VZCZCXYZ0030
OO RUEHWEB

DE RUEHJMA #0868 1311218
ZNR UUUUU ZZH ZUI RUEWMCF2400 1311230
O 111218Z MAY 07
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC0000
INFO ARAB ISRAELI COLLECTIVE
RHEHNSC/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHBS/USEU BRUSSELS

UNCLAS JERUSALEM 000868 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NEA FOR FRONT OFFICE; NEA/IPA FOR 
WILLIAMS/SHAMPAGNE/BELGRADE; PLEASE PASS TO NSC FOR 
ABRAMS/DORAN/WATERS; TREASURY FOR 
SZUBIN/LOEFFLER/NUGENT/ADKINS; PLEASE PASS TO USAID FOR 
KUNDER/MCCLOUD/BORODIN 
 
E.O. 12958: N/A 
TAGS: EFIN EAID KWBG ECON PHUM
SUBJECT: WORLD BANK ESSP STILL STRUGGLING TO DELIVER 
PHARMACEUTICALS 
 
REF: 2006 JERUSALEM 4232 
 
¶1.  (SBU) SUMMARY:  THE WORLD BANK'S EMERGENCY SERVICES 
SUPPORT PROGRAM (ESSP) TEAM MET WITH DONOR COUNTRY 
REPRESENTATIVES APRIL 26 TO DISCUSS THE PROGRAM'S CURRENT 
STATUS, INCLUDING ITS IMPACT AND IMPLEMENTATION.  WORLD BANK 
OFFICIALS SAID THAT PRESIDENT ABBAS HAS DESIGNATED PLO 
ECONOMIC AFFAIRS DEPARTMENT HEAD SALAM FAYYAD TO SIGN 
AGREEMENTS WITH THE WORLD BANK.  BANK OFFICIALS CITED DELAYS 
IN THE PROCUREMENT PROCESS AS THE CENTRAL REASON BEHIND THE 
PROGRAM'S SLUGGISH IMPLEMENTATION IN 2007, AS ONLY 29 PERCENT 
OF ESSP FUNDS HAD BEEN DISBURSED AS OF APRIL 26.  END 
SUMMARY. 
 
¶2.  (SBU) THE ESSP WAS RE-LAUNCHED IN MID-2006 AS ONE OF THE 
WINDOWS OF THE TIM (SEE REFTEL).  NINE DONORS, INCLUDING 
AUSTRIA, BELGIUM, THE EUROPEAN COMMISSION, FRANCE, NORWAY, 
SPAIN, SWITZERLAND, SWEDEN, AND THE UK, HAVE PLEDGED USD 62 
MILLION TO THEIR LATEST PHASE OF THE TIM.  THE ESSP IS 
FINANCING 50 PERCENT OF THE NON-SALARY BUDGETS OF THE 
MINISTRIES OF EDUCATION (MOE), HEALTH (MOH), AND SOCIAL 
AFFAIRS (MOSA); IN ADDITION TO THAT OF THE PALESTINIAN WATER 
AUTHORITY, THE PALESTINIAN ENERGY AUTHORITY, AND THE COASTAL 
MANAGEMENT WATER UTILITY.  ACCORDING TO BANK OFFICIALS, AS OF 
APRIL 15, ONLY USD 16.4 MILLION (29 PERCENT) OF THE AVAILABLE 
FUNDS HAVE BEEN DISBURSED.  THE BANK PROJECTS THAT 71 PERCENT 
WILL BE DISBURSED BY THE END OF JUNE.  END SUMMARY. 
 
¶3.  (SBU) WORLD BANK WB/G DIRECTOR DAVID CRAIG CONFIRMED THAT 
PA PRESIDENT ABBAS DESIGNATED PLO ECONOMIC AFFAIRS DEPARTMENT 
HEAD SALAM FAYYAD TO SIGN, ON BEHALF OF THE PLO, ALL WORLD 
BANK GRANT AGREEMENTS INSTEAD OF PA PRESIDENCY CHIEF OF STAFF 
RAFIQ HUSSEINI.  DONORS AT THE MEETING URGED THAT FAYYAD ALSO 
SIGN CONTRACTS WITH SUPPLIERS, INSTEAD OF HUSSEINI, IN ORDER 
TO SPEED-UP PROCUREMENT. 
 
STRUGGLING WITH THE DELIVERY OF PHARMACEUTICALS 
--------------------------------------------- -- 
 
¶4.  (SBU) ESSP TEAM LEADER EILEEN MURRAY SAID THAT THE ESSP'S 
DISBURSEMENT LEVELS HAVE BEEN LOWER THAN ANTICIPATED BECAUSE 
OF DELAYS IN PROCUREMENT AND BID EVALUATIONS BY THE MOH.  A 
USD 8.5 MILLION INTERNATIONAL COMPETITIVE BIDDING (ICB) 
PROCUREMENT PACKAGE FOR DRUGS HAD BEEN DELAYED BY THE PA 
MOHS REFUSAL TO APPROVE THE PROCUREMENT OF 
INDIAN-MANUFACTURED DRUGS, WHICH THEY BELIEVE ARE NOT OF THE 
HIGHEST QUALITY.  DFID DIRECTOR DAVID HALLAM EXPRESSED HIS 
FRUSTRATION WITH THE SLUGGISH ESSP IMPLEMENTATION, STATING 
THAT THE BANK SHOULD FIND FLEXIBLE MECHANISMS TO QUICKLY 
OVERCOME THE PA MINISTRIES' BUREAUCRATIC HURDLES. 
 
¶5.  (SBU) CRAIG STATED THAT HE HAD RAISED WITH THE MOH THE 
OPTION OF HIRING AN OFF-SHORE DRUG PROCUREMENT AGENT TO 
ASSIST THE PA IN PROCURING DRUGS WHILE IT BUILDS INTERNAL 
PROCUREMENT CAPACITY, BUT THAT THE MOH HAD REFUSED THE 
SUGGESTION, CITING THE COMMISSION COSTS FOR SUCH AN AGENT. 
 
¶6.  (SBU) BANK OFFICIALS STATED THAT THEY HAVE BEGUN INITIAL 
DISCUSSIONS WITH DONORS AND THE PA ABOUT THE ESSP'S SECOND 
PHASE TO ENSURE THE CONTINUED PROVISION OF ESSENTIAL SERVICES 
TO THE PALESTINIANS FOR ANOTHER 6-12 MONTHS.  BANK STAFF 
VOICED INTEREST IN NOT CONTINUING DRUG PROCUREMENT IN THE 
SECOND PHASE, GIVEN THE MANY PROBLEMS DURING THE FIRST PHASE. 
 DONORS URGED THE BANK TO WORK THROUGH THE DRUG PROCUREMENT 
ISSUES SINCE A COORDINATED DONOR APPROACH IS VITALLY NEEDED. 
 
 
¶7.  (SBU) CRAIG NOTED A FURTHER OBSTACLE - THAT MOH 
PROCUREMENT OFFICES IN THE WEST BANK AND IN GAZA HAVE 
DEVELOPED SEPARATE PROCUREMENT STANDARDS, REQUIREMENTS, AND 
SPECIFICATIONS FOR EACH OF THE TWO AREAS, MAKING UNIFORM DRUG 
PROCUREMENT MORE COMPLICATED AND TIME CONSUMING. 
 
¶8.  (SBU) BANK OFFICIALS STATED THAT EUROPEAN CONSULTANTS 
WOULD BE CONDUCTING A TWO-WEEK INSPECTION AND AUDIT OF 
2006-2007 ESSP OPERATIONS, AS PART OF AN EVALUATION OF THE 
TIM.  THE AUDIT REPORT SHOULD BE AVAILABLE IN JUNE, HE SAID. 
 
 
WALLES