Indonesia Infrastructure Initiative (IndII)

AusAID

Indonesia Infrastructure Initiative (IndII)

Water & Sanitation Initiative

Independent Assessment Team

Terms of Reference

1. Background and ContextThe Indonesia Infrastructure Initiative (IndII) forms part of the Australian Governments (GOAs) Infrastructure for Growth Initiative (IFGI). IFGI aims to support growth, increased productivity and employment in the Asia-Pacific region by helping address infrastructure constraints, including through:

Financing for basic physical infrastructure projects (e.g. to facilitate market access and trade, including in lagging regions);

Activities designed to improve infrastructure governance / management in specific countries or sub-sectors (e.g. to improve infrastructure policy and regulations, reduce corruption and improve the effectiveness of partner government investment in infrastructure); and

Contributions to selected global facilities trialing innovative approaches, financing global public goods or undertaking important analytical research (e.g. in areas of public-private partnerships, output-based aid, energy sector management, climate change adaptation and clean energy use).

The total IFGI commitment is $505.8 million over the four years 2007-08 to 2010-11.

Preparation of the Indonesia IFGI program commenced in 2007, with total funding set at $64.8 million. AusAID determined this would fund three sub-programs:

The IndII Facility ($50 million);

Trust Funds to support infrastructure activities managed by the MDBs ($10 million); and

Other activities to be managed directly by AusAID ($4.8 million).

The Project Design Document (PDD) for the IndII Facility was endorsed at the Peer Review meeting held in September 2007. SMEC was subsequently appointed as Managing Contractor and Facility implementation formally commenced in August 2009 following signature of the Subsidiary Arrangement (SA) by Government of Indonesia (GOI) and AusAID.

IndII Facility Design

The IndII Facilitys goal is to reduce policy, regulatory, capacity and financing constraints on infrastructure investment at national and sub-national levels. To achieve this, the Facility was structured with three components:

Infrastructure project management (IPM): this aims to support national and sub-national government agencies to develop, design and implement priority infrastructure projects, including those funded through the multi-lateral development banks (MDBs);

Policy and regulatory (P&R): this aims to support national government agencies to develop policies and regulations that will provide a more supportive environment for infrastructure investment and management; and

Infrastructure enhancement grants (IEG): this aims to provide grants for enhancing the safety and maintenance features of infrastructure projects that are being supported by IndII or other donors.

Implementation of the Facility is guided and overseen by a Management Board, which is co-chaired by the Bappenas Deputy for Infrastructure and the AusAID Minister Counsellor. Decisions on individual activities are taken by a Technical Team comprising an Echelon II official of the three GOI agencies represented on the Board (Bappenas, Coordinating Ministry of Economic Affairs, Finance) in consultation with AusAIDs resident infrastructure manager. The Board has directed that the Facility should give highest priority to the water and sanitation and transport sectors, and should seek to support weak as well as relatively strong agencies. GOI Board members have also expressed a strong desire to see the Facility support efforts to accelerate private investment in infrastructure through public private partnerships and to improve provision of housing for the poor.

Current Implementation Status

The work of the IndII facility encompasses transport and water and sanitation (watsan), and a third component covering a broader range of cross-cutting themes relating to infrastructure policy and investment. There are currently 45 activities completed or ongoing (February 2010).

The transport sector work has expanded rapidly and includes major port and rail master planning activities; local bus rapid transit (Palembang and Jogjakarta) and development of the air navigation blueprint. There is extensive work with DG Highways which complements EINRIP (eg through road safety) but also ventures beyond, into the development of medium term expenditure and performance based budgeting frameworks.

IndII already undertakes a range of water and sanitation projects and has developed a strong partnership with DG Housing and Settlements.

IndII assists with PPP scoping through the development of bankable business cases to support the Umbalan Spring project and the JatiluhartoJakarta bulk water project.

IndII will also design and fund a number of capital grants to provide physical infrastructure that enhances other Government or donor programs. These grants could be provision of state of the art bus shelters in well performing cities that upgrade their public transport to include bus rapid transit systems; there is potential for grants to enhance road safety; and there is also potential for these grants to extend household wastewater connections should the new mechanism prove replicable.

Water and Sanitation Initiative (WSI)Subsequent to mobilization of the IndII Facility, GOA announced a Water and Sanitation Initiative (WSI). Its goal is to improve living standards of the poor by improving access to more effective and sustainable water supply and sanitation services, and thereby to contribute to achievement of related Millennium Development Goals. The more specific objectives are to:

Expand access to water supply and sanitation services, particularly for the poor, women and children in schools; Make water and sanitation services more sustainable by supporting sector reform and capacity building; Improve the health and quality of life of the poor and vulnerable by increasing their understanding of good hygiene practices, as well as by expanding their access to water supply and sanitation services; Enhance aid effectiveness and complement other development agencies programs.

Identification of an Indonesia WSI program commenced in October 2008, with an indicative funding envelope of $35 million and an implementation completion date of June 2011 (the same as IndII). The initial concept, approved in December 2008, has since been substantially amended, in part due to the funding allocation having been increased to $60.5 million in June 2009. The revised concept, tabled and agreed in August 2009, provides for five components:

A$20 million for accelerating development of new urban water supply connections through output-based grants to municipal water utilities (PDAMs); A$10 million for urban sanitation development (of which A$5 million is for output-based grants for new sanitation connections and A$5 million is for preparation of city sanitation strategies for five cities); A$22.5 million to support provision of improved water supplies and sanitation and to promote better hygiene for low income rural and peri-urban communities (the PAMSIMAS program); A$5 million for a civil society component; and A$3 million for program management.The Project Design Document for the urban water supply and sanitation components was tabled and approved in principle in November 2009. Indonesia WSI program funds will be channeled through the IndII Subsidiary Arrangement (as already amended), and implementation of the urban water supply and sanitation components will be supported through amended IndII Facility management arrangements. These will involve the establishment of a second Technical Team (one will deal with water and sanitation and the other with transport and other sectors) and the restructuring and expansion of the IndII Facility Management Team. Monitoring and EvaluationThe IndII Facility PDD provides for: The Managing Contractor to engage a specialist to prepare a program-level Monitoring and Evaluation Plan (MEP), and thereafter to implement this using its core team resources AusAID to engage an Independent Assessment Team (IAT) to assess the development effectiveness of the strategies and investments made by IndII, and the appropriateness of the facility model and design in meeting the objectives of IFGI and the Indonesia Country Program Strategy.

Preparation of the IndII MEP has taken longer than expected, in part due to staffing issues and in part due to recognition that the Managing Contractors resources would be insufficient for its envisaged role. To address the latter issue and accommodate additional monitoring and evaluation work related to WSI, AusAID has agreed an increased budget for the M&E specialist. The IndII M&E specialist has participated in the preparation of the WSI Monitoring and Evaluation Framework for the urban water supply and sanitation components (as included in the PDD).

Ongoing M&E for the IndII Facility program and for the WSI urban water supply and sanitation components will be managed in an integrated manner by the Managing Contractor, and it has been agreed that the scope of the IATs activities should also be expanded to encompass these WSI components.

4. IAT structure:

The core Impact Assessment Team will comprise a team leader with a strong macro-economic perspective and an M&E specialist with strong experience in infrastructure programs. Both are expected to have prior working experience in Indonesia and to be familiar with AusAIDs approaches for monitoring and evaluation of facilities.

The IAT will also involve other external experts as required (with selection having regard to IndIIs sector/thematic focus), the AusAID Infrastructure Advisors (in-country, thematic group), the AusAID Desk officer and other AusAID personnel as appropriate.

The IAT will team up and work closely from time to time with IndII M&E Specialist in conducting each mission.

The team leader will be responsible for writing up the mission reports, with input as appropriate from other IAT members.

5. IAT Missions and Time Frames:The IAT is expected to undertake up to three missions, namely in March 2010, in May/June 2010, and possibly in May 2011.

The third mission in May 2011 is subject to further discussion with AusAID pending results of first and second mission.

6. FIRST MISSION (MARCH 2010)The first mission will primarily evaluate the overarching management of the facility, including:1. Assess and make evidence-based recommendations about the functioning of Facility management arrangements, specifically:

a. the efficiency and effectiveness of IndIIs management structure (including the Board, Technical Team, AusAID, Managing Contractor);

b. whether the managing contractor is meeting its contractual requirements;

c. the quality of MC policies/guidelines and whether these are being appropriately implemented (for example, the IndII Gender strategy);

d. the efficiency of activity identification and approval processes;e. financial management of IndII activities;

f. how well WSI has been integrated into IndII management arrangements;

g. communication strategies employed by IndII (such as Prakarsa).

2. Review and provide comment/recommendations to AusAID on the M&E Framework and on baseline surveys provided by the Managing Contractor. This review is also to include:a. whether the M&EF has struck the right balance between how the facility is operating versus the outcomes of the facility;b. whether IndII is sufficiently focused to be able to measure achievement of objectives

3. During this mission, the IAT will be required to develop an evaluation plan for the second mission to be conducted in May 2010 (see below, reporting requirements and timetable for more information).

In undertaking this mission, the IAT will:

1. Review background documents listed in Annex A and inform AusAID of any information or documents required prior to the mission (2 days);

2. Prior to arrival in Jakarta, prepare and submit an evaluation plan that outlines the methodology for the first mission: including stakeholders to be interviewed, additional documents required during the mission etc (1 day). This plan must be submitted at least two working days prior to arrival in Jakarta.

3. Participate in an AusAID preliminary briefing session before the start of the in-country field visit (22 March 2010);

4. Conduct meetings and assessments in Jakarta with relevant IndII stakeholders (9 days);

5. Brief AusAID of preliminary findings of the mission and provide a draft evaluation plan for the second mission (and an outline work plan for the May 2011 mission) (1 day). The final report should be prepared no longer than 10 pages and to be made ready by the end of April 2010 (see below timetable for more information)7. SECOND MISSION (MAY/JUNE 2010)

The second mission will conduct a Mid Term Review of IndII.

The Mid Term Review is expected to provide an analysis of:

1. A selection of IndII activities, specifically:

a. The appropriateness/relevance of these activities;

b. Whether these activities achieved their stated objectives and contributed towards higher level objectives;c. The likely outcomes and sustainability of these activities; and

d. How key AusAID policies such as gender equality, have been integrated and implemented in IndII activities.

2. IndIIs place within the infrastructure sector, specifically:a. IndIIs role in relation to other relevant work being done by GoI and donors in the sector;

b. Whether IndII is supporting GoIs infrastructure priorities (as outlined in the MTDP) at both the national and sub-national levelsc. Whether IndII is operating in the right sub-sectors: is this engagement strategic, considering AusAIDs other infrastructure initiatives? 3. The strengths and weaknesses of the IndII Facility model vis--vis alternative approaches AusAID could have taken to supporting infrastructure development in Indonesia4. The contribution of IndIIs model (including WSI) towards higher level country strategy and IFGI objectives

This analysis is expected to provide a frank summary of the strengths and weaknesses of IndII supported by evidence as well as lessons learned that would be relevant to any future phases of IndII.

In undertaking this mission, the IAT will:

1. Review background documents requested during the first mission and outlined in the evaluation plan (3 days);

2. Participate in an AusAID preliminary briefing session before the start of the in-country field visit ( 1 day);

3. Conduct meetings with a range of identified stakeholders and key GoI counterparts, including field visits to local governments if necessary/included in the evaluation plan (10-15 days);

4. Prepare an aide memoire and brief AusAID of preliminary findings of the review. The IAT will discuss with AusAID the possibility of undertaking the third mission in 2011. The final report should be prepared no longer than 20 pages and to be made ready by approximately the end of June 2010 (see below timetable for more information)8. THIRD MISSION

The third mission is tentatively scheduled for May 2011 to conduct (an optional) Independent Completion Report or other possible monitoring mission subject to further discussion with AusAID. 9. Reporting Requirements Following the first mission, the IAT will be required to:

1. Submit an assessment report that reviews and provides comment on:

a. The overarching management of the IndII Facility (covering all of the points raised above),

b. The M&E Framework and baseline surveys provided by the Managing Contractor;

2. Submit a detailed evaluation plan including the methodology for mission two (May/June 2010). In preparing the evaluation plan for mission two, the IAT is expected to consult with AusAID and:

a. Decide in consultation with IndII M&E Specialist, on a set of activities to be reviewed during mission two. The activities will be chosen having regard to the desirability of assessing performance by type of activity, by infrastructure sector, and by type of partner/client (central, sub-national);

b. Agree with the IndII M&E specialist on the information to be made available in order to permit the IAT to function efficiently (the intent will be to maximize synergy while maintaining the integrity and independent of the IAT role); and

c. Identify needs, if any, for supplementary specialist sector expertise required for the mid term review during mission two.

These will be discussed with the AusAID infrastructure manager in Jakarta and thereafter will be finalized within two weeks to reflect comments provided and agreements reached. The report of the first mission is to be submitted to AusAID before the end of April 2010.

Following the second mission, the IAT will be required to:

1. Submit a draft Mid-Term-Review (using the AusAID reporting template) to AusAID within two weeks of completing the field visit. AusAID may share this report with and seek feedback from partner government and other key stakeholders as appropriate.

2. Submit a final report within two weeks of receipt of AusAIDs final comments on the draft. The report should be a brief and clear summary of the evaluation outcomes and focus on a balanced analysis of issues faced by the Facility.

Should a third mission be undertaken, the IAT will be informed of reporting requirements prior to arrival in country. 10. TIMETABLETask and Expected OutputDescriptionDays workedRemarkDue Date

FIRST MISSION (MARCH 2010)

Desk reviewReview background documents provided prior to the in country mission2In home country15 16 March 2010

Assessment methodology and plan Submitted to AusAID a week prior to the in country mission for AusAID review and comments1In home country18 March 2010

Preliminary AusAID briefingParticipate in an AusAID preliminary briefing session before the start of the in country field visit2 hoursIn country22 March 2010

In country assessmentin country consultation process with relevant partners and stakeholders9In country22 Mar 1 April 2010

Presentation of Independent Assessment findings Initial findings of the assessment should be presented to AusAID and to relevant key counterparts and stakeholders where possible.1In country1 April 2010

Draft report of Independent Assessment Draft of report should be submitted in a format agreed by AusAID and is circulated to the relevant stakeholders and counterparts to seek feedback.2

(with two weeks interval for comments)In countryMid April 2010

Monitoring and evaluation plan and methodology for the MTRSubmitted to AusAID prior to the in country mission in May 2010 for AusAID review and comments.3In home countryEnd of April 2010

Final Report of Independent AssessmentThe final report of assessment should cover the following:

The functioning of IndII management arrangement including with GoI counterparts

The functioning of IndII facilities

Recommendations of IndII M&E Framework

3In home countryEnd of April 2010

MID TERM REVIEW (THIRD MISSION) in country consultation process with relevant partners and stakeholders15Indicative in May 2010

Desk reviewReview background documents provided prior the in country mission3In home countryIndicative in early May 2010

Preliminary AusAID briefingParticipate in an AusAID preliminary briefing session before the start of the in country field visit1In countryIndicative before mid May 2010

Presentation of findingsFindings of the mission is to be presented to AusAID and to relevant key counterparts and stakeholders where possible1 In countryEnd of the 2nd mission indicative 2nd or 3rd week of May 2010

Draft report of the MTRDraft of report should be submitted in a format according to AusAID template for MTR. 8In home countryIndicative in 1st week of June 2010

Final Report of the MTR and Aide MemoireFinal report of MTR should assess progress against objectives; improving implementation quality; and/or informing the design of any follow-on phases or new activities and incorporating provided comments.

The collective impact of the IndII engagements, unintended as well as intended impacts and explore the extent to which the total impact is greater than the sum of the impacts of the individual SPS and IEI engagements.

Provide independent information on development effectiveness for IndII AusAIDs reporting requirements based on ODE development

Consider the extent to which this mechanism performed better than alternatives in delivering on the GoI, IFGI and other AusAID objectives.

Provide recommendation and consideration to the decision on whether to extend IndII facility and its Managing Contractor.

3

(with two weeks interval for comments)In home countryIndicative 3rd week of June 2010

Outline of evaluation plan and methodology for ICR (optional)If it is decided to do so, it should be submitted to AusAID a week prior to the in country mission for AusAID review and comments.3

In home countryIndicative 3rd week of June 2010

INDEPENDENT COMPLETION REVIEW OPTIONAL (THIRD MISSION)15In country Indicative May 2011

Desk reviewReview background documents provided prior the in country mission3In home countryIndicative early May 2011

Preliminary AusAID briefingParticipate in an AusAID preliminary briefing session before the start of the in country field visit1In countryIndicative early May 2011

Presentation of findingsFindings of the mission is to be presented to AusAID and to relevant key counterparts and stakeholders where possible1In countryAt the end of mission indicative 2nd or 3rd week of May 2011

Draft report of the Independent Completion ReviewDraft of ICR should be submitted to AusAID on a format according to AusAID template for ICR.7In home countryIndicative end of May 2011

Final report of the Independent Completion Review and Aide MemoireFinal report should assess achievement of activity objectives; accountability and effectiveness of the aid activity; and what lessons can be learnt

3

(with two weeks interval for comments)In countryIndicative mid of June 2011

Presentation of Aide MemoireFindings in the Aide Memoire to be presented to AusAID and to relevant key counterparts and stakeholders where possible1In countryIndicative mid of June 2011

TOTAL DAYS WORKED 86

Annex A

List of Key Documents1. IndII Subsidiary Agreement (as amended)2. IndII Facility PDD

3. Indonesia WSI PDD (urban water supply and sanitation components)

4. Revised procedures for preparation, review of activity requests, proposals and designs

5. Minutes of IndII Management Board Meetings

6. Minutes of IndII Technical Team Meetings

7. IndII Facility Review and Planning Documents

8. IndII Facility Monitoring and Evaluation Plan (August 2009)

9. Australia-Indonesia Partnership Country Strategy;10. Discussion Paper: Design, Monitoring and Evaluation of Facilities

It was initially envisaged that the full $10 million would be available to the World Bank. The recent amendment of the Subsidiary Arrangement permits part of this amount to be allocated to ADB.

Copies of all documents referenced in the TOR are provided in an accompanying information package, a list of whose contents is attached as Annex A

Through an Exposure Paper published in November 2008

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