Module Code LD7164

Module Name Critical Evaluation Of Project

Feasibility Study
Student Number 22076179

Word Count 2827

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CONTENTS

Introduction …………………………….……………………………………………………………………………………………….. 3

Pre-Project, Project Execution and Post Project Analysis …………………………………………………………….

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Pre-Project ……………………………………………………………………………………………………….…….…....
4

Project Execution ……………………………………………………………………………………………………..……5

Post-Project …………………………………………………………………………………………………………………..6

Conclusion …………………………………….……………………………………………………………………………………..….. 9

References …………………………………….……………………………………………………………………………………..… 10

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Introduction

The World Bank offered a five-year grants for a health care system improvement project
in Montenegro, which was funded by a credit of SDR 4.9 million and a loan of EURO 5.1 million,
as of June 17, 2013. The project's development objectives were to increase capacity for policy,
planning, and regulation, stabilize health financing, and improve primary health care service
delivery. Key indicators included reduced drug prices, reduction of the Health Insurance Fund
annual deficit, waiting time reduction in primary care, and increased utilization rates and
satisfaction for primary health care, which made the Canadian International Development
Agency (CIDA) provided funding for the Healthcare System Improvement Project in
Montenegro, which was carried out by the Ministry of Health with a total commitment of USD
14.05M.

Montenegro and the Republic of Serbia were constituent republics of the Federal
Republic of Yugoslavia in 2003, when the project was appraised (United Nations Development
Programme, 2006). Its land area is around one-sixth that of Serbia, and its 670,000 residents
make up less than tenth of Serbia's total population. At that time, there were about 45,000
refugees, primarily from Kosovo, according to USAID (2003). Similarly, taking into consideration
the black market, the jobless rate in 2001 was close to 17%. The average monthly salary in the
formal sector was reported to be less than $200 (USAID, 2003). As a result, Montenegro's
health industry faced several difficulties. Delivery of health services, finance systems, and
governance frameworks were found to be important areas in need of development. It was
determined that the current public health finance system was unsustainable, pointing to
systemic financial weaknesses. In addition, flaws in management and policy creation
procedures were found, indicating the necessity for calculated changes to improve the health
sector's overall efficacy. Taking these difficulties into account, the project was planned to closely
correspond with the broad objectives specified in the government's health sector policy. The
policy and regulation, capacity building, and focused endeavour to improve primary health care
(PHC) services—often seen as the cornerstone of a strong healthcare system—were among the
strategic emphasis areas. The first project development goals (PDO) were designed to provide
a comprehensive approach to addressing these important concerns. The World Bank entered

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into a contract with the Montenegrin health sector for this project because it aligns with their
objectives for the country, which include reducing poverty and fostering the growth of human
capital via improved health and access to high-quality healthcare at all levels. Improving the
provision of primary health care (PHC) services was a key component of the initiative. This
demonstrated how important it is to have an accessible and efficient primary healthcare system
in order to promote public health and address health issues at their source.

Key performance metrics were developed in order to assess the project's effectiveness.
These metrics functioned as standards for assessing advancement and influence. One of the
most notable signs was the decline in medicine prices, which is an important factor in improving
the accessibility and affordability of necessary pharmaceuticals. Reducing the Health Insurance
Fund (HIF) deficit was an additional crucial statistic that demonstrated the project's dedication to
attaining financial stability in the healthcare financing system. Furthermore, improving primary
health care use rates was shown to be an indication, highlighting the objective of raising
community-level accessibility and consumption of vital health services. Additionally, this
endeavour will analyse these metrics.

Pre-Project, Project Execution and Post Project Analysis

Pre-Project

1. Initial Funding for the Project:

IDA Credit: SDR 4.9 million, or the equivalent of US$7.0 million

IBRD Loan: €5.1 million (equivalent to US$7.2 million)

US$0.82 million in co-financing from CIDA (TF055474)

PHRD Grant: TF052794, US$0.45 million

The Government's Part: US$3.7 million

The government's contribution, IDA Credit, IBRD Loan, co-financing from CIDA, PHRD
Grant, and other sources were used to support the Montenegro Health System Improvement
Project. The project's objectives were to improve primary health care (PHC) service delivery,
stabilize health finance, and restructure Montenegro's healthcare system with an emphasis on
planning, regulation, and policy. The project was divided into three parts: project management
(US$1.0 million), phased implementation of primary health care development (US$6.6 million),
and assistance for the health reform program (US$2.2 million). Strengthening the health system,

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enhancing project management, and improving PHC quality, efficiency, and access were the
project development objectives (PDOs). Reducing drug costs, lowering the HIF deficit, cutting
down on primary care wait times, improving certain groups' satisfaction and use of PHC in
Podgorica, narrowing the gap between impoverished and non-poor PHC utilization, maintaining
or raising immunization rates, and encouraging older people to use day care services were
among the key indicators. The aged, MoH, HIF, IPH, MDA, and the whole Montenegrin people
were the primary beneficiaries. The project's primary goals were to upgrade PHC services,
develop health institutions, improve health policies, and increase HIF and MDA capability.

Throughout the project's history, there were a number of significant adjustments and
restructurings, including the Level II Restructuring in July 2007 and the extra finance in
November 2009. The project's objectives were to improve environmental protections, advance
health reform, and increase original activities. A comprehensive breakdown was given, and
SDR 4,900,000 was the amended allotment of loan proceeds. The thorough evaluation of the
Montenegro Health System Improvement Project at the pre-project stage indicates a methodical
and balanced approach to addressing the deeply ingrained problems in the healthcare industry.
This review demonstrates a strategic and comprehensive framework in project planning and
design through the use of a diverse approach that incorporates economic, financial, and social
project appraisal and feasibility ideas, techniques, and methodologies. The economic analysis is
organized systematically and provides a thorough explanation of the project's methods as well
as its expected advantages. Important financial figures, such a 21% Economic Rate of Return
and a 1.82 Benefit: Cost ratio, provide strong arguments in support of the project's overall result
assessment. Sensitivity analysis takes into consideration several situations and possible
variations in costs and benefits, giving the economic evaluation an additional layer of
robustness.

As a result, the financial analysis is thorough and places a strong emphasis on resource
management. Notwithstanding obstacles such as personnel turnover, the Technical Services
Unit (TSU) demonstrated proficient financial management. A dedication to financial rigor is
demonstrated by the emphasis on timely quarterly financial reports, strict controls and
processes, and the obtaining of unqualified conclusions from independent auditors.

Project Execution

The thorough examination of the Montenegro Health System Improvement Project

throughout its implementation stage shows a methodical and targeted strategy for tackling the

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recognized obstacles in the healthcare industry. A comprehensive grasp of the project's
complexities is reflected in the evaluation, which includes a variety of economic, financial, and
social project appraisal and feasibility ideas, methodologies, and approaches. Building on the
pre-project phase, the economic analysis is still strong during the execution stage. The project's
performance should be evaluated throughout the execution phase by utilizing the Economic
Rate of Return (ERR) and Benefit: Cost ratio as crucial metrics. A real-time knowledge of the
project's economic feasibility would be possible through regular evaluation and monitoring of
these economic variables. The sensitivity analysis conducted during the pre-project phase
should be revisited and updated to ensure that potential variations are considered as the project
unfolds.

Financial management during the execution phase needs to continue to be a top priority
in order to maintain resource utilization efficiency. To preserve the good financial performance
attained during the pre-project period, regular financial reporting, controls, and processes must
be upheld. It is important to stress the importance that contracts play in managing disputes and
any difficulties that may develop during project execution, particularly when it comes to their
stated involvement in dispute settlement. Throughout the execution stage, social consequences
should also be regularly observed, with a focus on underrepresented groups. It is important to
monitor how the initiative affects primary health care waiting times, usage rates, and patient
satisfaction in order to evaluate the long-term societal improvements. Any social impact lessons
discovered during the pre-project stage should guide further social enhancement initiatives
during execution.

In addition, the lack of reports from stakeholder workshops and beneficiary survey data
throughout the implementation phase should spur an urgent attempt to carry out these
evaluations. Stakeholder involvement and primary data gathering are essential elements of a
thorough project analysis. These findings would offer priceless insights into how the project's
social aspects and community views changed as it was being carried out. During the project's
execution, it is important to regularly re-evaluate the moderate risk to development outcomes
that was determined during the pre-project phase. One important component that has been
found is the government's commitment, which has to be continuously watched to make sure that
favourable results continue. In order to adjust to evolving conditions and uncertainties that can
surface during the execution stage, sensitivity analysis should be reviewed.

The project's 2007 restructure, which was a proactive reaction to obstacles, should guide
future adaptation during implementation. The execution should be guided by the updated

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Project Development Objectives (PDO), which place a strong emphasis on capacity building for
planning, regulations, and policy as well as enhancing the quality, accessibility, and efficiency of
primary health care (PHC). It is imperative to swiftly handle any additional restructuring
requirements in order to maintain project alignment with changing conditions. Contracts'
function in resolving disputes should be specifically mentioned throughout the execution stage.
It is crucial to communicate clearly about the contractual procedures in place for handling
disagreements or problems. A comprehensive understanding of risk management techniques
would be possible with insights into risk reduction techniques through contract management
throughout execution.

Thus, the implementation phase of the Montenegro Health System Improvement Project
necessitates a persistent attention on the financial, social, and economic aspects, in conclusion.
The project's success depends on proactive risk and dispute management, ongoing monitoring,
and re-evaluation of economic measures. In order to achieve long-term beneficial results in
Montenegro's health sector, a dynamic and adaptable approach should be ensured by following
the lessons learnt during the pre-project phase.

Post project

The project has a reasonable efficiency rating, which suggests that it is taking a
balanced approach to reaching its goals. The greatest gains were obtained from the second
component, which concentrated on the gradual deployment of primary health care development.
The project's overall moderate result rating is justified by the economic rate of return (21%) and
a benefit-cost ratio of 1.82 under the base case scenario. With very little influence on ongoing
expenses, the project is anticipated to produce respectable returns. The modest danger of
outcomes not being sustained highlights how crucial the government's commitment is. This
emphasizes the necessity of ongoing efforts to maintain the performance gains made in the
health system.

It is emphasized how crucial it is to strike a balance between prompt project preparation

and quality upon entrance. This emphasizes how important it is to have a comprehensive and
well-thought-out project preparation phase to guarantee a strong basis for execution. It is
acknowledged that there is a problem with improper Monitoring and Evaluation (M&E) designs.
This highlights how important M&E systems are for tracking project progress and making wise
decisions. Restructuring decisions that followed, such as improved M&E and a new outcomes
framework, helped the project succeed overall. Additionally, it is stressed how important

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coordination with other development partners is. This lesson emphasizes how crucial it is for
stakeholders to work together effectively and communicate with one another in order to
maximize the benefits of health sector changes. The material supplied makes no mention of the
function contracts play in resolving disputes once a project is completed. Nonetheless, given the
project's overall somewhat good grade for procurement, it can be deduced that the
government's creation of a central Technical Services Unit (TSU) to manage procurement tasks
helped to resolve any possible conflicts. It's possible that explicit roles and duties created by
contracts and agreements contributed to the avoidance and settlement of disputes.

The project was originally assigned a "C" rating because of the low health and
environmental implications, even if environmental precautions were followed. A dedication to
compliance and environmental standards is demonstrated by the upgrade of the environmental
category to "B" under the Additional Financing (AF). Procurement delays were observed and
ascribed to communication breakdowns, unclear decision-making authority, and frequent
personnel turnover. Procurement was often evaluated as rather good or satisfactory despite
these difficulties, demonstrating effective management of the procurement operations. Despite
personnel changes causing delays, the Technical Services Unit (TSU) maintained its finances
adequately. A good financial management grade was attained in part by timely financial reports
and suitable controls and processes. Transition plans for going forward were deemed suitable,
and the health care system's financial performance improved. The foundation for long-term
improvements in primary health care is laid by achievements in the field, such as developing
infrastructure, introducing the idea of selecting a primary care physician, and updating the
benefit package. With particular achievements in capacity building, health policy formulation,
and enhancements in primary health care service delivery, the project's overall goal fulfillment is
assessed as considerable.

The project's effects on the people of Montenegro, especially the underprivileged

communities like the Roma minority, are often emphasized. Important metrics, such shorter
primary care wait times and higher primary health care use and satisfaction rates, demonstrate
a committed effort to improve social outcomes. The lessons learnt highlight the careful
balancing act that must be done between expediting project preparations and guaranteeing
quality at entrance for favourable societal outcomes. Although the lack of beneficiary survey
findings and reports from stakeholder workshops is acknowledged, it is clear that primary data
gathering and stakeholder involvement are important. These components play a critical role in
offering further insights into the social dimensions and community views during the pre-project

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phase in a thorough project study. A practical approach to risk assessment is demonstrated by
the understanding of a modest risk to development results and the recognition of the
government's commitment as a critical component in sustaining good outcomes. The integration
of sensitivity analysis into the economic assessment enhances the understanding of possible
fluctuations and uncertainties during the project's execution, hence improving the strategy for
risk management as a whole.

The project's capacity to adjust to changing conditions is demonstrated by its proactive

approach to implementation issues, as demonstrated by its 2007 restructure. The updated
Project Development Objectives (PDO) attest to a dynamic project design by placing an
emphasis on improving Primary Health Care (PHC) quality, efficiency, and access in
conjunction with capacity building in policy, planning, and regulation. The lack of a clear mention
of contracts' function in pre-project dispute settlement is acknowledged in the text. Although the
topic covers a wide range of aspects related to project planning, design, and execution, a
clearer explanation of how contracts handle disagreements or possible conflicts will improve the
analysis and provide useful information for effective risk management techniques.

Conclusion

The initial funding for the Montenegro Health System Improvement Project came from a
number of sources, including government contributions, co-financing from CIDA, IDA Credit,
IBRD Loan, and PHRD Grant. The project's objectives were to improve basic healthcare
services, stabilize health finance, and restructure Montenegro's health system with an emphasis
on planning, regulation, and policy. Project management, staged PHC development, and
support for health reform were among the goals of the project. The project's Development
Objective (PDO), which placed a strong emphasis on enhancing PHC services and fortifying the
health system, did not change. A quantifiable framework was supplied by key metrics, which
highlighted results including lower prescription costs, a smaller HIF deficit, shorter wait times,
and better service use. In order to improve progress tracking, the reorganization process
resulted in the removal of some indicators and the inclusion of new ones. Indicator baseline
values were set in order to improve the efficacy of outcome assessment. The initiative focused
on organizations including MoH, HIF, IPH, MDA, and targeted interventions for the aged in order
to provide wide benefits to the whole Montenegrin population. Three important areas of effect
were policy development, infrastructural improvement, and capacity building. After
reorganization in July 2007, the basic components, which were centred on project management,

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phased PHC development, and health reform, did not alter. In 2009, more funding helped to
advance environmental protections, advance health reform, and expand original initiatives.

Strong monitoring and evaluation procedures must be included in all subsequent

projects to ensure that markers are routinely checked and aligned with the project's objectives.
Project execution and sustainability depend on continuous contact with stakeholders, including
locals, international organizations, and governmental bodies. Plan ahead for potential changes
and challenges as well. This will allow the project design to be flexible and meet evolving needs
without compromising its primary objectives. They can also maintain transparent and honest
financial reporting practices so that interested parties are aware of how funds are allocated,
used, and reallocated throughout a project. Finally, they can invest in training and knowledge
transfer initiatives to develop long-term local capacity and ensure that institutions are able to
efficiently oversee and preserve the project's results.

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References

UNDP. (2006). Assessment of Development Results Evaluation of UNDP’S Contribution:

Montenegro. Available at:
http://web.undp.org/evaluation/evaluations/documents/ADR/ADR_Reports/
ADR_Montenegro_web.pdf (Accessed: 26 December, 2023).

USAID. (2003). Montenegro: Annual Report FY 2003. Available at:

https://erc.undp.org/evaluation/evaluations/detail/1852. (Accessed: 26 December, 2023).

World Bank. (2013). Montenegro Health Care System Improvement Project. Available at:
https://documents1.worldbank.org/curated/en/109821468062649994/pdf/
ICR26940ICR0Mo00Box377354B00PUBLIC0.pdf (accessed: 17 October, 2023).

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