The Public Sector Modernization Project (PSMP) was approved in September 1996 following an 18-month preparation period. Project activities commenced in March 1997. Funding is provided by a World Bank loan (US$28.4m); an EU grant (US$2m); a British Department for International Development grant (US$3m) and government counterpart funding (US$26m).

The project is designed to support Government's efforts to improve management of policy implementation, to improve quality of service through creation of executive agencies and to rationalise the public sector through contracting out and privatisation. The project's five components are to:

• strengthen two ministries,
• create executive agencies,
• enhance and extend FMIS and HRMIS,
• strengthen procurement procedures,
• support the privatisation programme.

The agencies targeted for executive agency status are arranged in clusters to be dealt with on a phased basis. Two sets of consulting firms are conducting diagnostic studies with eleven entities to inform the Modernization Plan, Medium Term Financing Plan and Framework Document.

EXECUTIVE AGENCIES

Draft plans have been produced for the Registrar General's Department (RGD), the Office of the Registrar of Companies (ORC) and the Administrator General's Department (AGD). Extensive consultations are now ongoing and the final plans will be ready end-March 1998. Diagnostic work continues for MIND with all plans on target.

The merger recommendations for the land related entities are complete and awaiting clearance from the Minister of Environment and Housing before proceeding to the next phase of the diagnostic study. The study should be completed by mid-May 1998.

The remaining clusters that include JAMPRO, JAMPRESS, JIS, Customs, PIOJ, the Works Division and the Ministry of Transport and Works are expected to come on stream by the summer of 1998.

PROCUREMENT AND AUDIT

The terms of reference for external consultants are being finalised. Detailed proposals are to be submitted by April and work should begin in May 1998.

PRIVATISATION

The NIBJ Board is to review the planned privatisation activities to be financed by the PSMP and advise the Fiscal Policy Management Unit of the Ministry of Finance. The planned Phase II Water and Sewerage Sector Study is on hold pending advice from a World Bank specialist.

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