

22

E: Schedule 1 Proposed additional sectors

23

see sections 2 (j) ]INFRASTRUCTURE & SERVICE SECTORSCanals or dams; Education –(Pre-School to Higher Sec. level 1-12 , non-formal and Higher/tertiary Education) ; (TVET already including in STEVTA Law) Special EducationHealth facilities; Housing;Information technology; Land reclamation;Power generation facilities; including Coal and power generation Roads (provincial highways, district roads, bridges or bypasses); Sewerage or drainage;Solid waste management;Sports or recreational infrastructure, public gardens or parks; Trade fairs, or cultural centers; Tourism and Resort DevelopmentUrban transport including mass transit or bus terminals; Water supply or sanitation, treatment or distribution; and Wholesale markets, warehouses, slaughter houses or cold storages.

PPP Act 2010 Amendments to be aligned to the Elaborate – Institutional /Governance Arrangements

• Amendments proposed in the PPP Act 2010 would have to be reviewed by legal experts and reflected in all its support documents/facilities viz. – PPP Policy 2011 – PPP Board – Viability Gap Fund (VGF) – Project Development Facility – Fund- – PPP Node and Project Implementation Unit (PIU) TORs

Routing of Amendments proposed : a) cleared through the Law dept. and b) presented to the PPP Board formally– 24

Schedule 1 Amendments proposed

25

see sections 2 (j) ]INFRASTRUCTURE & SERVICE SECTORSCanals or dams; Education –(Pre-School School 1-12 , non-formal and Higher Education) ; (TVET already including in STEVTA Law) Special EducationHealth facilities; Housing;Information technology; Land reclamation;Power generation facilities; including Coal and power generation Roads (provincial highways, district roads, bridges or bypasses); Sewerage or drainage;Solid waste management;Sports or recreational infrastructure, public gardens or parks; Trade fairs, or cultural centers; Tourism and Resort DevelopmentUrban transport including mass transit or bus terminals; Water supply or sanitation, treatment or distribution; and Wholesale markets, warehouses, slaughter houses or cold storages.

PPP Act 2010 has an Elaborate – Documentation & Institutional

Paraphernalia

• Amendments proposed in the PPP Act 2010 would have to be reflected in all its support documents viz. – PPP Policy 2011 – Viability Gap Fund (VGF) – Project Development Facility – Fund

Routing of Amendments: The proposed amendments will have to be routed through Law dept. and presented to the PPP Board formally– – TORs of Board, PPP Unit and PPP node would have to be amended as

well if there are any implications for the text and definitions 26

What Impact are We Looking for from PPPs?

• This needs to be elaborated by :– Sub-sector – Types of Services – Key Indicators

• Must have appropriate institutional support and mechanisms

–for implementation • Must be performance and accountability oriented which can

be measured and shared publicly 27

ImpactOutcomeMore Children in Schools

More Children persisting in schools

More Children learning well .. With measurable outcomes

28

Journey towards Higher Outcomes through PPPs

Higher enrolment

Higher attendance

Teacher presence

Facilities improved- expaned

Quality Improved –

Higher Learning

outcomes

Poor teaching

Insufficient facilities

Low Attendance

Children not in school

Low level of learning

29http://www.globalpost.com/sites/default/files/imagecache/gp3_full_article/photogallery/gallery_1763684/Pakistan_06_02_09_Stuteville_InsidePoorGovtSchool_EDIT.jpg

Next Steps – Final Meeting and Presentation to the Minister /CS/ACS

30

Key Steps Decided 1. 2. 3.

Date of Final meeting prior to the Final Presentation of the task ,process and outcomes

Venue

List of All Stakeholders by Institution

• HANDS

• Sindh Education Foundation

• SZABIST

• TRC

• UNICEF

31

32

Thank you

VGF Definitions –Infrastructure Oriented- need to expand them to services and soft areas

• The amount of money needed to fund the ongoing operations or future development of a business or project that is not currently provided by cash, equity or debt. Funding gaps can be covered by investment from venture capital or angel investors, equity sales, or through debt offerings and bank loans.

• In Context Of Public Private Partnership:• The Viability Gap Funding Scheme provides financial support in the form

of grants, one time or deferred, to infrastructure projects undertaken through public private partnerships with a view to make them commercially viable. GoI has established a Viability Gap Fund to aid the PPP infrastructure projects which face the viability gap due to inherent nature of the project. The Scheme is administered by the Ministry of Finance. (Govt. of India)

33