Indonesia: Second Decentralized Health Services Project

Transcription

1 Completion Report Project Number: Loan Number: L2074/75-INO September 2014 Indonesia: Second Decentralized Health Services Project This document is being disclosed to the public in accordance with ADB s Public Communications Policy 2011.

2 CURRENCY EQUIVALENTS Currency Unit rupiah (Rp) At Appraisal At Project Completion (21 November 2003) (31 December 2013) Rp100 = $ $ $1.00 = Rp8,560 Rp12,224 ABBREVIATIONS ADB Asian Development Bank BAPPEDA Badan Perencana Pembangunan Daerah (Provincial/District-level Development Planning Agency ) BAPPENAS Badan Perencanaan dan Pembangunan Nasional (National Development Planning Agency) BKKBN Badan Kependudukan dan Keluarga Berencana Nasional (National Family Planning Coordinating Board) DALY disability-adjusted life year EIRR economic internal rate of return ENPV estimated net present value KPPN Kantor Pelayanan Perbendaharaan Negara (Regional Treasury Office) MDG Millennium Development Goal MODS Desa Siaga Operational Models MOH Ministry of Health NOTES (i) The fiscal year (FY) of the Government of Indonesia and its agencies ends on 31 December. (ii) In this report, "$" refers to US dollars. Vice-President S. Groff, Operations 2, Director General J. Nugent, Southeast Asia Department (SERD) Officer-in-Charge N. LaRocque, Human and Social Development Division, SERD Team leader Team member B. Lochmann, Senior Social Sector Specialist, SERD M. Camara-Crespo, Project Analyst, SERD L. Marin-Manalo, Operations Assistant, SERD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

3 CONTENTS Page BASIC DATA MAP i vi I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 1 A. Relevance of Design and Formulation 1 B. Project Outputs 3 C. Project Costs 5 D. Disbursements 6 E. Project Schedule 7 F. Implementation Arrangements 7 G. Conditions and Covenants 7 H. Consultant Recruitment and Procurement 8 I. Performance of Consultants, Contractors, and Suppliers 8 J. Performance of the Borrower and the Executing Agency 9 K. Performance of the Asian Development Bank 9 III. EVALUATION OF PERFORMANCE 9 A. Relevance 9 B. Effectiveness in Achieving Outcome 10 C. Efficiency in Achieving Outcome and Outputs 11 D. Preliminary Assessment of Sustainability 12 E. Impact 13 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13 A. Overall Assessment 13 B. Lessons 14 C. Recommendations 14 APPENDIXES 1. Design and Monitoring Framework Projected and Actual Loan Disbursements Annual Disbursements Project Implementation Schedule Status of Compliance with Loan Covenants Summary of Gender Equality Results and Achievements Use of National Consultants for Project Management Procurement of Civil Works and Goods Project Outcome Indicators Recalculation of Economic and Financial Viability Project Organizational Structure 61

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5 BASIC DATA A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower 5. Executing Agency 6. Amount of Loan 7. Project Completion Report Number Indonesia Loan 2074 (OCR) and 2075 (ADF) Second Decentralized Health Services Project Republic of Indonesia Ministry of Health Loan 2074 $46,372,873 Loan 2075 SDR24,400,954 ($37,950,347) PCR: INO-1491 B. Loan Data 1. Appraisal Date Started Date Completed 2. Loan Negotiations Date Started Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness In Loan Agreement Actual Number of Extensions 6. Closing Date In Loan Agreement Actual Number of Extensions 7. Terms of Loan Loan 2074 Interest Rate Maturity (number of years) Grace Period (number of years) Loan 2075 Interest Rate Maturity (number of years) Grace Period (number of years) October October October November November December December March March December December LIBOR + 0.6% % per annum (grace period); 1.5% per annum thereafter Terms of Relending (if any) Interest Rate Maturity (number of years) Grace Period (number of years) Second-Step Borrower

6 ii 9. Disbursements a. Dates Initial Disbursement 19 October September 2005 Effective Date 29 March 2005 Final Disbursement 8 August 2014 Loan August 2014 Loan 2075 Original Closing Date 31 December 2010 Revised Closing Date 31 December 2013 Time Interval months months Time Interval 70 months Time Interval 106 months b. Amount Loan 2074 ($) Category Original Last Revised Amount Net Amount Amount Undisbursed Allocation Allocation Canceled Available Disbursed Balance Civil Works 9,784, ,800 9,530, , ,478 6,322 Civil Works (West 8,250,000 (8,250,000) 8,250,000 7,961, ,399 Sumatra) Equipment 2,676,000 2,327, ,816 2,327,184 2,314,692 12,492 Vehicles 16,885,000 1,126,000 15,759,000 1,126,000 1,119,610 6,390 Equipment (West 616,000 (616,000) 616, ,848 3,152 Sumatra) Materials and 505,000 8, ,400 8,600 3,695 4,905 Consumables Training, 10,406,000 9,401,680 1,004,320 9,401,680 9,328,064 73,616 Fellowships and Seminars Consulting Services 5,211, ,500 4,713, , ,257 7,243 and System Development Consulting Services 520,000 (520,000) 520, ,918 27,082 and System Development (West Sumatra) Project Management 5,414,000 5,812,042 (398,042) 5,812,042 5,784,873 27,169 Project Management 80,585 (80,585) 80,585 80,829 (244) (West Sumatra) Project Management 142,958 (142,958) 142, ,818 5,140 (Extension) Project Management 50,000 (50,000) 50,000 49, (West Sumatra - Extension) Front End 324, , , ,000 0 Interest and 9,225,000 4,700,000 4,525,000 4,700,000 3,627,580 1,072,420 Commitment Charge Unallocated 4,370, ,278 3,610, , ,278 Community Health Program 13,800,000 (13,800,000) 13,800,000 13,796,778 3,222 Total 64,800,000 48,669,627 16,130,374 48,669,627 46,372,873 2,296,754 Note: Total undisbursed amount of $2,296, was cancelled on the financial closing date of 8 August 2014.

7 iii Loan 2075 ($) Loan 2075 Category Original Allocation Last Revised Allocation Amount Canceled Net Amount Available Amount Disbursed Undisbursed Balance Civil Works 5,314, ,048 4,850, , ,546 7,502 Equipment 9,172,216 6,267,155 2,905,060 6,267,155 6,322,589 (55,434) Vehicles 1,452,868 1,348, ,329 1,348,539 1,363,681 (15,142) Equipment (West Sumatra) 1,140,555 (1,140,555) 1,140,555 1,167,620 (27,065) Materials and Consumables 275, , , , ,928 6,237 Training/ Fellowship and 11,729,494 8,838,669 2,890,825 8,838,669 8,845,171 (6,502) Seminars Training/ Fellowship and Seminars 165,130 (165,130) 165, ,273 (143) (West Sumatra) Consulting Services and System 3,573,853 2,879, ,976 2,879,877 2,911,283 (31,405) Development Consulting Services and System 249,650 (249,650) 249, ,057 2,593 Development (West Sumatra) Interest Charge 1,179, , , , ,616 0 Unallocated 2,502,561 76,454 2,426,107 76, ,454 Community Health Program 15,753,692 (15,753,692) 15,753,692 15,642, ,109 Total 35,200,000 38,018,551 (2,818,551) 38,018,550 37,950,347 68,204 Note: Total undisbursed amount of $68,204 was cancelled on the financial closing date of 8 August Local Costs (Financed) - Amount ($) 60,592,192 - Percent of Local Costs 77% - Percent of Total Cost 59% C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimate Actual Foreign Exchange Cost Local Currency Cost Total

8 iv 2. Financing Plan ($ million) Cost Appraisal Estimate Actual Implementation Costs Borrower Financed ADB Financed Other External Financing Total IDC Costs Borrower Financed ADB Financed Other External Financing Total ADB = Asian Development Bank, IDC = interest during construction. 3. Cost Breakdown by Project Component ($ million) Component Appraisal Estimate Actual Strengthened regional capacity to ensure the provision of health and family planning and welfare services (Combined Strengthening Maternal and Child Health and Revitalization of Family Planning) More equitable, higher quality, and more sustainable local health services (Improving District Capacity in Managing Decentralization) Strengthened capacity of national government to support decentralized health services (Strengthening Government s Role to Support Decentralization) New Model of Desa Siaga Development Rehabilitation and Reconstruction of West Sumatra Contingency Interest Charges Total Project Schedule Item Appraisal Estimate Actual Date of Contract with Consultants Q Q Civil Works Contract Date of Award Q Q Completion of Work Q Q Equipment and Supplies First Procurement Q Q Last Procurement Q Q Completion of Equipment Installation Q Q Start of Operations Completion of Tests and Commissioning Beginning of Start-Up Other Milestones Q = quarter. 5. Project Performance Report Ratings Ratings Implementation Period Development Objectives Implementation Progress From 19 December 2003 to 31 May 2004 Satisfactory Satisfactory From 1 June 2004 to 28 February 2005 Satisfactory Unsatisfactory From 1 March 2005 to 31 December 2011 Satisfactory Satisfactory

9 v Ratings Implementation Period Development Objectives Implementation Progress From 1 January 2012 to 31 December 2013 On Track On Track D. Data on Asian Development Bank Missions Name of Mission Date No. of Persons No. of Person- Days Specialization of Members a Fact finding/preappraisal 7 18 Jul a, f Fact finding Aug a, f Fact finding 3 23 Sep 3 Oct a, f, g Fact finding Oct a, f Loan negotiations Nov Inception 4 15 Oct a, d, e Special review mission 29 Nov 9 Dec a Inception Jun a, d, e Review mission 1 21 Nov 9 Dec a, d Review mission Jun a Review mission 3 27 Nov 11 Dec a Review mission 4 28 Jan 8 Feb a, d Midterm review 30 Oct 15 Nov a, c, d, e Review mission Jun a, g Review mission 6 25 Mar 1 Apr b, c, e Special review Sep b, d, e Review mission Feb a, b, e Special review May a, b, e Review mission Dec Review mission 9 30 May 2 Jun a Review mission Nov 7 Dec a Review mission Jun a, d Review mission Nov a, d, e Review mission Jul a Special review Feb b Project completion review 21 Apr 2 May b, e a a = health specialist/health economist, b = social sector specialist, c = project implementation specialist, d = national officer (economics, project implementation, finance, procurement), e = project analyst, f = young professional, g = consultant, h = counsel. Source: Asian Development Bank.

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11 I. PROJECT DESCRIPTION 1. The Government of Indonesia (the government) is committed to achieving the Millennium Development Goals (MDGs) by While Indonesia has made considerable progress in improving the health status of women and children, progress at the national level is not replicated in all regions and provincial disparities exist the under-5 mortality rate in 2007 varied from 96 per 1,000 live births in West Sumatra to 24 in Yogyakarta. 1 In 2002, there was also considerable concern that progress with regard to the MDGs related to maternal and child health would slow or even reverse as a result of the government s ongoing decentralization reforms. Since the 2001 decentralization reforms, the main responsibility for managing the health system has been delegated to district governments. In 2003, the government requested the Asian Development Bank (ADB) to finance the Second Decentralized Health Services Project 2 to help improve the health and nutritional status of vulnerable segments of the population, particularly women and children, in eight provinces. 3 The outcome was improved health services in nine provinces and 90 districts and cities. II. EVALUATION OF DESIGN AND IMPLEMENTATION A. Relevance of Design and Formulation 2. The project was highly relevant at appraisal. It was designed at a time when Indonesia had just experienced a major restructuring of the health system involving decentralization, which commenced in 1999 and which shifted responsibility for most health and family planning services to the district level. 4 Although it posed obvious challenges, decentralization was viewed as offering new opportunities to strengthen provincial health and family planning services. Locally adapted reforms gave health care providers more appropriate incentives, skills, supervision, and discretionary authority to offer quality services. The low quality of public health services in Indonesia was viewed as affecting mainly the poor and vulnerable groups and was linked to a range of shortcomings in the health sector, many of which reflected chronic underfunding. 5 The project supported key elements of the government s National Medium Term Development Plan ( ), with emphasis on areas such as health and poverty reduction, and the government s long-term strategy for the health sector. 6 It was anticipated that successful decentralization would increase access to better quality care, particularly for vulnerable groups. The project (i) drew on the experience of the ADB-financed Decentralized Health Services Project, 7 which aimed to help local governments identify their health care needs Government of Indonesia National Report. Child Poverty and Disparities in Indonesia. Challenges for Inclusive Growth. Jakarta. Asian Development Bank (ADB) Report and Recommendation of the President to the Board of Directors: Proposed Loan for the Government of Indonesia for the Second Decentralized Health Services Project. Manila. The eight provinces are South Sumatra, Bangka Belitung, Central Kalimantan, South Kalimantan, South Sulawesi, West Nusa Tenggara, East Nusa Tenggara, and Gorontalo. A ninth province, West Sulawesi, was subsequently added to the project. In May 1999, the Indonesian Parliament adopted the Law on Regional Autonomy (Law No.22/29) and Law on Fiscal Balance (Law No.25/99) requiring decentralization of government services and functions by Consultations during project preparation confirmed that low quality and inadequate services that did not respond to the needs of the local population were important reasons for the low utilization of public health services and that, for the poor, even minimal user fees were an obstacle to the use of health services. Ministry of Health Development Plan towards Healthy Indonesia. Jakarta: Government of Indonesia. ADB Report and Recommendation of the President to the Board of Directors: Proposed Loan for the Government of Indonesia for the Decentralized Health Services Project. Manila.

12 2 and improve the quality of services; and (ii) was viewed as a geographical expansion of the Decentralized Health Services Project. 3. At the time of project preparation in 2003, Indonesia had made strong progress in key health and family planning indicators. However, a number of challenges to achieving the healthrelated MDGs remained, especially in maternal health. Between 1994 and 2002, the maternal mortality rate fell from 390 per 100,000 live births to 307 per 100,000 live births, compared to the MDG goal of 102. Over the same period, the infant mortality rate fell from 57 per 1,000 live births to 35 deaths per 1,000 live births, while the under-5 mortality rate almost halved, from 81 deaths per 1,000 live births to 46 deaths per 1,000 live births. 8 With prompt and proper treatment, most of these deaths could have been prevented. 9 A consistent pattern of interprovincial disparities exists, with the majority of provinces lagging behind the national average. Income disparities are reflected in indicators of child and maternal mortality, which may be due to gaps in coverage of health services between the rich and the poor. 10 The project was designed to support comprehensive reform and capacity building efforts of the Ministry of Health (MOH) and the National Family Planning Coordinating Board (BKKBN) in the context of the ongoing decentralization process. The project was expected to increase the quality and effectiveness of health and family planning services in the project provinces by improving the clinical and managerial skills of health personnel, upgrading health facilities and equipment, and involving civil society in planning and monitoring the delivery of health services. 4. The project design was consistent with ADB s country strategy and program, which emphasized reducing poverty and regional inequalities and promoting human development. 11 ADB s health sector policy emphasized access for all to basic health services that are effective, cost-efficient, and affordable. 12 The policy highlighted (i) the health of the poor, women, and indigenous peoples; (ii) setting clear priorities to ensure the most efficient use of resources; (iii) mobilizing resources for the public health sector; (iv) building managerial capacity; (v) testing innovative approaches; (vi) introducing effective technologies; (vii) focusing on functions that involve public goods; and (viii) encouraging collaboration between public and private health care providers. 5. The project was designed to cover 90 districts and cities in eight provinces. The project incorporated lessons learned from the Decentralized Health Services Project (footnote 7) and other projects being implemented at that time. 13 The lack of professional and managerial skills United Nations Indonesia: Progress Report on the Millennium Development Goals. Jakarta; United Nations Report on the Achievement of Millennium Development Goals New York. The prevalence of moderately underweight children under 5 years of age in the same period decreased from 35.5% to 27.3%, compared to the MDG goal of 18.7%. The percentage of births attended by skilled health personnel increased from 47.2% in 1994 to 68.4% in 2002 (compared to an MDG of 90.0%). The modern-method contraceptive prevalence rate was unchanged at 54.2% between 1994 and 2002, while the total fertility rate decreased moderately from 2.85% to 2.60% during the same period. Most maternal deaths in Indonesia can be traced to delays in (i) making decisions to refer pregnant women to a facility that can manage complications, (ii) finding transport to get there, and (iii) appropriate medical care and blood transfusion. United Nations Children s Fund (UNICEF) MDGs, Equity and Children: The way forward for Indonesia. Issues Brief. Jakarta. ADB Country Strategy and Program: Indonesia, Manila. ADB Policy for the Health Sector. Manila. South Sumatra and Central and South Kalimantan participated in previous ADB-supported health sector projects. East and West Nusa Tenggara were included to help integrate inputs of various externally financed interventions into a more comprehensive and efficient local health system. Bangka Belitung and Gorontalo were two newly created provinces that required additional support to develop managerial capacity for health services.

13 3 at the provincial level emerged as the biggest challenge, which implied the need for a technically strong project implementation unit to support district implementation units. Like its predecessor, the project was designed to support full ownership by district and city governments through detailed subproject proposals and substantial expected budget contributions Changes in scope. The project design allowed flexibility to respond to major health policy changes. The project underwent two major adjustments. The first, upon completion of the midterm review in 2007, was to support the desa siaga (alert village) program which uses a community mobilization approach to promote safe pregnancies and deliveries at the village level. The government launched the program in 2006 and aimed to extend it to 80% of the country s 75,000 villages by 2015 through training of village midwives, investments in health services, and improved access to emergency obstetric care. 15 The second change was in the aftermath of the 2009 earthquake in West Sumatra, when the government requested ADB to utilize savings of loan proceeds of $15.6 million for the reconstruction and rehabilitation of 102 health facilities and the provision of medical and nonmedical equipment for puskesmas (community health centers) and poskesdes (village health posts). B. Project Outputs 7. The project was implemented in two phases because the midterm review in October 2007 led to a restructure of the project. During the first phase ( ), the project had three outputs: (i) strengthened regional capacity to ensure the provision of health and family planning; (ii) more equitable, higher quality, and more sustainable local health services; and (iii) strengthened capacity to support decentralized health services. Activities during the first phase included (i) capacity building in clinical skills such as training and fellowships for doctors (including specialists for master s and doctorate degrees), and training and fellowships for midwives and nurses; (ii) capacity building in managerial skills in order to better identify local health and family planning needs and poor and other vulnerable groups, and address barriers to access by the poor; and (iii) investments in health care infrastructure through the rehabilitation of health centers and provincial training facilities, and the procurement of medical equipment and vehicles including ambulances. 16 During the second phase ( ), upon completion of the midterm review, the project had five outputs (paras. 8 13) and was to develop professional capacity, strengthen regional capacity for referral hospitals and training facilities, and advocate health sector reforms at the provincial level. Overall, the project performed well and achieved most of its targets. 17 Additional benefits should be noted, such as the reconstruction of health facilities in the aftermath of the 2009 earthquake in West Sumatra. At its conclusion, the overall physical completion was 98.7%. 8. Output 1: Strengthened maternal and child health services. This output provided capacity building focusing on neonatal care, particularly in the management of low birth weight Regional governments were required to prepare annual plans in order to access project funding. These were to be reviewed by the central government to ensure compliance with obligatory functions and minimum service standards. About $29.5 million was reallocated, out of which about $21.2 million was utilized for block grants (implemented during ) including salaries of facilitators, small-scale equipment for poskesdes (village health posts), and training for midwives. About 60% of the block grant funds were allocated for civil works (the construction of poskesdes) and the remainder for operational costs for desa siaga. Most of the project s first-phase outputs were completed during the project s second phase and are therefore reported together with those of the project s second phase. According to outputs and performance indicators agreed upon during the midterm review.

14 4 and neonatal asphyxia in districts with low indicators for maternal and child health. Training at the district level involved 6,224 midwives and 243 health center teams. The project financed the construction and renovation of eight health centers and nine subhealth centers, eight midwife stations, and 13 village health posts. At the provincial level, hospital teams were trained in emergency obstetric care and provided with equipment. 9. Output 2: Enhanced community participation for improved maternal and child health (desa siaga block grants). Desa siaga aims to ensure that each childbirth is attended by a skilled midwife at an adequate health facility through increasing community awareness and preparedness. The four pillars of desa siaga are (i) development of notification systems in which all pregnant women are identified and recorded, (ii) establishment of voluntary blood donor systems in villages, (iii) community transportation and communications system identifying volunteers to assist in transporting pregnant women to health centers, and (iv) a financial support system in which funds are collected to encourage facility-based deliveries. 18 The project recruited and trained desa siaga facilitators in 90 districts and cities to help communities prepare village action plans to address maternal and child health issues. 10. The facilitators, ideally with knowledge on maternal and child health, were recruited from the villages. The project prepared training manuals for facilitators, including guidelines for the preparation of block grants to finance the activities to improve maternal and child health, as well as environmental health, including a clean environment. Under this output, 732 block grants totaling $29.4 million were allocated as follows: (i) $17.7 million (60%) to construct 449 poskesdes; (ii) $4.4 million (15%) to support the activities of village health forums, including health education and feeding sessions targeted at mothers and underweight children; (iii) $4.4 million (15%) for capacity building of village midwives in basic emergency obstetric and neonatal care, including timely referral procedures; and (iv) $2.9 million (10%) to finance operating costs of poskesdes, as part of the desa siaga operational models (MODS) in villages to improve access to maternal and child health services Output 3: Revitalized family planning services. This output strengthened the family planning program through improved capacity for counseling, access to contraceptives, and targeting of the family planning program to poor and vulnerable groups. It supported the registration of poskesdes as family planning clinics serving the village community wherein villages became eligible to receive contraceptives from the family planning program. Activities included (i) training 38,650 family planning field workers and family planning village institution staff and cadres; (ii) distributing 4,783 information, education, and communication materials to family planning field workers; (iii) establishing 3,022 information and counseling centers for adolescent reproductive health; (iv) training 10,348 program executors on family planning; (v) establishing 90 family planning district offices, including centers for information and youth counseling for reproductive health; (vi) establishing 3,970 private family planning clinics; (vii) providing 2,197,781 contraceptive services to the poor and urban slum dwellers; German International Cooperation (GIZ) Making childbirth a village affair. Eschborn. Desa siaga operational models were established in accordance with Ministry of Health Decree 564/Menkes/SK/VIII/2006, which was intended to accelerate the achievement of the health-related MDGs.

15 5 (viii) (ix) certifying 1,123 village midwives as family planning service providers; and providing family planning advocacy to stakeholders at the provincial and district levels. 12. Output 4: Improved district capacity in managing decentralization. This output strengthened human resource development at the district level through health planning and budgeting. Activities included (i) training 300 district and city staff from 81 districts on the preparation of district health accounts; (ii) training 53 district staff in integrated health planning and budgeting; (iii) providing 776 fellowships to district health office and provincial health office staff to obtain bachelor s, master s, or doctoral degrees; (iv) providing 935 fellowships to midwives to obtain diplomas 3 or 4; (v) training 100 district health office staff in reporting, monitoring, and evaluation; (vi) developing 90 district exit strategies to support district planning for financial sustainability; (vii) using national socioeconomic survey data for planning, monitoring and evaluation, and sex-disaggregated analysis at the district and provincial levels; and (viii) developing memoranda of understanding between local district health offices and local civil society organizations. 13. Output 5: Strengthened central government capacity to support decentralized health services. This output supported interventions to build government capacity to operate a decentralized health system. The following activities were supported: (i) preparing and disseminating revised operational guidelines for the desa siaga program; (ii) developing user-friendly instruments and guidelines for community-based surveillance; (iii) preparing and disseminating national survey data on local areas; (iv) identifying and disseminating best practices in serving the poor and vulnerable; (v) formulating recommendations on best practices for priority programs; (vi) completing nine operations research studies on desa siaga and other priority programs; and (vii) developing and disseminating guidelines for advocacy and health promotion. 14. Rehabilitation of West Sumatra. On 30 September 2009, a powerful earthquake struck West Sumatra province, affecting 13 of 19 districts and killing more than 1,000 people. Many government buildings collapsed, including hospitals and health centers. The reconstruction and rehabilitation of health facilities and provincial and district health offices covered 102 units (reconstruction of 64 units and rehabilitation of 38 units) and the provision of medical and nonmedical equipment for the reconstructed health facilities. C. Project Costs 15. At appraisal, the estimated total project cost including taxes was $143.0 million equivalent, comprising $73.2 million in foreign exchange cost and $69.8 million equivalent in local currency cost. The project was financed by two ADB loans: (i) $64.8 million from ADB s ordinary capital resources under ADB s London interbank offered rate-based lending facility, and (ii) $35.2 million from ADB s Special Funds resources. The two ADB loans were to cover all of the project s foreign exchange costs (51.2% of the total project cost) and 38.4% of the project s

16 6 local currency cost (18.8% of the total project cost). The government was expected to provide the remaining $43.0 million equivalent (61.6% of local currency cost and 30.0% of the total project cost). The government was expected to provide loan proceeds as grants to regional governments participating in the project, taking into account the fact that the project was expected to directly benefit the poor and would therefore focus on non-revenue-generating essential health services. Participating regional governments were expected to contribute to the project costs in accordance with their fiscal capacity. However, such cofinancing did not occur. 16. At completion, the actual total project cost was $102.9 million (28.0% lower than estimated at appraisal), comprising $23.7 million of foreign exchange cost and $79.2 million of local costs. The total loan amount was $84.3 million (15.7% lower than at appraisal) and the government contribution was $18.6 million (56.7% lower than at appraisal). As a result of exchange rate fluctuations of the special drawing right against the dollar, the total loan value increased to $102.8 million before taking into account loan cancellations. The government requested two partial cancellations of $13.1 million in August 2008 and $3.0 million in April 2012 bringing the available loan total amount to $86.7 million, of which $84.3 million was disbursed. 17. The project was substantially restructured, with two major reallocations. The first was following the midterm review mission in October 2007 to support the desa siaga program. At that time, $14.2 million was reallocated to the desa siaga program, with accompanying reductions in the allocation for civil works ($11.2 million or 74.5%), equipment and vehicles ($15.1 million or 50.2%), and materials and consumables ($0.7 million or 97.1%). The second, in September 2010, followed the powerful earthquake in West Sumatra. Total damage in the health sector was estimated at $83.2 million and the reconstruction needs were estimated at about $77.6 million. The government requested ADB to extend the project for 2 years and utilize project funds to support the rehabilitation of provincial health infrastructure in the province. Based on the midterm review figures, this second reallocation resulted in revised budgets for civil works (+247.6%), materials and consumables (+547.6%), consulting services and systems development ( 57.8%), training and seminars ( 34.9%), and community health program (+102.7%). In comparing the appraisal and actual costs, there was a significant decrease in total expenditures relating to materials and consumables ( 82.0%), equipment and vehicles ( 57.3%), consulting services and system development ( 52.9%), and civil works ( 42.6%). Expenditures for the desa siaga program (mainly to finance block grants) were $29.4 million, or 34.9% of the actual loan. These changes in project costs and financing were mainly due to the restructuring of the project. Projected and actual project costs are in Appendix 2. D. Disbursements 18. During the first 3 years of the project, disbursement was slow ($4.3 million, or 4.3% of the loan amount). It was only after the midterm review in 2007 that disbursements started to pick up and then increased sharply in At completion, the project had a total disbursement of $84.3 million, approximately 84.3% of the original loan amount. This included output 3 (the desa siaga component) at $29.4 million; training, fellowships, and seminars at $18.3 million (21.7%); equipment and vehicles at $12.9 million (15.3%); civil works at $8.6 million (10.3%); project management at $6.0 million (7.2%); consulting services at $4.1 million (4.9%); and fees and/or interest charges at $4.6 million (5.5%). The loan account was financially closed on 8 August 2014, with a cancellation of $2.4 million. The imprest accounts, with initial advances totaling $2.5 million, were established and managed in accordance with ADB guidelines. Actual disbursements started in September 2005 and were completed in August Annual disbursements are in Appendix 3.

17 7 E. Project Schedule 19. Project implementation commenced from the date of effectiveness 29 March 2005 and continued until 31 December The government requested two extensions to complete the civil works in West Sumatra. The actual implementation period was 8.8 years; however, project activities under outputs 1 5 were completed within the original project period. Overall implementation progress was rated satisfactory. The actual project implementation schedule against the original is in Appendix 4. F. Implementation Arrangements 20. The MOH was the executing agency for the project. A central project implementation unit in the MOH and a subunit in the BKKBN coordinated project implementation at the national level. A similar management structure was established at the two regional levels of government. Provincial project implementation units supported and coordinated district and city implementation units. Health committees with a wide representation of government services, professional associations, and civil society were established to advise the regional project directors and to ensure participation and transparency of decision making. In the districts and cities, regular government staff worked full time on project implementation. Project funds were to be used to contract additional project management staff where needed. As local capacity increased with project support, regional governments progressively replaced contracted staff with civil servants. As the BKKBN was decentralized in 2004, family planning was merged with other local government offices such as health and social welfare, which implied that at least 50% of BKKBN staff was assigned to other services. The 732 block grants made to villages under the desa siaga program component were administered by 732 village forums. During project implementation, the number of project provinces increased from eight to 10, including West Sumatra to support the earthquake rehabilitation. G. Conditions and Covenants 21. Covenants were largely complied with, except for compliance with the availability of counterpart funds every year, which were delayed during the project s first phase. The submission of quarterly reports and audited project accounts was delayed. The auditor issued an unqualified opinion for all audit reports. No major governance issues were identified. The project completion report was submitted in a timely manner. Appendix 5 summarizes compliance with covenants. 22. The implementation of the project s gender strategy was satisfactory. The expansion of poskesdes and improved referral helped women s access to health care services, especially in remote areas. Desa siaga aimed to provide adequate delivery and post-delivery rooms, ambulances, and medical equipment; however, in poor areas the provision of continuous water and electricity in health facilities remains a challenge. The proportion of deliveries attended by skilled medical staff increased slowly, from 56.2% in 2003 to 74.9% in 2012, against the final year target of 80%. Project interventions benefited women through increased access to training opportunities for female medical staff and involved women in the delivery of health promotion activities, including vaccinations and family planning through the posyandu (integrated health service post) at the community level. The project supported fellowships for midwives and doctors. A total of 2,147 staff (1,160 midwives and 987 doctors and maternal and child health workers) against a target of 2,000 staff benefited from these scholarships. A total of 6,224 district midwives were trained on maternal and child health and obstetric care, exceeding the target of 5,000. Based on project data, about 80% of staff in the poskesdes were female and

18 8 about 65% in the puskesmas. 20 At the community level, more women prefer delivery in the poskesdes and puskesmas and benefit from antenatal services. Appendix 6 summarizes key achievements of the gender strategy. H. Consultant Recruitment and Procurement 23. The project envisaged 130 person-months of international consultants and 388 personmonths of national consultants for support in project management, health system development, health planning and financing, human resources development, public health, health information and health promotion, civil works, and health technology. The consultants were engaged by the central project implementation units of the MOH and BKKBN according to needs at the national level and on request by the regions. The initial budget for consultants was $8.7 million. Actual expenditure was $4.1 million, 52.9% lower than the costs at appraisal. The use of consultants was fundamentally different to the original requirements planned at appraisal. After the midterm review, it was expected that only one international consultant (2 person-months) and four national consultants (a total of 80 person-months) would be used for civil works and architecture, human resource development, financial management, and information and communications technology and health information. Instead, the consultant budget was used mainly to hire project management staff for the project implementation units (359 staff for a total of 12,556 person-months) and three national consultants in the areas of system development and financing (7 person-months), community empowerment (7 person-months), and monitoring and evaluation (2 person-months). Most of the consultants who were used for project management worked at the district level (76% of consultants and 74% of person-months), while 18% of consultants worked at the province level (accounting for 17% of person-months) and 7% of consultants worked at the central level (accounting for 9% of person-months). Appendix 7 provides the details on the use of national consultants for project management. 24. The project experienced major delays in the procurement of goods. The main problem was delays in initiating and completing procurement actions. For example, district civil works for new construction were expected at appraisal to begin in January 2004 and to be completed at the end of In fact, this did not begin until January 2006 and was not completed until the end of Originally, the project anticipated the procurement of 162 packages of civil works, including 62 packages of new construction and 100 packages of building renovations. However, fewer facilities were built or renovated than expected, and the actual procurement involved only 51 packages of civil works, made up of 13 packages of new construction and 38 packages of building renovations. At appraisal, the procurement of medical equipment for districts was expected to begin in January 2005 and to be completed by the end of In fact, procurement did not begin until January 2006 and was not completed until the end of Procurement of civil works and goods is described in Appendix 8. I. Performance of Consultants, Contractors, and Suppliers 25. In general, the performance of consultants, contractors, and suppliers was satisfactory. The executing agency noted that the civil works contractors provided moderate-quality construction of health facilities. During the project s first phase, most construction was for new and renovated health centers and for contraceptive warehouses. In the second phase, most construction was for new and renovated poskesdes and posyandu with community participation, 20 Ministry of Health Second Decentralized Health Services Project. Final Report. Benefit and Evaluation. Jakarta.

19 9 and was of better quality. According to the executing agency project completion report, suppliers generally provided good-quality medical, information and communication technology, and office equipment. However, in a few locations the suppliers did not deliver complete sets of equipment or failed to provide spare parts. Most of the furniture was locally supplied and was of good quality. Anecdotal evidence suggests that, in both East Nusa Tenggara and West Sumatra, the overall quality of health centers was moderate. Buildings tended to deteriorate easily, which may be partly related to the lower quality of materials used and inadequate provision of operational funding due to limited local government budgets. 21 J. Performance of the Borrower and the Executing Agency 26. The performance of the borrower was satisfactory. During the first phase of the project ( ) counterpart funds were not released in a timely manner, which not only delayed project implementation but also contributed to the need to redesign the project at the time of the midterm review. During the project s second phase ( ), however, counterpart funds were received in a timely manner. However, key administrative personnel in the executing agency changed frequently, and project coordination in respect of output 3 was hampered because of limited interaction between the MOH and BKKBN. K. Performance of the Asian Development Bank 27. ADB s performance was satisfactory. ADB paid close attention to the implementation of the project and provided technical support. During the midterm review, ADB worked closely with the MOH in aligning the project to government priorities to help achieve the MDGs related to maternal and child, adjust the project scope, and reallocate resources. ADB was proactive and demonstrated flexibility in responding to the disaster in West Sumatra caused by the 2009 earthquake. In the course of project implementation, 22 missions, including both review and special project administration missions, were fielded and site visits were undertaken to gain indepth information about project implementation in a large number of districts. ADB approved two extensions. However, there was high turnover in project officers, and five different staff implemented the project. III. EVALUATION OF PERFORMANCE A. Relevance 28. The project is rated relevant. During the three decades preceding the design of the project, Indonesia had given high priority to improving physical access of the rural population to primary health care services. To address persistently high levels of maternal mortality and to improve access to clinical methods of contraception, trained nurses and midwives were placed in most rural villages. 22 From January 2004, regional governments also became responsible for ensuring access to family planning and reproductive health programs, taking over this function from the successful BKKBN family planning program, which had operated according to a highly centralized model. The project supported the local-government-led family planning program and helped to build the required capacity and commitment at the district level to support family 21 ADB review missions. July and November 2013 and February The average distance to a health facility in 2002 was 5.0 kilometers in rural areas and 1.5 kilometers in urban areas.

20 10 planning. 23 One of the BKKBN s key policies was to provide free or subsidized contraceptives to the poor. 29. The government was in the process of decentralizing both the health system and the family planning program, and it was unclear how this would affect the provision of basic health services and, ultimately, the achievement of the health-related MDGs. Given the low rate of utilization of public health services, there was also a need to develop effective models of public private partnership in the delivery of health services, which the project did not address during implementation. The redesign of the project at the time of the midterm review, although aiming to accelerate key MDG targets on maternal and child health, resulted in a centralized rather than decentralized project and, hence, a loss of ability to influence the decentralization policies adopted by the districts. Instead, the project focused on strengthening the provision of village maternal and child health services as part of the desa siaga program. This focus may have become less relevant because of rapid socioeconomic changes in the rural areas at the time and the introduction of jamkesmas (community health insurance schemes) and jampersal (birth delivery insurance scheme). 24 Rural roads had improved significantly and so access to health facilities improved, which may have implied that village health services could be expected to be less well utilized as rural people began to make greater use of hospitals and urban private health services. B. Effectiveness in Achieving Outcome 30. The project is considered less effective. The assessment of the outcome is based on the Indonesia Demographic and Health Surveys and 2012, 25 which are considered to provide highly reliable estimates. 26 The project was designed to improve health services in the project area, which implied improved utilization, especially by the poor, of key maternal and child health services needed to achieve the government s health-related MDGs. 27 As in the Decentralized Health Services Project (footnote 7), the project continued to support the government s expansion of the number of health facilities in remote areas. The main hindrance to boosting immunization coverage remains access to, and limited health facilities in, remote areas where road access remains limited, such as in parts of eastern Indonesia. One goal of the project was to increase measles immunization coverage from 71.8% (2003) to 85.0% (2012). By 2012, the measles vaccination rate was lower than the target of 85.0% and lower still in the project provinces (77.9%). 28 The slow increase in measles immunization rates can be explained by the fact that, between 2006 and 2010, the government budget allocation for maternal and child health decreased significantly. 29 Further, during the second phase of the project, significant Unites States Agency for International Development (USAID), the main source of contraceptives for Indonesia s family planning program, discontinued provision of contraceptives. Jampersal has provided free delivery, prenatal, and postnatal care to all pregnant women, postpartum women (up to 42 days postpartum), and newborn babies (0 28 days) who are not covered by any other maternal health program. Consultation and delivery care are provided in health centers or third-class wards in hospitals to all women who show their ID cards. Statistics Indonesia et. al Indonesia Demographic and Health Survey Maryland; Statistics Indonesia et. al Indonesia Demographic and Health Survey Maryland. The same data sets were used in ADB s performance evaluation report of the Decentralized Health Services Project in December The utilization of health facilities is largely determined by their physical access the higher the per capita expenditure levels the smaller the distance to reach health facilities. Ministry of Health Basic Health Research (Riskesdas). Jakarta. Between 2006 and 2010, the Ministries of Health budget allocation for maternal health decreased from 2.23% to 0.56% and the allocation for child health decreased from 1.54% to 0.56%.