4. Assessment of Risk to Development Outcome
Risk to Development Outcome Rating: Moderate
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The follow-on GOP program, Programa Nacional de Inversion de Salud (PRONIS), built on the lessons learned and know-how from PARSALUD. Financial sustainability of the program does not seem to be a concern, given that PARSALUD was already largely funded by domestic resources and funds have already been allocated for the new program investments. While the Project Coordinator and the Technical Coordinator have been transferred, many of the key PARSALUD personnel are now working on PRONIS, ensuring greater continuity of the follow-on investment program with PARSALUD. PRONIS is also supervising the completion of the outstanding PARSALUD consultancies and civil works to be delivered in 2016.
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PRONIS focuses on 748 key health centers and facilities, many of which PARSALUD rehabilitated or improved. However, contrary to PARSALUD, PRONIS is not specifically targeted to the poorest regions and it does not support an explicit, a priori objective or topic. The regions will identify the specific outcomes of focus for the investments depending on their demographic and epidemiological characteristics and political priorities.
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PARSALUD put in place systems to ensure sustainability at the local level, by promoting and supporting decentralization of responsibilities and functions and building capacity for better use of resources for maternal and child services, which would benefit the regions even in the context of PRONIS. However, the high turnover of staff in the regional administrations and the irregular progress of some of the indicators pose some questions on sustainability of achieved results if a systematic strategy to address those is not adopted. Nutrition and anemia in particular remain problematic at the national level. Therefore, ensuring more systematic progress on those indicators, especially among the most vulnerable population, would require alignment of national, regional and local commitment.
5. Assessment of Bank and Borrower Performance 5.1 Bank Performance
(a) Bank Performance in Ensuring Quality at Entry
Quality at Entry rating is: Moderately Unsatisfactory.
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The project suffered from a long preparation time. The Concept Note review was held in November 2005, but appraisal and negotiations were only conducted in December 2008. However, the time gap between the end of PARSALUD I and the beginning of phase II was mainly due to changes in the political arena and consequent inconsistent commitment from the GOP to maternal and child health and nutrition through the program. When the project regained political traction, the project was appraised, negotiated and approved by the Board of Directors within 3 months (December 2008-February 2009). Once approved by the GOP, the Loan Agreement was signed in November 2009 and declared effective in December 2009.
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The long preparation time might have been used more effectively for persuading the GOP to incorporate more of the “soft interventions” that characterized PARSALUD I. The main focus of the APL 2 was on infrastructure investment, reflecting a strong interest of the GOP. This was used as an entry point to incorporate some activities to support a reform agenda, evidence-based interventions and changes of practices at the individual and local level. These were in line with the highly effective activities promoted by PARSALUD I, although in PARSALUD II they had lost the prominence they had in phase I.
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Finally, more effort could have been placed to address suggestions from the QER and the DM, which proved to be important during implementation. Concerns were raised during the QER and DM with regard to the need to strengthen the M&E capacity of the counterpart and the M&E design, and to better assess the project’s fit with the new institutional environment, evaluating the risks that this entailed. These concerns were only partially addressed. Additional measures to strengthen M&E capacity of the counterpart had to be taken during the MTR. The RF reflected a baseline which was outdated by the time the project started and it included a high number of indicators; yet it could have more clearly incorporated some IOIs to support the achievement of PDO 1. Institutional constraints, such as the rigidity of the SNIP, were underestimated by the project. Given that the project supported a broader program, any substantial changes would have required additional approvals by SNIP causing further details; hence, the RF was never revised during preparation, reflecting a baseline taken in 2005 and targets set against that baseline.
(b) Quality of Supervision
The quality of supervision is rated Moderately Satisfactory.
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The task team conducted regular supervision missions approximately every six months to monitor the implementation of the project. Financial management supervision missions were at times held separately. In addition to formal missions, the team was in close communication with the PIU. Records of ISRs and Aide Memoire were kept, although in some instances these were not available in the Bank’s online system.
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The ISRs reported progress on most of the indicators, although data on two PDO indicators only became available in late 2014, at which time five IOIs were dropped. The team was aware of the outdated baseline and targets and repeatedly asked the counterpart to update the RF; however, while changes were made to the RF, the counterpart did not agree to revise the baseline. The team could have taken the opportunity of the restructuring in 2011 to address this issue so as to better be able to monitor the performance of the project.
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Given that the project triggered the Environmental Assessment (EA) (OP/BP/GP 4.01) and the Indigenous People Safeguard Policies (OP 4.10), environmental and social safeguards were monitored. An environmental safeguard mission carried out in June 2013, reported that, although the EA’s recommendations were not fully met, the seriousness of the counterpart on environmental issues and on their proactivity was remarkable. The mission produced a series of recommendations aimed to systematize the PIU’s efforts, which were ratified and implemented by the counterpart. A social safeguard supervision mission carried out on May 2013, made recommendations to improve the use of waiting homes for deliveries (casas de espera) and to increase the sustainability of the mobile health care teams (mobile brigades), both of which were adopted by the counterpart.
(c) Justification of Rating for Overall Bank Performance
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On balance, the overall Bank performance is rated as Moderately Satisfactory.
5.2 Borrower Performance
(a) Government Performance
Government Performance: Moderately Unsatisfactory
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The project could not count on constant political support. After a long preparation period in which government commitment to the project was variable, an incoming Minister of Health in October 2008 ensured that MINSA supported the investment program during its implementation, since it aligned well with the new political priorities. Throughout the life of the project, four ministers of health were in power. Laws and regulations were approved timely and Management Agreement with the regions were also finalized and implemented in line with the decentralization. While support from the highest levels of the Ministry was more stable, commitment from the Sub-Ministry level was more variable, requiring additional efforts from the PARSALUD team and the co-founders to keep momentum and ensure continuity of implementation.
The political economy of the investment system in Peru and the relationship between MINSA and MEF/SNIP posed some difficulties for both project design and implementation. At the time of project preparation, MEF and SNIP, which had recently been instituted, were strongly focused on hard investments rather than incorporate soft elements in investment program. Unfortunately, given the SNIP requirements at the time, options to adjust the project in line with “soft” interventions were very limited for MINSA. For the same reasons, even though aware that the RFs for the project and for the program should have been improved, MINSA could not support the request to update the baseline, given that it would have required additional political approvals by SNIP. During the last supervision mission in December 2015, the team was informed that MEF had not secured funds for key PARSALUD personnel to be in place during the grace period (until April 2016); the task team urged MINSA to address this issue. In addition, while in 2013 MEF had in principle agreed on increasing the proportion of loan resources to be used under Component 2 (which was supposed to be 6% for the Pari-Passu), this commitment never materialized and MINSA was not successful in its negotiations with MEF on this aspect. As documented in the ISRs, financial planning and coordination between MINSA and MEF remained an issue throughout the project.
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Coordination between MINSA and the project team was variable depending upon the political changes within MINSA. Tensions reached the highest levels in 2012, when the Project Coordinator left the PIU, but overall improved after the appointment of a new Minister of Health in the same year. In addition to informal and ongoing dialogue between MINSA and the PARSALUD team, representative of MINSA participated in the Steering Committee that regularly reviewed progress of the program, together with MEF, PARSALUD, and regional representatives. From 2011, improved planning and coordination between MINSA and the project team allowed for a reduction in the number of requests for No Objections and a smother processing of the same by the Bank, which resulted in less delays in implementation of Component 2.
(b) Implementing Agency or Agencies Performance
Implementing Agency Performance Rating: Moderately Satisfactory
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PARSALUD PIU, an independent unit created within and by MINSA, was responsible for the technical coordination, planning, M&E, financing and administration, including procurement, contracting and payments, and accountability for the program; however, it had limited decision making power. The execution of the technical component remained under the relevant Directories of MINSA. The coordination capacity of the unit was assessed as satisfactory from the start, given prior experience with coordination of the first phase of the program and with the related Bank procedures.
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The unit was adequately staffed. It included approximately 70 employees in 2015, in addition to some consultants. Its key personnel have been pretty stable throughout the life of the project. The Project Coordinator changed in 2012, after a political change in MINSA. The new coordinator used to be the Technical Coordinator of PARSALUD, which ensured institutional memory and consistent support to the initiative. Some issues of coordination and dialogue between different teams within the unit could be detected.
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The PIU complied with financial management procedures and reporting. The Finance and Administration Unit was appropriately staffed (6 employees) since the start of the project. For the first two years, integration of the information system and the improvement of the TASK POA to issue Interim Financial Reports and Statement of Expenditures was not complete. However, the PIU was still able to provide timely and reliable information for project monitoring through Excel. Transactions were well documented and financial reporting done in accordance with Bank requirements, as the financial audits confirmed.
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The unit was proactive in flagging any suspected cases of collusion in procurement. For example, an INT case was opened in April 2011 on risks during execution of works in the Region of Huancavelica. PARSALUD II timely identified and corrected fraudulent practices from an enterprise and it responded positively to all requests made by the Bank, designing and implementing a Governance and Anti-Corruption Action Plan.
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The unit was very active in addressing social and environmental safeguards. For example, even before the supervision mission in 2013, the unit had a dedicated and growing team that not only monitored compliance with the EA, but had also developed practical tools to be used during construction works to appropriately deal with solid waste and water management. The unit had a system to ensure these checklists were available to the construction companies and it monitored timeliness of use and compliance. The unit supported the development of a technical norm on liquid waste management, training, and the adoption and monitoring of plans for adequate solid waste and water management in facilities already constructed and those being constructed.
(c) Justification of Rating for Overall Borrower Performance
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On balance, the overall rating for the Borrower Performance is: Moderately Satisfactory.
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