Some updates and clarifications added to the article. These are noted below. The first explains what's different in this writeup vs. others. The caution explains the confusing instructions in the Bentley service manual. I spent considerable time choosing the words carefully...
Differences in procedures between this and similar mk3 TDI timing belt writeups: Do not use the camshaft bar or injection pump pin (and the timing belt) to counterhold against the engine when tightening or loosening the crankshaft pulley bolts. The camshaft bar says "not for torque". Different suggested torque spec for the camshaft bolt. Use a wood block to tap off a stuck valve cover instead of a screwdriver since it could scratch the metal. Other writeups suggest to set the tensioner with the injection pump lock in place. This writeup follows the Bentley manual - remove the injection pump lock pin after the belt is on but before setting the tensioner, details below.
Caution: the order of steps listed in this writeup is the same as the Bentley service manual but different from older writeups you may see elsewhere. Other writeups tell you to set the tensioner with the injection pump lock in place. This writeup follows the Bentley manual - I suggest removing the injection pump lock pin after the belt is on but before setting the tensioner. The Bentley manual says on page 23b-9 describing timing belt installation: "Remove the locking pin from the pump sprocket. Tension the belt by turning the semi-automatic tensioner with a spanner tool clockwise until the notch and the raised mark are aligned." While this is listed in the same step number and could be open to interpretation, the order is confirmed in another section where it describes injection pump installation (page 23b-12). One step says to remove the locking tool and then a few steps later, to then tighten the tensioner. Because both procedures list the same order, my interpretation of the service manual is correct - remove the pump locking pin before tensioning the belt. This means other writeups do not follow the service manual. However, there are also some confusing instructions in the service manual detailed below.
Why I follow the order of steps in the manual: My interpretation of the service manual is correct but why follow the service manuals steps? Later ALH engine TDI let the injection pump sprocket move even with its lock in place so that the tensioner spreads tension evenly across the timing belt when you set it. I believe that removing the injection pump lock pin before tightening the tensioner serves the same purpose in these earlier TDI - it lets the sprocket move a little bit if needed. It doesn't move much but it could move a little. In a later step you turn the engine over twice by hand to double check everything. The service manual says that if the pump pin doesn't go in then you loosen the pump bolts and rotate the pump so that the pin does go in.
Confusing instructions in the Bentley manual: One confusing point is that if the pump pin is off and won't go in, (assuming TDC and camshaft positions are correct), rotating the pump won't fix the sprocket's hole being off. The pump's shaft-sprocket relationship is locked with a woodruff key. Rotating the pump won't move the shaft much since the shaft moves freely inside the pump. Because the shaft won't move the sprocket shouldn't move (without moving the timing belt) and the pump pin won't go in if it didn't go in before. If the pin is just a hair off, my suggestion is to ignore it since you'll adjust the pump in a later step anyways. If the pin is off by more then a hair, the timing belt is probably off by a tooth.
Another confusing point is that the procedures for timing belt installation under the different sections "to install injection pump" and "to install camshaft/injection pump drive belt" (timing belt) are different. While both say to remove the injection pump pin before tensioning the belt, one procedure says to have the pump mounting bolts hand tight before tensioning the belt, the other does not say to loosen them in the first place (I think it does say to tighten them but with a typo, see below). One says to turn the engine over twice by hand to double check your work (I would definitely do that), the other doesn't.
Possible typo in "to install camshaft/injection pump drive belt": The manual also states: "Tighten the.....injection pump sprocket mounting bolt" and then lists it's torque as 18 ft-lb. The injection pump sprocket mounting bolt's torque is 41 ft-lb, not 18. I believe this is a typo that should read "injection pump mounting bolt" because the torque for those is 18 ft-lb. My guess is that someone included the word sprocket. As mentioned above, the instructions for installing the timing belt never say to loosen these bolts in the first place but instructions for injection pump installation do say to loosen them and have them hand tight. There's a confirmed typo for torque spec on the lower timing belt cover bolt, it's noted on the next page.
So what should you do? The procedures listed here follow the order of steps in the service manual while interpreting its inconsistent instructions. This interpretation of the service manual may not be correct but it's what I use and my car is fine. This website is not responsible for your work and the only official instructions are the ones listed in the Bentley manual, etc., read the TOS Agreement for the full legal disclaimer.