Voltage lower than expected (voltage regulation)
The circuit to the left of the dotted line drops approximately 7.7 volts across the transistor. Note that, because of the zener diode, the voltage at the base of the transistor is going to be approximately 7.1 volts less than the input voltage. The output voltage then is a further diode drop of about 0.6 volts less than this, because of the base-emitter diode. So with 9 V input, you'll be seeing about 1.3 V output from that part of the circuit.