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This document is confidential and is intended solely for the use and information of the client to whom it is addressed.
Beirut, LebanonMay 15, 2007
Infrastructure and Privatization Inter-Ministerial Committee Progress Report # 1
Presentation
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The objective of this first Infrastructure & Privatization IMC meeting is to share with your Excellencies the GR PCO structure and progress to-date, resolve pending issues, and agree on the prioritization of initiatives
Meeting Objectives
Brief your Excellencies on GR PCO structure and implementation progress to-date
Outline issues and challenges
Agree on a prioritization methodology for Paris III initiatives (a preliminary draft of the
prioritized initiatives will also be shared with you)
Appoint Secretary to the IMC and agree on his role
Note: GR PCO stands for Government Reform Program Coordination Office
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The Inter-Ministerial Committees (IMCs) are chaired by the Prime Minister, and will focus initially on Paris III related activities – The GR PCO will liaise with, and support all stakeholders
High Level Structure of the Oversight Committee
“Natural Owners”
M & S Unit
Prime Minister’s OfficePrime Minister’s Office
Prime Minister
Social IMCEconomic & Fiscal
IMC
Committees chaired by the Prime Minister IMC Secretary appointed during IMC first meeting
“Natural Owners”
M & S Unit
“Natural Owners”
M & S Unit
ParliamentParliament
Quarterly Progress Reporting on Paris III Initiatives
Note: M&S Unit = Monitoring & Support unit reporting to “Natural Owners” (Ministers/ Institutions Head) to be set-up as needed
Council of Ministers
Infrastructure & Privatization IMC
GR PCO
Technical Support
Reporting Consolidation
Periodic Reporting
The PCO will also support (as needed) the MoF in its interaction
with Donors
The PCO will also support (as needed) the MoF in its interaction
with Donors
Ministerial Initiatives Teams
Cross Ministerial Initiatives Teams
Ministerial Initiatives Teams
Cross Ministerial Initiatives Teams
Ministerial Initiatives Teams
Cross Ministerial Initiatives Teams
GR PCO Structure
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Reports will be prepared by Ministries/Government Entities and the GR PCO to monitor progress against Paris III commitments on a monthly, quarterly and annual basis
MonthlyReport
(not published)
MonthlyReport
(not published)
DescriptionDescription Audience Audience FrequencyFrequency
MonthlyGR PCO IMCsPrime Minister
(if interested)
Brief progress report (2-3 pages) from each Ministry/ Government Entity, including latest progress on KPIs (for those which are monitored frequently) and overview of major developments (informal document)
Submitted by the M&S Unit to IMCs and the GR PCO in order to ensure constant follow-up of progress and the detection of possible problems
GR PCO Annual Report
(published)
GR PCO Annual Report
(published)
Annually General PublicReport developed by GR PCO every year, summarizing progress against Paris III objectives
Summarized version of Bi-Annual Performance Report (not published)
GR PCO Reporting Types and Frequency
QuarterlyReport
(not published)
QuarterlyReport
(not published)
QuarterlyGR PCOPrime MinisterCouncil of
Ministers
A formalized performance report, developed by IMCs Secretariat jointly with each Ministry/ Government Entity
Submitted by IMCs to the PM and the GR PCO in order to ensure constant follow-up of progress and the detection of possible problems
GR PCO Structure
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Programs Planning Stage
Prepare in conjunction with ministerial and cross ministerial teams detailed action plans for their Natural Owner
Develop KPIs and milestones Prepare regular reports on
progress in implementation
“Natural Owners”
M & S Units
Support M&S Units in preparing action plans and milestones Report progress to “Natural Owners”/ IMCs (in the case of
cross-ministerial initiatives) according to established mechanisms
Implement initiatives and manage external parties deliverables Raise issues and risks to the attention of “Natural Owners”
Responsible for the implementation of Paris III Commitments
Sign the Paris III Commitment Document (PCD) with the respective IMC scope of work, timeline, milestones, and KPIs
GR PCO
Support Natural Owners, through their M&S Units, in initiative identification, charters, milestones and KPIs development
Train M&S Units on GR PCO processes Escalate issues to the respective level as appropriate Consolidate reports
Ministerial Initiatives
Teams
Cross Ministerial Initiatives
Teams
GR PCO Structure
During the first stage, the GR PCO will help Natural Owners prepare detailed programs charters, workplans, and milestones, which will take the form of a commitment document for Natural Owners
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Elimination of redundancies and gaps among allocated Paris III initiatives Initiation of the development of detailed work plans, that will be grouped into
program charters, resulting in a Commitment Document
Elimination of redundancies and gaps among allocated Paris III initiatives Initiation of the development of detailed work plans, that will be grouped into
program charters, resulting in a Commitment Document
Development of Detailed
Workplans
Development of Detailed
Workplans
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To-date, the team introduced the GR PCO structure to several Ministries/ Government Institutions, refined the list of Paris III initiatives, initiated the development of detailed workplans…
Progress To-date
Introductory meetings held with all initially identified Natural Owners Technical meetings held with M&S Units Regular follow-ups with M&S Units
Introductory meetings held with all initially identified Natural Owners Technical meetings held with M&S Units Regular follow-ups with M&S Units
Meetings with Natural OwnersMeetings with
Natural Owners
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Review and analysis of Paris III initiatives Grouping of initiatives into programs Preliminary allocation of Paris III initiatives to Natural Owners
Review and analysis of Paris III initiatives Grouping of initiatives into programs Preliminary allocation of Paris III initiatives to Natural Owners
Review and Update of Paris
III Initiatives
Review and Update of Paris
III Initiatives
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Development of a detailed toolkit to train Natural Owners and M&S staff on GR PCO structure, processes and tools
Development of commitment document template
Development of a detailed toolkit to train Natural Owners and M&S staff on GR PCO structure, processes and tools
Development of commitment document templateDevelopment of GR PCO ToolkitDevelopment of GR PCO Toolkit
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Progress To-date
… and completed the GR PCO toolkit (to be mainly utilized by the M&S units and GR PCO team)
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The team conducted introductory meetings with Ministers and Heads of Government Entities, and started the second round of technical meetings with Monitoring Support Units staff (M&S) where available
Meetings with Natural Owners and M&S Units
Monitoring and Support Unit Meeting Date
Ministry of Telecommunications M&S30 March 2007; 18 April 2007;
24 April 2007
EDL M&S20 March 2007; 13 April 2007;20 April 2007; 30 April 2007
HCP M&S22 March 2007; 13 April 2007;20 April 2007; 27 April 2007;
7 May 2007
Technical meetings were conducted with Natural Owners to discuss their understanding of own commitments under Paris III
Most Natural Owners were positive on GR PCO implementation
Technical meetings were conducted with Natural Owners to discuss their understanding of own commitments under Paris III
Most Natural Owners were positive on GR PCO implementation
Most M&S Unit members are committed to the GR PCO implementation process
Most M&S Units members came prepared with the initiatives plans submitted to Paris III
Some M&S Units lack the required human resources capacity needed for the process (e.g., MoEW, EDL)
Most M&S Unit members are committed to the GR PCO implementation process
Most M&S Units members came prepared with the initiatives plans submitted to Paris III
Some M&S Units lack the required human resources capacity needed for the process (e.g., MoEW, EDL)
Natural Owner Meeting Date
Minister of Telecommunications 16 March 2007
Ministry of Energy and Water 14 May 2007
EDL President 12 March 2007
HCP Secretary General 9 March 2007
CDR President 12 March 2007
Progress To-date
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List of Infrastructure and Privatization IMC Programs
Progress To-date
Ministry of Energy / EDL
1.Corporatize, restructure and privatize EDL
2. Improve power sector efficiency
3.Rehabilitate and strengthen the capacity of the power sector
Ministry of Telecom
1.Establish the Telecom Regulatory Authority
2.Corporatize Liban Telecom
HCP
1.Privatize mobile telecom
2.Privatize other public entities
CDR
1.Restructure CDR’s capacity to undertake reconstruction & development capital investments
2.Contribute in social development projects
3.Contribute in developing the infrastructure and rationalizing expenditure
Engagement Not Finalized to-dateEngagement Not Finalized to-date
The Infrastructure and Privatization IMC has up to 4 Natural Owners with a total number of up to 10 programs…
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… And 74 initiatives, representing 23% of the total number of Paris III initiatives
Progress To-date
Finance
Labor/NSSF
Education
Health
Social Affairs
CDRHCPEnergy/
EDL
Telecom
OMSAR
BDL
Economy & Trade
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2
6
74128
5
2
5
8
51
18
45
32
3516917
28
14
77
24
66
Finance
Labor/NSSF
Education
Health
Social AffairsCDR
HCP
Energy/EDL
Telecom
OMSARBDL
Economy & Trade
Justice
IMC # of Initiatives % of Total Initiatives
Social 19 18%
Economic 66 65%
Infrastructure 17 17%
TOTAL 102 100%
Distribution of InitiativesAs Extracted from Paris III Document
Distribution of InitiativesAfter Discussion and Reallocation to Natural Owners
IMC # of Initiatives % of Total Initiatives
Social 128 39%
Economic 122 38%
Infrastructure 74 23%
TOTAL 324 100%
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From the initial round of meetings, some issues emerged mainly related to initiatives ownership, sector strategy and staffing
Issues and Challenges
Issues Facing Infrastructure & Privatization IMC
Natural Owner
Initiatives Ownership Issues
Natural Owner/ M&S Engagement
IssuesSector Strategy Issues Staffing Issues
Ministry of Telecom
(MoT)
Need to appoint LT BoD or alternative governance structure
Need to finalize decision on whether to opt for mobile assets privatization or issuance of new “Greenfield” licenses
Ministry of Energy and Water / EDL
(MoEW/ EDL)
No consensus on approach for power sector reform: In-house reform vs. corporatization with Quick Wins
A power sector reform plan is currently being developed to be submitted to the World Bank
MoEW/ EDL requires recruitment of M&S staff
Higher Council for
Privatization (HCP)
Potential overlap with TRA on six initiatives
Potential overlap with MoEW and MoT on privatization initiatives
Strategy relating to privatization of other public entities (e.g., airport, ports, tobacco) still under development
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Initiatives Prioritization Criteria
Current initiatives can be prioritized according to several criteria including the extent to which they could translate into “quick-wins” and have a noticeable impact on the concerned sector reform
Should have a noticeable impact before November 2007 The impact should affect a large part of the population The impact on the concerned sector reform should be easily
communicated to the public
Should have a noticeable impact before November 2007 The impact should affect a large part of the population The impact on the concerned sector reform should be easily
communicated to the public
Short-term ImpactShort-term Impact
Can be implemented without the need for legislation enactment Requires long preparations (more than 5 months) before being
submitted to the Parliament Could be implemented with alternatives to legislation
Can be implemented without the need for legislation enactment Requires long preparations (more than 5 months) before being
submitted to the Parliament Could be implemented with alternatives to legislation
Absence of legislative barriers
Absence of legislative barriers
Already progressing and requires minimal budget Budget already allocated through other sources
Already progressing and requires minimal budget Budget already allocated through other sources
Budget availability / Ongoing activity
Budget availability / Ongoing activity
Prioritization of Initiatives
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List of Programs and Initiatives
Ministry of Telecom – Short-term Paris III Programs and InitiativesPrioritization of Initiatives
Sector Reform Programs and Initiatives Stakeholders Preliminary Timeline Comments
1.Establish the Telecom Regulatory Authority
1a.Create the Telecom Regulatory Authority and appoint its board
MoT, CoM Q1 2007 Completed TRA lacks resources
2.Corporatize Liban Telecom
2a.Appoint Liban Telecom Board of Directors or Alternative Governance Structure
MoT, CoM Q2 2007
2b.Setup Program Management Office (PMO) MoT, Liban Telecom Board Q2 2007
2c. Set-up provisional opening balance, and prepare asset transfer
MoT, Liban Telecom Board Q3 2007
2d.Capitalize Liban Telecom by transferring budget MoT, Liban Telecom Board, MoF
Q3 2007
PRELIMINARY
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List of Programs and Initiatives
Ministry of Energy and Water / EDL – Short-term Paris III Programs and Initiatives
Prioritization of Initiatives
Sector Reform Programs and Initiatives Stakeholders Preliminary Timeline Comments
1.Corporatize, restructure and privatize EDL
1b.Appoint qualified advisors to the Ministry of Energy and Water and EDL:- Advisory team at MoEW to support on strategic planning and evaluation of electricity policy reforms- Consultancy team at EDL to perform operational, financial, accounting, legal and contract management activities, including coordinating and assisting the HCP and its advisory team in the corporatization and privatization of EDL
MoEW/EDL, CDR, MoF, World Bank
Q2 2007 – Q3 2007 Terms of reference prepared and endorsed
Committee in CDR will evaluate the applications
Final decision by April 2007
1d.Complete the auditing of EDL financial statements from 2002 to 2006
MoEW/EDL Q2 2007 – Q2 2008 International auditor appointed Start auditing the most recent
financial statements, then go back to 2002
1f.Retain consultants to assist the HCP with the corporatization, restructuring and privatization of EDL
HCP, MoEW/EDL, CDR, MoF, World Bank
Q2 2007
2. Improve power sector efficiency
2a.Complete the establishment of a National Control Center to audit volumes and performance
MoEW/EDL, CDR Q2 2007 – Q2 2008 Contract signed by CDR with AREVA
2c.Negotiate additional bilateral contracts for fuel oil to reduce high premiums
MoEW Q2 2007 – Q4 2007
2h.Award contracts for the supervision of the KEPCo operations and maintenance contracts
MoEW/EDL Q2 2007 (End of June 2007)
2k.Reduce illegal network connections and enforce bill collection through support from security forces and the Justice department
MoEW/EDL, Ministry of Interior, MoJ
Q2 2007 – Q4 2008
PRELIMINARY
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List of Programs and Initiatives
Ministry of Energy and Water / EDL – Short-term Paris III Programs and Initiatives … (Cont’d)
Prioritization of Initiatives
Sector Reform Programs and Initiatives Stakeholders Preliminary Timeline Comments
3.Rehabilitate and strengthen the capacity of the power sector3a.Hire consultants for the electricity sector
generation and transmission Master Plan, to review least-cost investment needs and supply options
MoEW/EDL Q2 2007 Need 11 months to complete (according to EDL)
3d.Complete the expansion and rehabilitation of the 220KV transmission network
MoEW Q1 2007 – Q2 2008 Two remaining lines:– Aramoun-Bsaleem (Issue in
Mansourieh)– Bsaleem-Maameltein (Issue in
Ghineh)
PRELIMINARY
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List of Programs and Initiatives
Higher Council for Privatization – Short-term Paris III Programs and Initiatives
Prioritization of Initiatives
Sector Reform Programs and Initiatives Stakeholders Preliminary Timeline Comments
1.Privatize mobile telecom
1a.Perform financial due diligence (reconstruct cash flows for 2004-2006)
HCP, MoT Q2 2007
1b.Conduct a technical due diligence of the two networks (technical review, asset confirmation, KPIs, IM sections)
HCP, MoT Q2 2007
1c.Perform legal due diligence HCP, MoT Q2 2007
PRELIMINARY
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In its first meeting, each IMC should appoint a Secretary, which will provide administrative support to the IMC
Functions of the IMC Secretary
Provide overall administrative support
Prepare agenda and circulate it before the meeting
Receive contribution of the IMC members and compile them
Distribute documentation to IMC members before the meeting
Prepare and distribute minutes of meetings
Next Steps
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Overall, four IMC meetings need to take place to finalize programs, timelines, KPIs and funding, with steady-state implementation progress reporting starting in August
IMC Engagement Schedule – First Six Months
Appoint Secretary to the IMC and agree on his/her role Review progress, and resolve escalated issues Endorse initiative and program allocation, and
resolve overlaps
Appoint Secretary to the IMC and agree on his/her role Review progress, and resolve escalated issues Endorse initiative and program allocation, and
resolve overlaps
1st Infrastructure and Privatization IMC: 15 May 2007
1st Infrastructure and Privatization IMC: 15 May 2007
Follow up on 1st round of IMC meetings Endorse cross ministerial initiative teams Review and discuss program charters, plans and
milestones Start filtering funding / TA requirements Resolve escalated issues
Follow up on 1st round of IMC meetings Endorse cross ministerial initiative teams Review and discuss program charters, plans and
milestones Start filtering funding / TA requirements Resolve escalated issues
2nd Infrastructure and Privatization IMC: 20 June 2007
2nd Infrastructure and Privatization IMC: 20 June 2007
Approve natural Owners funding/ TA requests Endorse program charters including action plans, KPIs
and milestones Sign Paris III Commitment Documents with Natural
Owners
Approve natural Owners funding/ TA requests Endorse program charters including action plans, KPIs
and milestones Sign Paris III Commitment Documents with Natural
Owners
3rd Infrastructure and Privatization IMC: 16 July 2007
3rd Infrastructure and Privatization IMC: 16 July 2007
Follow up on 3nd round of IMC meetings Resolve issues arising out of funding requests and
other items Review monthly progress of implementation Start steady-state implementation progress reporting
Follow up on 3nd round of IMC meetings Resolve issues arising out of funding requests and
other items Review monthly progress of implementation Start steady-state implementation progress reporting
4th Infrastructure and Privatization IMC: 20 August 2007
4th Infrastructure and Privatization IMC: 20 August 2007
First Round of
IMC Meetings
First Round of
IMC Meetings
Meeting Objectives Dates
Second Round of
IMC Meetings
Second Round of
IMC Meetings
Third Round of
IMC Meetings
Third Round of
IMC Meetings
Steady-State Implementation
Progress Reporting
Steady-State Implementation
Progress Reporting
Next Steps
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Going forward, Natural Owners should finalize and prioritize their list of initiatives, and follow up on the development of Program Charters with their respective M&S Units
Actions Required
Review and finalize programs and initiatives ownership:
- Appoint Board of Director or “Alternative Governance Structure” for Liban Telecom in order to proceed with the corporatization exercise
- Reach consensus on a common approach to the “Reform of the Power Sector”
- Decide whether HCP, TRA or MoT should own initiatives for the privatization of mobile telecom
- Decide whether HCP or MoEW/EDL should own initiatives for the restructuring, corporatization and privatization of EDL
Review and agree on short term initiatives prioritization
Identify the need for, and assign specific ministerial or inter-ministerial initiative teams
Follow-up on progress in development of Program Charters with M&S Units
Next Steps