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A.I.D. LOAN NO. 497-U-089
A.I.D. PROJECT NO. 497-0348

0
AMENDMENT NO. 1 TO
LOAN AGREEMENT
BETWEEN THE
REPUBLIC OF INDONESIA
AND THE
UNITED STATES OF AMERICA



FOR

セ@

FACULTIES OF PUBLIC HEALTH

DATED: October 8, 1987


Dated: October 8, 1987

This AMENDMENT NO. 1, is entered into between the REPUBLIC OF
INDONESIA ("Borrower") and the UNITED STATES OF AMERICA, acting
through the AGENCY FOR INTERNATIONAL DEVELOPMENT ("A.I.D.").
WHEREAS, the Borrower and A.I.D. entered into a Faculties of
Public Health Project Loan Agreement on July 26, 1985 ("Loan
Agreement"), whereby A.I.D. agreed to Loan to the Borrower up to
Five Million United States ("U.S.") Dollars ($5,000,000) ("Loan");
WHEREAS, the Borrower and A.I.D. desire to amend the Loan
Agreement to reduce the amount of Borrower contribution to the
Project by Two Million Six Hundred Twenty-Two Thousand U.S. Dollars
($2,622,000) and to revise the Project Amplified Description and
Financial Plan;
NOW THEREFORE, the Borrower and A.I.D. agree as follows:
1.

Paragraph (b) of Section 3.2., Borrower Resources for the

Project, is amended to read as follows:

"(b)

The resources provided by the Borrower for the Project

will be not less than the equivalent of U.S. $6,378,000, including
costs borne on an "in-kind") basis."
2.

A revised Annex 1, Amplified Project Description, with

Attachment 1, Financial Plan, is attached to this Amendment.
3.

Except as expressly amended herein, the Loan Agreement is

ratified, confirmed and continued in full force and effect in
accordance with all its terms.
IN WITNESS WHEREOF, the Borrower and the United States of
America, each acting through its respective duly authorized


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representative, have caused this Amendment No. 1 to be signed in
their names and delivered as of the day and year first above written.

REPUBLIC OF INDONESIA

Signed
Moeslim Sja'roni
Acting Director General
for Foreign Economic Relations
Department of Foreign Affairs

UNITED STATES OF AMERICA

Signed
/'DaVid N. Merrill
Director
USAID/Indonesia


ANNEX I

AMPLIFIED PROJECT DESCRIPTION
FACULTIES OF PUBLIC HEALTH
The purpose of the Faculties of Public Health project is to assist
the Government of Indonesia to expand and regionalize public health
education and research by strengthening public health training programs
in selected regional universities to supply manpower, conduct research,
and provide technical assistance to the Ministry of Health, the National
Family Planning Agency (BKKBN), and other public and private sector
agencies involved in health and family planning service delivery.
Under the project the Ministry of Education and Culture (MEC) will
establish regional Faculties of Public Health (FKM) at:
a.
b.
c.

Airlangga University, Surabaya (UNAIR)
Diponegoro University, Semarang (UNDIP)
University of North Sumatera, Medan (USU)


and will strengthen and upgrade the new Faculty of Public Health at
Hasanuddin University (UNHAS).
At the end of the project each Faculty will have a minimum of 30
full-time Faculty members, consolidated two-year and four-year Sl degree
programs in Public Health producing 60 Sl graduates annually,
comprehensive research and public service programs, and expanded library
and information resources. FKM-UNAIR will also have an S2 program
producing 10 graduates annually.
I.

Project Strategy

To achieve its purpose the project will employ the following strategy:
A.

Strengthen the public health training, research, and community
service capacities of the Public Health Department of the Medical
Faculties at UNAIR, UNDIP, and USU to enable them to meet MEC
accreditation requirements for becoming Faculties of Public Health by

1990. It is expected this will be done in three phases:
Phase I :

establish by September 1985 a program of study offering
the two-year Sl degree in Public Health within the Public
Health Department of Medical Faculties at USU and UNDIP
and a program of study for the four-year Sl degree in
Public Health at UNAIR.

Phase II:

establish by August 1987, a program of study at UNHAS,
UNDIP, and USU to permit each to offer the four-year Sl
degree in Public Health.

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Phase III: fulfill MEC accreditation requirements to achieve Faculty
status at USU, UNDIP, and UNAIR by 1990.
B.


Strengthen Public Health training, research, and community service
capacity at FKM-UNHAS to keep pace with institutional development at
the three other emerging regional Faculties of Public Health.

C.

By building on the considerable administrative and technical skills
of FKM-UI, assist to develop it as a National Resource Center
(Fakultas Pembina) for supporting the development of the new
Faculties of Public Health.

D.

In all aspects of the project's implementation, actively encourage
cooperation between the FKMs and regional health and family planning
implementing agencies. Cooperation will not only expose students to
the problems and decisions they will encounter professionally, but
will also involve the FKMs directly in assisting to solve local
health problems.

II.

Project Administration and Management

The Director General for Higher Education in the Ministry of
Education and Culture, through his Directorate for Academic
Infrastructure Development, will have overall responsibility for the
project. A Project Steering Committee will establish policy and oversee
the project. It will be chaired by the Director General or his
representative with its members representing the Consortium of Health
Sciences (CHS), Ministry of Health, BKKBN, USAID, FKM-UI and BAPPENAS.
The Steering Committee will be assisted by a Project Management Unit
(PMU) to coordinate project activities and supervise project inputs on a
routine basis. It is anticipated that the PMU will be staffed by a
Director, two Assistant Directors, and an Administrative Assistant. A
long term consultant will assist the Director of the PMU in all aspects
of project implementation and monitoring.
Local Management Units (LMU) will be established at each projectassisted FKM to plan and coordinate project activities at the respective
institutions. The LMUs will serve on a part time, as needed, basis and
will be the liaison between central project management and the regional

FKMs. It is expected that each LMU will consist of three FKM faculty
members, part-time, and a seconded part-time secretary. The LMUs will,
as needed, consult with local Advisory Boards consisting of
representatives from the local government (PEMDA), local planning boards
(BAPPEDA), MOH, and BKKBN. These consultations will be for the purpose
of setting local project policy guidelines and will assist to link the
development of the FKMs to the public health interests of local
government.

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In its advisory capacity to the Director General for Higher Education
on the development of Public Health Education, the CHS will periodically
assess progress made by each Faculty in fulfilling teaching, research,
and community service requirements. A representative of the CHS will sit
on the Project Steering Committee to assure that project inputs
coordinated by the PMU are directed toward meeting accreditation
requirements. The CHS will make recommendations to the Director General
for Higher Education regarding approval for conferring Faculty status.


Project activities will be planned and budgeted on an annual cycle
coinciding with the GOI DUP/DIP cycle to facilitate coordination of AID
and GOI funding, and to make project implementation responsive to the
evolving needs of the concerned FKMs. The anticipated schedule is as
follows: yearly policy guidelines for project activities will be issued
by the Project Steering Committee each April, one year prior to the
beginning of the Indonesian fiscal-year (IFY) in which the activities
will take place. The PMU will translate these guidelines into
operational strategies for the regional FKMs. The regional FKMs in turn,
will adapt the strategies to meet their individual needs during local
planning meetings held in May, and will produce operational workplans
and draft DUPs for the upcoming fiscal year. A national planning meeting
will be held in July to review and approve each workplan. The PMU will
compile workplans from each FKM into a comprehensive project workplan for
the upcoming fiscal year for submission to AID and GOI by September 1.
Commitment of AID project funds and GOI counterpart budgets would be
expected by the following April, the first month of the Indonesian fiscal
year.
III.
A.


Project Activities

Faculty Development: Between L7 and 45 new teaching staff will be
added to each of the 5 FKMs participating in the project. In
addition graduate training at the masters and doctoral level both in
Indonesia and abroad will be provided to existing staff by the
project to upgrade academic qualifications to levels required by the
MEC for teaching at the Sl, S2, or S3 level, as appropriate to the
degree programs planned for each institution. Technical
qualifications of Faculty members will be further improved through a
variety of short term training programs and teaching externships both
in Indonesia and abroad.

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B.

Research: Research funds available through the project will allow
Faculty members to obtain research experience, refine analytic and
methodologic research skills, and develop the Faculties' abilities to
independently attract research funds from other sources.
Collaborative research projects with FKM-UI will give researchers
from the regional FKMs first hand guidance in designing and
conducting research studies. Technical assistance from domestic and
external sources will be available to assist Faculties to develop
comprehensive research and community service programs. Project funds
may be utilized to train a limited number of Ph.D.'s at each of the
regional FKMs, whose presence will promote higher quality research.
Finally, loan funds will be available to disseminate research
findings within the professional Public Health community, and to
analyze their policy implications.

C.

Academic Program Development: Project resources will be available to
review and revise existing Sl curricula with a view toward
incorporating a greater variety of instructional materials and
educational technologies. Each faculty will have flexibility to
establish an instructional resource unit to develop teaching
materials and support the use of more innovative participatory
teaching methodologies in their academic programs. Loan funds will
be used to purchase hardware to help equip these units, to fund the
initial training needed of staff within these units and to provide
technical assistance (grant funded) to develop educational software.
Equipment and technical assistance to improve administration at
regional FKMs will also be supported by the project.

D.

Expanded Information Resources: Library books will be procured to
complement and support the Sl, 52, and 53 teaching programs being
developed at the FKMs. Microfiche readers, printers, and microfiche
journal subscriptions will be provided to each FKM. Loan funds will
also be available for other appropriate means of providing or
disseminating information. These may include research journals, a
technical report series, or translations of standard texts.

E.

Strengthening FKM-UI as Pembina Fakultas: With project support
FKM-UI will develop a formal 53 program which will accept its first
annual intake of students by 1987. Graduates will strengthen 52 and
53 teaching programs and Faculty research capacities at the regional
FKMs. It is anticipated that there will be 10 53 graduates by 1992
and 36 graduates by 1999. The 52 program at FKM-UI will be expanded
from 25 to 50 graduates annually to accommodate Ministry of Health
manpower needs and the increased need for Faculty members with 52
level education at the regional FKMs.
It is anticipated that FKM-UI, with project assistance, will also
support development of the regional FKM's by:

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1.
2.
3.
4.
5.
6.
7.
8.

providing short term in-service training;
conducting research in cooperation with the regional FKMs;
maintaining a centralized public health information data base;
disseminating research findings from regional FKMs;
providing technical assistance to regional FKMs in technical and
managerial areas;
translating standardized public health texts into Indonesian and
publishing a technical report series on specialized areas of
Public Health;
reviewing all project funded research proposals; and
serving as a teaching externship site for faculty members from
regional FKMs.
IV.

Project Inputs

International loan funded procurement of goods and services under the
project will be solicited from firms or individuals in Code 941
countries, Indonesia and the United States. International grant funded
procurement of goods and services will be solicited from firms or
individuals in Indonesia and the United States. Goods and services
funded by the project budget will be procured on a competitive basis,
advertised in Indonesia as well as abroad for international procurement.
Indonesian firms will be eligible to bid for all local and international
procurement.
A.

Training:
The training input will be aimed at achieving qualitative
improvements in the academic and technical qualifications of teaching
staff. There will be three types of training:
1.

Degree training in Indonesia and abroad: The project will
support up to 40 persons in Masters degree programs in Indonesia
and approximately 30 persons in the U.S. or other eligible
countries as appropriate. Up to 10 persons will be placed in
Ph.D. programs in Indonesia and 10 persons in the U.S. Overseas
long term training candidates will attend intensive English
language training in Indonesia prior to departure, and
additional pre-academic orientation and English language
training in the U.S. immediately prior to commencing their
academic programs. Support for in-country Ph.D. training will
contain a component to allow candidates to attend up to two
semesters at a U.S. university as part of a "sandwich" Ph.D.
program where the degree is granted by the Indonesian university
but portions of the academic or dissertation requirements are
fulfilled abroad. All participants enrolled in graduate
programs both overseas and in-country will attend specialized
training of trainers courses of 1-2 months duration.

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Degree trainees will be drawn from existing full-time public
health teaching staff at the regional FKMs and FKM-UI. A
limited number of part-time teaching staff will also be eligible
for degree training if this would significantly enhance public
health teaching at the FKM concerned. Selection of all degree
candidates will be made in accordance with the specific areas of
expertise required at each FKM, and will be phased to assure
that sufficient core staff remain at each institution to carry
out teaching, research, and public service programs.
GOI funds will support all salaries while in training, exit
fees, and any other costs associated with departure from
Indonesia. Admission fees for domestic long term training
participants will also be provided by the GOI. AID loan funds
will support all tuition related fees, international and
domestic airfares, and maintenance allowances during training.

B.

2.

Short courses and teaching externships abroad: This training
will primarily upgrade technical skills of senior faculty
members. Up to 25 persons will attend short courses. Up to 10
persons will attend teaching externships of approximately six
months duration. The GOI will finance exit fees and salaries
while in training for these participants. AID loan funds will
support all international and domestic airfares, tuition, fees,
and maintenance allowances.

3.

Short courses in Indonesia: Up to 12 short courses on public
health topics will be conducted during the life of the project.
These will include three short courses, on Research Methodology
and Data Analysis, Curriculum Development, and FKM
Administration, in the first year of project implementation.
Topics for subsequent courses will be determined at annual
project planning and review meetings. Short course funds may
also be used to enroll participants in appropriate existing
courses being conducted in Indonesia, or to support a limited
number of in-country faculty externships at FKM-UI. AID funds
will support curriculum development costs, instructor related
costs, materials and supplies, travel and per diem costs for
trainees and organizing committees, and tuition costs for short
courses.

Infrastructure Operations
The GOI will finance recurrent operating costs of the project
assisted institutions, including the costs of additional teaching
staff.
To accommodate the increased teaching and research workload
required to achieve Faculty status, the following minimum number of
new permanent teaching positions will be added and filled over the
life of the project:

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usu
UNHAS
UNDIP
UNAIR
UI

19
25
17
45
25

additional
additional
additional
additional
additional

staff
staff
staff
staff
staff

All costs for additional staff will be assumed by the GOI.

c.

Commodities
The project will provide a limited amount of equipment for improving
academic quality, research capacities, and Faculty administration.
Commodities financed by the project may include:
1.

Library and Information Dissemination Materials: Up to $15,000
of loan funds will be used to procure public health books for
each of the five FKM's to supplement existing libraries. Loan
funds will be used to procure microfiche readers, printers,
duplicators, and microfiche journal subcriptions for FKM-UI and
each regional Faculty as well as initial training costs. The
GO! will support all in-country shipment costs, recurrent
maintenance costs, supplies for microfiche reader/printers, and
following the initial three years subsequent microfiche
subscription costs. Project loan funds may be used to translate
English language texts into Indonesian, to initiate the
production of a Public Health Technical Report Series, or a
public health journal. FKM-UI will be the leading agency for
any translation or publication activities. Costs for
translations and publications will be totally funded by AID loan
funds through 1989/90. Subsequent yearly costs for translations
and publications will be borne by the GO!.

2.

Teaching equipment packages: Up to $45,000 in loan funds per
FKM will be provided to procure audio--visual, replay, and media
production equipment for instructional resources and
publications. A feasibility assessment will be conducted to
ascertain each Faculty's actual equipment needs prior to
procurement. Initial training required for any teaching
equipment will be provided through the AID loan funds set aside
for procurement. Maintenance and supplies costs will be paid by
the GO!.

3.

Micro-Computers: The project will provide up to five
micro-computers to each of the five Faculties for administration
and for research data analysis.
An assessment of
micro-computer requirements at all Faculties will be conducted
prior to procurement.
AID loan funds for the micro-computers
will include provisions for software and initial training, with
recurrent maintenance and supply costs the responsibility of the
GO!.

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D.

4.

Administrative Equipment: AID loan funds will be utilized to
procure selected administrative equipment for the PMU and the
FKMs such as photocopy machines, typewriters, a micro-computer
and mimeograph machines. AID loan funds will be used to
purchase all equipment and to support initial training. The GOI
will pay for routine maintenance and supplies.

5.

Vehicles: AID loan funds will be utilized to procure a vehicle
for each of the regional FKM's and for the PMU. AID loan funds
will support initial purchase costs. The GOI will support
ensuing maintenance and fuel costs.

Research
This component of the project will assist to satisfy the research and
community service accreditation requirements for new Faculties and to
support the new academic programs being developed. Research findings
will also expand the regional epidemiologic data base necessary for
region specific planning of health and family planning programs.
Combined AID and GOI funding of $1,398,100 over the life of the
project will finance research programs at each of the Faculties. An
AID contribution of $648,100 will assist to initiate research
programs during the first five years of the project. GOI counterpart
funds in the amount of $750,000 will complement the AID
contribution. By 1991/92 research will be completely GOI funded.
It is anticipated that the experience and skills obtained while
conducting research with AID funds will enable the new Faculties to
develop the expertise, credibility, and reputation as research
institutions to attract the balance of the GOI contribution from the
Ministry of Health, BKKBN, and other sources sufficient to maintain
annual research funding levels of approximately $75,000/Faculty/year
upon cessation of the project funding.
An additional $100,000 of AID funds will also be available to

disseminate research findings through National Research Policy
Seminars. These seminars will provide a forum for FKM staff, and
health and family planning policy makers to link project research
findings to policy analysis and formulation on a national level. All
seminar expenses through 1989/90 will be AID funded. GOI funds will
be phased to support this activity beginning in 1990/91. During
1990/91 and 1991/92 AID funds will support all participant travel and
per diem for the annual National Research Policy Seminars, and the
GOI will support all other seminar costs. The total GOI commitment
to this activity for the years 1990/91 and 1991/92 will be $10,000.

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E.

Technical Assistance
Foreign and Indonesian expertise will be utilized to upgrade the
teaching, technical, administrative, and research capacities of the
FKMs.
The project will provide up to 100 person months of short
term domestic technical assistance, up to 65 person months of short
term international technical assistance, and up to 60 person months
of the services of a long term advisor to the Project Management
Unit. For the long term advisor, AID grant funds will support
salary, benefits, housing and utilities, international and domestic
travel and per diem for domestic travel. GO! funds will finance any
Indonesian taxes incurred. All costs of short term international
consultants will be funded by AID. Compensation for domestic short
term consultants, their travel, per diem, and other direct costs,
will be funded by AID within GO! guidelines.

F.

Planning and Review Meetings
Annual national project planning and review meetings, one per year
beginning in year 2, will review progress, set project policy
guidelines, and develop annual project workplans. Local project
planning and review meetings (one per year at each Faculty beginning
in year 2) will be held to translate national project policy
guidelines into local annual workplans appropriate to each FKM. All
planning meetings conducted during the project will be AID funded.

G.

Project Administration/Coordination
The responsibilities and composition of the Project Steering
Committee, PMU, LMUs, and local Advisory Boards are described in
Section II. As an exception to normal AID procedures, supplemental
salaries for the PMU staff, honoraria for PMU administrative
personnel, travel and per diem costs for PMU professional staff
sufficient for two supervisory visits to each FKM annually, travel
and per diem costs for a Project Oversight Committee comprising
representatives from each LMU, and honoraria for the Project
Steering Committee, will be AID funded. Routine PMU support costs
such as utilities, communications, telephone, supplies, and some
travel and per diem costs for the PMU will be GO! funded. All costs
for the LMUs and Local Advisory Boards will be the responsibility of
the GOI. In addition, AID funds will support invitational travel
required to support achievement of project outputs. These funds will
be used by PMU staff to visit universities in the U.S. to follow up
on students' progress and arrange admissions procedures; to allow
researchers to present findings from project funded research at
international conferences; and to allow Deans and faculty members
from the new FKMs to attend international conferences or assemblies
on Public Health education. AID Grant funds up to $80,000 will be
available to support invitational travel.

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V. Monitoring and Evaluation
Responsibility for monitoring project implementation will rest
primarily with the Project Management Unit. Monitoring reports will be
submitted semi-annually to the Director General for Higher Education.
A mid-term evaluation will be conducted with project funds after the
third year of project implementation to review progress, assess the
appropriateness of project inputs, and recommend any necessary changes in
project targets, administrative mechanisms or planning systems. It is
expected that a four person team of domestic and external consultants
will be used for this purpose.
A final evaluation will be carried out during the last year of
project implementation. Prior to the evaluation each FKM will conduct an
internal assessment of its progress toward goals specified in its Five
Year Development plan. External consultants will be appointed to review
routine monitoring data and the individual Faculty internal assessments,
and conduct the final project evaluation.
VI.

Illustrative Financial Plan:

The financial plan in Attachment I is illustrative and written
changes may be made to the plan by representatives of the parties named
in the text of the Agreement without formal amendment to the Agreement if
such changes do not cause (1) A.I.D.'s contribution to exceed the amount
specified in the text of the Agreement, or (2) the cooperating country's
contribution to be less than the amount specified in the text of the
Agreement.

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BUDGET SUMMARY
(US$ $000)

AID
L 0 AN

G0 I
GRANT

FX

LC

2,684

779.8

0

145

502

!Technical Assistance
IResearch

0
0

0
0

!Planning Meetings

0

173.2

I Infrastructure

0

!Project Management
IEvaluation
I Inflation/Contingency

0
0

I Training
ICommodities

716

5,000

FX

FX

LC

T0 TAL

10

677

4,150.8

0

0
0

0

787

1,434

1,492
0

624.1
748.1

0
0

0
760

2,116.1
1,508.1

0

0

0

0

0

0
0

0
3,894

173.2
3,894

0
0

0
76

509.7
18

0
0

250
0

10

6,368

LC

532.1

4,000

759.7
94
1,248.1

15,378