Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 7555-NEP

STAFF APPRAISAL REPORT

NEPAL

ENGINEERING EDUCATION PROJECT

May 26, 1989

Population & Human Resources DivisionCountry Department IAsia Region

This document has a restricted distribution and may be used by redpients only in the performance oftheir officeal duties. Its contents may not otherwise be disclosed without Wodd Bank authorization.

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CPWECY EOUIVALENTS(At Appraisal October 1988)

Currency Unit - Nepal Rupee (NRP)US$1 - NRP 24.3NRPl - US$0.041

Weights and Measures

1 meter (m) - 3.28 feet (ft)'1 kilometer (km) - 0.62 mile (mi)

Fiscal Year

July 16 - July 15

School Year

January - November/December

Academic Year - InstituteOf Engineering

July - May

Principal Abbreviations and Acronyms Used

ADB - Asian Development BankBNS - Basic Needs StrategyCIDA - Canadian International Development AgencyHMG - His Majesty's GovernmentIOE - Institute of EngineeringJICA - Japanese International Cooperation AgencyMOEC - Ministry of Education and CultureNORAD - Norwegian Assistance for DevelopmentNPC - National Planning CommissionPCE - Proficiency Certificate in EngineeringPCS - Proficiency Certificate in SciencePIU - Project Implementation UnitPPU - Project Preparation UnitSATA - Swiss Association for Technical AssistanceSDC - Swiss Development CooperationSLC - School Leaving CertificateSOEs - Statements of ExpendituresTU - Tribhuvan UniversityUNICEF - United Nations Childrer.'s FundUNDP - United Nations Development ProgramUSAID - United States Agency for International Development

ANN .A 1275 Page 3

(e) Academic Programs and Records--an office which maintains students'academic records and can assess performance and progress under theInstitute's academic regulations. This type of office is requiredfor: (i) the degree programs at Pulchowk; (ii) the certificate ,programs at Pulchowk and Thapatali; and (iii) the certificate andtrade programs at Pokhara.

In addition, a central office is proposed to deal systematically withthe matters of admissions, examinations, and aspects of financialsupport for registered students, i.e. tuition fee stipends, otherstipends, awards and scholarships.

(f) Computer Services--a unit responsible for the management andoperation of IOE's common computer facilities and related equipment.Computer Services would also assist with treining of personnel usingthe equipment, and would provide software support. The unit wouldserve all campuses.

(g) Library Services--this is a standard unit responsible for books andperiodicals that constitute the library holdings. A main library isenvisaged at Pulchowk, with branch libraries at the other campuses,all administered by a Chief Librarian.

(h) Printing--suitable printing and copying equipment is needed in theInstitute. Sophisticated facilities are now common and would likelybe acquired in this project. The facilities should be managed andoperated by personnel with appropriate skills. All photocopyingequipment should probably be the responsibility of a central office.

(i) Instructional Equipment--equipment required for learning and teachingpurposes would be managed by this unit. Most of the equipment isportable, e.g. projectors, PA systems, VCRs and monitors. The officewould be responsible for stocking and servioing the components,making them available as required, and operating some of theequipment when used in teaching.

(j) Bookstore--this is clearly a separate operation that should behandled by business people. The bookstore has a role to play in theInstitute by providing educational reference texts and learningmaterial that is particularly suitable, and available to students atminimum cost. It should allow trading-in and selling of second-handtextbooks. Also, the bookstore provides a mechanism whereby theacademic staff can market scholarly and professional material.

(k) Liaison and Information Analysis--as part of a management informationsystem, this unit would be responsible for general technology andinformation transfer (external), liaison with government, industry,and professional organizations. It would monitor certain Instituteoperations, relevant market trends, and would advise regardingmanpower needs, special training requirements, and marketdevelopments to which the Institute might respond. This functionwould be incorporated into the Office of Manpower Development whichwill be established in the project.

ANNEX 12

76 Page 4

(1) Campus Planning--this unit would be concerned primarily with theplanning and construction of new physical facilities, majorrenovation projects, plant upgrading, and primary technical servicesand facilities.

Technical Services

7. The need to establish a separate maintenance and technical servicesunit is based on the following considerations. In engineering universitiesand colleges, a great deal of laboratory equipment, instruments, testingfacilities, mechanical, electrical and electronic control systems are acquiredand used. In addition, aids, data-handling systems, and digital computers areused for scientific or academic purposes and increasingly for administrativeservices. The maintenance and servicing of much of this equipment is beyondthe capability of regular technical staff. In many universities, servicecontracts are widely used next to specialized technical services units. Theneed for effective maintenance and repair of equipment is expected to growsubstantially in the IOE. It would therefore be necessary to appoint aDirector of Maintenance and Technical Services who would manage a number oftechnical staff specifically for Technical Services.

Library Services

8. Library services is another area where a separate management functionis required. A Chief Librarian should head the library services and managethe library, including branch libraries. He or she should interact withTribhuvan University's library service and library administration. The IOEwould also need effective library facility at Thapatali and Pokhara.

Management Information System (MIS)

9. The proposed management information system (Liaison and MarketStudies, Information Analysis) would be established and report primarily tothe senior management of the Institute. The MIS unit would be handled by amanager who could also be responsible for Campus Planning.

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ANNEX 1378 Page 1

NEPAL

ENGINEERING EDUCATION PROJECT

Selected Documents in Project File

Nepal Second Education Project (Technical and Vocational Training) StaffAppraisal Report No. 3558-NEP, Education and Agricultural InstitutionDivision, South Asia Projects Department, The World Bank.

Tribhuvan University, Institute of Engineering, An Introduction, Lalitpur1987.

N. McEvers, Manpower Implications of Education and Training Development in theKingdom of Nepal, The International Development Association, May 1983.

Nepal: Policies for Improved Growth and Alleviating Poverty. World Bank1988.

Educonsult Ltd and the University of Calgary, Engineering EducationDevelopment Project, A Feasibility Study, Institute of Engineering,Tribhuvan University, Nepal, May 1987,

Ten Year Development Plau for IOE, Institute of Engineering ConsultancyServices, Kathrnandu, Nepal, September 1985.

Maintenance Management Plan for Institute of Engineering, TribhuvanUniversity, Institute of Engineering, Project Preparation Unit,P.B. Shrestha; P.N. Marky September, 1988.

Maintenance Inventory Work Report for Project Preparation Unit, 1988,Tribhuvan University, Institute of Engineering Pulchowk Campus.

A Report on the Design Proposal for Pulchowk and Thapathali Campuses,September 1, 1988, PPU Institute of Engineering, Pulchowk, Lalitpur

Reports and Proposal Drawings, Pokhara Campus Development Project Institute ofEngineering, August 1988.

Progress Reports on Rules and Regulations, Institute of Engineering, June1984.

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NEPALENGINEERING EDUCATION PROJECT

Table of Contents

Page No.

BASIC DATA ........................................................... iii

CREDIT AND PROJECT SUMMARY ........................................... iv

I. ECONOMIC DEVELOPMENT AND DEMAND FOR SKILLED LABOk .... ......... 1

A. Economic Development, Employment and the Demand forSkilled Labor ......................................... 1

B. The 'ducation System and Issues in the Supply ofEngineering Personnel ................................. 8

C. Government Policies in Education and SkilledLabor Development ..................................... 15

D. External Financing of Education and Skilled LaborDevelopment ........................................... 16

E. IDA Strategy and Rationale for Involvement ................. 18F. Previous IDA Lending Experience in Education ............... 19

II. THE PRO ECT .................................................... 20

A. Origin of the Project ...................................... 20B. Project Objectives and Scope ............................... 20C. Project Description ........................................ 21D. Technical Assistance ....................................... 23

III. PROJECT COSTS. FINANCING AND IMPLEMENTATION .................... 24

A. Costs ...................................................... 24B. Financing .................................................. 26C. Project Management and Implementation ...................... 27D. Environmental Impact ....................................... 32E. Impact on Women ............................................ 32

IV. BENEFITS AND RISEKS ............................................. 33

A. Benefits ................................................... 33B. Risks ...................................................... 33

V. AGREEMENTS REACHED ............................................. 34

This Report is based on the findings of an appraisal mission to Nepal inSeptember/October 1988. Mission members included Messrs. Joseph Bredie(Mission Leader), Roland Bachmann, Gunnar Berg, Tom Coyle, Ian Morris andRobert Jourdain (Consultants).

This document has a restricted distribution and may be used by re,ipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

- ii -

TABLES IN TEXT

1.1 Numbers of Regular Government Employees byGrade and Class 1984/85 ......................................... 4

1.2 External Assistance to the Education Sector1981/82 - 1986/87 ............................................... 17

3.1 Cost Summary .................................................... 243.2 Financing Plan Summary .......................................... 253.3 Procurement Methods ............................................. 27

ANNEXES

1. The Education System in Nepal2. Economically Active Population 1971 and 19813. Engineering Manpower Demand and Supply Estimates4. Technical Assistance Summary5. Detailed Project Costs6. Area and Unit Capital Cost7. Implementation Schedule8. Project Management and Implementation Capability9. Improvements of the IOE Physical Facilities10. Building Maintenance11. Staff Requirements and Training12. Managemen. and Administration of the IOE13. Selected Documents in the Project File

- iii -

NEPAL

BASIC DATA

POPULATION

Estimate (1988) 17.5 mAnnual Growth Rate 2.7XAverage density 119 per sq kmLiteracy rate (1986) 34.81GDP per capita (1987/88) US$160

,EDUCATION

School Enrollments Total Male Female 1 female(1987) (1,000s) (1,000s) (1,000s)

Primary (grades 1-5) 1,912.5 1,327.8 583.7 31Lower secondary(grades 6-7) 281.5 207.9 73.6 26Secondary(grades 9-10) 278.0 209.9 68.1 24

Higher (2ost grade 10): _a

Certificate 53.8 - -

Diploma 21.9Degree 4.7 -

Public Lxpenditure on Education (1986-87)

As a percentage of GDP 2.1As a percentage of Total Public Expenditure 11.0

Percentaga of Approximate recurrentEducation budget cost per student

1987/88 1986/87Rupees US$

Primary 38 252 10Secondary 13 362 15Tertiary 25 5,981 245Other Z4

/a Includes 17,372 studencs enrolled in private campuses.

- iv -

NEAL

ENGINEERING EDUCATION PROJECT

Credit and Project Summary

Borrower : Kingdom of Nepal

Beneficiary : Institute of Engineering (IOE) of Tribhuvan University

Amount : SDR 8.8 million (US$11.4 million equivalent)

Terms : Standard with 40 years maturity

Cofinanciers : The Canadian International Development Agency (CIDA) willprovide a grant equivalent to US$3.95 million. The SwissDevelopment Cooperation (SDC) will provide a grantequivalent to US$8.53 million.

ProiectDesexiption : The project aims to broaden the spectrum of engineering

skills that will be available to the economy and increasethe supply of engineers snd technicians. It will redressthe current imbalances in the supply of engineering man-power, reduce the current shortages and meet the demandgenerated by the Government's investments in hydropower,infrastructure and industry. In order to meet about 90X ofthe projected demand and to train engineers and techniciansspecifically for Nepal's needs the project will: (a) expandthe capacity of the IOE to train technicians from 1,370 toabout 1,700 places and that for engineers from 360 to about920 places through construction and rehabilitation offacilities at existing IOE campuses; (b) raise the qualityof engineering education through training staff, improvingcurricula, providing educational materials and raisingadmission and examination standards; and, (c) improvemanagement through strengthening the Office of the Dean,training managerial and administrative staff, developing aManagement Information System and establishing a ManpowerDevelopment Unit. The project will be implemented over aperiod of eight years. To assist with the implementation, atotal of about 175 study-years of fellowships and about 26staff-years of visiting specialists will be provided. CIDAwill finance a consortium of six universities to provideassistance with the expansion of the engineering degreeprograms and the improvements in management and academicaffairs. SDC will finance construction, technicalassistance for construction management, architecturalservices and maintenance, and technical assistance for theexpansion and improvements of the certificate technicianprograms and for project monitoring.

Rlika : The project will assist in maklig the JOE the one institutein Nepal capable of offering B.Sc. degree programs in Civil,Electrical, Electronics and Mechanical Engineering, and inArchitecture and Rural Planning, that meet internationalstandards and are geared to Nepal's requirements. The IOEwill also produce more technicians with skills tailored tothe needs of the economy. Cost savings will be achieved bysubstituting locally trained engineers for higher paidexpatriate ones and by lowe-ring the cost of training throughincreased class size and teaching loads and better utiliza-tion of staff and facilities. The major risk concerns thepossibility of flagging commitment within the Government tocarry through agreed reforms of management, staff regula-tions and accreditation by external examiners. To reducethis risk the Government agreed during negotiations tochange strategically important academic regulations andappoint key management staff as a condition ofeffectiveness.

- vi -

Prolect Cost: 1,ocal ForLwdz Total------ (US$ million) -------

A. Facilities Development:Pulchowk 3.45 6.38 9.83Thapathali 0.71 1.28 1.99Pokhara 0.92 16

Subtotal La 5.08 8.72 13.80

B. Staff and Curriculum Development:Pulchowk 0.82 4.97 5.80Thapathali 0.11 0.24 0.34Pokhara P04.71

Subtotal /- 1.23 5.62 6.85

C. Management Development:Pulchowk 0.36 0.41 0.77Thapathali 0.01 0.04 0.04Pokhara .Q 0.06

Subtotal 0a 0.37 0.49 0.87

Baseline Cost 6.69 14.83 21.52

Contingencies:Physical 0.58 1.21 1.80Price 04 1.74 2.68

Total Project Cost /a /b 8.21 17.79 26.00

Financing Plan: Local Forei Total-(US$ million) -

Government 2.11 - 2.11CIDA - 3.95 3.95SDC 3.35 5.19 8.53IDA i.7 8.6 11.40

Total Q 17.79 26.00

Estimated Disbursements:

IDA FY 1990 1991 1992 1993 1994 1995 1996 1997---------------------- US$ million ------------------

Annual 1.20 2.18 3.50 3.28 0.48 0.46 0.26 0.04Cumulative 1.20 3.38 6.88 10.16 10.64 11.10 11.36 11.40

Economic Rate of Return: Not applicable.

flg: IBRD No. 21597

La Figures may not add due to rounding.1k Includes US$0.95 million in identifiable taxes.

NEPA

ENGINEERING EDUCATION PROJECT

I. ECONOMIC DEVELOPMENT AND DEMAND FOR SKILLED LABOR

A. Economic Development. Emloyment and the Demand for Skilled Labor

Economic Development

1.1 Nepal's per capita GDP of US$160 places it among the very poorestcountries in the world. Despite developmental efforts over the past twodecades, sustained growth of per capita GDP has not been achieved. During theSixth Plan (1980-85) there was a surge in public expenditures aimed ataccelerating the pace of development by improving the provision of social andeconomic infrastructure together with an expansion of the already considerablegovernment involvement in productive activities. This response to laggingeconomic growth was not sustainable because of: (i) the ensuing large budgetand current account deficits (the latter resulting in a substantial fall ininternational reserves); (ii) weaknesses in public administration; and(iii) shortages of skilled labor.

1.2 In 1985, the first year of the Seventh Plan (1985-90), His Majesty'sGovernment (H1MG) implemented a fiscal stabilization program supported by anIMF Standby Arrangement. Together with both the IMF and the World Bank, itbegan implementing a concerted Structural Adjustment Program (SAP) in 1986 toaddress a range of longer-term constraints to growth. Simultaneously, theGovernment also launched an ambitious Basic Needs Strategy (BNS) aimed atalleviating poverty and reaching "Asian Standards of Living" by the year 2000.As a result of these policies economic performance has improved. During thelast three years GDP is estimated to have grown at over 4Z per annum despiteerratic weather in 1986-87 which resulted in drought followed by floods whichdamaged transport and irrigation facilities. Over the ten years prior to theSAP (1974-85) GDP had averaged 3.81 growth.

1.3 Sustained longer-term growth will depend on a range of importantfactors including: (i) a continued sound policy response to changing macroeconomic conditicns (including continued constraint on regular budget expen-ditures); (ii) appropriate economic and social infrastructure investmentsdesigned to support growth (particularly in the agricultural sector andsectors which support agriculture); (iii) continued efforts to improve generalpublic administration and the efficiency of institutions supporting thedevelopment effort; and (iv) continued investment in human resources designedto raise the general level of education and reduce specific technicalworkforce constraints.

1.4 HMG efforts to address these development problems have been reflectedin the sectoral allocations of the development budget in the Seventh Plan.Considerable efforts have been made to both rehabilitate existing irrigationfacilities and extend the capacity of the irrigation system in order to reducethe dependence of agricultural output on the timing of the monsoon. Effortshave also been made to improve the level and quality of other direct inputs to

- 2 -

the agricultural sector and to improve and extend the transport system by thecontinuation of a significant roads and bridges infrastructure program.Hydropower investments have also been made. The emphasis on these sectors inthe Seventh Plan have been reinforced by the 1988-89 budget allocations. Thedevelopment budget has been increased by 50X to NRP 13.4 billion. In the keyeconomic sectors, irrigation's allocation was increased by 1401 to NRP 1.7billion; road allocations were expanded 901 to almost NRP 2.0 billion andag-iculture by 80% to reach NRP 1.4 billion. Further, with the support ofmajor donors, the Government has agreed on the Arun III hydropower project(402 MW) as the appropriate next investment in new generating capacity to meetNepal's demand for power. This project, to be commissioned in the late 1990s,would increase Nepal's production of power by more than 200X. The plans forthe key sectors are ambitious but they will contribute to maintaining currentGDP growth rates. They will also have important implications for the demandfor skilled labor. The expansion of Nepal's basic economic infrastructureincluded in the plan will moreover require a commensurate expansion of thecountry's capacity to maintain its infrastructure in terms of both financialresources and skilled labor.

population. Labor Force and Emplovment

1.5 The 1981 census indicated that Nepal's population increased by 301 to15 million over the decade 1971-81 and the annual rate of population growthover this period was 2.66%. The population was comparatively young asindicated by the fact that 41% was aged 14 years and below. Officialestimates of the labor force are based on the population aged 10 years andabove which was 10.5 million in 1981. The economically active population wasestimated at 6.9 million, with a male participation rate of 83% and a femaleparticipation rate of 46%. Over the decade 1971-81 the economically activepopulation increased by 2 million or at about 200,000 per annum. Nepal'spopulation is currently estimated at 17.5 million and is growing at about 2.7%per annum. Even under the most optimistic World Bank population projectionscenario, total population is expected to be more than 24 million by 2000 andabout 30 million 10 years later. This momentum of population growth hasprofound implications for the future growth of the labor force. OptimisticWorld Bank projections of the labor force (defined here as 100% of males and60% of females aged 15-59 years) indicate that it will reach 10.3 million inthe year 2000 (1985, 6.7 million) and the growth will be about 600,000 perannum.

1.6 Nepal is essentially an agrarian society. Agriculture contributed57% of GDP and employed 91% of the workforce in 1981. Of the non-agriculturalsectors of the economy, community services (dominated by Government) accountedfor 7% of GDP and 4.6% of employment; and commerce for 3.5% of GDP and 1.6% ofemployment. The non-agricultural sectors combined accounted for just over 30%of GDP but less than 3% of employment. Manufacturing and construction whichaccounted for 11% of GDP employed less than 1% of the workforce. The NationalPlanning Commission (NPC) anticipates that employment in agriculture will growat 3.5% and in the non-agricultural sectors by more than 8% per annum to theyear 2000. These rather optimistic projections of non-agricultural employmentgrowth still imply that agriculture would absorb about 81% of the economicallyactive population by the year 2000.

- 3 -

1.7 Although currently reported unemployment rates are low (some 51 oft'he workforce) there is substantial underemployment particularly in the agri-cultural sector. Underemployment has been estimated at 41X of person-daysavailable in rural areas and some 25X in urban areas. The BNS recognized thisand paid special attention to the alleviation of unemployment andunderemployment. A range of measures is being adopted to support theexpansion of employment in all sectors. The measures include formalconsideration of the employment implications of macro-economic decision-making, the expansion of irrigation facilities (but with a shift in emphasistoward smaller, less capital-intensive schemes), and an emphasis on labor-

, intensive crops (foodgrains, sugar cane, tobacco) with multiple cropping where

possible.

OccuRational and Educational Profile of the Laborforce

1.8 The occupational breakdown of the laborforce shows that in '.981 only600,000 of the economioally active population were engaged in non-agriculturaloccupations (see Annex 2). Professional and technical workers accounted forless than 11 of the laborforce (64,000) or about 111 of those engaged in non-agricultural occupations. About 36X of professional and technical workers hada tertiary education and the largest proportion of tertiary-educated personswere found in administrative occupations (611 of 6,200). Persons with aprimary education or less are predominant in all other occupational groups.

1.9 Government is the single largest wage sector employer in Nepal. In1985, total publ4c sector employment was about 203,000 made up as follows:civil service 61,000, education 80,000, casual workers 22,000 and publicsector enterprises 40,000. (The first year of the Seventh Plan - 1985 - isthe latest year for which reasonably comprehensive data on employment isavailable and is used here only as an order of magnitude estimate.) Thenumber of regular civil service employees by grade and employment class for1984-85 is shown in Table 1.1. The importance of educational qualificationsrequired for civil service employment is evident. The minimum qualificationsappears to be the completion of lower secondary (grade 8 pass). Almost 851(45,059) of the regular government employees have completed secondary orhigher education programs. HMG now requires that all school teachers have theSchool Leaving Certificate (SLC) and the Ministry of Education and Culture isnot renewing the contract of teachers without this qualification.

-4-

Tablg 1.1: NUMBERS OF REGULAR GOVERNMENT EMPLOYEES BY GRADE AND CLASS1984-85

Class Entry Oualifications Numbers

Gazetted Special 43I 511II 1,788III Bachelor Degree 8.083

Total 8,425

Nongazetted I Proficiency Certificate 14,039II School Leaving

Certificate (SLC) 22,595III Grade 10 pass 10,580IV Grade 8 pass 5.559

Total 52,773

Source: Strategies for National Manpower Development inNepal. ILO, Kathmandu, 1986, p. 94.

Shortages of Technical Labor

1.10 The development effort in Nepal with its emphasis on a reduction ofunemployment and underemployment through support for the agricultural sectorand the establishment of basic economic infrastructure for the development ofother sectors has been constrained by skilled labor shortages. Skillshortages together with inadequate manpower planning and associatedinefficiencies in labor force utilization have been a major contributingfactor for the delays experienced with the implementation of developmentprojects in all sectors of the economy. The skill shortages or in manysectors skill imbalances result from the traditional concentration on civilengineering occupations in manpower planning, training and public sectoremployment to the detriment of the needs for mechanical and electricalengineering personnel in the water resources, power and communication sectors.Evidence collected from project managers indicates that shortages of trainedengineering personnel tend to thwart efficient and timely execution ofprojects in these sectors. The lack of skilled engineering personnel has alsobeen one of the principal reasons for the poor maintenance of infrastructureand capital equipment. More generally, technical skill shortages throughoutthe economy have constrained growth and expansion of employment opportunities.

1.11 While it is difficult to build up a comprehensive picture of theskilled labor market in Nepal because of a lack of basic employment and labormarket data, available indicators strongly suggest that there are severeshortages of skilled personnel--particularly engineering/technical personnel.

(An important element of the present project - the Office of ManpowerDevelopment - is expected to significantly improve information available fortechnical manpower planning.) In 1981, for example, 27X of paid employment inthe industrial sector (74,000 workers) were expatriates, many at thesupervisory level. Within the Government sector many technical posts (Gazettedand Non-gazetted), which are important to the implementation of keydevelopment projects remain unfilled. In 1981, the National PlanningCommission (NPC) reported a shortage of middle and higher level professionaland technical workers of about 201 of the available stock. Amongst these, thegreatest shortage (641) was reported for engineers. NPC estimates oftechnical and professional workforce shortages at the start of the SeventhPlan (1985) indicated that shortages had risen to 301 of available stock.

1.12 A range of labor market indicators confirm official estimates ofskilled workforce shortages. A sample survey of university graduates in 1983indicates that 771 of all employed graduates got their job within 6 months(only 4.3X took more than 1 year). While the level of unemployed graduateswas almost 24X of the sample, the vast majority were graduates of less thantwo years standing. Further, 861 of the unemployed had a non-technicaleducation while only 14X had a technical/vocational qualification(agriculture, engineering and education). Of the unemployed group, 301 weregraduates of the Institute of Commerce and Management, and 141 were from theInstitute of Science and Technology.

1.13 A more recent survey of 15 firms (public and private) with almost3,000 employees indicated that: (i) all but three firms had trouble findingtechnical personnel particularly medium and high level technical personnel(ii) thirteen firms expressed the need for further improvement in the skillsand knowledge of their employees particularly in the mechanical and electricalareas; and (iii) technical personnel received more salary even though theiryears of schooling were equal to that of non-technical personnel. Inducementswere usually given in the form of housing and dearness allowances and throughhigher grading of staff. Employers agreed that they needed to do this to keepexperienced workers (in the face of high demand). Recruitment of skilledpersonnel by firms is usually through advertisement--at least for permanentposts. An analysis of responses to advertisements in a sample of firmsindicated that: (i) significantly more applicants apply for non-technicalposts; and (ii) the level of over-qualified graduates applying for posts issignificantly less for technical posts.

1.14 The most recent data on pressures in the labor market for technicalpersonnel confirms earlier trends. During the first three years of theSeventh Plan (i.e. 1985-88), HMG has approved and financed 330 degree levelengineering posts in the civil service (a 151 expansion in the total stock)and 1,012 certificate level posts (221 expansion). An NPC review of these newposts in July 1988 indicated that 20% of both categories were unfilledapparently because of a lack of supply. These figures do not cover postsexisting at the start of the Seventh Plan and it is estimated that there isan overall vacancy rate of 111 for degree level posts and 121 for certificateposts within the civil service (Annex 3).

1.15 The apparent shortage of engineers and technicians is a reflection ofNepal's past inability to develop an appropriate stock of technical personnelThe actual proportion of engineering personnel in the economically activepopulation is smaller than in other countries in the region. Nepal currently

-6-

has about 2,700 engineers and 5,500 technicians. This is about 0.9X of theeconomically active population in the non-agricultural sectors. This level isextremely low compared to Bangladesh where 3.8% (1981) of the modern sectorlabor force was comprised of engineers and technicians, of which 35X wereuniversity graduates.

Projected Demand for Engineering Personnel

1.16 The current shortages of engineering personnel are expected toincrease according to projections prepared by the NPC. The projections arebased on the investment program of the Seventh Plan (1985-90), the workforcerequired by public sector agencies to manage planned investments, and the needof the private sector. They indicate that the demand for engineers wouldincrease by 9.81 per annum during the plan period and technicians by 11.31 perannum. According to the Mid-Term Review of the plan (1985-88), realized(effective) demand has grown at 4.81 for engineers and 6.91 for techniciansalthough the number of posts being approved in the engineering cadre by thecentral agencies of HNG has been constrained by concerns over the lack ofsupply of engineering personnel. Earlier projections made in an 1983engineering personnel study estimated that the demand for engineers andtechnicians would grow at 8X and 9.21 respectively per annum. iowever, theseprojections were based on an annual average rate of expansion of the publicsector engineering cadre of 8.31 between 1978-83 and a projected rate ofexpansion of government expenditure in excess of 131 per annum over the period1983-95.

1.17 Having reviewed available information on (a) the labor market forengineering personnel, including the small but growing private sector demand;(b) the most recent and prospective performance of the economy; (c) theability of the government to mobilize domestic revenues and finance publicexpenditures; and (d) government priorities for infrastructure investments andsupport of the BNS, the mission has estimated that the effective demand forengineers will grow at about 41 per annum over the period 1988 to 1992 and3.5% to the year 2000, while that for technicians would grow 41 over theperiod 1988-2000. (See Annex 3 for a more detailed discussion of engineeringmanpower projections.)

Type of Engineering Personnel Required

1.18 The nature of the development effort means that Nepal requirestechnical personnel in the four basic engineering disciplines: civil,mechanical, electrical, electronics and in architecture and rural planning.In 1983, the public sector stock of 1,890 engineers was broken up as follows:66X civil, 61 mechanical, 101 electrical and 18Z other (survey officers,electronics; telecommunications; aeronautical, mining, chemical andmstallurgical engineers). While this distribution reflects in many ways thenature of the past development programs in Nepal, it has also been influencedby the nature of the past supply position which has not accurately reflectedeither the past or present demand position. Further, the nature oftechnological change throughout the formal sector is having an importantimpact on trends in the demand for technical personnel and is expected toraise the demand for electrical, electronics and mechanical engineers inrelation to civil engineers. Indications of this are evident from a number of

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observations. For example, the World Bank projects that the domestic demandfor power will grow by 9-12X per annum, largely as a result of growth andchanges in technologies of production and consumption. (NeDal Power SubsectorReview. The World Bank Report No. 68792-NEP, January 15, 1988.) Also, whilethere are no immediate plans to undertake large scale public sectortelecommunications investmenta, there has been significant growth in localarea networks as the formal business sector strives to reduce the transactioncosts of doing business. Given these developments in power andcommunications, the demand for electrical and electronic engineering personnelis expected to grow significantly.

1.19 Further, while it is not currently fully reflected in the budget,there is a clear need to increase allocations for the maintenance of publicsector assets. Economic infrastructure assets--particularly in agriculture--must be maintained and extended. Continuing improvements in the productivityof agriculture will also involve considerable expansion of agriculturalindustry inputs. For this to happen, transportation, infrastructure andservices must also be maintained and extended. This will require technicalpersonnel in electrical and mechanical engineering presently not available.

1.20 A review of the labor market also indicates that the technical skillsneed to be better tailored to the requirements of Nepal. Employers havegenerally been satisfied with the technicians trained in Nepal but theGovernment--the major employer--has not been satisfied with the quality ofmany (particularly degree level) graduates who have returned from trainingoverseas. In many cases accreditation of these graduates has been a majorproblem--particularly those from programs in eastern Europe. While there isclearly a common core of technical knowledge in basic engineering programs,there are country-specific considerations which need to be taken into accountin designing a national curriculum. These include: the educationalbackground of students entering the programs; the specific range of technicalskills required in Nepal on the basis of existing work practices; the natureof engineering problems given Nepal's topography; and the range of engineeringtasks being undertaken as part of the national development efforts.

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B. The Education System and Issues in the Sumglyof Engineering Personnel

Overview

1.21 The formal educational system of Nepal is managed by the Ministry ofEducation and Culture (MOEC) and provides for five years of primary education;two years of lower secondary education; and three years of (upper) secondaryeducation. A national examination--the School Leaving Certificate (SLC)--isheld at the end of grade 10 and is a minimum requirement for entry to tertiarystudies and for most career positions in the public service including theteaching service. The largely autonomous multi-campus Tribhuvan University(TU) is responsible for all tertiary education except Sanskrit education whichis provided by the Sanskrit University created in 1987, with an enrollment ofunder 500 students. The academic program covers a wide spectrum of subjects.Individual programs range from two to eight years but the majority of students(65Z) are enrolled in Proficiency Certificate programs usually of two years'duration.

1.22 The period from 1971 to the mid 1980's has been characterized byrapid quantitative expansion at all levels of education. Total educationenrollments of about 0.5 million in 1971 had expanded to 2.4 million studentsin 1987-88 attending about 17,500 schools and educational institutionsthroughout the country. Currently, there are 1.9 million students at theprimary level (301 female); 281,500 at the lower secondary level (261 female)and 278,000 at the secondary level (251 female). These advances have been theresult of expanding public sector support for the education system togetherwith strong social demand and considerable efforts to enhance the mobilizationof private finance for education. Despite the rapid increase in enrollments,overall literacy rates are still low at 351 (52X males, 181 females) andfemale enrollments are lagging.

1.23 In 1985, National Planning Commission data indicated that the grossenrollment ratio was 82X for the primary age group (521 female); 311 at thelower secondary level (191 female), and 201 at the secondary level (121female). As a result of using different population estimates, the primary agegroup figure used by MOEC for 1985 is 771. Net enrollment ratios are expectedto be significantly lower. However, the rate of expansion of the primaryeducation system since the mid 1980s has been less than the rate of populationincrease indicating that the gross enrollment rate may decline andimprovements in literacy rates achieved in the past decade stagnate.Expansion of enrollments at the secondary level may increase modestly in thenear future. University enrollments have increased to about 82,500 (including17,372 private campus students) by 1988. The rate of increase has been 81 perannum since 1982. The increase has been largely in private campuses, thegrowth in public campuses has only been 3.81 over the same period. This rapidgrowth in enrollments has been driven by a strong private demand for tertiaryeducation. A lack of strategic planning for labor force needs in the economyhas resulted in current enrollments being very skewed with humanities and lawhaving 481 of students and management 231 while engineering with 31, medicine

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2X, and agriculture/forestry 21, account for a relatively small share of totalenrollments.

The Institute of Engineering

1.24 Engineering education is provided by the Institute of Engineering(IOE) of the University. It provides proficiency level studies (which are ofthree years' duration) in a range of engineering subjects and a bachelorslevel degree program (of four years' duration) in civil engineering forstudents with a proficiency certificate in either science and technology orengineering. The IOE is also responsible for a small trades' program which ispart of the technical educacion system. The system of technical schools atthe secondary level is largely the responsibility of MOEC. Moreover, otherMinistries provide specialized and lower-level technical education programs.

1.25 The IOE has three campuses, Pulchowk (the main campus) and Thapathaliin Kathmandu and Pokhara in the Western Region. It had an errollment of 1,727students in 1988 of which 21Z are degree level students, 701 certificate leveland 91 trades level. Students are being prepared primarily for jobs as civilworks overseers, mechanical, electrical and electronic supervisors,refrigeration and air-conditioning technicians, architectural draftsmen andcivil engineers. Currently the IOE is graduating about 300 technicians eachyear at the three campuses. The degree program in civil engineering wasdeveloped (largely in response to demand by donors involved in the financingof Nepal's infrastructure program) at the main campus at Pulchowk and has acapacity to graduate about 55 annually. The IOE also trains about 100craftsmen in a one-year program for the Western Region in Pokhara. RecentlyHMG has decided that the training of craftsmen will be transferred in the mid1990's to MOEC as part of reforms in technical and higher education.

1.26 Past investments in the IOE provide a basis for the expansion ofengineering education in Nepal. Existing programs are the result of a seriesof efforts over a number of years designed to meet labor market requirements.These efforts have met with mixed success. Capacity has been expanded but notsufficiently to meet the demand. Curricula have been upgraded several timesin cooperation with engineering specialists and major employers but withoutinputs from comprehensive job analysis. A range of factors impinge on thedesign of programs and on the ability of the IOE to meet future skilledworkforce needs. These include academic, capacity and managerial constraintswhich are discussed below.

The Strong Demand for Engineering Education

1.27 The demand for engineering education is strong and is expected toincrease with the projected growth in qualifying students. In 1988, thenumber of students applying for a seat in the IOE's engineering educationprograms was about ten times larger than the admission capacity. For thetechnicians program admission requires completion of secondary education(Grade 10) and passing of the SLC examination. Approximately 50,000 students

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were enrolled in Grade 10 in 1987. About 49,350 of these sat for the SLC and17,200 or 35X passed the eram. Students who fail the SLC may sit for it again(without repeating grade 10) in later years. This adds significantly to thetotal potential supply of SLC graduates wanting to enter the university. Fromthose who passed, about 4,560 applied for the 528 seats available in thetechnician programs at the IOE. Admission to the civil engineering programcurrently requires a Proficiency Certificate in Engineering (PCE) from thethree-year IOE program or a Proficiency Certificate in Science (PCS) from thetwo-year science and technology programs. More than 5,300 students areenrolled in the science and technology program and about 1,200 in theengineering program. In 1988 there were more than 800 applications for theIOE's civil engineering degree program (total 72 places in 1988) comprising500 from a PCS program and more than 300 from the PCE program. The strongdemand for degree level engineering education is expected to continue,particularly from the ranks of science and technology graduates. Studentsfrom the PCS programs express a strong preference to enter either the medicalor the engineering degree program. Given the strong demand the IOE willcontinue to have a sufficiently large pool of applicants even if it wouldincrease its admission capacity by 50X as is planned in this project.

Academic Background of Students and Admissions

1.28 Admission to certificate programs is competitive and based on theapplicants' academic background. There is no separate entrance test todetermine aptitude for technological courses. Admission requires: (a) a passin all nine SLC subjects; (b) an average of 601 in maths and English; and(c) an average for all SLC subjects plus maths and English score of 501 ormore. Specific requirements above a pass are not made for science. Thequality of students particularly their proficiency in mathematics, science andEnglish tends to be inadequate and is one of the factors responsible for thelow pass rates at examinations and the high examination repetition rateswithin the certificate program. Currently students who fail examinations donot retake courses but progress to the next semester and subsequently retakeexaminations of previous semester courses until a course is passed. Thisphenomenon is known as backsitting and implies that there are no pre-requisitecourses in the certificate programs as presently constituted. Few SLC holdersachieve high scores in science and mathematics which are optional subjectswithin the secondary school curriculum because of the lack of science andmathematics teachers, books and materials in the schools. However, the ADBcurrently has a project focused on improvements of science education insecondary schools. While the IOE gives priority to students with theappropriate background, with the current admission standards it is necessaryto teach remedial programs (particularly in science) to bring studentunderstanding up to the level required for the PCE program. The extent andscope of remedial requirements in the curriculum needs to be reviewed in thecontext of an overall review of the curriculum content based on analysis ofjob requirements in the economy. The admission standards and theeffectiveness of remedial programs also need to be improved, and with theassistance of IDA, the IOE is establishing a computer based facility to teachremedial science, mathematics and in the future, English.

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1.29 Admission to the civil engineering degree program is divided 50/50between applicants from the PCS and PCE streams and is based on achievement atthe proficiency certificate exam (50X) and the result of an entrance test(501). The IOE administers separate entrance tests for candidates from thetwo streams. The test for candidates from the PCS program focuses on Scienceand English while for candidates from the PCE program it focuses onEngineering and English. The pass rate in both tests is 30X but the standardsin the PCS stream appear to be more clearly defined and more appropriate fordegree level engineering education than that for the PCE stream. From ananalysis of the PCE program curriculum it is also evident that the sciencecontent is significantly lower than in the PCS program. In addition,applicants from the PCE stream may have graduated several years earlier fromcourses significantly different from those currently taught. To rectify thissituation, the IOE adjusts the nature of the entrance exam according to thespecific year(s) the student studied at the IOE. Two separate merit lists areproduced to fill the available number of places according to the 50/50 quota.Thus students with very different academic backgrounds enter the civilengineering program. The current entrance test do not adequately evaluateapplicants in areas crucial to success in the degree program. These includeaptitude in engineering, communication skills, and above average knowledge inmathematics, physics and chemistry. As a result, marny students admitted underthe current admission procedures are weak particularly in the latter threesubjects. The appropriateness of the present admission standards need to bereviewed in the light of the objectives of the degree program.

Enrollment of Women

1.30 The IOE reserves 101 of student places for women but has difficultyfilling this quota. Of the 4,560 applicants for certificate programs in 1988,only 69 were women. The quota was 53. That same year there were only twowomen among the first 24 on the merit list for the degree program in civilengineering. There are presently 111 female students (6.41 of the total)enrolled in IOE programs of whom 104 are in the certificate programs, i.e.,almost 101 of enrollments in the certificate program are women, with a muchhigher proportion being enrolled in architecture. Very few women appear toseek a career in the areas of mechanical or civil engineering. In the civilengineering degree program which has an enrollment of 237, only five studentsare women. The lack of appropriate accommodation for women at the IOE hasoften been cited as a constraint to enrolling more women.

Curriculum

1.31 The curriculum for the technicians programs at the IOE has beenrevised several times. In 1986, the length of all technician programs wasextended from 2.5 to 3 years. The past revisions have not been based onactual surveys of job requirements and work practices in either the public orprivate sectors. The current curriculum content emphasizes classroominstruction which takes up 811 in the first year and 601 in the second andthird years. Relatively little time is spent on technology applications,workshop experience and skill development. This would not seem to beconsistent with the changing nature of many of the jobs for which techniciansare recruited. There is strong evidence to suggest that improvedunderstanding of technology applications and enhanced technical/manual skills

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would improve the external efficiency of current programs. This would requirea structural change in the curriculum by increasing the time spent inlaboratories and workshops. The curriculum would also be enhanced byallocating more time to maintenance and repair issues. Presently, many ofthose responsible for curriculum development, as well as many students in thecertificate programs, see the program as preparation for subsequent degreestudies in engineering. The guiding force for the technicians programsshould, however, be to satisfy requirements for the labor market not to serveas a preparation for degree programs whose entry requirements demand amongother things high proficiency in science, mathematics and English.

1.32 The civil engineering degree program generally reflects patternstypical of accredited programs in North America. It has a satisfactorycontent in basic sciences e.nd engineering sciences but does not sufficientlycover the relevant civil engineering subjects. The deficiencies in civilengineering subjects are caused in part by a lack of appropriate laboratoryfacilities. The curriculum adequately covers the particular engineeringrequirements of Nepal. Periodic analysis of trends in employment andtechnology should continue to guide further enhancements of the program.Pressures to lower curriculum standards and admit students not sufficientlycompetent in the basic sciences and mathematics should continue to beresisted.

Examinations

1.33 The format and procedures for performance evaluation of students havereceived considerable attention at the IOE. Final course grades comprise twoelements. First, students must pass an internal course assessment whichaccounts for 20X of the final grade. Second, a final three-hour closed bookexamination accounts for 80X of the final grade. An important problem withthe current student evaluation process--particularly at the technician level--is that not enough attention is paid to practical or skill related aspects ofthe curriculum which cannot be examined under current procedures.

Academic Regulations

1.34 The present IOE regulations do not specify prerequisite or co-requi-site courses. Students failing a course are permitted: (a) admission tosubsequent semester courses; and (b) an unlimited number of attempts atpassing failed courses by repeating final exams which are scheduled annually.There is no time limit to graduation in a program (para. 1.28). Theseprocedures are recognized as undesirable from an educational standpoint. Aset of academic regulations is needed which would ensure that onlyacademically qualified students can progress from year to year, and thatrealistic time limits are specified for graduation.

Competence of Staff

1.35 There is an adequate supply of qualified staff within the IOE(Annex 11). Many are highly qualified academically--particularly thosecurrently involved in civil engineering and architecture. The majority ofstaff are involved in the teaching of certificate programs. Their technical

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and professional engineering experience appears to be limited. It is alsonecessary to improve the attitudes of staff towards the principal function ofthe IOE--teaching. The observed lack of motivation to perform teaching dutiesappears to be related to the cumbersome administration and the highlycentralized management of the IOE.

Instructional Materials

1.36 There is an inadequate and in some cases inappropriate supply ofinstructional materials and consumable supplies at the IOE. This is particu-larly evident in laboratories and workshops supporting the technician programwhere consumable supplies and parts are lacking. The current supply of text-books, teacher guides and learning materials to support the curriculum is alsoinadequate and complicated by the fact that many students are not strong inEnglish. Teaching staff in the technician program need to provide lecturenotes and handouts often in both Nepali and English. The IOE has a range ofaudio visual aids but these are not being used regularly since many classroomsare not equipped for their use. On the other hand, the civil engineeringprogram has an adequate supply of textbooks and reference materials within thelibrary, but there is no campus bookstore to supply students with affordableand appropriate textbooks for private use and to keep for their professionalworking life.

Capacity Constraint

1. 37 The current capacity in Nepal to train engineering personnel isinadequate in terms of student numbers and enrollment distributionparticular'y at the degree level. Nepal is almost totally dependent onoverseas training for its engineers. Since 1986 the IOE has had a capacity toproduce about 55 civil engineers annually. At full enrollment in 1990, theoutput would increase to about 88. But in the other three basic areas ofengineering -- electrical, electronic and mechanical -- and in architectureand rural planning, Nepal remains completely dependent on overseas training.The number of degree level graduates being trained overseas presently isinsufficient. Moreover, the opportunities at good quality engineeringinstitutes in the region are diminishing because of the high indigenous demandfor engineering education in these countries. Further, donors have beenexpressing reluctance to continue to finance the high cost of overseastraining for engineers.

1.38 The annual number of engineering fellowships has steadily declinedfrom about 130 in 1980 to less than 90 in 1987. However, a small number ofstudents obtain privately financed engineering education in the region. Anumber of problems have been identified with overseas training which affectthe efficiency, quality and cost effectiveness of continued reliance onoverseas training to meet labor force ,.equirements. Specifically:(a) studies overseas are often prolonged because of language proficiencyrequirements; (b) qualifications from certain countries are not fullyrecognized in Nepal; (c) few foreign programs currently available focus on thenature of engineering problems faced in Nepal particularly in the areas ofhill irrigation, suspension bridges, hydropower, water supply management andmountain road construction; and (d) overseas training is costly relative todomestic training. The current operating cost per student per year at the IOE

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in 1987 was NRP 10,137. The average cost of regional fellowships in theregion is NRP 27,000 and in North America or United Kingdom it is of the orderof NRP 206,000 per year.

Academic Management and Administration

1.39 As an Institute of Tribhuvan University, the IOE is subject to therules and policies under which the University operates. Tribhuvan provideshighly centralized management control for 69 campuses all over the country.While university enrollment has tripled between 1975-85, the managementorganization has not developed at the same pace and Tribhuvan is finding itdifficult to provide adequate management support for all campuses andinstitutes. Recently, the Univarsity :ias begun to delegate some managementresponsibilities to the technical institutes including the IOE. However, thepresent management structure vI the IOE tends to concentrate decision-makingregarding academic affairs at. "dministration in the Dean's Office.Considerable delegation of decision-making to department heads, separation ofacademic and administrative functions, an effective advisory role for staff,and a management structure which encourages academic leadership are needed ifthe IOE is to take on more management responsibilities.

1.40 The primary function of IOE is teaching. To support the teachingfunction there is a need for effective administration of key areas includingbudgeting, staffing and support services. A lack of appropriately skilledpersonnel for administration, particularly in plant and facilitiesmaintenance, purchasing and stores, record keeping, data collection andanalysis and management information, hampers the development of effectiveadministrative support in the IOE.

Financing Education

1.41 Since 1971 the share of public expenditure on education as a propor-tion of GDP has risen from less than 11 to 2.1X in 1986-87. The share ofeducation in total government expenditure has remained constant at around llXfor more than a decade. The largest determinant of resources available forthe further development of education in Nepal (given the poverty of themajority of the population) is the potential to expand public resourcesdevoted to education. Historic trends and the long-term domestic resourcemobilization outlook indicate that the public budget is unlikely to growsignificantly faster than the economy; and competition for budget resourcesfrom other Government programs would seem to indicate that the share ofeducation in the budget is unlikely to iLcrease significantly without aconscious change in public expenditure policy. This implies that the publicresources available for education are likely to grow at a rate largelydetermined by the performance of the economy. Most recent Bank projectionssuggest GDP will grow at 4.51 per annum over the period 1988-92 and thatpublic expenditure will expand at a slightly higher rate.

1.42 The BNS has placed strong emphasis on the achievement of universalprimary education and there is a strong private demand for secondary anduniversity education. Thus, there will also continue to be strong competitionfor resources within the education sector. In 1987-88, NRP 1.6 billion wasallocated to education. The share of the budget allocated to primary

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education has been expanding since 1980-81 and has risen from 26Z to more than401 in 1987-88. The share of the budget allocated to secondary education hasfallen from 18.51 to 13.21 over the same period. Enrollments have continuedto grow as a result of private financing of secondary education. The share ofthe education budget devoted to the University has also fallen significantlyduring the 1980s from 351 to 23.4X in 1987-88. The IOE's budget accounts for5.21 of the University's budget and 1.21 of the education budget. There areno private campuses providing engineering programs.

1.43 The IOE's total budget in 1987-88 was NRP 19.7 million with a recur-rent budget of NRP 15.8 million. The average recurrent cost per student peryear in 1987 was NRP 10,137 or US$417.2. Measure.; planned by the IOE toimprove efficiency would reduce the unit cost to NRP 9,527 (US$392.0) by 1996.This level of unit costs is low compared to the unit costs of secondary(basic) level technical education programs in Nepal where unit costs ofbetween US$399 and US$655 have been calculated for the year 1985.

C. Government Policies in Education and Skilled Labor Development

1.44 HMG has recognized the potential development benefits from investmentin education and labor force development. Specifically, HMG has emphasizedprimary education while also devoting resources to secondary, technical/vocational education and higher education to meet the skilled labor forcerequirements of the economy. The rapid quantitative expansion of theeducation system was a result of Government efforts, particularly the imple-mentation of the National Education System Plan in 1971 and the acceptance ofresponsibility for a significant share of the financing of education beginningin 1975-76. Primary education and textbooks for grades 1-3 are now providedfree of charge, although communities remain responsible for school buildingsand a large proportion of additional materials required by schools. Insecondary education HNG provides grants for 751 and 501 of teacher salaries atthe lower and upper levels, respectively. The rest of the funds are to beraised from students fees and the local community. In higher education, whichis financed for more than 95% by the government, the emphasis is to expand theoutput of engineering, medical, agricultural and forestry graduates.

1.45 HMG's specific targets for the education sector are reflected in theSeventh Plan and with respect to the longer-term development of primaryeducation in the BNS. The Seventh Plan has a target of achieving a grossenrollment ratio at 87% for primary schools by 1990 (82% in 1985). With thelaunching of the BNS, HMG has decided to provide universal primary educationby the year 2000 and expand the currently modest adult literacy program.While the targets of the BNS are overly ambitious (enrollments of boys wouldneed to expand 64% and girls 2411 over the period 1985-2000 and the primaryeducation budget would need to expand at about 7% per annum), the direction ofthe policy thrust is sound.

1.46 At the secondary level, the Seventh Plan proposes to integrate thetwo levels of secondary education and increase enrollments. Gross enrollmentratio targets have been specified for lower secondary and secondary at 451 and351 respectively. This is to be achieved by encouraging the establishment ofnew schools and the expansion of existing schools. HMG is also concernedabout the quality of secondary education which provides the foundation for

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both higher level education and employment. Specific efforts are being madeto reduce the number of untrained teachers and improve the quality of scienceeducation.

1.47 The MOEC is implementing plans for the future development ofvocational/technical education. The existing seven technical schools underMOEC have a capacity to train no more than 835 students. With the support ofthe ADB, HNG is planning to construct four new schools to improve the regionalcoverage of technical education (currently biased towards Kathmandu Valley)and meet basic level labor force needs. The primary emphasis for highereducation as reflected in the Seventh Plan is to (a) improve quality bystrengthening the existing campuses of the University; (b) expand the capacityand range of offerings of the technical institutes in line with skilled laborforce requirements; and (c) encourage the private provision of universitylevel programs under the general umbrella of the university.

D. External Financing of Education and Skilled Labor Development

1.48 A number of donors have been active in supporting education. Theflow of external assistance to the education sector has expanded significantlyfrom 9.51 of total expenditure in 1975 to 17.91 in 1986 but fell to 13.31 in1987. Over the six-year period 1981-87 more than 16% of educationexpenditures and about 201 of development expenditure was financed by externalassistance as shown in Table 1.2. Loan assistance, wnich only began in1978-79, has grown considerably and in 1986-87 it was significantly largerthan the grant aid but grant aid remains the most important component in the1980's constituting about 571 of total external assistance disbursements.

1.49 Each level of education has several donors involved. Co-ordinationbetween donors is however not very strong partly because of HMG's preferenceto deal with donors incividually and partly because of the absence of a strongpublic expenditure planning system which can focus individual donoractivities. The local UNDP office has taken a major interest in co-ordinatingthe donors in the sector. IDA with its expanded involvement in the sectorwill continue to work with HMG and donors to improve the effectiveness ofassistance to the education sector. IDA is in the process of finalizing anoverall strategy for its involvement in the social sectors.

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Table 1.2: EXTERNAL ASSISTANCE TO THE EDUCATIOW SECTORt1981/82-1986/87)

NRP million

1981/82 1982/83 1983/84 1984185 1985/86 1986/87

Total expenditure 519.1 734.0 815.8 825.8 1,087.0 1,278.8

Devetopment expenditure pj 412.3 604.6 678.6 644.2 879.4 1,036.5

Aid disbursements: Loan 27.1 27.4 57.9 52.7 74.1 122.4

Grant 49.7 140.5 80.9 49.2 120.5 47.5

Total 76.8 167.9 138.8 101.9 194.6 169.9

Total aid disbursements as:

X of Total expenditure 14.8 22.9 17.0 12.3 17.9 13.3

X of Developnent expenditure 18.6 27.8 20.5 15.8 22.1 16.4

Source: Ministry of Fiance, Economic Survey 1987/88 (various tables).

Development expenditure as defined by HNG includes almost allexpenditures for primary education.

1.50 The major donors in the general education sector are IDA, ADB, USAID,and UNDP. Within the occupational training sector IDA, the Swiss Associationfor Technical Assistance (SATA), and ADB have played an important role. Thefocus of external assistance in general education has been to supportexpansion of the system and improve the quality of the delivery. In thisregard USAID has been assisting in expanding literacy (PVO-World Education,1987-90, US$0.6 m) and training primary school teachers through a radioeducation project (RETT-II, 1984-89, US$6.2 m). IDA together with UNDP andUNICEF is supporting primary education (Cr. 1463-NEP, 1984-89, US$12.3 m).UNESCO is also supporting teacher training and the development of textbooks(1984-89, US$1.2 m), UNICEF/UNESCO and the Norwegian Assistance forDevelopment (NORAD) are involved in a project to improve the access of women(1978-98, US$1.6 m). UNICEF/UNESCO and UNDP are financing an Education forRural Development Project (1981-86, US$1.3 m). Secondary education is beingsupported through the ADB Science Education Project (1983-89, US$9.9 m).

1.51 Within the occupational training sector SATA is financing threetechnical schools (1980-90, US$3.0 m). SATA has also supported the EducationFaculty of Tribhuvan University (1975-87, US$0.5 m). IDA is assisting theInstitute of Engineering w'th the First Education project (Cr. 772-NEP,1978-85, US$6.5 m) complet-d in 1987, and the Second Education Project (Cr.1198-NEP, 1985-90, US$14.3 m) which is currently under implementation. IDA isalso assisting the Institute of Agriculture and Animal Science with theAgricultural Manpower Project (Cr. 1534-NEP, 1985-91, US$8.4 m). USAID isalso providing support for the same institute (1985-91, US$16.5 m). TheJapanese International Cooperation Agency (JICA) is giving assistance to theInstitute of Medicine (1980-88, US$1.6 m) which is also receiving technicalassistance from the University of Calagary (Canada) which is financed by CIDA.

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1.52 In 1986, USAID financed a study designed to improve the efficiencyand management of the education sector which was completed in 1988 (IEES,1984-88, US$0.3 m). Partly building on this study, IDA has undertaken areview of the social sectors and poverty in Nepal. This will provide a basisfor IDA's continued involvement in the sector and support efforts tocoordinate assistance in the sector.

1.53 Several projects are under preparation. At the secondary level theADB is preparing a Technical School Project (US$11.8 m) and a TeacherEducation Project (US$15.0 m). In higher education, the Government of Indiais discussing a women's Polytechnic Project (US$4.7 m). In addition to theEngineering Education Project, IDA is planning a Basic Education and a PovertyAlleviation Project.

E. IDA Strategy and Rationale for Involvement

1.54 IDA has reviewed the overall status of human resource development inNepal and the nature of its contribution to the development effort. The long-term development of Nepal is critically dependent on: reducing populationgrowth; upgrading the human resource base; removing specific skillconstraiuts; improving agricultural productivity and creating incomeopportunities. Investment in the education sector is of strategic importanceand there is a need for external financing. The general level of basiceducation needs to be improved significantly in order to meet basic needs,support efforts to reduce population growth rates and raise the general levelof productivity of the labor force in the agricultural sector. In addition,specific skill constraints need to be removed in order to provide theworkforce in support of the national development effort, particularly thosewhich support agriculture and the engineering personnel required for waterresources hydropower, roads and bridges and telecommunications.

1.55 Government efforts with donor support have been addressing theseobjectives. IDA support for education was initially focussed on developingthe capacity to train skilled technical personnel (technical education andagricultural training) with three projects from 1978. An Education SectorMemorandum in 1981 recommended that further involvement concentrate on supportfor primary education, secondary science, vocational training and engineeringeducation. As a result, a major ongoing Primary Education Project wasinitiated in 1984. The ADB extended support for secondary science and SATAfor vocational training (paras. 1.50 and 1.51). The Engineering Educationproject builds on past investments by IDA in the IOE and has been designed tomeet the needs for highly skilled labor force crucial to the developmentefforts in the productive sectors.

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F. Previous IDA Lending Exoerience in Education

1.56 The First Education Project (Cr. 772-NEP) was designed to expandcapacity and improve quality at the Pulchowk campus of the IOE. The SecondEducation Project (Cr. 1198-NEP), was designed to establish a new IOE trainingfacility at Pokhara to train technicians for the Western Development Region.The Third Education Project (Cr. 1463-NEP) aims to improve the quality ofprimary education, expand primary school enrollment and improve retention in700 schools in six districts. The Fourth Project (Cr. 1534-NEP) aims toexpand the capacity and quality of training programs at the Institute ofAgriculture and Animal Sciences.

1.57 The First Education Project, completed in 1987, took about two yearslonger than planned because of weak contractor and project management perform-ance. According to the Project Completion Report (Report No. 7172, Sec.M88-340), some aspects of educational quality did not reach the standardsexpected at appraisal. The reasons included frequent changes in curriculum,underutilization of the staff development program and inadequate preparationof incoming students. However, most of the students who completed the programhave found jobs readily and perform to the satisfaction of their employersaccording to a tracer study conducted in 1984. Progress with the civil worksof the Second Education Project was initially delayed by weak projectmanagement, compounded by the contractors inability to complete the work onschedule. In 1986, new IOE management took effective measures to avoidfurther delays. Construction, equipment and furniture installation werebasically completed in 1987. The education components, including the trainingof trade trainees and technicians, staff training, and curriculum and learningmaterials development are progressing well.

1.58 Implementation of the Third Education Project has been mixed withtraining programs and development of instructional materials progressing wellbut with civil works experiencing some delays due to difficulties withconstruction in mountainous areas. Full use has not been made of IDA fundsfor important technical assistance because of HMG reluctance to use IDA fundsfor this. Despite these problems, preliminary evidence suggest that morestudents are entering and staying in school in the project area, compared toother areas, as a result of project activities. The Agricultural Nanpowerproject has made significant progress. Key elements of the teaching programare now fully operational.

1.59 Important lessons concerning deficiencies in project management,maintenance and implementation learned from previous projects have been takeninto account in designing the Engineering Education project. To alleviatethese deficiencies, the Project Implementation Unit (PIU) will be strengthenedwith the addition of an experienced international construction manager,maintenance teams will be set up at each campus and a consortium ofuniversities will assist with project implementation, particularly improvingacademic quality and strengthening management of the IOE.

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II. THE PROJECT

A. Origin of the Project

2.1 The project was identified in May 1983, when an IDA mission reachedan understanding with HMG regarding the need to establish the capacity totrain engineers in Nepal and to increase the output and quality of techniciantraining at the IOE. Project preparation was lengthy because policy decisionsrequired consensus from the public and private sector agencies which arerepresented on tne Council of Tribhuvan University. These agencies had attimes, different interests and objectives regarding the IOE. In 1985, the IOEsubmitted its Ten-Year Development Plan which included a proposal for aproject to construct a new campus for training engineers. The plan wasaccepted in principle by the Government, but HMG and IDA suggested that theIOE should develop an alternative lower-cost proposal for the training ofengineers.

2.2 During 1986, the IOE prepared a more economical alternative, with theassistance of CIDA-financed consultants, focussing on more efficient use andexpansion of existing capacity. A feasibility study was submitted inMay 1987. The IOE also prepared plans for the improvements of staffdevelopment, management, maintenance, and finance. On the basis of thefeasibility study and the plans, the project was preappraised in June 1987.The preappraisal mission estimated that the costs to upgrade all campuseswould be US$35 million and that recurrent expenditures would increase by 27%annually. To make the proposed project more affordable and sustainable inview of the limited growth of the economy and the government's budget for thesocial sectors, an IDA mission in January 1988, working with HMG, reduced thescope and the cost of the project. In June 1988, a Project Preparation Unit(PPU) was established to prepare for the appraisal which was undertaken inSeptember 1988.

B. Project Obiectives and ScoRe

2.3 The project will gradually increase IOE's capacity to train engineersand technicians in order to alleviate shortages of engineering personnel andto supply about 90% of the projected demand for engineering personnel whichwill be generated by the Government's investment program in hydropower,infrastructure and industry. The project builds on previous investments inthe IOE and continues the improvements in quality and efficiency started inthe previous projects. It also aims to enable the IOE to develop expertiseand provide professional services in engineering problems typical to Nepal.

Project Obiectives

2.4 The proposed project will assist in:

(a) expanding the enrollment capacity of the technician training programsfrom 1,370 to about 1,700 students and that of the engineeringeducation programs from 360 to about 920 students throughconstruction, rehabilitation and maintenance of facilities;

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(b) raising the quality of engineering education through training ofstaff, improving curricula, providing educational materials and rais-ing admissions and examination standards; and

(c) improving management through strengthening the Office of the Dean,training managerial and administrative staff, developing a ManagementInformation System, and establishing a Manpower Development Unit.

C. Proiect Descrigtion

2.5 The capacity expansion, academic improvements and institutionaldevelopment objectives will be achieved through a combination of three com-ponents implemented over a period of eight years. The components and relatedtechnical assistance will be implemented accord'ng to the schedule shown inAnnex 7. More detailed implementation schedules for maintenance, staff andmanagement development activities are presented in the Maintenance Plan, StaffDevelopment Plan and Management Plan prepared by the IOE. The projectcomponents include:

Construction. Rehabilitation and Maintenance of Facilities. (Estimated baseline costs, US$13.80 million)

2.6 At the Pulchowk campus, the project will include the construction of

facilities and the renovation of the existing classrooms, laboratories andworkshops. The new and ren. vated buildings will be furnished and educationalequipment would be installed. At the Thapathali campus, additions to theclassrooms, laboratory, workshops, student center and hostel facilities willbe constructed. The existing library, classrooms, laboratories and mainworkshop will be renovated. Site improvements will be made to alleviatecurrent flooding problems. Furniture and equipment in these buildings willalso be provided. At the Pokhara Campus, additional laboratories, workshops,staff houses, girls hostel and audio-visual resource center will beconstructed, furnished and equipped. Other facilities will be modified toaccommodate the expansion of technician enrollment. The PPU established inJune 1988 completed the campus plans and preliminary design drawings for eachof the three campuses before negotiations. Local architectural consultingfirms will be contracted to prepare the detailed construction working drawingsand provide full supervision of the construction and renovation work. Toassure proper maintenance, a campus maintenance manager and maintenance crewshave been recruited for each campus to execute effective programs for themaintenance and repair of buildings as well as equipment. Additional fundingfor maintenance activities will be provided in the recurrent budget. Atnegotiations the Government provided assurances that proper maintenance crews,programs and budgets have been established according to the Maintenance Planagreed to by the Association.

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Staff and Curriculum DeveloRment (Estimated baseline costs, US$6.85 million)

2.7 For staff develooment, the project will provide international,regional and local fellowships for post-graduate education and advanced tech-nical training for the teaching staff, particularly those who will be teachingthe new degree programs. Preference will be given to female faculty members.It will also provide visiting professors and instructors and the financing ofsalaries for temporary staff. To improve staff utilization and alleviateabsenteeism, regulations governing teaching load, leave and sabbaticals willbe better enforced and/or changed if necessary. The Executive Committee ofTribhuvan University approved the necessary measures and changes in the IOE'sregulations. They were presented during negotiations and are satisfactory tothe Association. Curriculum development will be strengthened by providingassistance from local consultants, technical assistance specialists andvisiting professors to the faculty committees. Curriculum development will beundertaken for the existing certificate and civil engineering degree programs,the new architecture and rural planning program and for the three newengineering degree programs. The first year of the ergineering degreeprograms will be common and there will be a substantial common core in thesecond year. Assistance will also be provided for the improvement ofadmission standards and procedures as well as for the development of betterassessment and examination procedures, and academic regulations. Atnegotiations, the government agreed that: (a) by July 1993 admission to thedegree program which is open to proficiency certificate holders, will requireapplicants to pass a common admission test; and (b) by July 31, 1993, academicregulations will provide that in the degree and certificate programs, studentsshall have passed the examination(s) of prerequisite courses before they areallowed to take follow-up courses. These agreements have been incorporated inthe IOE's regulations. Funds will be provided for the preparation, printingand distribution of instructional materials, books and program prospectuses inNepali.

Management Development (Estimated base line costs US$0.87 million)

2.8 The office of the Dean will be strengthened through reorganization ofthe senior management structure. In order to separate academic andadministrative responsibilities, positions will be established for twoAssociate Deans for academic affairs--one responsible for the training oftechnicians, the other for the education of engineers, and one Associate Deanfor services and planning (administration). The Dean and the Associate Deanswill form an Executive Committee, which will be responsible for managing theInstitute. At negotiations the Government gave assurances that TribhuvanUniversity has approved the new management organization described in aManagement Plan which is acceptable to the Association. Appointment of thethree Associate Deans would be a condition for credit effectiveness. AGoverning Committee (currently called Advisory Committee) with widerepresentation will also be established to increase IOE's responsiveness tothe needs of the community. Further training will be provided for managersand administrators in new and existing functions and a Management InformationSystem will be developed to facilitate institute-wide budget, income andexpenditure control and performance monitoring. An Office of ManpowerDevelopment will be set up by June 30, 1990 staffed by a part-time managerunder the Associate Dean for services and planning, to monitor the demand andsupply of engineering personnel in Nepal, provide a permanent link between IOE

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and the labor market, and examine the ability of students to pay for highereducation. During negotiations, it was agreed that heads of Departments willbe appointed at each campus with full responsibilities for academic andadministrative operations reporting directly to the Associate Deans. The mainadministrative facilities will be renovated and additional equipment andfurniture provided.The reorganization of the management structure will be implemented accordingto a program and timetable satisfactory to the Association.

D. Technical Assistance

2.9 The project will provide a total of 173.5 study-years of fellowshipsand 26.5 staff-years of visiting specialists in a number of key areas. Thislevel of support is considered necessary on the basis of an assessment of theIOE's project implementation capability. The assessment indicated thatassistance will be necessary for architectural design and the management ofcivil works, developing curricula and determining equipment specifications.On the basis of an analysis of the teaching requirements of existing and newprograms it was determined that 94 teaching staff and 25 support staff(including four administrators) will need to be trained. In addition, 13visiting professors will be required to teach the new degree programs whileIOE faculty is being trained.

2.10 For the construction, renovation and maintenance of facilities, SDCwill finance the assistance of an architectural specialists for about threestaff months, a construction manager for three staff-years and a maintenancespecialist for one-half staff-year, as well as one study-year for a buildingmaintenance fellowship.

2.11 For the curriculum and staff development, CIDA will financeassistance for the engineering degree programs for improvements in admissions,curriculum and examinations, preparation of equipment lists and lab layouts,and the teaching of the degree level courses. The assistance will be providedby a consortium of six Canadian Universities and include 8 study-years oftechnical training, 72 study-years of graduate and post-graduate fellowshipsand 16.37 staff-years of visiting specialists. CIDA will also assist with thedevelopment of a system of accreditation. SDC will finance 41 study-years ofregional fellowships for staff who would be teaching in the degree programsand 13 study-years of technical training for support staff. SDC will alsofinance assistance for admission, curriculum, and examination improvements andstaff training for the technician certificate programs which will include 37study-years of fellowships and 3.6 staff-years of visiting specialists.

2.12 For the management development, the project will finance a localconsultant to develop a Management Information System. In addition, CIDA willfinance one and a quarter staff-years for three visiting specialists from theconsortium to assist with the development of administrative services,management and class scheduling. CIDA would also finance one and a halfstudy-years for administrative fellowships. SDC will finance seven staffmonths for a specialist to assist with the development of a project planning,monitoring and evaluation system.

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III. PROJECT COSTS. FINANCING AND IMPLEMENTATION

A. Costs

3.1 The total cost of the project is estimated at US$26.0 millionequivalent. A summary of the estimated costs by component is provided inTable 3.1 and by category of expenditure in Table 3.2 (detailed costs bycomponent and category and project expenditure by year and purpose arepresented in Annex 5).

Tabte 3.1: SUJSARY OF PROJECT COSTS BY COHPONENT

NRP mllion j m"i ion Foreir as X of TotalCaqwonent Locat tore gn TotaL ocat Toregn oa X of otal base cost

A. Facilitiess developmoent-- Degree Pulchouk 74.80 130.33 205.13 3.08 5.36 8.44 64 39

Certificate, Putchowk 9.10 24.59 33.68 0.37 1.01 1.39 73 7Certificate, Thapathali 17.14 31.11 48.24 0.71 128 1.99 649

- Certificate, Pokhara 22.6 255 481 0.92 1.0 1.99 5

Subtotal La 123.49 211.87 335.36 5.08 8.72 13.80 63 o4

S. Staff and curricultmdevelopment

- Degree Pulchouk 10.84 98.35 106.19 0.45 4.05 4.49 90 21- Certiftcate, Pulcho k 9.16 22.54 31.69 0.38 0.93 1.30 71 6Certificate, Thsoathali 2.56 5.76 8.32 0.11 0.24 0.34 69 2Certifiate, P 39 928 030 0.41 0.71 57

subtotal a 29.94 136.53 166.47 1.23 5.62 6.85 82 32

C. Management developmentDegree Pulchowk 8.67 9.95 18.62 0.36 0.41 0.77 53 4

- Certiffcate, Thapathali 0.16 0.92 1.07 0.01 0.04 0.04 85 0- Certificate, Pokhara 0.27 1.15 1.42 0.01 0.05 0.06 I1 Q

Stbtotal LS 9.10 12.02 21.11 0.37 0.49 0.87 57 4

Total Baseline Costs 162.53 360.41 522.95 6.69 14.83 21.52 69 100Physical contingencles 14.14 29.50 43.64 0.58 1.21 1.80 68 8Price contingencies 22.80 42.31 65.11 0.94 1.74 2.68 65 12

Total Project Cost La 199. 432.22 631.70 8.21 17.79 26.00 _ 121

/a Figures may not add due to rounding.

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Table 3.2: SUMMARY OF PROJECT COSTS BY CATEGORY OF EXPENDITURE

NRP miltion US mii Foreign as X of TotalComponent Locai- -F~IF ion o rFriatTotaL X of total base CSt

1. Investment Costs:

A. Civit works 87.53 57.09 144.61 3.60 2.35 5.95 39 28B. Furniture 12.45 8.11 20.56 0.51 0.33 0.85 39 4C. Professional services 9.99 - 9.99 0.41 - 0.41 - 29. International

fellowships - 44.91 44.91 - 1.85 1.85 100 9E.Rgmal fellowships 23.49 23.49 0.96 0.97 100 5

F. Local traifning 14.72 14.72 0.61 0 0.61 - 3G. Local specialists 4.50 - 4.50 0.19 - 0.19 1H. Foreign specialists - 62.03 62.03 - 2.55 2.55 100 12I. Equipment 15.88 139.82 155.70 0.65 5.75 6.41 90 30J. ok 2.79 24.57 27.35 0.11 1.00 1.13 90 5K. Consumable materials 1.64 0.40 2 04 0.07 0.02 0.08

Total Investment Cost - 149.49 360.41 509.90 6.15 14.83 20.98 71 98

It. Recurrent Costs:

A. Maintenance 3.64 - 3.64 0.15 - 0.15 - 1B. Staff salaries 4.71 - 4.71 0.19 - 0.19 - 1C. Materials and Services 3.10 - 3.10 0.13 - 0.13 - 1D. Utilities 1.60 1.60 0.07 _ 0.07 -Total Recurrent Costs /a 13.04 - 13.04 0.54 - 0.54 -

Total Baselire Costs /a 162.53 360.41 522.95 6.68 14.83 21.52 69 100

Physical contingencies 14.14 29.50 43.63 0.58 1.21 1.80 68 8Price contingencies 22.80 42.31 0j 3 j1 0.94 1.74 2.68 65 12

Total Project Costs /a 199.47 432.22 631.70 8.21 17.78 26.00 68 121

a Figures may not add due to rounding.

3.2 Baseline costs have been estimated on the basis of October, 1988prices. Civil works costs are based on actual construction costs for similarfacilities in Nepal. Furniture costs are estimated at 15X of building costs.Equipment costs have been estimated on the basis of actual costs of equipmentfor similar types of facilities at other institutions, and include allowancesfor transportation and installation. Unit area and capital costs per studentplace are reasonable compared to Bank-wide averages (Annex 6). Unit costs forlocal training, international and regional fellowships, and foreignspecialists have been based on standard rates used by international agenciesfor similar services on projects in Nepal and elsewhere in the region.

3.3 Custom Duties and Taxes will be applied to goods not specificallyimported for the project. Civil works include a tax component estimated atUS$0.84 million. Instructional equipment, furniture, books and consumablematerials imported specifically under the project will be subject to a tax of

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1Z. Total estimated duties and taxes amount to US$0.95 million. TheGovernment provided assurances that it would take the necessary steps toensure efficient customs clearance, including payment of such taxes.

3.4 Contingency allowances of US$4.48 million (about 21% of baselinecosts) have been included to account for unforeseen physical conditions andestimated price escalation. Physical contingencies were estimated at 10% ofbaseline costs for civil works, furniture, equipment and books, and at 51 forall other categories. Price contingencies were estimated for both local andforeign costs on the basis of projected average annual rates of price escala-tion of 41 for foreign rates and 6X for local rates.

3.5 The foreign exchange component of US$17.78 million (about 681 of thetotal estimated project costs) has been calculated on the basis of the follow-ing foreign exchange percentages: civil works - 401; furniture - 40%; equip-ment and books - 90%; foreign specialists, regional fellowships andinternational fellowships - 1001; and consumable materials - 20%.

B. Financing

3.6 The proposed IDA Credit of US$11.4 million plus grant c-'financing ona parallel basis from CIDA and SDC totalling US$12.49 million will financeabout 91.91 of the total estimated project costs. A cross-effectivenesscondition between the IDA Credit and the cofinanciers' grants is included inthe Credit Agreement. IDA will act as the administrator for the SDC grant.HMG will be responsible for the remaining 8.11 of the project costs, amountingto about US$2.11 million equivalent (Table 3.3). The IDA Credit will coverabout 48.61 of the estimated foreign exchange cost of the project, while thecofinancing grants will cover the remaining 51.41. Indications of intent fromthe cofinanciers were presented during negotiations.

Recurrent Expenditures

3.7 The project will generate additional recurrent expenditures forsalaries, operations and maintenance resulting from the nominal increase inthe number of staff and the substantial increase in the provisions forlearning materials, supplies, utilities and maintenance. The recurrentexpenditure budget is estimated to increase from NRP 20.1 million in 1988-89to 25.7_mil:lion by 1996-97 (1988-89 prices) after which it is expected toremaifi more or less at the same level. The average annual increase in 1988-89prices is NRP 705 thousand or 3.131. The increase in recurrent expendituresis primarily due to substantial increases in the provision of learningmaterials and funds for repair and maintenance of 501 and 2001 respectively.Despite a 50% increase in enrollments the increase in salary costs isrelatively small (15X), thanks to better deployment of staff and higherstudent/teacher ratios. Unit recurrent costs actually decline from NRP 11thousand to NRP 9.5 thousand over the life of the project (1989-97).

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labtl 3: FINANCING PLAN-us# million)

AHtG AID1A PtA SCTotaltRI tem mt. X Am. at. -X Ii. Amt b4

Investment Costs

A. Civil works 1.40 20.0 - - 5.61 80.0 7.01 27.3S. Furniture 0.05 5.0 0.98 95.0 - - - - 1.03 4.0C. Professional services - - - - - 0.46 100.0 0.46 1.8D. International

fellowships 0.00 0.00 - - 2.00 90.9 0.20 9.1 2.19 8.5E. Regional fellouships 0.00 0.00 - - - - 1.12 100.0 1.12 4.4F. Local training - - 0.80 100.0 - - - 0.80 3.1G. Local specialists 0.23 100.0 - - 0.23 0.9H. Foreign specialists - - - - 1.96 63.3 1.14 36.7 3.10 12.01. Equ1pment 0.21 2.6 7.58 97.3 - - - 7.78 30.3J. Books 0.01 1.0 1.41 99.0 - - - - 1.43 5.5K. Consumable materials O.O 1O.0 0.l0 90.0 - - - - O.11 0.4

Recurrent Costs

A. Naintenance 0.12 58.8 0.09 41.2 - - v 0.21 0.8B. Staff salaries 0.14 55.0 0.12 45.2 - - - 0.26 l.0C. Materisls and Serv. O.1O 58.0 0.07 41.9 - - O.l8 0.70. Utilities 0.05 56.9 0.04 43.0 - - - - 0.09 0.4

Total Project Costs /g 2.11 8.1 11.40 43.9 3.95j/15.4 8.53 32.8 26.00 100.0

Less taxes and duties 0.95 0.95

Total Net Project Cost /S 1.16 4.5 11.40 43.9 3.95j/15.4 8.53 32.8 25.00 100.0

:a Figures may not add due to rounding.

/1 Excluding the cost of overhead and aduininstration of CIDA ard the executing agency.

C. Project Management and Imniementation

3.8 Project management and implementation will be undertaken by a ProjectImplementation Unit (PIU) which will be established by the IOE.Implementation will be done according to the schedule shown in Annex 7 whichwas discussed and agreed upon during appraisal. The PIU will consist of full-time staff dedicated to specific project activities, but who will beintegrated as regular members of the IOE's administrative structure. PIUsenior staff will include: a Project Coordinator; Project Architect; ProjectEngineer; Education Officer; Procurement Officer; Administrative Officer;Fiscal Officer; and, Site Supervision Officers. These staff will be assignedto operating units in the IOE with related administrative responsibilities (asindicated in the organizational chart in Annex 12). The selection of stafffor the PIU positions will be based on professional qualifications andexperience with similar project responsibilities and would be open to

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candidates both from without and from within the IOE. The establishment andstaffing of the PIU as an integral component of the new IOE senior managementstructure will be a condition of effectiveness.

3.9 The PIU will be responsible for procuring and directing the servicesof civil works consultants and specialists to be provided under the technicalassistance program. The fellowship program will be implemented according toadministrative procedures acceptable to the Association, with the PIU having amonitoring and coordinating role. The PIU will use the assistance ofspecialists to carry out the Technical Assistance program. Procurement offurniture, books and teaching materials for the project will be undertaken bythe PIU on the basis of specifications and tender documents to be drawn up andexecuted by them. The PIU will use the assistance of specialists (Equipro) tocarry out the procurement of equipment for the project. The PIU will reviewand approve the master plan and preliminary drawings prepared by the ProjectPreparation Unit (PPU) for each campus with the assistance of a specialistarchitect. These documents will constitute the facilities program and designbrief for the architectural consultants to prepare the detailed design andworking drawings for the new construction and renovation work required at thethree campuses. The PIU will select on a competitive basis following WorldBank guidelines for the Use of Consultants, architectural consultants from ashort-list of prequalified registered consulting firms. The contracts forarchitectural consulting services will include responsibility for thepreparation of detailed design drawings and cont-.act documents, as well asfull supervision of the works. The PIU's project management capabilities willbe strengthened through the addition of a foreign construction managementspecialist who will assist in the review of civil works contract documents,construction scheduling, and site supervision activities. Also a specialistarchitect will be provided to review the design and detailed constructiondrawings. A Project Liaison Committee, consisting of key IOE administrativeand academic staff, will be established for each campus to work with the PIUin the implementation of the project.

3.10 The project will be implemented over a period of eight years,starting in mid-1989. Full enrollment will be achieved and all projectcomponents will be completed by June 30, 1997. The Closing Date will beDecember 31, 1997. (The project implementation schedule is shown in Anmex 7.)

Status of Proiect Prenaration

3.11 The IOE established a PPU in February 1988, which has prepared draftmaster plans and preliminary design drawings for the renovation work and newbuildings required for the program changes at all three campuses. These planswere reviewed and revisions were agreed to at app_...isal. The PPU isproceeding with the finalization of the master plan and preliminary designdocuments. Management, Staff Development, Maintenance, and Finance Plans havealso been prepared. The necessary revisions of these plans were discussedduring appraisal. The revised plans, which were ready by December 1988 andreviewed by IDA, include timetables setting out the implementation schedulefor the activities and reforms contained in the plans. The curricula outlinesfor the new degree programs have been reviewed and will be further revised bythe IOE Subject Committees prior to effectiveness.

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Procurement

3.12 Procurement arrangements are shown in Table 3.4 below.

Table 3.4: PROJECT EXPENDITURE SY PROCUREMENT CATEGORY(USS million)

Total costProcurement tethod including

Category of expenditure ice L u U ther pg N/A contingencies

Civil works 4.21 2.80 - 7.01

Professional services - 0.35 0.11 - 0."6- (0.35) (0.11) - (0.46)

Furniture 0.41 0.62 - 1.03(0.41) (0.57) - - (0.98)

Equipment books andconsua6le materials 8.29 1.01 - - 9.30

(8.29) (0.78) - (9.07)

Technical assistance:Specialists - 3.10 3.10

Fellowships - - 3.31 - 3.31

Local experts and training - - 1.03 - 1.03- -C(1.03) -(.03) /I

Recurrent costs - - - 0.74 0.74-- - (0.32) (0.32)

Total /b 12.91 4.78 7.55 0.74 26.00(8.70) (1.69) (1.14) (0.32) (11.85)

Lg Includes international shopping direct purchase, and technicalassistance contributions by CIDA and SDC.

b Figures may not add due to rounding./c- Inctudes US0.15 million to cover the cost of transporting

student to training sites,

Note: Figures in parenthesis are the amounts financed by the Credit.

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3.13 The contracts for civil works at the three campuses will be awardedon the basis of ICB procedures in accordance with World Bank Guidelines. Inorder to facilitate scheduling of the renovation work and to minimizedisruptions to existing academic activities, contracts for this work will beorganized into smaller components and awarded using LCB procedures. Equipmentwill be tendered under ICB and LCB procedures. Books will be procured on thebasis of direct purchase from publishers or authorized distributors at thelowest possible price on the basis of at least three price quotations ifapplicable. Equipment, furniture and consumable materials will be dividedinto two main groups: those items to be procured in large quantities (e.g.value greater than US$200,000) will be secured through ICB procedures; and,those items involving smaller quantities (e.g. value less than US$200,000)will be procured using LCB. Minor and/or specialty items of equipment,furniture, educational materials and books estimated to cost less thanUS$5,000 each and aggregating to less than US$50,000 equivalent will bepurchased by international shopping on the basis of quotations from a minimumof three suppliers. Agreement would be reached before Credit effectiveness ona standard bidding document to be used for all ICB procedures. Since astandard bidding document will be used, only technical specifications,modifications to the standard document and proposed contract awarding will besubject to prior review by the Association. Specialists will be selected inaccordance with Association Guidelines for the Use of Consultants.

3.14 In view of the anticipated complexity of the equipment procurementactivity, involving several financial contributors and much specialized equip-ment for the new degree programs, it is planned that specialist services ofthe International Labour Office- -Technical Cooperation Equipment andSubcontracting Branch (Equipro) be used to manage and implement according toAssociationL Guidelines the equipment procurement process, covering ICB as wellas international shopping. Procurement services to be provided by Equiprowill include arrangements for insurances, shipping, transportation to sites,installation, commissioning, training and warranty confirmation.

Disbursement

3.15 The proposed credit of US$11.4 million equivalent will be disbursedover a period of eight years (Annex 5). Since civil works and procurementwhich amounts to almost 90X of the credit are scheduled to be completed infour years, almost 90% of the credit is scheduled to be disbursed in the sameperiod. Thus, the disbursement profile differs from the standard disbursementprofile for education projects in Nepal, which shows a 10 year disbursementperiod and projects that 30% of the proceeds is disbursed after five and 75Xafter seven years. The standard profile is based on previous projects inNepal which have suffered from considerable delays primarily with civil works.Such delays are not expected in the proposed project because the Institute ofEngineering, the executing agency, has gained considerable experience withproject implementation in two previous IDA projects (Cr. 772-NEP and Cr.1198-NEP) and one ADB project. This experience is likely to reduce thepossibility of implementation delays. In addition, to avoid delays with civilworks, a provision has been made for a construction management specialist toassist with construction scheduling and management.

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3.16 Disbursement would be made as follows: (a) civil works--80X of totalexpenditures; (b) equipment, furniture and consumable materials--lOOX offoreign expenditures--1001 of local expenditures ex-factory, and 701 of otherlocal expenditures; and (c) professional services, local training, localexperts and books --100 of total expenditures. In addition, disbursementwill be made for WOI for the first two fiscal years of the borrower and for601, 401, and 201, respectively, for each of the next two years forincremental recurrent costs for maintenance, staff salaries, materials,student services, utilities, operation and maintenance of vehicles, printingand office supplies. Disbursements for expenditures covering professionalservices and specialists will be against full documentation. Fulldocumentation will also be required for all other expenditures related tocontracts greater than US$200,000. For contracts below US$200,000, itemizedstatements of expenditures (SOEs) will be used. Itemized statements ofexpenditure will also be used for all expenditures covering fellowships, localexperts/training and recurrent and other costs. Documentation in support ofthese SOEs will be retained by the PIU and made available to IDA supervisionmissions on request. To the extent possible, withdrawal applications shouldbe consolidated into amounts totalling US$50,000 or more prior to submissionto the Association.

Snecial Accounts

3.17 In order to facilitate disbursements, two Special Accounts will beestablished at the Nepal Rastra Bank, representing an estimated average offour months expenditures: an Association Special Account with an authorizedallocation of US$500,000 and a Swiss Special Account with an authorizedallocation of SF 600,000.

Accounts. Audits and ReRorting

3.18 The PIU will establish and maintain separate accounts for all projectexpenditures. The accounts will be maintained in accordance with soundaccounting practices. The executing agency, IOE has several accountingofficers who have managed the accounts of the two previous IDA projects.Their experience is expected to be utilized in the proposed project. It hasbeen agreed during appraisal that the accounts will be maintained and auditedaccording to the practice established in the previous projects which issatisfactory to the Association. Auditing of the accounts would be performedannually by HMG's Accountant General's Office in accordance with proceduresacceptable to the Association. The Special Accounts and accounts supportingSOE activity would be audited annually by independent auditors acceptable toIDA. The SOE audit should contain a separate opinion from the auditor as towhether the statements of expenditure submitted during such fiscal year,together with the procedures and internal controls involved in theirpreparation, can be relied upon to support the related withdrawals. An auditreport will be submitted to the Association within twelve months of the end ofthe Government's financial year. The Association may at times request otherinformation concerning the project records and accounts, certified by anindependent auditor. Such information should be submitted not later than sixmonths after the end of the particular fiscal year. The PIU will also monitorprogress in project implementation and report to the Association eachsemester. Within twelve months of the Closing Date, the PIU will submit aproject completion report to the Association.

- 32 -

D. Environmental Impact

3.19 The project is expected to have a positive impact on the environment.The engineers and technicians trained under the project will learn about waysto preserve and improve the environment in a course on environmentalengineering which is already included in the program. They will also studythe engineering aspects of water supply, sanitation and waste disposal systemsand learn about the maintenance of existing systems. The maintenance ofsystems which help to keep the environment clean, has not received sufficientattention in Nepal. Upon completion of their studies, a significantproportion of the engineers and technicians, particularly the civil engineersand the architects and rural planners, are expected to be employed on publicsector projects in irrigation, water supply and sanitation and the planning ofurban and rural settlements. The IOE has already taken the initiative toupgrade its waste management system at the new campus in Pokhara and similarsystems will be installed at the other two campuses. Also, landscaping andsite improvements to prevent erosion during the monsoon will be undertaken ateach campus as part of the project.

E. Imnact on Women

3.20 The IOE reserves 10 of the seats in the technician certificate andin the engineering degree program for qualifying women. In the technicianprogram the impact of this measure is encouraging. In 1988, more than 101 ofthe student enrollment in the technician certificate program were women. Inthe civil engineering degree program the percentage of women is much lower,around 2X which may partly reflect the traditionally limited interest womencurrently have in construction work but also the lack of appropriateaccommodiations for them at the IOE campuses.

3.21 In addition to reserving seats for women, three additional measuresto increase the enrollment of women will be implemented in the project.First, separate hostel facilities for women will be constructed at eachcampus. On the basis of discussions with women students and women facultymembers, the mission expects that the availability of these facilities willcause more women to enroll in engineering education. Second, at least two ofthe engineering degree programs that will be established under the project,electronics and architecture and rural planning, are expected to attractwomen. This has been the experience in India, Bangladesh and other countriesin the region. Finally, qualified female faculty would be given preferencefor the graduate and post-graduate fellowship training program in the project.Raising the qualifications and status of the female faculty is expected tohave a positive impact on the acceptability of women in engineering and toprovide role models to women students.

- 33 -

IV. BENEFITS AND RISKS

A. Benefits

4.1 The major benefits of the proposed project will be:

(a) The Institute of Engineering will acquire the capacity to offer B.Sc.degree programs and certificate programs in Civil, Electrical,Electronics and Mechanical Engineering, and in Architecture and RuralPlanning, that meet international quality standards and are geared toNepal's requirements;

(b) The IOE will produce engineers and technicians in sufficient numbersto meet about 90X of the projected demand. With skills tailored tothe particular needs of Nepal these engineers and technicians will betrained to design, operate, supervise and maintain the country'seconomic infrastructure and assets;

(c) For the economy at large, cost savings will be achieved bysubstituting locally trained engineers for higher paid expatriateones. Moreover, unit training costs will be lowered by increasingclass size, teaching load, school time, and through betterutilization of staff and facilities;

(d) In addition, the project is expected to put the IOE on a soundmanagement basis.

B. Risks

4.2 The major risk concerns the possibility of a flagging commitmentwithin HMG to meaningful reforms of staff regulations, management, maintenanceand accreditation procedures. To address this risk, HMG has provided evidenceduring negotiations that it has approved such reforms. Also, the appointmentof key management staff is a condition of effectiveness. Because of thecurrent impasse between India and Nepal on reaching new agreements on tradeand transit, it is also possible that there may be delays and increased costsfor this project. However, HMG is making every effort to resolve this issue,and the financial contingencies provided in the cost estimates are expected tocover any cost increases caused by delays.

- 34 -

V. AGREEMENTS REACHED AND RECOMMENDATIONS

5.1 At negotiations, the Government provided the following:

(a) Evidence of the establishment of proper maintenance crews, programsand budgets according to a Maintenance Plan agreed to by theAssociation (para. 2.6).

(b) Regulations approved by Tribhuvan University pertaining to teachingload, lease and sabbaticals, satisfactory to the Association (para.2.7);

(c) Regulations approved by Tribhuvan University concerning theestablishment of the new management organization described in theManagement Plan satisfactory to the Association (para. 2.8);

(d) Letters of intent from the cofinanciers (para. 3.6);.

5.2 At negotiations the Government provided assurances that it hasincorporated the following changes in the IOE's regulations:

(a) By July 31, 1993 admission to the degree program will requireapplicants to pass a common admission test (para. 2.7);

(b) By July 31, 1993, academic regulations will provide that in thedegree and certificate programs, students will have passed theexamination(s) of prerequisite courses before they are allowed totake follow-up courses. (para. 2.7).

5.3 The Government also agreed that it will carry out the reorganizationof the management structure in accordance with the program and timetablesatisfactory to the Association (para 2.8).

5.4 As conditions for credit effectiveness, the Government agreed that itwill (a) establish the positions for the three Associate Deans and appointstaff to these positions with experience and qualifications acceptable to theAssociations by July 15, 1989 (para. 2.8); (b) obtain formal agreements fromthe Canadian International Development Agency to provide technical assistanceand from the Swiss Development Cooperation to finance civil works andtechnical assistance (para. 3.6); and (c) establish and staff the PIU by July15, 1989 (para. 3.8).

5.5 Subject to the above conditions, the project constitutes a suitablebasis for an IDA Credit of SDR 8.8 million (US$11.4 million equivalent to theKingdom of Nepal on standard IDA terms with 40 years maturity.

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36

Page 1

Economically Active PonulationTen Years and Above

1971 1981Persons X of Persons X of Annual growthengaged total engaged total 1971-81('000) engaged ('000) Engaged (in X)

IndustxyAgricultural, Forestryand Fishing 4,579 94.35 6,244 91.15 3.1

Manufacturing La 52 1.07 34 0.50 -4.2 LcElectricity, Gas and Water 2 0.04 3 0.04 4.1Construction 5 0.10 2 0.03 -8.8Commerce 64 1.32 109 1.59 5.5Transport and Communication 10 0.21 7 0.10 -3.5Financial and BusinessServices 3 0.06 10 0.15 12.8Personnel and CommunityServices 138 2.84 314 4.58 8.6Industries n.e.i. bZ 127 1LA 1.

Total 4.856 100.0 6.850 100.0 3.5

OlCopationProfessional and Technical 25 0.52 64 0.93 9.9Administrative 1 0.02 6 0.09 19.0Clerical 47 0.97 49 0.72 0.4Sales 60 1.24 85 1.24 3.5Services 34 0.70 16 0.23 -7.3Farming and Fishing 4,579 94.37 6,260 91.39 3.2Production and Labor Workers 106 2.18 214 3.12 7.3Occupational n.e.i. Z 156 2.28 N.A.

Total 4.856 100.0 6.850 100.0 3.5

Emnlovment StatusSelf-employed 4,170 85.93 5,860 85.55 3.5Employee 453 9.33 621 9.07 3.2Unpaid Family Workers 208 4.29 173 2.53 -1.8Employer 22 0.45 47 0.69 7.9Status Not Stated - - 149 2.18 NA.

4.856 100.0 6.850 100.O

/a Includes persons engaged in mining and quarrying sector.,& Industries not earlier included./c The decrease in the number of persons engaged in some categories of

industry reflects a reclassification of industrial categories by theNational Planning Commission.

ANNEX-3-37 Page 1

NEPA

ENGINEERING MANPOWER DEMAND AND SUPPLY ESTIMATES 1987/88 - 1999/2000

Introduction

1. The mission undertook a review of information available on the demandand supply of engineering manpower in order to confirm that the scope of theproposed project was reasonable. The information base available for thispurpose was less than adequate. The quantitative analysis of trends in demandhas drawn heavily on a qualitative analysis of developments in the economy andtheir possible implications for the demand of technical manpower. The quali-tative analysis was particularly important for the assessment of the size ofspecific programs to be developed at the degree and certificate level. (Animportant element of the project--The Manpower Development Office--is expectedto significantly improve information available for technical manpower planningand develop formal contact between the IOE and employers to facilitate acontinuous analysis of employment needs and conditions.)

2. The public sector is the major employer of skilled and technicalmanpower in Nepal. It employs 90-95X of all engineering manpower. However,consistent time series data (with mutually exclusive occupational andsectoral/agency categories) on the deployment of engineering manpower ineither the public or private sector are not available. The mission was ableto review four separate estimates of the stock and anticipated future demandfor engineering manpower which have been made during the 1980s. Officialestimates made by the National Planning Commission (NPC) cover the publicsector for the period of the Seventh Plan 1985-1990 but are not presented byindividual public sector agency. The most comprehensive estimates arecontained in the McEvers (1983) study which covers the period 1982/83-1993/94.However, the study does not cover all the agencies in either the public orprivate sectors. Many of the public sector development boards, commissionsand public enterprises are covered but it does not include the governmentowned manufacturing sector. With the exception of the major firms in theconstruction sector it does not cover the private sector. By and large thesubsequent IECS study (1985) is based on the earlier McEvers study.

3. It is possible with the information available to make reasonableestimates, at an aggregate level, of the existing stock and likely futuretrends in demand for degree and certificate level engineering graduates. (Formore disaggregated analysis it was judged that the margin of errors were toolarge to provide meaningful results.) While the four studies have differedsignificantly in both the methodologies adopted and the extent to which theprivate sector and public corporations have been taken into account (in partdetermined by the inadequate information base) all studies have indicated thatsevere shortages of technical manpower exists presently and that this wasexpected to continue--particularly at the degree level--during the 1990s giventhe existing supply situation. The degree of anticipated shortages oftechnical manpower expected in the 1990s in the absence of an expansion ofdomestic training capacity has varied significantly between studies largelydue to assumptions made about future trends in the effective demand forengineering manpower.

ANNU 3

38 Page 2

Projections of Future Requirements

4. On the basis of the available studies, together with a review oflabor market indicators (paras. 1.10 to 1.15) and discussion with informedsenior government officials, the mission: (i) estimated the current (June1988) stock of engineering manpower--both engineers and technicians; and(ii) the average vacancy rate in the public sector. These estimates formedthe base for the projection of requirements for engineering manpower presentedin Tables 1 and 2 which are discussed below.

5. Estimated SuDPlY and Demand as at June 1988. The stock of manpowerestimated as of June 1988 has been based on data supplied by the NPC--princi-pally the unpublished results of the mid-term review of the seventh plan--adjusted for known private sector activity. The estimated figures arebroadly consistent with adjusted estimates contained in both the IOE (1985)and McEvers study (1983) although the level of vacancies used in the Missionprojections are significantly below those used in the latter two studies. Aprevious study in 1983 estimated a vacancy rate of 15.32 for engineers and 202for technicians. The mission estimated a vacancy rate of 1 for engineersand 121 for technicians in June 1988. (These figures are deliberatelyconservative and are based on (i) informed opinion and partial surveys of thelevel of Nacancies and (ii) the reported 20X vacancy rate by NPC in allengineering and technician posts created during the first three years of theSeventh Plan.) An important reason for the apparent decline in the vacancyrate has been the reluctance of the central agencies of government to approveand fund new posts when they know the manpower does not exist to fill theposts.

6. Factors Influencing the Demand Projections. The public sector is thedominant employer of engineering manpower in Nepal. The future effectivedemand for engineering manpower will be largely determined by both the publicsector's future capacity to expand its budget with the nature of the publicsector's sectoral allocation of development expenditure. The economy hasgrown at 4.5X for the past three years and World Bank projections indicatethat over the period to 1992/93 GDP will continue to grow at 4.51 in realterms (agricultural 3.61, non-agriculture 5.81). The projections alsoindicate that government expenditure will be able to grow at a slightly higherrate than GDF over the same period. (Nepal: Policies for Improving Growthand Alleviating Poverty. World Bank 1988.) It is unlikely based on historictrends, that this rate of expansion of the economy can be maintained over the12 year period of this analysis of manpower requirements. Implicitassumptions about long-term growth used to underpin the manpower projectionsare that GDP growth would be of the order 3.5X-4X per annum.

7. In addition to underlying GDP growth projections a number of govern-ment policies and actions will obviously influence the nature and level ofskilled/technical manpower demand. The choice of a range of macroeconomicpolicies including wages policy (changes in the real wage level) and thesectoral allocation of government development expenditure will have a veryimportant impact on skilled labor demand. HMG has planned a number of impor-tant investments in (i) agriculture (irrigation projects); (ii) large-scaleinvestment in electrical power and infrastructure (including the rehabilita-tion of roads, water supply and storage facilities); and (iii) expansion ofcommunications and transport systems. These will all place a large demand onthe existing cadre of engineering manpower.

-x 3Page 3

Table t: ESTIMATED ENGINEERING MALUhOR DEMAND AM SUPPLY, 1987/88-1999/2000

June aM m/89 1989/90 1990/91 1991/92 1992/93 19m/94 1994/96 1996/9. 1990/97 199/98 I /9 1999/2000

A Emncn.rsEstimate dmadnd 2,973 3,092 3,218 3,344 3,481 3,682 3,706 3,638 3,972 4,111 4,266 4,404 4,658Estimated stock 2,700 2,700 2,638 2,949 3,062 3,141 3,216 3,274 3,386 3,620 3,636 3,740 3,863

SupplyLocal - 88 88 Be 68 86 88 164 170 220 220 220 220Foreiga _ 131 108 104 92 80 88 6 o0 0 0 0 0

Anausl attrition - 81 a6 66 92 94 93 98 102 106 109 112 its

Not Supply 2.700 2.838 2.949 3,062 3.141 3 16- 3.274 3.386 3.620 3.036 3.748 3.663 3.i6S

Not supply as Iof do mnd 91 92 92 91 91 90 88 es 89 es 88 69 61

3. TechniciansEstimated deon4 6,126 6,370 6,626 6,690 7,106 7,462 7,760 8,060 9,382 6,118 9,066 9,429 9,606Estimated stock 6,470 6,470 6,e06 6,969 8,246 6,677 8,876 7,207 7,662 7,688 8,210 8,605 6,900

Suply

Local - 363 416 436 468 462 504 626 626 626 656 656 566Forei; - 0 0 0 0 0 0 0 0 0 0 0 0

Anmual attrition - 137 142 149 160 184 172 190 189 197 206 214 223

Hot Supply 6.6470 6.686 6.969 0246 0 6.617 6-076 7.207 76S24 7-E 0.216 8.666 8906 9.23s

Net aupply as XOf deond 89 89 90 91 92 92 93 94 94 94 94 94 94

ANNEX 34f Page 4

8. Further, while it is not currently fully reflected in governmentbudget allocations, there is a clear need to expand the funds allocated to themaintenance of public sector assets. While this need is not currently aneffective demand (it can only happen with a reallocation of current expendi-ture priorities) it will clearly be essential if reasonable GDP growth ratesare to be maintained. Economic infrastructure assets--particularly in theagricultural sector--must be maintained and extended. Continuing improvementsin the productivity of agriculture will also involve considerable expansion ofagricultural industry inputs. For this to happen, transportation infrastruc-ture and services must also be maintained and extended. Trends in this direc-tion will require technical manpower not presently available.

9. The private sector is currently a relatively small employer oftechnical manpower (modern manufacturing accounts for only 3.1X of GDP) but itis currently growing at a rapid rate. The index of industrial production isestimated to have increased 70X since 1985 and the current policy frameworkmakes it likely that sustained growth, albeit from the small base, willcontinue. (Nepal: Policies for Improving Growth and Alleviating Poverty,World Bank 1988 p. iii.) The larger towns in the Terai, the location for asignificant proportion of manufacturing activity, are growing very fast at upto 20X per annum. It is also evident that the formal service sector in thelarger towns is undergoing both real growth and significant technologicalchange (e.g. computerization and use of local area communication networks)which will impact on the demand for technical manpower as new technologies areadopted.

10. The Demand Plojections. Following an assessment of historic andanticipated trends in the sectoral allocation of public expenditures (particu-larly as reflected in the development budget); together with (i) the level ofresources likely to be available to Government; (ii) the need to expandmaintenance budgets, and (iii) the pace of growth and technological change inthe manufacturing and service sectors of the economy; the following growthrates in the effective demand for technical manpower have been used for thedemand projections over the 12 year period to the year 2000:

Engineers: 1987/88 - 1991/82 4.0 percent1991/92 - 1999/2000 3.5 percent

Technicians: 1987/88 - 1999/2000 4.0 percent

(This assessment has assumed there will not be a major change in thetechnologies used by the Government administration. A decision to computerizeand develop local area communication networks on a wide scale would addsignificantly to manpower requirements in a range of engineering disciplines.)

11. During the first three years of the Seventh Plan (i.e., 1985-1988)the total number of engineering posts in the public sector increased 4.8X perannum and the number of technician level posts 6.9X per annum. On this basisthe demand estimates used for the projections are conservative. The highersustained growth rate for technicians is based on the observations that:(i) there are currently only 2.03 technicians for every engineer (a more usualinternational ratio is 4:1 or 5:1) and (ii) the nature of projectedinvestments are more likely to require and attract technician level personnel(e.g. smaller scale irrigation projects and the prospective expansion of

ANN& d

41 Page 5

maintenance programs for roads, buildings, irrigation, andtransport/communication systems). On the basis of the proposed project theengineer to technician ratio would only rise to 1:2.3 by 1999/2000 from thecurrent 1:2. A major alteration of work practices (not currently planned) byGovernment would expand the requirements for technicians significantly butwould not reduce the demand for engineers.

Supply Estimates

12. The supply projections are primarily based on the enrollment plansresulting from the implementation of the project. The following points shouldbe noted. Firstly, government plans to stop sponsoring students (funded byeither government or donors) to engineering programs in overseas universities.This is consistent with donor wishes not to maintain past programs indefi-nitely. Current planning will result in a phasing out of overseas supply by1997. Secondly, of those who enter the various programs it has been assumedthat only 131 will not complete a degree or certificate. Given the proposedchanges to rules and regulations concerning academic progress and the academicstandards to be achieved by students, the 13X dropout rate may beconservative--at least during the period of the project. Thirdly, it isassumed that no certificate level graduates will automatically enter thedegree program. Currently 50X of students entering the civil engineeringdegree program of IOE come from the certificate program. Proposed changes tocurriculum and entry standards to the degree program to be made under theproject will make it very unlikely that many certificate level graduates willqualify for entry to the degree program. Fourthly, it is assumed that allgraduates from IOE will enter the workforce directly upon graduation. This isa reasonable assumption as available evidence suggests participation rates ofgraduates are approaching 1001.

13. Annual Attrition of the EngineerinZ Cadre. The mission has estimatedthat the annual attrition from the stock of engineers would be 3X and 2.51for technicians. This is made up of allowances for retirement, accident/sick-ness and job mobility out of the engineering professions. Data on which tobase estimates for attrition are limited. Estimates used in other studieshave varied and their basis have not been explained. Official studies haveused 41 per annum; the McEvers study used 1.71 for engineers and 1.31 fortechnicians. A recent manpower study of agricultural sector manpower (includ-ing engineering manpower in the agricultural sector) estimated at 41 attritionrate.

The Results

14. The results of the aggregate projections presented in Table 1 havebeen based on conservative estimates in the demand for engineering manpower.They indicate that about 881 of requirements for degree level manpower andabout 941 of certificate level manpower will be met by the year 2000.

15. If demand were to grow a; the same rate as the past three years (4.81for engineers and 6.91 for technicians) and all other variables remainedunchanged only 751 of demand for engineers and 681 of demand for technicianswould be met in the year 2000. This demand scenario is shown in Table 2.

ANEX 3

42 Page 6

Tabg e: ESTINATED ENGINEERING MPOIER DENAND AND SUPPLY, 1987/89-1999/2000

1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000

Encineers

Est. dearnd 3,092 3,240 3,396 3,559 3,730 3,909 4,096 4,293 4,499 4,715 4,941 5,179

Est. stock 2,700 2,638 2,949 3,052 3,141 3,215 3.274 3,386 3,S20 3,635 3.746 3,853

Supptly

Local 88 88 88 88 88 88 154 176 220 220 220 220

Foreign 131 108 104 92 80 68 56 60 0 0 0 0

attritlon 81 85 88 92 94 96 98 102 106 109 112 116

Not supply 23 2.949 3.0S2 41 L3.1 3.274 3.386 3.20 3.635 37 38 3.958

Not suppy asX oTdd: 92 91 90 a8 86 84 83 82 81 79 78 76

Technicans

Est. demad 6,370 6,810 7,279 7,782 8,319 8,893 9,506 10,162 10,863 11,613 12,414 13,271

Est. stock 5,470 5,686 s,959 6,245 6,577 6,875 7,207 7,552 7,888 8,216 8,565 8,906

f Peat 353 41S 435 488 462 504 525 525 525 555 555 555

Foreign 0 0 0 0 0 0 0 0 0 0 0 0

attritIon 137 142 149 156 164 172 180 189 197 205 214 223

Net supply 5M o86 L1 6LU� L6 7.207 7Z.5M L.56 8A L90 ?A23

Net supply asXofdsiusnd: 89 88 86 85 83 81 79 78 76 74 72 70

43ANNEXPage 7

The Determination of Requirements by Program

16. The purpose of the projections was to determine the appropriate scopeof the project. The information base was not adequate to enable projectionsof demand and supply by program with acceptable degrees of accuracy. Rather aqualitative analysis was undertaken of the proposed enrollment plan. Thecurrent and proposed steady state output plan is shown in Table 3 by program.In designing the project maximum flexibility has been built into thefacilities to be constructed should anticipated trends in the demand formanpower change. As a specific component of the project it has been decidedto establish within the IOE a capacity to monitor trends in the labor marketfor engineering manpower and conduct tracer studies. Clearly, adequateplanning requires information on (i) the occupational demand for skills,(ii) levels of vacancies, (iii) changes in relative wages (particularly inthe private sector, and (iv) the periods of unemployment and underemploymentof technical manpower upon graduation. Better labor market information willassist potential students make program choices, and help graduating studentswith career choices. The IOE should develop a sense of responsibility forgraduating students--a complete reliance on occasional manpower forecasts byexternal agencies tends to relieve the Institute of this responsibility.Tracer studies and job evaluations will enable more attention to be given tothe needs of employers (government departments and major private sector firms)and professional organizations.

Table 3: CURRENT AND STEADY STATE OUTPUTS PER YEAR BY PROGRAM

Current Steady X of1987/88 state Total output

A. DegreeCivil 88 88 40Mechanical 0 44 20Electrical 0 44 20Electronics 0 22 10Architecture and Rural Planning 0 22 10

Total Degree 88 220 100

B. Technician fbCivil 210 262 47Mechanical 46 94 17Electrical 17 115 21Electronics 17 42 8Architectural and Rural Planning 63 42 8

Total Technician 353 555 Le 100

La Achieved in 1996/97.A Technical training output will reach 88X capacity by 1992./c Achieved in 1997/98 with phasing out of trade training at Pokhara.

A .. 444 Page I of 2

NEPAL

ENGINEERING EDUCATION PROJECT

Suffary of Technical Assistance Estimates

Quantity Total Cost CIDA SDCP NY USS USS USS

1. PULCHOWI DEGREE PROGRAM --- -------- ---------- .-.- ..

(i) Fellowship Training - ForeignSenior Fellow Exchange 5 2.50 43,000 43,000

Ph.D.'s: - Electrical 2 6.00- Electronics 2 6.00- Mechanical 4 12.00- Civil 1 3.00- Applied Mathematics 2 6.00- Unallocated 1 3.00

Total Ph.D.'s 12 36.00 720000 720,000

M.Sc.1s: - Electrical 5 10.00- Electronics 3 6.00- Nechanical 6 12.00- Architecture 1 2.00- UnalLocated 1 2.00

Total M.Sc.fs 16 32.00 640,000 640,000

Dip. - Lab Technicians 8 8.00 160,000 160,000- Librarian 1 1.50 30,000 30,000

Total Dip. 9 9.50

Cii) Fellowship Training - RegionalPh.D.0s: - Applied Mathematics 1 3.00

- Physics 1 3.00- chemistry 1 3.00

Total Ph.D.$s 3 9.00 90,000 90,000

M.Sc.'s: - Electrical 6 12.00- Electronics 2 4.00- Mechanical 6 12.00- Architecture 1 2.00- Unallocated 1 2.00

Total M.Sc.#s 16 32.00 410,000 410,000

Dip. - Lab Technicians 12 12.00 120,000 120,000- Reswurce Center Dir. 1 1.00 10,000 10,000

Total Dip. 13 13.00

(iii) Foreign Specialists- Prof. for instructional assistance 13 13.00 1,092,000 1,092,000- Dev. of curriculum, equip., lists,

lab layouts * 3.00 234,000 234,000- Curriculum Dev. - English 1 0.12 9,000 9,000- Accreditation visits * 0.25 42,200 42,200

Total Foreign Specialists 14 16.37

Sub-total 83 147.87 3,600,200 2.970,200 630,000

* The number of short-term specialist for these activities will be determined during inplementation.

45 ANNEX 4Page 2 of 2

NEPAL

ENGINEERING EDUCATION PROJECT

Suimary of Technical Assistance Estimates

Quantity Total Cost CIDA SDCP MY USS USS USS

83 147.87 3,600,200 2,970,200 630,000

2. IOE MANAGEMENT, ADNINISTRATION, FINANCE STRENGTHENING

(i) Administrative Fellowships 3 1.50 33,600 33,600(ii) Scheduling Specialist 1 0.25 24,000 24,000

(iii) Construction Management Specialist 1 3.00 450,000 450,000(iv) Architectural Specialist 1 0.25 88,000 88,000(v) Building Maintenance Specialist 1 0.50 48,000 48,000(vi) Building Maintenance FelLowship 1 1.00 20,000 20,000

(vii) Aduin. & Management Specialists 2 1.00 87,000 87,000(viii) Project Planring and Evaluation Specialist 1 0.6 76,000 76,000(ix) Technical Assistance Specialist 1 0.65 115,000 115,000

Sub-total 12 8.75 941,600 144,600 797,000

3. PULCHOYK-CERTIFICATE PROGRAM

(i) Fellowships - International 5 2.50 60,000 60,000Cii) Fellowships - Regional 15 15.00 *80,000 180,000

tjii) Curri. Dev. & Teacher Training Specialists 8 3.60 390,000 390,000

Sub-total 28 21.1 630,000 0 630.000

4. THAPATHALI-CERTIFICATE PROGRAM

(i) Fellowships - International 2 1.00 24,000 24,000Cii) Fellowships - Regior.4 9 9.00 108,000 108,000

Sub-total 11 10.00 132,000 0 132,000

5. POKHMARA-CERTIFICATE PROGRAM

(i) Fellowships - International 3 1.50 36,000 36,000(ii) Fellowships - Regional 8 8.00 96,000 96,000

Sub-total 11 9.50 132,000 0 132,000

TOTAL ESTIMATED TECHNICAL ASSISTANCE COSTS(Not including Equipment or Civil Works) 197.22 5,435,800 3,114,800 2,321,000

TOTAL INCLUDING CONTINGENCIES (C 5X) 207.08 5,707,590 3,270,540 2,437,050=3G= G--GG= =3=G=33 ===3333==

Enipleerl^e Tedmnicim Teorchn Tchnicime ftelmerplus T;etdgcln Teclmic_la Tecmigclee StinraerIn Technicisn Techncianbepr.. Certifiest. Certificate Certificate DOer.. Celbif lst Certificfte Certificate ceero. Certificate CertificatePrge Prcgr PraW Prae Pr c Praem Proeam Prrm Pran Praomrs Program Total Cost

paldmeek Pulel A l, ThepetU lI Pears PiaIdl_.k PulAeh I Thapatheli Peths,. PUldajek mappthaIi Pokhara WP tSucuoe C_qee CePe C_oe Cewes coup- coup ceaps cop" CROPu Campus C_ .I I ol a i m i ion

Civil Works .72 9.2 19.16 29.26 S.1., - - 44.61 5Furniture 11.6 1.29 2.64 8.46 - - - 1.60 - 20.5 0.65

Profemiaml ServIcs 5.69 0.46 0.97 - 2.50 - - - 0.1 - - 9.99 0.41InernatiaI Felloeships - - - 0.51 40.49 l.t 0.61 0.92 0.6 el4.9 1.06

R9egial Fel lawehipa - - - - 1.75 4.661 2.75 2.44 - - - 26.40 0.97

Ltal Training - - - - 8.61 5.62 1.52 8.90 0.06s 0.06 0.S 14.79 0.61

Loal Special let - - - - 0.19 0.46 - - 0.tt - - 4.5O 0.18Foreig Specalists 12. - - - .01 9.91 - - 4.45 - - 62.06 2.6

Ewipmt 69.05 20.60 25.06 18.64 - - - - 2.2 1.02 1.25 1515.70 6.41

Betk - - - - 10.1i 7a.s 2.65 V11 - - - 27.6 1.38Conwmeble Obterlsl - - - - - - - I- 1.6 - i.1 2.04 0.06

7.4. S_.et Cat 3. 4LS 06E 10 t S2N L L L t. DE LiZ a.U z.

bi toe 1.96 - 0.41 1.24 - - - - - - - 8.64 0.1sstff Salaries - - - - 1.62 1.40 0.85 1. S - 4.71 0.19Obterlals we Servics - - - - 1.0? 0.n2 0.2t 0.60 - - - 5.10 0.1SOther - - - - 0.67 - 0.1 i 0.85 - 1.60 0.07

7.4.1 Reeu I. at. c. N.E dEa JU.1 RaW L ZZa AL 1.2? L.f in-. 20.3

fl'aical Centilngu ie 19.69 8.84 4.76 4.74 6.01 1.96 0.56 1.25 1.S0 0.10 0.15 48.64 1.79

Price Continacies 65.94 2.46 8.86 2.62 19.71 4.60 1.27 t.06 1.61 0.06 0.06 65.11 2.11

1v:Tot al Prall ul4ee Cats 3 U UQ.N 5.2? ZaIJI U. ILM n.E !LU B BaE

Taxe. 18.t0 1.65 2.99 4.22 0.1U 0.10 0.04 0.10 0.t5 0.01 *0.02 26.00 0.96

F preip Sedde 11.78 265.6t0 86.26 29.45 120.96 26.44 6.6S 11.76 11.18 1.06 1.29 462.22 17.76

ENREEI ETI111t PROJEC T

Pro;ect Eamend,turo bw Year and Pursese(Rupee '000)

ease Caost Tota I89/90 90/91 91/92 92/93 93/94 94/95 95/96 96/4t4 Rupee U$8 00

Faci I itiee DevelopmentEngineering Degree Pregran - Pulchoek Campus 16,100.54 47,S09.70 8D,866.37 57,490.43 2,216.02 387.02 337.02 277.54 20S,134.63 8,441.75

Technician Certificate Program - Pulchoak Campus 9.879.13 14,679.29 9,119.56 - - - - 33,677.98 1,385.93

Technician Certificate Program - Thapathali Campus 13,412.18 29,457.82 5,051.96 57.61 65.84 69.95 69.95 57.61 48,242.93 1,985.31

Technician Certificate Program - Pohara Campus 29,353.05 17,858.78 124.41 174.18 199.06 211.80 211.50 174.18 48,306.67 1,987.53

Subtotel F acsilities Development ;8.744.91 l09.505.58 95.162.30 57.722.22 2.48Q 92 6S8.47 618.47 S0.33 335.362,21 13.800.91

Staff and Curriculum DevelcmmentEngineering Degree Program - Pulchoak Campus 9,758.15 12,676.11 19,223.44 18,005.87 14,103.8S 19,961.56 14,968.18 490.15 109,186.99 4,493.29

Technician Certificate Program - Pulchowk Campus 5,352.11 7,906.18 7,285.59 3,278.62 2,816.87 2,425.83 2,393.61 235.29 31,694.05 1,304.28

Technician Certificate Program - Thapathali Campus 1,446.30 1,703.21 1,576.19 1,476.28 1,186.46 692.26 158.80 82.74 8,322.25 342.48

Technician Certificate Program - Pokhare Campus 2,503.66 4,057.08 3,181.83 2,461.06 2,181.72 1,675.13 912.91 294.85 17,267.73 710.61

Subtotal Staff and Curriculum Development 1,22 26.J42.65 3126704 25.222.84 20.288,1 24.7B.J79 18.433,49 1.102S3 166.471.03 6.850.66

atnacement DevelcmentEngineering Degree Program - Pulchoek Campus 9,443.14 3,391.15 3,116.47 839.15 743.02 495.71 419.03 171.17 18,618.82 766.21

Technician Certificate Program - Thapathali Campus 1,070.50 - - - - - - - 1,070.50 44.05

Technician Certificate Program - Pokihar Campus 1,296.34 20.90 20.90 20.90 20.90 22.40 22.40 - 1,424.74 58.63

Sub'7tal Management Development 11.809.98 3,41205 3.137.37 M806 73.92 1518.10 "L4 17.17 21.114.06 86t.89

tatal Bas line Costs 99.615.10 139260.18 129.566.71 83.804.10 23.RA42 25E891.6 10.408.89 1.783.C3 5.947 29 21-520.48

Physical Contingencies 8,628,88 12,473.82 11,282.00 7,1S8.62 1,481.96 1,526.85 1,022.82 99.42 43,639.07 1,795.85

Price Contingencies 2,605.23 10,928.20 16,S.12 14,326.66 8,471.94 7,423.78 6,815.26 1,006.14 64,112.34 2,679.52

TOTAL PROJECT COSS 110.849.21 162.661.80 157.38a.83 1W5,204.J 3.457,J 2 34-SU.i 27.331.47 2. 60 631.698.7D 2S.e35.83

Taxes 6,844.83 10,081.71 5,137.12 759.86 81.66 71.S8 21.14 7.48 23,006.43 948.77

Foreign Exchange 62,333.83 98,041.61 112,189.40 90,344.35 22,882.10 28,596.36 20,012.05 174.15 432,224.06 17,787.00

OIf

ANNEX 5Page 3

48

NEPAL

ENGINEERING EDUCATION PROJECT

Estimated Schedule of Disbursement(US$ Million)

IDA fiscal Amount per Cumulative Disbursementyear and semester Amount /a Profile 2 /bsemester

IDA SDC IDA 2 SDC 2 IDA

19901 0.60 1.28 0.60 5.3 1.28 15.0 02 0.60 1.28 1.20 11.5 2.56 30.0 0

19911 1.09 1.69 2.29 20.1 4.25 49.8 0.52 1.09 1.69 3.38 29.6 5.94 69.6 1

19921 1.75 0.93 5.13 45.0 6.87 80.5 32 1.73 0.93 6.88 60.4 7.80 91.4 5

19931 1.64 0.20 8.52 74.7 8.00 93.8 92 1.64 0.20 10.16 89.1 8.20 96.1 14

19941 0.24 0.10 10.40 91.2 8.30 97.3 222 0.24 0.10 10.64 93.3 8.40 98.4 30

19951 0.23 0.04 10.87 95.4 8.44 98.9 422 0.23 0.04 11.10 97.4 8.48 99.4 53

19961 0.12 0.03 11.23 98.5 8.51 99.8 652 0.12 0.03 11.36 99.6 8.53 100.0 76

19971 0.02 - 11.38 99.8 842 0.02 - 11.40 100.0 90

/a Figures may not add due to rounding

/b According to Kabir Ahmed's memorandum of June 17, 1988.

NEPAL

ENGINEERING EDUCATION PROJECT

Area and Unit Capital Costs Comparison for New Ensineering DegreeFacilities

Estimated cost per student place /b

Gross area per -------- This project --------student place Building

This World Bank and site World Bankproject unit data la works Furniture Equipment Total unit data------ (sq m) --------- ------------ …----------USS -----------------------------

Academic, 20.6 13.5-31.7 5,019 858 6,152 12,029 7,860-16,517communaland admin-istration

la Figures shown are the mid-range figures - the first figure is for opost-secondary, non-universitytechnical, vocational and agricultural institutes (FY81-83)9 and the second figure is foruniversities (FY78-80). Data was not given for technical universities programs such as engineeringbut this would be expected to be at the upper range of the university figures.

lb Since the project includes both new and renovation works, costs have been calculated only for thenew degree facilities and student numbers were based on only the additional 568 degree studentsrather than the total of 932 degree students.

Sources 'World Bank Unit Area and Unit Costs Estimates in Education Projects' November 1983.

ccI

50

ANNEX 7

NEPALENGINEERING EDUCAJION PROJECT

ImPSnWint SchedUIS

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->-- ~~~~~~14 I Igo 490 191f11 1 4 1 19 I1 19 1g f "

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- I~~~67ua2w&Ofl~~~~~~~O~~msi-t

Wa*M ft* -_

ANNE"_51 Page 1

NE

ENGINEERING EDUCATION PROJECT

Proiect Management and Imniementation Capability

Existing Capabilities

1. The project design and implementation activities will be particularlycritical in this project. The project will entail three different levels ofdesign and construction at three different sites. Implementation will furtherbe complicated by the need to continue the operation of existing teachingprograms at the three campuses while the renovation and new constructionoccurs. Strong project management expertise, therefore, is consideredessential to the successful implementation of this project.

2. While the basic design and construction capabilities available in thecountry are considered appropriate for this project, the local engineering andconstruction industry suffers from a lack of expertise in project management,relating to systematic controls of project scheduling, costing andconstruction supervision. Experience with the First and Second IDA Projectssuggests that while basic design services were relatively well handled, therewere serious shortcomings in the coordination of the design and supervisionactivities.

3. Also, the recruitment of senior IOE staff for the PIU and the IECS inprevious projects, while having obvious staff development benefits, hasweakened the IOE's academic staff. This issue will need to be addressed inthe proposed project given the added demands the expansion of the degreeprogram will place on staff resources, and the objective of the project toimprove academic quality.

Project Implementation Unit

4. In the previous IOE-IDA projects, the Project Implementation Unit hasbeen established as a separate semi-autonomous group. In keeping with theproposed projects objective of strengthening the IOE's capabilities, adifferent approach is proposed for this project. It is recommended that theproject implementation functions be performed by a group which is integratedas a part of the regular organizational structure of the Institute. Staffresponsible for specific implementation functions, such as: the ProjectCoordinator, Fiscal Officer, and Education Officer should be assigned to thoseoperating units with related ongoing responsibilities such as the offices ofServices and Planning, and Associate Dean - Degree Programs. It is felt thatthe integration of the project implementation functions with the existing IOEoperating units will facilitate the high degree of staff cooperation andparticipation this project will require. It will also ensure that theexpertise and experience gained from the implementation activities will betransferred to other staff and be available once the project has beencompleted for the normal continuing operations of the IOE.

52 ANNE 8Page 2

5. In order to strengthen the project management capabilities of theproposed project implementation group, it is recommended that an experiencedtechnical expert be recruited for the position of 'Construction ManagementSpecialist". This individual would be responsible for assisting with thedevelopment and administration of appropriate project scheduling, contractdocument preparation, cost control and construction supervision procedures(detailed terms of reference are provided).

6. Project Design. The Institute of Engineering Consulting Services(IECS) has provided the architectural and engineering design services for boththe first and second projects. While the quality of their design work inthese projects has been considered satisfactory, problems have arisen due todelays in completion of drawings, shortcomings in the construction details andlack of coordination of site supervision and drawing revisions.

7. In order to ensure that detailed design and construction can proceedas early as possible upon effectiveness, the IOE should complete thepreparation of revised master plans and preliminary building designs for allthree campuses not later than March 31, 1989. These plans need to be reviewedand approved by campus staff.

8. In order to ensure that appropriate professional design andsupervision services are provided for this project, it is recommended that thedetail design and supervision services be awarded on a competitive bid basis,from a list of prequalified registered consultants. Special attention shouldbe given to the credentials and evidence of full-time commitments of keysenior staff in the selection criteria. It is suggested that an objectivethird-party agency (such as the UNDP or USAID) as well as the ConstructionManagement Specialist participate in the evaluation of bids for architecturalservices in order to avoid potential claims of conflict of interest orunfairness in the selection process. For the purposes of time expediency andfor ease of coordination with academic scheduling requirements, some of thesmaller contracts for renovation work could be let without competitive biddingto the IECS.

9. Because of the complexity of the equipment procurement requirements,it is proposed that the PIU use the services of Equipro to manage andimplement the equipment procurement component. Procurement of other goodswould be the responsibility of the PIU Procurement Officer.

53 ANNU 9Page 1

NEPA

ENGINEERING EDUCATION PROJECT

Lumrovement of the IOE's Physical Facilities

IntLr2duction

1. In support of the project objectives which are: (1) to increase boththe quantity and quality of graduates in engineering Degree and TechnicianPrograms, and (2) to increase the efficiency of the IOE's operations; thephysical facilities of the IOE, including both facilities and equipment, willneed to be upgraded and expanded. All three campuses of IOE (Pulchowk,Thapathali, and Pokhara) will be affected.

Adeguacv of Current Facilities

2. The condition of facilities at the three IOE campuses variesconsiderably, depending primarily on their age. Major problems relating tothe physical facilities include; deficiencies in building repair andmaintenance, and worn and, in some cases, inappropriate equipment (primarilyat the Pulchowk and Thapathali Campuses). The Pokhara Campus is new but itsbuildings and equipment will need to be modified and expanded to accommodatethe phasing out of the trades programs and increased enrollments for theTechnician Certificate Programs. Problems due to lack of maintenance areprevalent at Pulchowk and Thapathali whereas at Pokhara building deficienciesdue to poor initial construction will need to be rectified.

3. Facilities at Pulchowk are all considered structurally sound but themajority of the buildings are in need of repair. Many of the technicianlevel laboratories and workshops suffer from a lack of equipment and services.

4. Thapathali is the campus with the most severe facility deficiencies.Most buildings are in need of significant repairs and the equipment in themechanical machine shop is now 20 years old and an estimated 50X are notfunctioning properly.

Implications of Proposed Program Expansion

5. The proposed expansion of the Degree Programs at the Pulchowk Campusfrom one to five disciplines, and an increase in enrollments from 360 to 932students will require a substantial upgrading of the classroom, laboratory,library and academic support facilities. Similarly, the expansion of enroll-ments in the Technician programs at the three campuses will create a need forsome additional buildings and equipment. Inadequacies in existing buildingsand equipment will also need to be corrected at each of the campuses.

6. The PPU's master plans and preliminary drawings reviewed during theAppraisal Mission (September 17-October 5, 1988) indicate that therequirements for new space and equipment can be minimized by increasing theutilization of existing facilities at all campuses. This will be achieved

54 ANNEX 9 Page 2

through the introduction of a larger percentage of common courses, moreflexible scheduling procedures, larger class sizes for some lecture courses,and greater shared uses of facilities. Current utilization of laboratory andworkshop facilities at all th-ee campuses is low. The Completion Report ofthe IDA First Education Project (February 1987) indicated that laboratoryutilization rates at Pulchowk range from only 3.51 to 11.91. Review of courseschedules for the winter term of 1988 for the technician certificate programat Pulchowk indicated that, based on actual classrooms scheduled, utilizationwas about 651. However, taking into account potential classroom space notbeing used (e.g., storage or on loan to other users), utilization efficiencyis 611.

7. This analysis was based on the current operation schedule of 10:15 amto 4:55 pm, 5-1/2 days per week, which results in 38 available classopportunities per room per week. Based on a potential of 42 class hours beingplanned for the new project, current use would result in a utilization rate ofabout 591. Laboratory utilization ranged from 8 to 381, for an averageutilization per lab of about 151. Improvements in the planning and schedulingof the new programs are expected to make it possible to attain acceptableutilization rates in the proposed project of 801 for class rooms and 60-701 inthe labs and workshops.

8. As a result of the proposed increases in utilization, the plannedincrease in the Degree program enrollment of some 2601 (along with its greaterdemand for facilities), as well as the planned 171 increase in the Technicianenrollments, will be achieved with only a 341 increase in the academicbuilding area (13,200 m2 added to existing area of approximately 38,950 m2) atall three campuses.

55 Page 3

Summary of Physical Improvements by Campus

Total new Total renovations (m2)Campus construction Light Moderate Heavy

(m2)

PulchowkAcademic facilities 9,200 - 13,400Student hostel 500 - - 700Staff housing 1,750 - -

Other - 430 -

ThapathaliAcademic facilities 1,693 - 3,935 210Student hostels 378 -

Staff housing -

PokharaAcademic facilities 1,928 - 4,834Student hostel 680 - -

Staff housing 1,800 - -

Improved Scheduling

9. In order to achieve the higher levels of utilization proposed, theIOE will have to adopt a policy of common access to facilities, versus thecurrent policy of dedicating the use of one classroom to one class. The morecomplex process of scheduling which this policy will entail should be managedby the central administrative group. To strengthen the capability of thisgroup, staff should be trained in appropriate scheduling procedures andcomputers should be used to simplify these activities. A foreign specialistwill be provided to assist in training the IOE staff in the use of these newsystems and equipment for facilities scheduling. Terms of reference for theFacilities Scheduling Specialist are provided.

Staff and _tudent Housing

10. Additional student housing will be provided at Pulchowk, Thapathaliand the Poihara Campus and more staff housing will be built at Pulchowk andPokhara Campuses. Emphasis will be given at the Pulchowk and Pokhara campusesto the provision of hostel accommodation for girls, which is intended tofacilitate further increases in the enrollment of female students in thefuture.

56 Page 4

Imgroved Maintenance

11. Clean, well finished and well equipped buildings are essential forcreating a working environment that is conducive to a high standard ofacademic achievement. Academic quality at the IOE has been adversely affectedby inadequate provisions for both building and equipment maintenance. Theproposed new developments for the IOE would include substantial improvementsto the management, staffing and funding of maintenance operations in order toprevent rapid deterioration of building and equipment in the future (seeAnnex 10).

57 ANNEX 10Page 1

NEPAL

ENGINEERING EDUCATION PROJECT

Building and Eguipment Maintenance

Existing Maintenance Operations

1. Current levels of maintenance at the IOE' s campuses are inadequate,which has led to premature deterioration of buildings and equipment. The poormaintenance is also felt to be a contributing factor to problems of academicquality. The untidy buildings and inoperable equipment must cause frustrationfor staff and students and lower the attitudes towards academic achievementand excellence.

2. The inadequacies of the IOE's maintenance operations are a result of:

(a) the exclusion of the maintenance function as a main component in theInstitute's organizational structure;

(b) severely limited funding allocations;

(c) lack of qualified staff; and

(d) the absence of any appropriate maintenance programs and procedures.

3. Not all the building deficiencies, however, are the fault ofinadequate maintenance. Many can be attributed to poor initial construction(e.g., the new hostel buildings at Pulchowk and throughout the Pokharacampus). These defects, which were not corrected at the time of construction,have added to the maintenance problems. The combination of these initialconstruction defects and the shortage of financial and human resourcesavailable for maintenance will, in time, shorten the "life-expectancy" of theIOE's capital investments. Fortunately, the majority of the IOE's facilitiesare relatively new and corrective measures can still be made at reasonablecosts.

4. Maintenance of laboratory equipment is also a major problem. TheCompletion Report of the First IDA Project indicates a serious shortage oftrained laboratory technicians at Pulchowk (only 8 out of a total of 51designated lab technician positions have been filied). The situation asappraised in October 1988 had not improved, with many of the positions stillvacant and only 2 of the 12 staff in the Civil Degree program considered to beproperly qualified lab technicians. The lack of qualified technicians hasresulted in inadequate maintenance and repair of the lab equipment andworkshop machines. In those cases where there are qualified technicians inplace, no regular equipment maintenance programs and procedures have yet beenestablished.

58AMN 10Page 2

Reguired Improvements

5. The level and quality of maintenance must be substantially improvedin the future in order to ensure the protection of the current and proposedcapital investments in facilities, and to provide a physical environmentconducive to high academic standards. To minimize future maintenance problemsassociated with poor construction of new buildings, special attention shouldbe given to strengthening construction management and supervision capabilitiesfor the proposed project. A regular maintenance plan and work program shouldbe established for the general facilities and preventative maintenance programshould be developed and implemented for all building systems and equipment.

6. Past recurrent budget allocations for maintenance are clearlyinadequate and must be substantially increased if any realistiz level ofpreventive maintenance is to be achieved. Current maintenance allocations atthe IOE amount to 14.1 NRP per square meter of building area. It is proposedto more than double this amount to 32.4 NRP per square meter for the total newbuilding area. This increase would be made in increments over the duration ofthe project.

7. The expansion of the Degree Program will require a substantialinvestment in new, relatively sophisticated equipment. Appropriatelyqualified lab and workshop technicians must be provided to ensure properoperation and maintenance of this equipment.

8. The IOE has prepared a Maintenance Management Plan to address theissue of maintenance. (Maintenance Management Plan for Institute ofEngineering. Tribhuvan University, Institute of Engineering ProjectPreparation Unit P.B. Shrestha, P.N. Maskey, September 1988.) The Planacknowledges the severity of the current problems and proposes very general,but reasonable, recommendations for improvement. The proposed Plan, however,lacks sufficient detail to provide an adequate plan of action for theimplementation of an appropriate new maintenance program. The plan onlyincludes a sample maintenance program for the D block at Pulchowk, but lackssuch detail for the entire Pulchowk campus and for the other two campuses.This required detail should be provided in the final version of the plan,which should be submitted to IDA by December 31, 1988.

9. The proposed project will, therefore, provide support in the form ofboth technical and financial assistance to help the IOE strengthen itsmaintenance capabilities. Such support would include:

(a) a revised organizational structure to include a specific maintenancegroup and clear lines of responsibilities for this function withinthe senior management structure;

(b) revised recurrent budgeting to include funding for an appropriatemaintenance program. The proposed project would include increasedfunding assistance for this component, designed on a graduated scaleover the project period to assist the IOE in meeting these additionalrecurrent costs;

59ANNE 10Page 3

(c) the development and implementation of a specific program of generalmaintenance and preventative maintenance policies and procedures foreach campus, that will include improvements in the recruitment andtraining of staff. The proposed project should include the provisionof a specialist in "Building Maintenance", who would assist the IOEin design and implementing such a maintenance program, as well asinternational fellowship training for the Director of Maintenance andTechnical Services at the Pulchowk campus. (Detailed terms ofreference for the Building Maintenance Specialist are provided).

(d) funding would be provided for fellowship training of 20 lab andworkshop technicians, to provide proper operation and maintenance ofequipment, for the degree program facilities, as well as funds foradditional local training of lab technicians in the certificateprogram.

(e) the equipment specifications and tenders would include an initialsupply of spare parts for all major equipment items procured.

(f) the Director of Maintenance and Technical Services and the BuildingMaintenance Specialist would develop a preventative maintenanceprogram and provide training for staff on its implemertation.

(g) specific office, storage ani: workshop space for the maintenance unitas well as equipment for these areas has been included in thefacilities plans for each campus.

ANNEX 1160 Page 1

NEPAL

ENGINEERING EDUCATION PROJECT

Teaching Staff Requirements and TraininR

Introduction

1. The Institute of Engineering (IOE), Project Preparation Unit (PPU)undertook an analysis of the number and type (grade and qualifications) ofteaching staff required as a result of the expansion of the enrollmentcapacity in the proposed project. The analysis, which included proposals forstaff development/upgrading was presented in the Staff Development Plan ofSeptember 1988. The agreements reached during the appraisal to raise thestudent/staff ratio, reduce the allowance for sabbaticals and leave, andimprove other staff utilization criteria changed the number of teachers andthe staff upgrading required during the project. The analysis to determinethe new requirements is presented below.

Teaching Staff Requirement

2. The PPU determined the number of teachers required for the IOE as aresult of the projected increase in total enrollment from about 1,800 to 2,700students. The analysis was based on present standards for student teacherratio, teaching loads, class size, staff distribution by program and staffqualifications (Government civil service grade) required by the program. Italso included recommendations for staff development, particularly graduate andpost-graduate fellowships. The analysis indicated that the IOE would have torecruit more than 60 new teachers and upgrade more than 180 of the existing282 teaching staff through fellowships.

3. The analysis was reviewed during appraisal and it was decided tochange the standards for student/teacher ratios, teaching loads, staffdistribution and staff qualifications required. The student/teacher ratiowould be increased from the current 5.6.:1 to 10:1 by the end of the project(1997-98). In addition it was agreed that the total number of staff asdetermined by the 10:1 ratio would be increased by 1OZ to allow forsabbaticals, secondments, study or other leave. Also, the teaching loadsagreed to during the preappraisal (14 hours/week for lecturers and above and18 hours/week for instructors) would be used in the analysis. The staffqualifications required by program would be lowered (e.g. the number of PhD'srequired was reduced from less than 90 to 25) on the basis of the teachingprogram requirements and the practice and standards in other countries in theregion.

4. On the basis of the new standards the PPU analysis was revised. Therevised analysis indicates that the total teaching staff would have to beincreased from the present 282 to 297 staff members by the year 1996-97. Toupgrade the teaching staff a total of 17e study-years of fellowships (2.5 MY.post-graduate; 45 KY, PhD; 64 MY, MSc; and 59.5 MY, Adv.Techn.) would berequired for 122 staff members. The detailed criteria for the revision arelisted below and the tables put together for the analysis are attached.Separate analysis were done for the degree programs and the certificateprograms.

ANNEX 1161 Page 2

Standards and Criteria Used

5. The requirements for new staff identified in this annex would formthe basis for the fellowship and external teaching assistance schedule for theproject. These requirements should be incorporated into the IOE StaffDevelopment Plan and should be used as a guide in the recruitment, deployment,and upgrading of IOE graduate teaching staff.

(a) enrollment projections have been taken from the Revised DevelopmentPlan (March 1988);

(b) an overall student/teacher ratio of approximately 10:1 has been used.Note that for each individual discipline a slightly different ratiohas been applied. These ratios are based on an analysis of projectedteaching commitments, standards in other comparable programs and theneed to use standard group size and round-off staff numbers.

(c) graduate staff allocation in the certificate program departments havebeen based on student teacher ratios similar to the correspondingdegree program departments and on the assumption that graduate staffaccount for 50% of total teaching staff requirements in thecertificate program.

(d) technical support staff for laboratories and workshops have not beenincluded.

*e) staff attrition due to resignation, retirement, etc. are not expectedto have an impact on the availability of teachers in view of thecurrent surplus of staff.

(f) the projected enrollment figures in the 2nd, 3rd and 4th year (92/93,93/94, and 94195) appear high. It is assumed that actual enrollmentwill be less if stricter academic regulations would be enforced.Lower enrollment figures would alleviate teaching loads to someextent and improve opportunities for staff to participate in programdefelopment and teacher training activities.

(g) for the general science area, five PhD fellowships have been includedin the plan. It is recommended that up to four of these be awardedto prospective staff with engineering qualifications. Two of thethree fellowships in mathematics could be awarded to candidates witha civil, electrical or mechanical engineering qualification tospecialize in linear algebra (applied math) and in finite elementanalysis (numerical methods). The third fellowship would be forstaff specializing in calculus, vector analysis and statistics. Theremaining two fellowships in the science area are intended for thestaff teaching the physics and chemistry classes of the common firstyear curriculum (degree program). The senior staff for thesesubjects should have basic engineering qualifications (electronics,chemical, mechanical). The reason for these recommendations is thatthe teaching staff should be trained with the objective of enhancingthe engineering focus in the science courses of the degree program.

ANNEX 11

62 Page 3

Tables Page No.

1. Lab Section Hours per week with Full Enrollment .............. 4

2. Section Hours per Week and Staff Requirements,Full Enrollment ............. ...... .......................... 5

3. Academic Staff Availability and Requirements (FullEnrollment) by Qualifications and Discipline ............... 6

4. Academic Staff Development Schedule, Architecture andRural Planning ............................................. 7

5. Academic Staff Development Schedule, Civil Engineering ....... 8

6. Academic Staff Development Schedule, Electrical Engineering.. 9

7. Academic Staff Development Schedule, Electronics Engineering. 10

8. Academic Staff Development Schedule, Mechanical Engineering.. 11

9. Academic Staff Development and Recruitment Schedule byDiscipline and Year .. 12

10. Academic Staff Development, Fellowship Program . . 13

ANNEX 11

63 Page 4

Table 1: LAO SECTION HOURS PER WEEK WITH FULL ENROLLMENT

Lob Architecture Civil Electriceal Electronics Mechanical General

I~ ~ ~ ~ ~ ~~~~~T Ii

Language 0o 80

Computer studio 2 2 44 44 5 6 26 26 26 26

Drafting 6 8 6 6 8 8 84 84

Design studio e6 86

Survey 15 11

Chemistry la 185

Physics 185 185

Materials 1 1 20 20 2ff 16

Circuits 15 15 10 10

Measure and control 4 4 10 10 a 8

Coamunicatlons 21 21

Microwave 2 2

Building science 6 6 8 a 8 8 8 a 8 8

Hydrology 12 12

Thermodynamics 19 19

Machine shop 4 4 4 4 4 4 6 5

Electric power 12 12

Project labs 24 24 12 12 12 12 12 12

Electric machines 6 6

Fluid mechanics 18 18 21 21

Mechanics and structures 8 8 6 6 14 14

Geotech 18 18

Total 104 104 170 170 69 69 88 88 158 168 67 57

ANNEX 11

64 Page 5

Table 2: SECTION HOURS PER WEEK AND STAFF REqUIREMENTS, FULL ENROLUMENT

Item Architecture Civil Electrical Electronics Mechanical GeneralT-r I T I T T I -T IT -rT I

Labs 104 104 170 170 69 69 so 68 153 158 57 67

Lectures (term) 14 g8 18 18 18 115

Tutorials 2 14 9 9 9 76

Shared course 6 12 4 8 8 4 4 a - -

Total 118 106 212 198 91 6S 109 101 175 170 172 182

Nuber of staff 14 8 16 7 8 18 12+ 18 6 11 6 5 9 7

Total 14 28 12 18 22 19

Enrol lement 102 864 182 91 182 921

10:1 10 28 1S 9 16

Recommended Totel StaffRequirement 14 28 16 18 19 18

T - Teacher.I - Instructor.

ANNEX 11Page 6

65

Table 8: STAFF AVAILABILITY AN STAFF REqUIREMENTS (FULL ENROLLMENT) BYQUALIFICATIONS AND DISCIPLINE

Staff Architecture Civil Electrical Electronics Mechanical General

Total required 14 28 16 13 19 is

Qualification PhD 2 7 4 a 4 6targets USc 9 18 10 8 12 6

Bsc a 8 2 2 8 2

Available PhD (Pk) 2 7 2 1 - -(All programs) (Ti) - - - - -

(DUP) - - - - _

MSc (Pk) 11 (7) /a 88 1 8 6(TI) - - - - 6

(DIP) - 2 1 2 a

BSc (Pk) 10 18 6 4 _ _(TI) - _ _ _ _ _(DIP) 1 6 - - - -

e Five are first degrees (Russia).

Pk - PulchowkTi - ThapetallDIP - Oharan and Polchara

ANNEX 1166 Page 7

Table 4: STAFF DEVELOPMENT SCHEDULE, ARCHITECHTURE AND RURAL PLAWIN0

Academic year 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97

Projected enrol last 24 47 69 91 102 102Basic staff requlred 8 7 10 12 14 14

Certificate program enrollment 201 177 155 184 184 184 184 184Graduate stIff assigned 18 12 10 9 9 9 9 9

Total graduate *t.ff available 28 28 28 28 28 28 28 28

Do iciency

Note: No overall deficiency determined. However, two dditional USc are recommnded In view of programconcentration and presnt staff qualifications. One external TA In 1995/96.

ANNEX 11

67 Page 8

Table 6: STAFF DEVELOPMENT SCHEDULE, CIVIL ENCINEERINO

Academic yexr 1989/90 1990/91 1991/92 1992/98 1998/94 1994/96 1996/06 1906/97

Projected enrollment 884 864 844 884 B84 804 864 864Boolc staff required 28 20 28 28 28 20 28 20

Certificate program enrollment 070 674 488 402 402 402 402 402GrOduate staff assigned 89 29 24 20 20 20 20 20

Total graduate staff available 65 58 68 58 58 68 58 68

Deficlency

Note: No overall deficiency determined. In order to strengthen hydrology area, add one PhD. Oneexternal TA in 1995/96.

ANNEX 11

68 Page 9

Table 6: STAFF DEVELOPMENT SCHEDULE, ELECTRICAL ENGINEERING

Academic year 1999/90 1990/91 1991/92 1992/93 1993/94 1994/96 1995/98 1996/97

Projocted enrollment 48 94 1B8 102 192 182Ba.ic staff required 6 9 12 16 1 16

Certificate program enrollment 56 83 109 134 134 184 134 134Graduato etaff assigned a 4 6 6 6 6 6 6

Total graduate staff available a a a 8 8 8 8 8

Deficiency -4 2 7 10 14 14 14

Additional staff: PhD - - - - 1 2 2 2(Cumulative) mSc - - 2 6 7 10 10 10

USc - - - 1 2 2 2 2

Recruit BSc 2 8a B 1 4 2Start in MSe program 2 4 /b 1 a 1Finish MSc program 2 4 1 8 1Start in PhD program 1 L 1Finish PhD program 1 1Recruit UScTech. Assist. USe/PhD 1 1 1 1

SP From Certificate Program.Includen one from Certificote Program.

ANNEX 11

69 Page 10

Table 7: STAFF DEELOPMENT SCHEDULE, ELECTRONICS ENOINEERIN

Academic year 1999/90 1990/91 1991/02 1992/98 1998/04 1994/95 1995/96 1996/97

Projected enrollment - - 24 47 09 91 91 91Basic staff required - - 8 6 9 18 18 18

Certificate program enrollment es e8 109 184 184 184 184 184Oraduate staff aseigned 4 6 7 9 9 9 9 9

Total available 8 8 8 9 8 8 8 8

Deficiency 2 7 19 14 14 14

Additional staff: PhD - - - 1 1 2 2 2(Cumulative) MSc - - 1 4 5 6 6 6

BSc - - 1 2 4 6 6 6

Recruit BSe 2.1 2 2 2 2Start in MSc program a 11Finish USc program 8 1 1Start in PhD progrm 1 1Finish PhD program 1 1Recruit USc 2 1Tech. Assist. MSc/PhD 1 1 1

/a For certificate program.

/b One from certificate program.

ANNEX 11

70 Page 11

Table 8: STAFF DEVELOPMENT SCHEDULE, MECHANICAL ENGINEERING

Academic year 1989/90 1990/91 1991/92 I992/98 1998/94 1994/96 19M/98 1996/97

Projected enrollment - - 24 47 98 188 1SO 182Basic stuff required 3 6 10 14 1S 19

Certificate program enrollment 67 67 67 67 67 67 67 87Graduate staff assigned 4 4 4 4 4 4 4 4

Total available 4 4 4 4 4 4 4 4

Deficiencya 5 10 14 16 19

Additional Staff: PhD 1 1 2 a 3 4(Cumulative) MSc 2 8 0 8 9 12

Bae 1 2 a 4 8

Recruit Bsc 8 2+1 Le 8 8 2 2 2Start In MSc program 8 2 8 2 1 1 1

*Fifilsh MSc program a 2 a 2 1 1Start In PhD program 1 /b 1 1 1Finish PhD program 1 1 1 1Recruit MSc 1 2Tech. Assist. MSc/PhD 1 1 1 1

/a For certificate program.

;b From certificate program.

ANNEX 11

71 Page 12

Table 9: STAFF DEVELOPMENT AND RECRUITMENT SCHEDULE BY DISCIPLINE AND YEAR

Academic year 1989/90 1990/91 1991/92 1902/93 1998/94 1994/95 1995/98 1996/97

MSc studyXsrcTT;cEure 2 2CivilElectrical 2 6 6 4 4 1Electronics a 4 2 1Mechanical a 5 5 6 a 2 1Unallocated 1 2 1

Total MSc 7 16 14 11 9 6 2

PhD StudyArchitectureCivil 1 1 1Electrical 1 2 2 1Electronics 1 2 2 1Mechanical 1 2 3 a 2 1

General: math 1 2 8 1physics 1 1 1Chemistry 1 1 1

Unallocated 1 1 1

Total PhD 3 7 11 10 8 4 2

BSc recruitedElectOrcal 8 1 4 2ElectronTcs 8 2 2 2 2Mechanical 8 a 8 a 2 2 1

Total BSc recruited 8 9 8 9 6 4 1

MSc recruited

Electronics 2 1Mechanical 1 2

Total MSc recruited 2 1 1 2

Ext. Teach. Assist.All disciplines 2 a 8 8 2

ANNI;zA 11

72 Page 13

Table 10: ACADEMIC STAFF DEVELOPMENT, FELLOWSHIP PROGRAM

Discipline MSc PhD MSc-PhD(2 yr) (3 yr)

Architecture 2Civil 1Electrical 11 2 1Electronics 5 2 1Mechanical 12 4 3General 5Unallocated 2 1

Total 32 15 5

Foreign 16 12 5Region 16 3

73 Page 1

NEPAL

ENGINEERING EDUCATION PROJECT

Management and Administration of the Institute of EngineeringImplementation Guidelines

Introduction

1. The need for a new management organization has been discussed withTribhuvan University (TU) and the Institute of Engineering (IOE). It wasagreed that a new organization would be established along the lines suggestedin the Management Plan prepared by the PPU. This Annex provides additionalsuggestions for the structurr. and functions for the proposed organization withan emphasis on administrative support services which have not been givensufficient attention.

Background

2. As an Institute of Tribhuvan University, the IOE is governed by thepolicies, rules and regulations of the University. Tribhuvan's managementorganization (University Council, Executive Council and Academic Council) andadministrative offices provide central management support and control for thealmost 70 university campuses located throughout the country. While theuniversity has grown rapidly (enrollment more than tripled from 16,700 in 1975to 55,300 in 1985) the management and administrative organization of TU havenot developed at the same pace. Also, very little delegation of managementresponsibilities has taken place. The University is finding it increasinglymore difficult to provide timely and appropriate management support to thecampuses and institutes such as the IOE. For that reason, Tribhuvan isconsidering a degree of decentralization of management and the technicalinstitutes, including the IOE, have been given autonomy in some aspects ofacademic and personnel management. To cope with the additional demand onmanagement resulting from the expansion of IOE's operations in the proposedproject and to improve academic and administrative efficiency, the Universitywould have to agree to delegate more managerial responsibilities to the IOEalong the lines proposed in the Report on Autonomy prepared by the ProjectPreparation Unit (PPU).

3. The IOE management (and administrative) organization is similar tothat of the University (faculty board and academic committees) and is largelycentralized in the Office of the Dean. As is the case in the university,IOE's management has not developed at par with the growth in enrollment. Theexpansion of operations in the proposed project will make it necessary tostrengthen the existing management organization. Management responsibilitiesfor academic and administrative affairs would need to be separated andassigned to qualified (or specially trained) academic and administrative staffrespectively. To encourage academic leadership, management responsibilitywould have to be delegated to three Associate Deans to be appointed for thedegree programs, the certificate programs and for planning and services(administration). To involve the faculty in decision making, management

ANNEX 1274 Page 2

responsibilities need to be further delegated to the Heads of (academic)Departments and the Directors for planning and services.

Management Organization

4. The new management organization is shown in the attached chart. Thefollowing objectives have been incorporated: separation of administrative andacademic functions; and, separation of degree and certificate programjurisdictions. An effort has been made to organize support services accordingto function, e.g. administrative, technical. The Project Implementation Unit(PIU) is functionally integrated in the organization and the ExecutiveDirector for Planning has been changed into an Associate Dean for Services andPlanning as was agreed during appraisal.

5. In addition, a coordinating committee has been included under theAssociate :ean--Degree Program. The certificate program management has asimilar committee. These coordinating committees, chaired by the respectiveAssociate Deans, would have a membership made up of department heads in thedegree stream, and campus directors in the certificate stream. Thecoordinating committees would be advisory to the Associate Deans, particularlyin academic matters, provide a coordinating function in program developmentand management, and would contribute to collective action and leadership inthe Institute.

Administrative and Service Functions

6. The IOE would have to develop distinct units, properly staffed, tomanage the following administrative and service functions:

(a) Financial Services--concerned with budgets, accounting, payroll,purchasing, trust funds, and financial data. To the extent practi-cal, these services should be centralized at Pulchowk. A branchoffice at Pokhara is desirable.

(b) Personnel Services--concerned with the non-academic staffing in theInstitute: terms of employment of technical, clerical and profes-sional support staff. Again, this unit would be centered at Pulchowkwith a branch office at Pokhara.

(c) Maintenance and Technical Services--in charge of maintenance andrepairs, general supplies, inventories, transportation, minorconstruction projects (in-house construction), and campus security.The unit could include responsibility for supervision ofInstructional Equipment listed separately below. This type ofservice is required on each campus.

(d) Student Services--to provide counseling for students and be respon-sible for on-campus food services, first aid, housing, and to assistwith recreational and cultural programs and functions for the benefitof students. Again, this type of service is required on each campusaccording to local conditions.

Anim,^ 1275 Page 3

(e) Academic Programs and Records--an office which maintains students'academic records and can assess performance and progress under theInstitute's academic regulations. This type of office is requiredfor: ti) the degree programs at Pulchowk; (ii) the certificateprograms at Pulchowk and Thapatali; and (iii) the certificate andtrade programs at Pokhara.

In addition, a central office is proposed to deal systematically withthe matters of admissions, examinations, and aspects of financialsupport for registered students, i.e. tuition fee stipends, otherstipends, awards and scholarships.

(f) Computer Services--a unit responsible for the management andoperation of IOE's common computer facilities and related equipment.Computer Services would also assist with training of personnel usingthe equipment, and would provide software support. The unit wouldserve all campuses.

(g) Library Services--this is a standard unit responsible for books andperiodicals that constitute the library holdings. A main library isenvisaged at Pulchowk, with branch libraries at the other campuses,all administered by a Chief Librarian.

(h) Printing--suitable printing and copying equipment is needed in theInstitute. Sophisticated facilities are now common and would likelybe acquired in this project. The facilities should be managed andoperated by personnel with appropriate skills. All photocopyingequipment should probably be the responsibility of a central office.

vi) Instructional Equipment--equipment required for learning and teachingpurposes would be managed by this unit. Most of the equipment isportable, e.g. projectors, PA systems, VCRs and monitors. The officewould be responsible for stocking and servicing the components,making them available as required, and operating some of theequipment when used in teaching.

(j) Bookstore--this is clearly a separate operation that should behandled by business people. The bookstore has a role to play in theInstitute by providing educational reference texts and learningmaterial that is particularly suitable, and available to students atminimum cost. It should allow trading-in and selling of second-handtextbooks. Also, the bookstore provides a mechanism whereby theacademic staff can market scholarly and professional material.

(k) Liaison and Information Analysis--as part of a management informationsystem, this unit would be responsible for general technology andinformation transfer (external), liaison with government, industry,and professional organizations. It would monitor certain Instituteoperations, relevant market trends, and would advise regardingmanpower needs, special training requirements, and marketdevelopments to which the Institute might respond. This functionwould be incorporated into the Office of Manpower Development whichwill be established in the project.

ANNEX 12

76 Page 4

(1) Campus Planning--this unit would be concerned primarily with theplanning and construction of new physical facilities, majorrenovation projects, plant upgrading, and primary technical servicesand facilities.

Technical Services

7. The need to establish a separate maintenance and technical servicesunit is based on the following considerations. In engineering universitiesand colleges, a great deal of laboratory equipment, instruments, testingfacilities, mechanical, electrical and electronic control systems are acquiredand used. In addition, aids, data-handling systems, and digital computers areused for scientific or academic purposes and increasingly for administrativeservices. The maintenance and servicing of much of this equipment is beyondthe capability of regular technical staff. In many universities, servicecontracts are widely used next to specialized technical services units. Theneed for effective maintenance and repair of equipment is expected to growsubstantially in the IOE. It would therefore be necessary to appoint aDirector of Maintenance and Technical Services who would manage a number oftechnical staff specifically for Technical Services.

Library Services

8. Library services is another area where a separate management functionis required. A Chief Librarian should head the library services and managethe library, including branch libraries. He or she should interact withTribhuvan University's library service and library administration. The IOEwould also need effective library facility at Thapatali and Pokhara.

Management Information System (MIS)

9. The proposed management information system (Liaison and MarketStudies, Information Analysis) would be established and report primarily tothe senior management of the Institute. The MIS unit would be handled by amanager who could also be responsible for Campus Planning.

77 ANNEX 12

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ANNEX 1378 Page 1

NEPAL

ENGINEERING EDUCATION PROJECT

Selected Documents in Proiect File

Nepal Second Education Project (Technical and Vocational Training) StaffAppraisal Report No. 3558-NEP, Education and Agricultural InstitutionDivision, South Asia Projects Department, The World Bank.

Tribhuvan University, Institute of Engineering, An Introduction, Lalitpur1987.

N. McEvers, Manpower Implications of Education and Training Development in theKingdom of Nepal, The International Development Association, May 1983.

Nepal: Policies for Improved Growth and Alleviating Poverty. World Bank1988.

Educonsult Ltd and the University of Calgary, Engineering EducationDevelopment Project, A Feasibility Study, Institute of Engineering,Tribhuvan University, Nepal, May 1987,

Ten Year Development Plan for IOE, Institute of Engineering ConsultancyServices, Kathrnandu, Nepal, September 1985.

Maintenance Management Plan for Institute of Engineering, TribhuvanUniversity, Institute of Engineering, Project Preparation Unit,P.B. Shrestha; P.N. Marky September, 1988.

Maintenance Inventory Work Report for Project Preparation Unit, 1988,Tribhuvan University, Institute of Engineering Pulchowk Campus.

A Report on the Design Proposal for Pulchowk and Thapathali Campuses,September 1, 1988, PPU Institute of Engineering, Pulchowk, Lalitpur

Reports and Proposal Drawings, Pokhara Campus Development Project Institute ofEngineering, August 1988.

Progress Reports on Rules and Regulations, Institute of Engineering, June1984.

80- 82- 4 86- 88e

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