Projects

Project Information

Decentralized Health Services

Country and Location

Indonesia - Aceh, Bali, Bengkulu, Central Sulawesi, North Sulawesi, Riau, and Southeast Sulawesi Provinces

Borrower

Republic of Indonesia

Date of Approval

14 December 2000

Project Description

The Project will assist the Government of Indonesia in decentralizing the management of health services and in improving the quality of health services delivery particularly to the poor and vulnerable groups. Implementation of decentralization will start in early 2001, in accordance with the laws on decentralization issued in May 1999. Decentralization offers opportunities to better answer local health needs through locally adapted reforms and specific investments in the health sector. However, rapid implementation of decentralization could create a major risk of breakdown in the delivery of public health services because the traditionally centralized planning and management of health services have not prepared local staff adequately to take over this responsibility. There is a need to support local health staff during the transition period and prepare them for their new responsibilities. While assisting local governments to maintain health services delivery, the Project will help local governments identify local needs, giving priority to programs that target and benefit the poor, and improve health service quality.

The Project will be implemented in two phases in 50 districts and 12 cities of 7 provinces: Aceh, Bali, Bengkulu, Central Sulawesi, North Sulawesi, Riau, and Southeast Sulawesi. In the first phase, activities will concentrate on developing local capacity to plan, manage and deliver health services. Local governments and health offices will prepare health sector development plans and investment proposals to improve service quality, efficiency, and effectiveness, and proposals to introduce locally appropriate health sector reforms. In the second phase, the Project will support the implementation of the development plans and investment proposals prepared by local governments during the first phase. Prior to implementation, the plans and proposals will be reviewed to ensure that they are technically and economically justified and that they address the priority needs of the poor and vulnerable groups.

Total Project Cost

The estimated total cost of the Project is US$87 million equivalent comprising $36.7 million equivalent (42 percent) in foreign exchange and $50.3 million equivalent (58 percent) in local currency.

Loan Amount

ADB will provide a loan in SDR of US$65.024 million equivalent from its Special Fund resources to the Republic of Indonesia.

Executing Agency

Ministry of Health and Social Welfare

Procurement

All ADB-financed civil works and goods will be procured in accordance with ADB's Guidelines for Procurement. For procurement of goods, international competitive bidding will apply for contracts estimated to cost US$500,000 equivalent or more. Supply contracts for goods other than vehicles, motorcycles and office equipment estimated to cost the equivalent of US$500,000 or less will be awarded on the basis of international shopping (IS). Civil works contract - all estimated to cost less than 1.0 million equivalent - and supply contract for vehicles, motorcycles and office equipment will be awarded on the basis of local competitive bidding (LCB). Civil works contracts valued at less than US$50,000 equivalent may involve the participation of local communities in accordance with procedures to be agreed with ADB. Direct purchase of goods costing less than US$50,000 equivalent will be allowed.

The EA has been advised of the need for maintaining transparency and accountability, as required under the ADB's Anticorruption Policy, in undertaking procurement of all goods and services. The EA was informed that the ADB anti-corruption provisions (as provided in the ADB's Guidelines for Procurement and the Guidelines on the Use of Consultants) will apply to all expenditures financed under the proposed loan.

Consultants

International and domestic consultants and consulting firms will be engaged to (i) support project implementation units and technical committees, and (ii) provide technical expertise. Part of the consulting services provision will be reserved to provide project managers flexibility in engaging consultants according to local needs identified during phase I of the Project. To support project management, domestic consultants will be engaged, where needed, to complement existing staff capabilities. Depending on the needs of the 62 districts and cities, a maximum of 4,394 person-months of domestic consulting services may be required for project management. To provide technical expertise, the Project will fund a total of 37 person-months of international and 225 person-months of domestic consulting services. Local consulting firms will be recruited for information technology, and environmental and social impact assessments. All consultants will be recruited in accordance with ADB's Guidelines on the Use of Consultants and other arrangements acceptable to ADB for the engagement of domestic consultants.

Technical Assistance

Advisory technical assistance (TA) will support policy reforms in the health sector, and permit the Government of Indonesia and the project provinces to further assess the needs for sector reforms, and to develop and implement these reforms. The TA is financed from the Japan Special Fund (JSF).

Estimated Completion Date

1 March 2006