Ex-post Evaluation

1-1 Background of the Project

Along with the rapid development of the Malaysian economy, the quantity and variety of chemical substances consumed have also rapidly increased. This also applies to hazardous chemical substances. However, the preparation of regulatory measures and control lag behind this growth. Consequently, Malaysia needed to promptly implement control measures for the disposal of industrial waste. In response, JICA had implemented and completed the Project-type Technical Cooperation "Hazardous Chemical Substances Evaluation Analysis/Industrial Waste Disposal Technical Cooperation Project" from 1993 – 1997. However, this Project was aimed at developing basic technology and knowledge through technical transfer at the laboratory level. Therefore, Malaysia requested the cooperation in order to manage and control industrial pollution, applying the outputs gained from the former Project in actual industrial activities. SIRIM is a public corporation wholly owned by the Government of Malaysia. SIRIM plays the central role in the country as a research institution of industrial technology.

This ex-post evaluation is conducted two years after the completion of the project to gain an understanding of the impact and sustainability of the project.

1-2 Project Overview

To provide the industrial sector with evaluation and management services for the safe use of chemical substances, the Project transferred the necessary techniques to SIRIM, such as techniques for assessment and treatment of wastewater.

(1) Overall Goal

SIRIM's capacity in risk assessment of hazardous chemicals will be upgraded.

(2) Project Purpose

SIRIM will be able to provide evaluation and management services in chemical safety for the industrial sector.

(3) Output

0) The management system of the Project will be established.
1) The equipment will be procured, operated and maintained properly.
2) Technical expertise in chemical safety evaluation will be developed.
3) Technical expertise in the treatment of waste waters containing color and nitrogen will be developed.
4) The expertise developed will be disseminated across industries.
5) Information on evaluation and treatment of chemical substances will be disseminated.

(4) Input

Japanese side:

Malaysia's side:

3-1 Summary of Evaluation Results

(1) Impact

a. Achievement of the Overall Goal:

Before the Project termination, SIRIM created the study report on hazardous chemical substances, which means that the Verifiable Indicator of Overall Goal, i.e., SIRIM's assessment of at least one hazardous chemical substance, was fulfilled. In addition, SIRIM's ex-post self-assessment revealed that SIRIM has further developed its technical capability since the project termination. Therefore, it is concluded that the Overall Goal has been achieved.

b. Unintended Effects:

SIRIM's capability has moved beyond modifications of methods and techniques to attain the level of innovation of new procedures and new products. SIRIM has managed to modify the techniques learnt in the Project to help solve clients' problems, i.e. to test the chemical composition of unknown products, rather than verify the chemical purity of known products, the thrust of the Project's technology transfer.

The counterparts with Project knowledge have better served in Government committees such as POPs (Persistent Organic Pollutants) and EHS (Environmentally Hazardous Substances).

(2) Sustainability

a. Institutional Aspect:

SIRIM was corporatised in 1996. The former Environment and Energy Technology Centre (EETC) was integrated with the other SIRIM Centre, and reformed as the Environment and Bioprocess Technology Centre (EBTC) after the Project termination. 48 staff were assigned in the whole EETC at the Project termination, while currently 55 staff in former EETC out of 90 staff in the whole EBTC. It indicates that the number of staff has increased. There were 25 counterparts (cumulative number) during the Project period, and 76% of counterparts including the Project Leader and Project Coordinator are still assigned.

This Project was designed based on the understanding that the draft Industrial Chemical Act would be enacted, which is not yet enacted. However, SIRIM has provided the consultancy services on hazardous chemical substances based on the international standard, such as Globally Harmonised System (GHS) of classifying and labelling chemicals, and other domestic acts, such as Occupational Safety and Health Act (OSHA) and Environment Quality Act. Finally, it is concluded that the pending Industrial Chemicals Act (ICA) didn't affect the sustainability of the Project.

b. Financial Aspect:

SIRIM's corporatisation in 1996 has meant that they are required to match their revenue and funding with their cost of operations and maintenance. The income of EBTC for the year 2003 was RM 9.5 million (RM 2.7million was from commercial, and RM 6.8 million was from government strategic funding). This makes up 6.6% of SIRIM's total revenue (inclusive of commercial and governmental) of RM 143.5 million for 2003. However, SIRIM is not a purely commercial body. They still have to carry out some government responsibilities, such as maintaining essential but non-statutory services. However, beyond that, "non-economic" services will have to be financed by their own revenues. As such, SIRIM has to live within their means, i.e. their costs must be balanced against their revenue. And this has proved to be a risk to sustaining Project outcomes, especially since some of the costs are foreign-based (thus expensive), and some services or consumables are not available locally.

SIRIM has made investments since Project termination, i.e., RM0.6 million in capital expenditures and 5% annually of capital costs for maintenance and repairs for Project equipment and facilities.

c. Technical Aspect:

SIRIM obtained ISO/IEC 17025, which is the general requirement for competence in testing and calibration laboratories, and has still maintained it. SIRIM management rated their capability above average compared to averages at the time of project termination. Clients generally rated SIRIM's capability in risk assessment as better than SIRIM's competitors. Users Survey indicated that more than 96% intend to give more business to SIRIM in the future indicating that SIRIM can have a sustainable level of business.

Based on the results of the Counterpart survey, on average 75% of the counterparts have utilised JICA reports and reference materials after Project completion. This result indicates that most of the technical fields are still relevant. The counterparts, except in mutagenicity areas, indicated that Project skills gained in the Project are still relevant to current industrial needs. Project skills and equipment has been utilized in the ecotoxicity, risk assessment and wastewater treatment.

3-2 Factors that have promoted Project

(1) Impact

SIRIM's capability has moved beyond modifications of methods and techniques to attain the level of innovation of new procedures and new products.

(2) Sustainability

SIRIM has spent its budget on the training program for staff and the maintenance cost of the Project equipment.

3-3 Factors that have inhibited Project

(1) Impact

None

(2) Sustainability

- Though the Industrial Chemical Act is not yet enacted, SIRIM has provided the consultancy services on hazardous chemical substances based on the international standards and domestic acts. It is concluded that the pending ICA didn't affect the sustainability of the Project.

- The main issue that has affected sustainability is the status of equipment and suppliers, i.e., outdated equipment, unavailability of parts/accessories locally, no local maintenance/repair services etc. This pushes up the maintenance costs as well as upgrading costs which directly affects sustainability.

3-4 Conclusion

Given the results of the ex-post evaluation, it is concluded that the Overall Goal has been accomplished. Proposed Industrial Chemicals Act would have increased demand for SIRIM's risk assessment services. Although not implemented, the needs for risk assessment services are not diminished. This is evidenced by the active government participation in both international (Globalised Harmonised System) and domestic (USECHH Regulations 2000) arenas in terms of the management of hazardous chemicals. As the result of the Project, SIRIM has been one of the best testing institutes in Malaysia which can provide risk assessment to the industrial sector. It is expected that SIRIM will fulfill the industrial needs.

Although SIRIM was corporatised in 1996, SIRIM has continued to maintain "non-economic" services within their operations, which were transferred through the Project and are still necessary for Malaysia. In addition, the Project has enabled SIRIM to develop additional products and services for industry based on the transferred skill and technology. The sustainability of SIRIM has been secure.

3-5 Recommendations

(1) Recommendations for Malaysian Government

Budget must be provided for Project outcomes to be sustained as SIRIM cannot raise enough revenue to finance it. It is proposed that the Malaysian Government makes available maintenance budget for technologies that are consistent with achievement of national objectives. If sufficient funding cannot be raised, it is recommended that SIRIM donate the useable equipment to a government institution so that they can be maintained through government grants and funds.

(2) Recommendations for JICA

None

3-6 Lessons Learned

For future projects, donor agencies should review with their partner agencies the financial implications of maintenance and replacements as the sustainability of projects are dependent on the technical equipment and facilities provided.

It is important to appoint local suppliers to equipments and also to use local parts as much as possible in order to avoid the undesirable situation where maintenance and repairs are impossible because suppliers cannot be traced.

Another area to consider is to train the counterpart agencies in the hardware so that they can maintain the equipment and thus avoid the problem of non-traceable suppliers.

Technical cooperation projects to include management training components, e.g. marketing strategies, pricing and branding strategies, customer relations strategies, investment raising strategies and business development strategies to ensure that post project completion sustainability will be addressed earlier.

3-7 Follow-up

Situation None