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The World Bank for OFFICIAL USE ONLY Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 3 1142-IN PROJECT APPRAISAL DOCUMENT ON A Public Disclosure Authorized PROPOSED CREDIT IN THE AMOUNT OF SDR 96.5 MILLION (US$141.83 MILLION EQUIVALENT) TO THE GOVERNMENT OF INDIA FOR IMPROVING HEALTH OUTCOMES THROUGH THE KARNATAKA HEALTH SYSTEM DEVELOPMENT AND REFORM PROJECT Public Disclosure Authorized July 15,2006 Human Development Sector India Country Management Unit South Asia Region This document has a restricted distribution and may be used by recipients only in the performance oftheir Public Disclosure Authorized official duties. Its contents mav not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective July 20,2006) Currency Unit = Indian Rupee (Rs.) US$l.OO = Rs. 46.80 US$0.021362 = Rs.1.00 US$1.46997 = SDR 1 ABBREVIATIONS AND ACRONYMS AEE Assistant Executive Engineer ANM Auxiliary Nurse Midwife ARI Acute Respiratory Infection BPL Below Poverty Line CAAA Controller Aid Accounts and Audit C&AG Comptroller and Auditor General of India CAS Country Assistance Strategy CFO Chief Finance Officer CHPD Center for Health Policy and Development CHC Community Health Centre cs Central Schemes css Centrally Sponsored Schemes DGS&D Directorate General of Supplies and Disposals DIR Detailed Implementation Review DHO District Health Officer DHS Directorate of Health Services DO Development Objective DoHFW Department of Health and Family Welfare DPA Deputy Project Administrators DPIO District Project Implementation Officer DPMU District Project Management Unit EA Environmental Assessment EMP Environmental Management Plan FM Financial Management FMM Financial Management Manual FMR Financial Monitoring Reports FY Fiscal Year Go1 Government of India GoK Government of Karnataka GP Gram Panchayat GSDP Gross State Domestic Product HC Health Commissioner HMIS Health Management Information System IBRD International Bank for Reconstruction and Development IDA International Development Agency IMR Infant Mortality Rate FOR OFFICIAL USE ONLY IP Inpatient KHSDP Karnataka Health System Development Project KHSDRP Karnataka Health System Development and Reform Project KSIHP Karnataka State Integrated Health Policy KSDL&WS Karnataka State Drug Logistics and Warehouse Society MCH Maternal and Child Health M&E Monitoring and Evaluation MDG Millennium Development Goals NCB National Competitive Bidding NFHS National Family Health Survey NGO Non Government Organization OD Organizational Development OOP Out-of-pocket OP Outpatient ORS Oral Rehydration Solution PA Project Administrator PGB Project Governing Board PEHFW Public Expenditure on Health and Family Welfare PHC Primary Health Centers PHU Primary Health Unit PHCF Public Health Care Competitive Fund PPP Private Public Partnership PRIS Panchayat Raj Institutions RCH-I1 Reproductive and Child Health Program-I1 Rs . Rupees SA Service Agreement SECAL Sector-specific Adjustment Loan sc Scheduled Caste SGEHFW State Government Expenditure on Health and Family Welfare SHG Self Help Groups SICF Service Improvement Challenge Fund SIL Specific Investment Loan SIP Service Improvement Plan SPHRU Strategic Planning and Health Reform Unit SPMU State Project Management Unit ST Scheduled Tribe THOs Taluk Health Officer TGEHFW Total Government Expenditure on Health and Family Welfare USMR Under-5 Mortality Rate UHIS Universal Health Insurance Scheme vcm Vulnerable Communities Health Plan WB World Bank ZP Zilla Panchayat Vice President: Prahl C. Pate1 Country Director: Michael F. Carter Sector Director: Julian F. Schweitzer Sector Manager: Anabela Abreu Task Team Leader Paolo C. Belli This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. INDIA Karnataka Health System Development and Reform Project TABLE OF CONTENTS Page A . STRATEGIC CONTEXT AND RATIONALE .............................................................. 4 1. Country and Sector Issues.................................................................................................... 4 2 . Rationale for Bank Involvement .......................................................................................... 7 3 . Higher Level Objectives to which the Project Contributes ................................................ -7 B. PROJECT DESCRIPTION .............................................................................................. 8 1. Lending Instrument ............................................................................................................. -8 2 . Project Development Objective (PDO) and Key Indicators ................................................ 8 3 . Project Components ............................................................................................................. 9 4 . Lessons Learned and Reflected in Project Design............................................................. 13 5 . Alternatives Considered and Reasons for Rejection.......................................................... 14 C . IMPLEMENTATION ..................................................................................................... 14 1. Institutional and Implementation Arrangements ............................................................... 14 2 . Monitoring and Evaluation ............................................................................................... -14 3 . Sustainability ...................................................................................................................... 16 4 . Critical Risks and Possible Controversial Aspects ............................................................ 16 5 . Loadcredit Conditions and Covenants ............................................................................. 18 D. APPRAISAL SUMMARY .............................................................................................. 18 1. Economic and Financial Analysis (see Annex 9 for a more detailed discussion) ............. 18 2 . Technical., .......................................................................................................................... 19 3 . Fiduciary ............................................................................................................................ 19 4 . Social .................................................................................................................................. 21 5 . Environment ....................................................................................................................... 22 6 . Policy Exceptions and Readiness...................................................................................... -23 Annex 1: Country and Sector Background ................................................................................... 24 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies in the Health or Health-Related Sectors ................................................................................................................... 28 Annex 3-A: Results Framework and Monitoring ......................................................................... 30 Annex 3-B: Quantitative Targets for the Health Sector Relative to the Time of the Project .......34 Annex 4: Detailed Project Description ......................................................................................... 43 Annex 5: Project Costs.................................................................................................................. 59 Annex 6: Institutional Arrangements ............................................................................................ 60 Annex 7: Financial Management and Disbursement Arrangements ............................................ 64 Annex 8: Procurement .................................................................................................................. 77 Annex 9: Economic and Financial Analysis ................................................................................. 93 Annex 10: Safeguard Policy Issues ............................................................................................. 109 Annex 11 : Project Preparation and Supervision ......................................................................... 113 Annex 12: Documents in the Project File .................................................................................... 115 Annex 13: Statement of Loans and Credits ................................................................................. 118 Annex 14: Country at a Glance., ................................................................................................. 122 Annex 15: Map of Karnataka ...................................................................................................... 124 iii Tables: Table 1: Key Development and Health Outcomes Indicators ...................................................................... 4 Table 2: Progress in Health in Karnataka since Independence ................................................................. -24 Table 3 : Variation in key health system performance indicators .............................................................. -25 Table 4: Comparative Health Service Coverage and Access Indicators .................................................... 25 Table 5: Karnataka, Leading Conditions Treated in Hospitals and Dispensaries, 1999 ...........................
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