Completion Report

Project Number: 43110-013 Loan Number: 2541 August 2016

Fiji: Emergency Flood Recovery (Sector) Project This document is being disclosed to the public in accordance with ADB's Public Communications Policy 2011.

CURRENCY EQUIVALENTS

Currency Unit – Fiji dollar/s (F$)

At Appraisal At Project Completion 21 May 2009 17 July 2015

F$1.00 = $0.4781 $0.4695 $1.00 = (F$) 2.0916 (F$) 2.1299

ABBREVIATIONS

ADB – Asian Development Bank DMF – design and monitoring framework DNR - Department of National Roads EMP – environmental management plan FRA - Fiji Roads Authority LWRM – Land and Water Resource Management Division MNP – Ministry of National Planning MWTPU – Ministry of Works, Transport, and Public Utilities PCR – project completion report PMU – project management unit PSC – project steering committee RRP – report and recommendation of the President SPSO – Pacific Subregional Office WAF – Water Authority of Fiji

NOTE

In this report, "$" refers to US dollars unless otherwise stated.

Vice-President S. P. Groff, (Operations 2) Director General X. Yao, Pacific Department (PARD) Director R. Jauncey, Pacific Subregional Office (SPSO), PARD Team leader J. Kohlhase, Infrastructure Specialist, SPSO, PARD Team members B. Puamau, Operations Assistant, SPSO, PARD L. Uruvaru, Associate Project Analyst, SPSO, PARD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS Page

BASIC DATA i

MAP vi

I. PROJECT DESCRIPTION 1

II. EVALUATION OF DESIGN AND IMPLEMENTATION 1

A. Relevance of Design and Formulation 1

B. Project Outputs 3

C. Project Costs 4

D. Disbursements 5

E. Project Schedule 5

F. Implementation Arrangements 5

G. Conditions and Covenants 6

H. Consultant Recruitment and Procurement 7

I. Performance of Consultants, Contractors, and Suppliers 8

J. Performance of the Borrower and the Executing Agency 9

K. Performance of the Asian Development Bank 10

III. EVALUATION OF PERFORMANCE 11

A. Relevance 11

B. Effectiveness in Achieving Outcome 11

C. Efficiency in Achieving Outcome and Outputs 12

D. Preliminary Assessment of Sustainability 13

E. Impact 14

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 14

A. Overall Assessment 14

B. Lessons 14

C. Recommendations 15

APPENDIXES

1. Design and Monitoring Framework 16 2. Summary of Project Outputs 18 3. Chronology of Major Events 24 4. Appraisal and Actual Project Costs 26 5. Currency Equivalents 27 6. Summary of Contracts Funded by the Asian Development Bank 28 7. Projected and Actual Disbursements (Cumulative) 32 8. Project Implementation Schedule 33 9. Status of Compliance with Loan Covenants 34

BASIC DATA

A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower 5. Executing Agency 6. Amount of Loan 7. Project Completion Report Number

Republic of Fiji 2541 Emergency Flood Recovery (Sector) Project Republic of Fiji Ministry of National Planning $17.56 million 1584

B. Loan Data 1. Fact-Finding (Appraisal not required)

– Date Started – Date Completed 2. Loan Negotiations – Date Started – Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness – In Loan Agreement – Actual – Number of Extensions 6. Closing Date – In Loan Agreement – Actual – Number of Extensions 7. Terms of Loan – Interest Rate – Maturity (number of years) – Grace Period (number of years)

22 March 2009 21 May 2009 29 July 2009 30 July 2009 27 August 2009 5 November 2009 3 February 2010 25 November 2009 NA 29 February 2012 17 July 2015 2 London interbank offered rate-based variable lending rate for US dollars 32 8

8. Disbursements a. Dates Initial

Disbursement

25 May 2010

Final Disbursement

9 July 2015

Time Interval

62 months

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Effective Date

25 November 2009

Original Closing Date

29 February 2012

Time Interval

27 months

b. Amount (US$ million)

Category Original

Allocation

Last Revised

Allocation

Amount

Disbursed

Undisbursed Balance

a

01 Civil works/consulting services

16.99 16.99 16.82 0.16

02 Interest and commitment charges

0.57 0.57 0.20 0.37

Total 17.56 17.56 17.02 0.53

a An undisbursed loan amount of $534,381.51 was cancelled at loan closing date of 17 July 2015.

9. Local Costs (Financed) Appraisal Actuala

- Amount ($ million) (I) (I) - Percent of Local Cost - Percent of Total Cost

(I) = not available

a Local costs were not separated.

C. Project Data

1. Project Cost ($ million)

Cost Appraisal Cost Estimate

Actuala

Foreign Exchange Cost 17.56 (I) Local Currency Cost 2.43 (I) Total 19.99 (I) (I) = not available

a Local costs were not separated.

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2. Financing Plan ($ million)

Cost Appraisal Cost Estimate

Actual

Implementation Costs Borrower Financed 2.43 7.28 ADB Financed 17.56 16.82 Other External Financing

Total 19.99 24.10IDC Costs

Borrower Financed ADB Financed 0.20 Other External Financing

Total 19.99 24.3

Note: Numbers may not add up due to rounding.

ADB = Asian Development Bank, IDC = interest during construction.

3. Cost Breakdown by Project Component ($ million)

Component Appraisal

Cost Estimate Actual

A. Base Cost

1. Civil Works 16.22 23.57 a. Emergency response costs 0.96 3.06 b. Major road rehabilitation 2.80 4.05 c. Landslips (major roads) 3.36 2.29 d. Secondary road rehabilitation 6.72 2.27 e. Bridge 0 6.69 f. Water supplies 1.06 4.50 g. Agricultural drainage scheme repairs 1.32 0.712. Consulting Services 1.43 0.52 a. Design 0.33 0.18 b. Supervision and project management 0.88 0.23 c. Project coordinator, environment specialist 0.22 0.11B. Contingencies 1.76

a. Physical 0.88 0b. Price contingencies 0.88 0

C. Financing Charges During implementation and Commitment Charges

0.57 0.20

Total 19.98 24.29

Note: Numbers may not add up due to rounding.

Source: Asian Development Bank calculations.

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4. Project Schedule

Item Appraisal Estimate Actual

Date of Contract with Consultants Design Consultancy Services Phase Q3 2009 30 July 2010

Consultancy Services for Construction Phase Q4 2009 26 April 2011 Civil Works Contract Major Road Rehabilitation Date of Award Q1 2010 4 October 2011 Completion of Work Q4 2010 23 August 2013 Landslip Date of Award Q1 2010 23 August 2013 Completion of Work Q3 2010 20 October 2014 Secondary Road Rehabilitation Date of Award Q4 2009 18 April 2012 Completion of Work Q3 2011 28 November 2013 Water Supply Date of Award Q1 2010 24 January 2012 Completion of Work Q4 2010 28 October 2014 Agricultural Drainage Date of Award Q3 2009 (I) Completion of Work Q3 2010 (I) Other Milestones 1. First change in method of procurement on 24 February 2011. 2. Second change in method of procurement on 19 November 2010. 3. First extension of loan closing date to February 2014 approved on 11 August 2011. 4. Second extension of loan closing date to 28 October 2014 approved on 24 February 2014. 5. Closing of loan account: 17 July 2015.

(I) = not applicable; Q = quarter.

5. Project Performance Report Ratings

Implementation Period

Ratings

Development Objectives

Implementation Progress

From 1 August 2009 to 31 December 2009 Satisfactory Satisfactory From 1 January 2010 to 31 December 2010 Satisfactory Satisfactory From 1 January 2011 to 31 December 2011 Satisfactory Satisfactory From 1 January 2012 to 30 June 2012 Satisfactory Partly Satisfactory From 1 July 2012 to 31 December 2012 Satisfactory Satisfactory From 1 January 2013 to 31 December 2013 Satisfactory Satisfactory From 1 January 2014 to 31 December 2014 Satisfactory Satisfactory From 1 January 2015 to 31 July 2015 Satisfactory Satisfactory

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D. Data on Asian Development Bank Missions

Name of Mission

a

Date

No. of Persons

No. of

Person-Days

Specialization of Members

b

Fact-finding mission 22–28 March 2009 and 13–21 May 2009

5 35 a, b, c, d, e

Loan negotiations 29–30 July 2009 2 4 a, f Loan inception mission 25 Jan–9 February

2010 2 14 a, d

Loan review mission 25 October–8 November 2010

3 27 a, d, g

Loan review mission 20–28 June 2011 3 12 a, d, g Midterm review mission 4–8 June 2012 3 9 a, d, g Loan review mission 25–29 October 2012 4 12 a, d, g, h Loan review mission 4–8 March 2013 3 9 a, d, i Loan review mission 25 November–4

December 2013 3 18 a, d, i

Loan review mission 28 July–4 August 2014 4 16 a, d, i, j Project completion review mission

c 18 January–5 February

2016 1 18 k

a Fielded concurrently with other missions.

b a = infrastructure specialist, b = senior safeguards specialist, c = public financial management officer, d = associate project analyst, e = staff consultant, f = senior counsel, g = finance, administrative and control officer, h = logistics assistant, i = safeguards officer, j = Board of Director's Advisor, k = staff consultant.

c The project completion review mission comprised J. Kohlhase, Infrastructure Specialist, and an

economist (staff consultant).

I. PROJECT DESCRIPTION

1. In January 2009, continuous, heavy, and sometimes intense rains caused some of the worst flooding in Fiji’s history. Flash floods affected many areas but were particularly damaging in the north-western section of the main island of Viti Levu. Overall, about 150,000 people—one-sixth of the country’s population—were affected directly or indirectly through disruptions to communications and access to food and clean water. Roads, schools, medical facilities, and water supply and sanitation facilities were extensively damaged. Crops were lost, commercial enterprises badly hit, and tourism disrupted. 2. Many houses were damaged and most people were able to return to their homes once the waters had abated. Subsistence and market crops had been widely damaged. Food rations were needed, particularly in rural areas where reliance on root crops for daily needs was high. This hardship was compounded by damage to roads that restricted people’s access to markets and social services. The floods had a disproportionate impact upon the poor, reflected in a decline in growth, increased poverty, and decline in social indicators. The government prepared a damage assessment report that estimated rehabilitation and reconstruction costs for public infrastructure of $41 million.1 Damage to the sugar industry infrastructure was about $5 million, while crop losses exceeded $4 million. The International Monetary Fund calculated the public and private economic costs to be about $180 million—equivalent to 5.3% of gross domestic product.2 3. The Asian Development Bank (ADB) approved a loan of $17.56 million for the Emergency Flood Recovery (Sector) Project in August 2009 to assist in the short-term rehabilitation of the damaged infrastructure.3 The project was to contribute to the costs of rehabilitating road infrastructure, water supply systems, and agricultural drainage schemes. It was to be implemented over two years using a sector approach, with each subproject being selected and prioritized in accordance with the agreed process and eligibility criteria. Design and construction would incorporate activities to mitigate the impacts of future floods. The project would help restore access to infrastructure for people in rural areas and allow economic activities and social services to resume.

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

4. ADB did not have a country strategy in place in 2009. ADB’s engagement in Fiji since a political crisis in 2006 had been limited, based on a reengagement approach ADB had developed in 2006 (para.5).4 However, ADB recognized the impact of the disaster on people in the rural areas of the country where poverty was prevalent. The project aimed to help restore economic and social activities in affected areas to pre-disaster levels, but damage to the transport network and other infrastructure was an impediment to recovery. The movement of agricultural products to markets, and by tourists to hotels and attractions, was restricted. ADB

1 Office of the Prime Minister. 2009. Consolidated Report on Flash Floods. 8–16 January 2009. Suva. This included estimates for damage to roads ($16.0 million), water and sanitation ($6.4 million), utilities ($2 million), agricultural drainage and sea defenses and flood gates ($1.5 million).

2 International Monetary Fund. Use of Fund Resources—Request for Emergency Assistance. Draft (March 2009). Washington, DC.

3 ADB.2009. Report and Recommendation of the President to the Board of Directors: Proposed Loan to Fiji for the Emergency Flood Recovery (Sector) Project. Manila.

4 ADB. 2007. Fiji Islands: Reengagement Approach. Manila.

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assistance to rehabilitate transport infrastructure was appropriate given ADB’s previous experience in transport sector projects.5 In 2009, an ADB technical assistance project was ongoing helping prepare a land transport master plan and preparatory work for a fourth road upgrading project. 6 5. After the 2006 political crisis in Fiji, ADB adopted a two-stage approach to reengaging with the country. Under the first stage, ADB continued the operations that were ongoing as of December 2006 after ascertaining that the interim government (i) effectively controlled the country, (ii) had recognized the country’s international obligations, (iii) was willing and able to assume all of its predecessor’s obligations to ADB, (iv) had ensured that the ongoing projects and programs would continue to be implemented, and (v) had authorized a representative to make withdrawals. Stage two of reengagement would involve the preparation of a new country partnership strategy as a basis for approval of new projects, but this required that five conditions be met which ADB Management considered not fully met in 2009. Thus ADB approved the emergency assistance loan on an exceptional basis.7 6. Loan processing was delayed beyond the 12-week period normal for an emergency loan because of the evolving political situation in the country, the lack of a current ADB country strategy, government capacity constraints, and the need for extensive consultations with key development partners. Development of an interim operational strategy began as part of loan preparation but was delayed by the need for further consultations with development partners and delays in the International Monetary Fund's Article IV mission until October 2009. ADB approval of the loan included a waiver of the requirement for an interim operational strategy.8 7. The Ministry of Works, Transport, and Public Utilities (MWTPU) had started repairs to transport and water and sanitation infrastructure as soon as conditions permitted after the floods, removing landslides that were blocking roads, repairing washed-out road sections, and restoring safe but basic access. Resources were diverted from ongoing road and water rehabilitation and maintenance contracts. ADB undertook a detailed review of the damage assessment with the World Bank. Given ADB’s long-term involvement in Fiji’s transport and water infrastructure, the government requested that ADB take the lead in preparing a project for rehabilitation and repair of affected infrastructure because the priority needs and costs were relatively modest. The World Bank concentrated on disaster risk management. 8. The project design was consistent with ADB’s Disaster and Emergency Assistance Policy, since it focused on the short-term rehabilitation of the damaged infrastructure and had flexible implementation provisions to allow it to respond to changing conditions (footnote 8).

5 ADB 1988. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to Fiji for the Road maintenance Sector Project. Manila; ADB. 1992. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Fiji Islands for the Second Road Upgrading Project. Manila; and ADB. 1997. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Republic of the Fiji Islands for Third Road Upgrading Project. Manila.

6 ADB. 2009. Technical Assistance to Fiji for the National Transport Sector Plan. Manila.

7 The conditions were: (i) whether a new loan would expose ADB to additional legal or political risks; (ii) whether the de facto government is in effective control of the country and enjoys a reasonable degree of stability and public acceptance; (iii) whether the de facto government generally recognizes the country's existing international obligations; (iv) the number of countries (particularly ADB member countries and neighboring countries) that have recognized the de facto government or dealt with it as the government of the country; and (v) the attitude of other international organizations towards the de facto government.

8 ADB. 2004. Disaster and Emergency Assistance Policy. Manila.

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9. The main aim of the country partnership strategy for Fiji for 2014-2018 are to raise economic growth by encouraging private investment, make growth more inclusive, improve service delivery, reduce volatility of economic growth, and build resilience to withstand natural disasters.9 The project design was consistent with this strategy, since the improvements to water and sanitation services, and transport links for rural communities to expand their access to markets, are key contributors to inclusive economic growth. B. Project Outputs

10. The project was designed using a sector approach. Each subproject was to be selected and prioritized in accordance with the agreed process and eligibility criteria (RRP Appendix 3). ADB anticipated that some of the project component outputs indicated in the RRP and the design and monitoring framework (DMF) would change. A build-back-better approach was adopted that would ensure that the minimum engineering design standards would be met but would also include a review of opportunities for building replacement structures that would be more robust than the original structures and incorporate appropriate climate-proofing. Table 1: Achievement of Project Outputs

Appraisal Achievement Component A: Repairs during the Emergency Response Phase

The RRP included emergency repairs as a project component and output, but the DMF did not include these as an output. The RRP cost table appendix included $0.84 million to finance eligible expenditures incurred during the emergency period to restore basic, safe access.

Retroactive financing of $2.72 million for emergency civil works covering contracts procured in 2009 that were eligible for retroactive financing, covering clearing of landslides and debris, reinstatement of washed-out approaches to bridges and wet crossings, and temporary road pavement repairs.

Component B: Civil Works

8.0 km of sealed pavement roads rehabilitated and upgraded.

12.4 km of roads rehabilitated and upgraded

Stabilization of eight landslips on major roads Stabilization completed at one site Regravelling of about 50 km of unsealed roads, reconstruction of 30 culverts, and reconstruction or strengthening of 10 washed-out wet crossings.

30 km of the secondary road network at Koronivia, Lokia, Toga, Waila, Nadarivatu, and Monasavu regraveled. Rakiraki Bridge upgraded.

Repairs to two water intake structures. Two water intakes (Vatukoula and Matovo) and two bridge pipelines (Laqere and Sigatoka) repaired and upgraded. Varaciva dam repaired. New pipeline constructed at Waiwai to improve the intake usage.

Repairs to agricultural drainage schemes to (i) clear waterways, (ii) repair damaged seawalls and dykes, (iii) repair and protect scoured drains and culverts, and (iv) repair floodgates. No specific schemes identified but $1.16 million included in cost estimate.

$0.63 million for repairs to agricultural drainage schemes completed in early 2010, using advance action and retroactive financing.

Component C: Consulting Services 42.5 person-months of international consulting services and 82 person-months of national consulting services for project coordination, design, and supervision of implementation. Consulting services were also to be used to strengthen the MWTPU EMU in: (i) engineering design and preparation of bidding documents, (ii) construction supervision, and (iii) project management.

Only 36% of the project fund provision utilized due to delays in recruitment of the project coordinator, and the non-use of implementation consultants, the implementing agencies taking on this responsibility, i.e. FRA for the road civil works and WAF for the water supply civil works (paras.30-35).

DMF = design and monitoring framework, EMU = environmental management unit, FRA = Fiji Roads Authority, MWTPU = Ministry of Works, Transport, and Public Utilities, RRP = report and recommendation of the President, WAF = Water Authority of Fiji. Source. Asian Development Bank

9 ADB. 2014. Country Partnership Strategy: Fiji, 2014-2018. Manila.

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11. The output target set out in the DMF for resealing main roads was exceeded, but most of the other targets were not met. Outputs, however, were only indicative since this was a sector project (para.10). The shortfalls were largely due to delays in implementation and higher-than-expected costs. Detailed implementation designs revealed that the original designs were inadequate, and costs had been underestimated as a result. Culvert reconstruction was incorporated into road rehabilitation works and not undertaken as stand-alone subprojects. The rehabilitation of several bridges had been included to reduce the number of wet crossings, but only one was financed by the project due to cost increases. However, water supply subprojects and repairs to small agricultural drainage schemes exceeded targets. C. Project Costs 12. The project cost was estimated at $19.99 million. ADB was to finance $17.56 million (87.8%) of the total, including taxes and duties of $2.43 million, with the government providing the balance.10 The final project cost was $24.29 million, with ADB financing $17.02 million (70%) and the government $7.28 million (30%). The increased government contribution resulted from its commitment to fund excess expenditure on the Rakiraki Bridge after ADB capped its contribution as costs escalated (para.14). Appraisal and actual costs are shown in Appendix 4. 13. Expenditure for emergency response covered through retroactive financing totaled $3.06 million, compared with the appraisal estimate of $0.98 million. The costs of agriculture drainage scheme repairs, also covered by retroactive financing, were below the estimate. Expenditure of $4.5 million on the repair of water supply intake structures greatly exceeded the appraisal estimate of $1.05 million. This was mainly because these projects were ready to go when implementation began and the Water Authority of Fiji (WAF) had the capacity to carry them out. By contrast, the poor initial designs meant that road components such as bridges, culverts, and land stabilization were delayed by the need for redesign and the higher costs that resulted. Appendix 2 shows expenditure by project subcomponent. 14. The Rakiraki Bridge subproject is an extreme example of the price escalation issue. The initial design estimate was $2.20 million. The tender bids ranged from $1.50 million to more than $8.00 million, and the final cost was $6.69 million. ADB capped its contribution at $1.57 million. Part of the problem was an initial design that failed to adequately take into account site conditions and did not include the costs of diversion works during construction. However, the Fiji Roads Authority (FRA) also contributed to cost escalation by changing design standards, including raising the design life from 30 to 100 years. The project completion review was unable to determine whether a cost–benefit analysis was done to determine the value for money of these changes. The initial design for the subproject to stabilize the Wailevu landslip, which was dropped from the project, did not consider local conditions to the extent it should have.

15. These cost increases would have had a significant negative impact on economic internal rates of return and project efficiency (paras. 56-57), but rates of return were not calculated in line with ADB’s Disaster and Emergency Assistance Policy (footnote 8) and staff instructions on processing of emergency assistance loans which state that financial and economic internal rates of return will be flexibly used.11 The subproject eligibility criteria included in the RRP

10

The RRP did not provide cost estimates broken down into foreign exchange and local currency. 11

The Staff Instruction complements Operations Manual (OM) Section D7 (Disaster and Emergency Assistance) by providing supplementary guidance and clarification on processing, reporting and administration of emergency assistance loans and grants (EALs). It also reiterates key principles under the Disaster and Emergency Assistance Policy (DEAP)1 and OM Section D11 (Sovereign Operations).

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required that assessment included a narrative assessment of economic impact.12 A review of available documentation indicates that subproject selection followed the eligibility criteria, with priority given to the number of potential beneficiaries and the level of economic activity a subproject would generate (Appendix 2). D. Disbursements

16. The loan was disbursed in accordance with ADB’s Loan Disbursement Handbook (2009). Disbursement procedures included retroactive financing (limited to 30% of the loan), direct payments, and reimbursements. Retroactive financing was the main mechanism used during the emergency response stage. Direct payments and retroactive financing were also important for the agriculture drainage schemes. Disbursements were initially low since financing was restricted to direct contracts entered into by the country’s divisional commissioners during the declared 30-day natural disaster emergency period that began on 11 January 2009.13 ADB later extended the period to 90 days. It also allowed disbursements for other direct contracts entered into by the implementing agencies, including ongoing maintenance contracts. These steps significantly improved the rate and amount of disbursements but added substantially to the workload of the executing agency and ADB in terms of reviewing supporting documents for withdrawal applications submitted by the implementing agencies. By July 2011, almost two years into the project and near the original project completion date, cumulative disbursements were only 19% and commitments only 27%. Project progress and disbursements did not pick up until 2012. By July 2014, cumulative disbursements had reached 75% and commitments 96%. The final disbursement was on 9 July 2015, and $17.02 million of the loan was disbursed (97%). E. Project Schedule

17. ADB approved the loan of $17.56 million on 27 August 2009, and it became effective on 25 November 2009. The original loan closing date of 29 February 2012 was extended 24 months to 28 February 2014 on 11 August 2011 due to design and tendering delays, and ultimately to 28 October 2014 on 24 February 2014.

18. The initial delays were largely due to capacity constraints within the implementing agencies, including limited familiarity with ADB procurement and withdrawal procedures. ADB changed procurement eligibility criteria to speed up disbursements, but this increased the amount of work of the executing agency and ADB (para. 16). For the road component, initial design deficiencies delayed implementation of this component and hence disbursements.

F. Implementation Arrangements

19. Project implementation arrangements followed those set out in the RRP, although they were affected by organizational changes that caused some disruption during the project period (para. 37). The MWTPU was responsible for the roads and water supply components. The Land and Water Resource Management Division (LWRM) of the Ministry of Agriculture and Primary Industries implemented the agricultural drainage scheme component. As the executing agency the Ministry of National Planning (MNP) was the executing agency responsible for the overall execution of the project and coordination with the MWTPU and LWRM. The WAF was established on 1 January 2010 and took over implementation of the water supply component

12

RRP Appendix 3. 13

Fiji is divided administratively into four divisions, which are further subdivided into fourteen provinces; each division is headed by a Commissioner, appointed by the Government of Fiji.

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under the guidance of the MWTPU. The Department of National Roads (DNR), which was established in 2005 as a semi-autonomous agency within the MWTPU, was responsible for implementing the roads component until FRA, a fully autonomous agency established on 5

January 2012, took over. An external consulting firm provided advisory services during the transition period (para. 37). 20. A project steering committee (PSC) was established comprising representatives from the MNP (chair) and the Ministry of Finance, the permanent secretary of the MWTPU, divisional commissioners, the LWRM director, the directors of national roads and water supply, and divisional engineers (as required). The PSC had responsibility for overseeing and monitoring all aspects of project implementation, including (i) policy guidance and coordination, (ii) subproject selection, (iii) project progress reports and other project documentation, and (iv) audited accounts and financial statements. 21. A project management unit (PMU) was established in the MWTPU, headed by the director of national roads. The PMU was responsible for day-to-day implementation, coordinating the project activities of both the MWTPU and the LWRM, and reporting to MNP, the executing agency. The PMU: (i) carried out the assessments, design, and supervision of subprojects; (ii) managed the tendering processes and contracts; (iii) prepared withdrawal applications; and (iv) maintained project accounts for auditing. It was also meant to prepare project progress reports and a project completion report (PCR) and monitor the project’s socioeconomic and environmental impacts, however, these reports were often delayed and incomplete. The PMU was to be supported by design, supervision, management, and project coordination consultants under the loan. However, the project coordinator was not appointed until 29 November 2010, twelve months after loan effectiveness, which was detrimental to project implementation (para. 35). The LWRM used its own staff resources for the design, procurement, and the implementation in the rehabilitation of agricultural drainage. G. Conditions and Covenants

22. The government and the executing agency complied fully with ADB’s Anticorruption Policy and its provisions, and with most loan covenants, but only partly with some covenants that were important for effective project implementation (Appendix 9). The PSC was established at project commencement and reviewed and approved subprojects, but it did not fulfill other requirements and had little involvement in implementation monitoring and supervision. Delayed and incomplete quarterly reporting by the implementing agencies was a serious concern despite follow-up by ADB as it impeded ADB monitoring and may also indicate that implementation supervision was poor. Supervision by MNP is unclear as records needed to assess this were not prepared by the PSC (paras. 35-36). MNP has not prepared a consolidated PCR as called for under a covenant, although FRA prepared a draft on the road projects. The environment covenant was partly complied with (para. 24). 23. The project was classified as category B for environment. An overall initial environmental examination and two initial environmental examinations for sample subprojects were undertaken, with the reports provided in supplementary appendixes B, C and D of the RRP. However, FRA and WAF did not submit any other environmental assessments for subsequent subprojects to ADB. This occurred even though ADB informed MNP, FRA and WAF on several occasions that generic environmental management plans (EMPs) cleared for the RRP were not acceptable for the monitoring of new subprojects, and that site-specific EMPs had to be submitted for ADB’s non-objection.

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24. A March 2013 country portfolio review mission from the Pacific Department (PARD) assessed safeguard implementation performance for all Fiji projects and concluded that the project had followed environmental safeguard procedures and was generally responsive to the environment covenants. Subsequent missions from PARD’s safeguard specialist reviewed and concluded that the: (i) Matovo intake water subproject, (ii) the road subprojects for the Rakiraki Bridge and Lomaloma landslip stabilization subproject met the EMP requirements. A completion report assessment by the safeguards officer in the Pacific Subregional Office (SPSO) supported the findings of the PARD review missions, stating that the EMPs prepared by FRA for the main roads component were appropriate while the EMPs prepared by WAF for the water component civil works were equivalent to initial environmental examinations and were acceptable. Safeguards closure reports were submitted to SPSO by FRA in August 2015 and by WAF in January 2016. FRA prepared a consolidated closing environmental impact assessment for the project and assessed by the SPSO mission as adequate.

25. Special audit. The borrower of an emergency loan is required to carry out a special audit of governance and financial accountability upon project completion. This gives the government and stakeholders the opportunity to evaluate and provide formal feedback on project design, implementation and performance, and provide an overall assessment. This audit was conducted by the office of the auditor general.14 The audit report referred to the delays in the project’s progress and reporting, as well as inadequate maintenance of records. However, it concluded that controls over procurement, contract management, disbursement, and audit functions were eventually sufficient. Audit assurance was provided for all financial statements, and financial accountability was evident. Loan proceeds have been used in accordance with the purposes for which it was borrowed and in compliance with the terms of the loan agreement. The use of loan proceeds has been faithfully represented in the financial statements. The audit also examined project governance. Findings on the performance of the borrower and executing agency are referred to in para. 38. H. Consultant Recruitment and Procurement

26. The PMU in MWTPU had limited technical staff and needed technical support. The project included funding of $0.33 million for design support, $0.77 million for supervision and management support, and $0.19 million for a project coordinator. The PMU support included 18 person-months for a project accountant (national consultant). This had been recommended in the third road upgrading project audit report, which urged MWTPU to strengthen the PMU for future ADB projects. No contract was awarded, and MWTPU made one of its staff members available to take on the role. 27. The design phase consultants were recruited under advance procurement to expedite the feasibility studies, detailed design, and preparation of bidding documents. The RRP suggested this could be done by November 2009, but a delay in the contract negotiations to February 2010 set implementation back by three months. This is an important delay in what was meant to be an emergency response project. 28. The delay in the appointment of the project coordinator to support the PMU and MNP until 12 months after loan effectiveness was partly due to a limited response to the recruitment advertisement and partly to the fact that the consultant first identified did not clear the internal Fiji government approval process. This hurt the project because it deprived the capacity-

14

An independent office established under the Constitution of Fiji, responsible for the audit of all government accounts.

8

constrained executing and implementing agencies of expert implementation support in the critical early stages. The inception mission in January 2010 noted the capacity shortfalls (with the exception of LWRM) and the need for regular support. MNP did not fill the gap. 29. Response from consulting firms for construction supervision was limited. Selection was quality-and cost-based. A contract was signed in April 2011 but cancelled in December 2012 after the consultants failed to mobilize, and FRA assumed the supervision role. 30. The government followed ADB’s Procurement Guidelines (2009), with ADB relaxing international competitive bidding requirements to speed up subproject preparation, allowing procurement procedures applicable to national competitive bidding instead. The RRP included an outline procurement plan listing goods and works contracts for which procurement was either already ongoing at the time of approval, or which were expected to start within 18 months. Civil works were divided into packages to be procured using international competitive bidding, national competitive bidding, and shopping procedures. Both advance procurement and retroactive financing were used. The RRP noted that ADB had approved advance action on the invitation of bids, bid evaluation, and contract awards for the procurement of goods and services and for recruitment of consultants. 31. Retroactive financing was limited in the RRP to 30% of the loan. Disbursements were initially low, since financing was restricted to direct contracts entered into by the country’s divisional commissioners during the 30-day natural disaster emergency period. ADB later extended the period to 90 days, and allowed disbursements for other direct contracts including ongoing maintenance contracts (para.16). 32. The RRP noted that LWRM had initiated procurement of 10 contracts for emergency repairs to agricultural drainage schemes with estimated costs in the $15,000–$400,000 range. This was adjusted during the inception mission to nine contracts which LWRM expected to complete by end March 2010. These had a total value of about F$2.8 million procured under advance action, and were eligible for retroactive financing. I. Performance of Consultants, Contractors, and Suppliers

Consultants 33. Recruitment and performance of consultants were problematic, and a significant part of the funding for the planned consulting services was not utilized. Consulting firms showed limited interest in bidding for project contracts. The firm contracted as the design consultant for the road component performed poorly. MWTPU and FRA reported that the firm lacked experience working in developing countries such as Fiji where capacity is limited, and prepared designs that were not adequately suited to local conditions. FRA blamed the firm for inadequate designs and underestimating costs (para.13). The design for the Lomaloma land stabilization subproject did not consider the broader geological conditions in the site area, where the risk of slippage was high and subsequently resulted in the road pavement cracking. Poor design of the reconstruction of the Rakiraki Bridge led to a redesign by the FRA’s own professional advisory services. ADB capped its contribution to this subproject due to the increased costs resulting from the need to meet minimum standards and the extended bridge design life (para.14). WAF relied on its own internal capacity for design and did not use project consultancy services. The consultant engaged as project coordinator after a lengthy delay was not very effective. MWTPU, FRA, and WAF relied largely on their own capacity for implementation and supervision.

9

Contractors 34. The performance of the majority of civil works contractors was reported by the MWTPU as satisfactory, with the exception noted below. FRA reported that the road gravelling and Lomaloma slip stabilization contractors performed well. Resourcing and management of the Rakiraki Bridge construction was poor initially, but a change in contractor management in 2015 brought significant improvements. The end quality of the bridge works is very good (as proven during Cyclone Winston in February 2016). WAF reported satisfactory performances by the contractors for the water component, with the exception of the international contractor for the Matovo intake and Waiwai pipeline subprojects. WAF expressed concerns about the selection process and complained that the contractor delayed the project substantially, provided poor on-site management, lacked skilled personnel with proficiency in English, and lacked equipment. J. Performance of the Borrower and the Executing Agency

35. The performance of the borrower and the executing and implementing agencies in exercising their responsibilities for implementing the project is rated less than satisfactory. Although MNP was responsible as the executing agency for overall project progress and coordination, it did not follow up progress with MWTPU when it was unable to appoint a project coordinator in the first year of implementation. Delays accumulated as a result. The PSC was set up at project start-up to review and approve the subprojects to be financed under the loan, but its summary records of decisions made and subprojects approved do not document the deliberations or how the subprojects chosen met the agreed eligibility criteria. This has made it impossible for the PCR to determine how thoroughly the candidate subprojects were assessed and how valid the choices were. Once the subprojects were approved, neither the PSC nor the executing agency seemed to have monitored or supervised them. Their supervision of the performance of the implementing agencies and the project overall was limited. 36. In its special audit report on the project, the office of the auditor-general states that it was unable to establish how effective the PSC was in engaging personnel and consultants in project planning, implementation, and management. The reason was again inadequate documentation, including a lack of minutes on the meetings at which these decisions were made. The report recommended that the steering committees for future projects provide the documentation needed to support the decisions they make and demonstrate how they have performed in their oversight role. It recommended that implementing agencies ensure the competency of persons engaged in the design and implementation of projects, and that reports on project progress are provided in a timely manner. 37. The inception mission had noted the weak capacity within the executing agency and the implementing agencies, particularly MWTPU. Delays were frequent, and almost no procurement was done in the two years after the project’s initial emergency responses through retroactive financing. The reorganization of MWTPU and the transition of implementation of the roads component from DNR to FRA caused disruptions (para. 21). Some of the reporting shortcomings can be attributed to the restructuring of MWTPU, which left responsibility for record keeping unclear. MWTPU staff reported that overlapping roles and responsibilities of the advisory services contracted to assist in the transition undermined morale, which affected DNR’s performance. LWRM used its own resources and performed well in designing, procuring, and implementing the rehabilitation of the agricultural drainage schemes. 38. Submission of quarterly reports by the implementing agencies was inadequate. The executing agency had not prepared its required PCR at the time of ADB’s project completion

10

review mission, and its record keeping and documentation was poor, which left ADB without necessary information. FRA had prepared a draft PCR, but WAF and LWRM had not. 39. MWTPU had responded well to an ADB 2007 procurement–related audit and submitted its audit reports with only small delays.15 The audits for 2014 and 2015 were combined and submitted in November 2015. The audited reports showed no major issues. The special audit by the office of the auditor-general found that audit assurance was provided for all financial statements prepared by the borrower, and that financial accountability was evident from the independence of and the assurances provided by the external auditor.

K. Performance of the Asian Development Bank

40. ADB performance is rated satisfactory overall, despite some weaknesses. Time is a critical factor in the preparation of an emergency response project, but preparation was nonetheless inadequate and did not take proper account of the weak capacity of the executing agency and the implementing agencies, and MWTPU in particular. Because the project was originally meant to be completed over two years, it might have been more appropriate for ADB to have provided an initial emergency assistance project and followed up with a more carefully designed rehabilitation project. Nevertheless, ADB was responsive and flexible during implementation and made good use of advance actions and retroactive financing. It responded quickly and showed flexibility by adjusting procurement procedures (para. 16). 41. ADB conducted regular review missions. It was available on a regular basis for consultations, since SPSO is located in Suva. The inception mission had noted that ADB would need to provide regular assistance in the project’s execution, and ADB should perhaps have given MNP more help, particularly analytical and technical support. ADB quickly accepted the initial candidate for project coordinator, but should have done more to ensure that the MNP pushed through recruitment rather than leaving the project without proper supervision in the crucial initial year. ADB should also have made sure that MNP and the PSC carried out their monitoring and supervision responsibilities more thoroughly.

42. ADB should have intervened earlier to head off the surprising cancellation of implementation consulting services, given that the clear need for this support had been explicitly noted in the project’s RRP. The RRP had stated that recent emergency assistance loans in the Pacific had suffered long disbursement delays due to inadequate design, contracting, and supervision capacity. It said that rapid disbursement would only be possible if design and supervision were carried out effectively and in a timely manner, and that contracting the expertise required to ensure that this would happen was a sound investment.

43. The external consultant engineering advisers to FRA voiced concerns to ADB in 2015 and the PCR mission in 2016 about ADB’s approval of the project and the implementation arrangements, given ADB’s initial recognition in the inception report of weak institutional capacity. They noted that the design consultants selected lacked the experience needed to deal with the capacity constraints. This could raise concerns about ADB’s selection process, but the responsibility for the choice was shared between the executing and implementing agencies and ADB. The special audit report found that implementing agencies should ensure the competency of the consultants recruited for such projects (para. 25).

15

Just under four months in 2010 and 2011, and less than one month in 2012 and 2013.

11

44. FRA’s professional advisory services noted that ADB was not responsible for technical design of the subprojects but questioned why the regular review missions did not question the inadequate designs and cost estimates, particularly in the case of the Rakiraki Bridge reconstruction and the Lomaloma landslip stabilization. An ADB review mission back-to-office report did raise these design and cost concerns in 2011; it is debatable whether ADB should have allowed the Rakiraki Bridge subproject to continue as a project component even with a cap on its contribution, given that FRA’s redesign changed this from an emergency rehabilitation undertaking into a major upgrade. However, ADB had been committed to the bridge rebuilding for several years, and pulling out at a later stage would have disrupted implementation.

III. EVALUATION OF PERFORMANCE

A. Relevance

45. The project is rated relevant. It responded to identified needs following the devastating floods. The damaged transport network was a constraint on the movement of people and goods, an impediment to rural activity, and an obstacle to recovery in the tourism industry. Restoring access to markets for agricultural products was necessary to rehabilitate rural economies in the affected areas. The design’s focus on short-term rehabilitation of the damaged infrastructure was consistent with ADB’s Disaster and Emergency Assistance Policy (footnote 8). 46. ADB did not have a country partnership strategy for Fiji in 2009, and its engagement in the country since 2006 had been limited to continuing to implement unfinished projects in the transport and water sectors (paras. 4 and 5). It had considerable expertise and experience in the two sectors, and the project was in line with Fiji’s national transport sector program. The project’s focus and intended outcomes at approval were consistent with the country partnership strategy (footnote 9). 47. The project was designed not only to repair damage, but also to consider building infrastructure to standards strong enough to help ensure resistance to future floods. Climate proofing was to be incorporated in road and bridge design. 48. While a sector approach initially seemed appropriate because of the government’s experience in the road and water sectors and the use of selection criteria to pick from a number of potential subprojects, it was in fact not. The reason was the poor capacity identified from the start of the implementing agencies. While the emergency repairs and agriculture drainage components were quickly implemented, this was due to the fact that this initial funding was largely retroactive and covered work already undertaken under existing maintenance contracts. Preparation of the road and water subprojects were both delayed due to limited capacity. 49. The project was meant to support short-term post-disaster rehabilitation but the delays in project design and implementation changed the intended emergency response nature as by the time rehabilitation started, most subprojects were no longer responding to an emergency. The redesigned Rakiraki Bridge subproject was essentially a regular upgrade project. B. Effectiveness in Achieving Outcome

50. The project is rated less than effective. While the project outputs delivered provided some progress toward the general outcome indicator targets set out in the DMF, some output targets were not met and some project components were cancelled due to inadequate initial designs and resulting delays and cost overruns, resulting in non-achievement of outcomes.

12

51. The project rationale was to restore economic and social activities to pre-flood levels by rehabilitating public infrastructure, including the transport network and water supplies. There is limited documentation on the subproject selection process other than brief profiles of approved subprojects following the criteria set out in the RRP. The profiles include brief summaries of the number of people in the subproject areas who might benefit from the subproject and the importance of the restored access to villages and to markets for farming, and tourism, but no attempt was made to quantify the likely benefits of individual subprojects (para. 57). 52. Restoration of agricultural production to pre-flood levels was one of three outcome indicators, although no baseline was provided. This was to be achieved by rehabilitating drainage schemes and through the broader impact of the road transport infrastructure rehabilitation restoring access to markets. No data has been collected or assessment made of the impact on local production of individual drainage subprojects for the years following the project in 2009, although provincial data for 2009-2014 shows that overall production recovered in 2010 from its drop in 2009, with substantial increases from 2011 to 2014 (Appendix 2). Gross domestic product recovered in 2010 from negative growth in 2009 and grew slowly to 3.4% by 2013. Fiji’s economic growth rate had been in decline since 2006. Agricultural and rural household incomes had been particularly hard hit but no recent income data is available. 53. Because no traffic counts have been conducted since 2009, it is not possible to know whether a second outcome target of restoring road transport services on rehabilitated roads to pre-disaster levels was met. The project roads were actually sections of roads restored by larger upgrading projects, with ADB-financed components only contributory to benefits. The PCR prepared by ADB for the third road upgrading project found the road works were effective in improving access to services and markets.16 No pre-disaster data was readily available on the water supply subproject operations, but WAF reported that it believes they are operating at above the pre-disaster levels, the third outcome indicator. The design of subproject water intakes ensured that the intake structures will withstand future floods, although potential obstacles to keeping the plants operational during high water levels were overlooked. WAF has developed proposals to address these.17 54. The main safeguard measures included in the project involved environmental assessments. The project was rated Category B. The environment impact reports have been reviewed and considered adequate A consolidated environmental impact report for the whole project indicates no major negative impacts (paras. 23-24). C. Efficiency in Achieving Outcome and Outputs

55. The project is rated less than efficient. This is largely due to project design, recruitment of consultants, procurement of civil works and the delays in subproject design and implementation. However, it is also the result of the initial underestimation of costs and subsequent cost overruns that forced the cancellation of project components.18 Processing of the loan itself was slower than the 12 weeks normally required for an emergency loan. The RRP anticipated that actual outputs could vary from those set in the DMF as this was a sector project, but the project outputs generally have not met their targets (para.11). 16 PCR number 1543 Fiji: Third Road Upgrading (Sector) Project. September 2015. 17

For example, access is impossible to the Sigatoka pump intake when the river is high. The site has no standby generator, and so cannot function when power supplies are cut. These factors mean that the Sigatoka operations are shut down during high flooding.

18 The depreciation of the Fiji dollar against the US dollar also contributed to cost overruns.

13

56. The cost increases are likely to have lowered the economic rates of return of individual subprojects, but the absence of the necessary data made it impossible to estimate to what extent (paras. 52-53). In line with the ADB’s staff instructions on emergency assistance, the RRP did not estimate economic rates of return, rather it stated that the borrower would carry out quick and simple economic evaluations of subprojects, using methods appropriate to the particular circumstances (para. 15). The subproject eligibility criteria included in the RRP required that assessment include a narrative assessment of economic impact.19

57. The PSC prepared narrative evaluations that addressed each of the subproject selection criteria to demonstrate that selected subprojects were economically justified and used these to prioritize the chosen subprojects. It gave priority to subprojects based on the number of potential beneficiaries and their value in restoring economic activities (Appendix 2).

58. The main road sections resealed as part of this project are part of the Kings Road which was upgraded under Third Road Upgrading Project (FRUP III) (footnote 5). The PCR for FRUP III (footnote 16) calculated that the upgrading of the King’s Road, had an economic rate of return of 6.9%. This emergency project restored part of the road to existing standards, improving drainage, culverts, and alignment to improve their resilience. Its rate of return is thus likely to be higher. The Rakiraki Bridge subproject was redesigned as a significant upgrade operation (para. 14). Its economic internal rate of return is likely to be no higher than the Kings Road upgrade since it is part of the same road route. WAF calculated that the water supply project subcomponent had a rate of return of 14%. D. Preliminary Assessment of Sustainability

59. The project is rated likely sustainable. The government is committed to maintaining its road network. Maintenance budgets were previously inadequate but have doubled since 2011, and F$80 million was allocated for 2016. The project completion review found that current allocations for road maintenance are adequate for the projects roads but as they are met from current budgets, reliance on year-to-year grants exposes maintenance budgets to unexpected changes. The government is planning to set up a road maintenance fund under a Road Fund Act but has not done so yet. It also needs to improve enforcement of vehicle weight and axle-load regulations to ensure that the project’s outputs and outcomes will be sustained.

60. The introduction of appropriate water-user tariffs and effective revenue collection are vital to making the outcome of the water components sustainable. The project completion review discussed this with WAF, including the need to review consumer and industrial tariffs. Appropriate tariffs need to be better calculated and included in WAF asset management plans. WAF demonstrated commitment to addressing maintenance and maintenance funding. 61. The resilience built into the project design and construction will be a key factor in physical sustainability of the output assets. To date they have proven effective. Fiji was hit by severe winds, heavy rainfall, and flooding during Cyclone Winston in February 2016, but the project assets held up well. No damage from swollen river waters has been observed to the Rakiraki Bridge. Some potholes were opened up on the sealed roads, but this was to be expected and have been repaired. A lot of the project regraveling done was washed out and needed replacement. The Matova water intake sustained some damage, but the repair cost is small. Other water courses suffered little damage, however additional work is still needed to

19

RRP Appendix 3.

14

build operational resilience since the water intakes still run the risk of not being able to operate during high flooding and power outages (para. 53).

E. Impact

62. Institutional. The project had little institutional impact. The capacity of the implementing agencies remains weak. The project had no component to strengthen institutional capabilities. ADB staff provided capacity assistance during review missions, focusing on implementation monitoring and building familiarity with ADB procurement and withdrawal procedures. 63. Social and economic. The project has had significant social and economic impacts. The agricultural asset and roads components helped restore economic growth and agricultural production in affected areas. The water supply component has improved public health by improving reliability of clean water supplies and by reducing flooding and improving drainage in project areas. WAF has reported that the water supply subcomponent has helped reduce family health risks, such as infant diarrhea caused by contamination of water that results from low pressure in the piped system. Intermittent supply cuts have been reduced, enabling a more regular supply of clean water for cooking and washing, which significantly benefits women. 64. Environmental. The project has had some positive environmental impacts. During construction, civil works were restricted to rehabilitation and upgrading; environment guidelines were complied with, although with some delay (para. 24). Sediment was controlled during road, bridge, and land stabilization works. The road component has lessened negative impacts on surrounding ecological systems by improving surface water runoff management and reducing erosion and sedimentation. The water component has improved environmental conditions by reducing flooding and improving drainage in project areas.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment

65. The project is rated less than successful. It was designed as an emergency response to a disaster but was beset by delays due to weak local capacity. Implementation effectively got under way only two years after approval—a time when as an emergency operation it should have been completed. The project funded emergency repairs to roads and agricultural drainage schemes, but went further and rehabilitated existing structures using a built-back-better approach to make them more resilient to future floods and climate change. The redesign of the Rakiraki Bridge subproject, however, turned it into a substantial upgrade operation. 66. The project is rated relevant but less than effective and less than efficient. Sustainability is rated as likely based on the government’s commitment to provide maintenance funds for its road and water supply network. The project had significant positive social, economic and environmental impacts. B. Lessons

67. ADB disaster response operations often involve executing and implementing agencies with capacity that is limited either inherently or due to the impacts of an emergency. This is particularly the case in countries such as Fiji where institutional capacity is often weak. The project inception report identified this as an issue facing MWTPU, the main implementing agency for the project. The design and approval process is shortened for an emergency

15

response project, nevertheless it must rigorously assess the adequacy of executing and implementing agency capacity, raise the institutional awareness of ADB procedures, and provide the institution with ongoing support during implementation. 68. ADB and the executing and implementing agencies must ensure that adequately skilled and experienced consultants are fielded to provide the inputs required for effective project design and implementation. The RRP explicitly noted that adequate consultant support would be particularly important for disbursements based on experience in emergency assistance projects in the Pacific when design, contracting, and supervision expertise had been insufficient.20 Nonetheless, the consultants engaged for the project design proved to be inexperienced and not suited for the project tasks in the weak capacity environment of Fiji. The consultant selection process for such projects must be robust. The executing and implementing agencies need to check candidate references. Interest among consultancy firms in this project seems to have been limited due to its location and nature. Providing consultancy services is expensive in the Pacific region, and the use of quality-and cost-based selection may have discouraged some more experienced and better suited bidders as costs formed a key part of the bid assessment. Further analysis across more projects is needed on this. 69. Project monitoring and reporting by the government were inadequate. ADB must ensure that mechanisms are in place for necessary data gathering and monitoring, and make sure that project covenants in this respect are complied with. C. Recommendations

70. When the design, costing and processing process has been shortened for fast approval of emergency project loans, ADB must field a comprehensive fact finding mission prior to loan effectiveness to assess project readiness and the implementation capacity of the executing and implementing agencies. This mission should ensure that remedial measures will be taken to address any weaknesses overlooked in the initial design, and also on the minimum capacity needed for proper procurement, implementation, and safeguard compliance monitoring. Cost effectiveness and value–for–money issues should not be ignored even when ADB is responding to emergencies. Improved monitoring is needed of subproject selection and implementation. 71. The incidence and intensity of natural disasters are increasing in the ADB region, exacerbated by climate change. ADB should consider having agreements with DMCs in place on contracting and procurement methods in the event of an emergency in countries that are particularly vulnerable to these events and/or have weak capabilities in these areas. ADB should also consider assessing the competence of national contractors and pre-clearing those with the stronger capabilities for engagement in any emergency response. Such measures and pre-clearance of contractors could be incorporated into ADB country operations business plans.

20

RRP para.51.

16 Appendix 1

DESIGN AND MONITORING FRAMEWORK

Design Summary

Performance Targets and/or Indicators

Data Sources and/or Reporting Mechanisms

Assumptions and Risks

Impact Reduced economic losses and social disruption from future extreme weather events.

Less damage to infrastructure from future extreme weather events

Future damage and loss assessments Environmental monitoring reports

Assumption Vulnerable infrastructure is maintained Risk Even more extreme events occur

Outcome Economic and social activities in affected areas restored to pre-disaster levels.

Road transport services operate at pre-disaster levels on rehabilitated roads Water supplies operate at pre-disaster levels Agricultural production in the areas of the rehabilitated drainage schemes at pre-disaster levels

DNR traffic counts Water Authority data Ministry of Agriculture and Primary Industries data Household income and expenditure surveys

Risk Political instability and global economic crisis suppress economic activity

Outputs 1. Road infrastructure rehabilitated and climate-proofed

About 8 km of main sealed highway rehabilitated About 50 km of secondary roads re-graveled About 8 major landslips stabilized About 30 culverts reconstructed About 10 wet crossings upgraded

DNR road condition and field surveys Project progress and completion reports

Assumptions Government commitment to flood risk management framework Capacity of national construction industry sufficient for timely implementation Support from roads, agricultural drainage, and water supply agencies with project implementation Risks Increased implementation costs because of increases in the cost of fuel, oil, and bitumen Diversion of Government resources to ineffective physical flood mitigation infrastructure design and construction Extreme climatic or geophysical events during construction

2. Agricultural drainage schemes rehabilitated and climate-proofed

About 40 agricultural drainage schemes restored

Project progress and completion reports Condition reports by Land and Water Management Division of the Ministry of Agriculture and Primary Industries

3. Water supply intake structures repaired and climate-proofed

About 2 water intake structures repaired

Project progress and completion reports

Appendix 1 17

Activities with Milestones Project preparation 1.1. Recruitment of design consultants by September 2009 under advance action. 1.2. Recruitment of construction supervision consultants by November 2009 under

advance action. Activities with Milestones Project preparation 1.2. Subproject proposals approved by November 2009. 1.3. Bids received for agricultural drainage scheme contracts by August 2009 under

advance action. 1.3. Design and bid documentation for road rehabilitation works by November 2009. 1.4. Design and bid documentation for water supply rehabilitation work by November

2009. 1.5. Design and bid documentation for major landslide stabilization work by February

2010. Project implementation 2.1. Agricultural drainage schemes rehabilitated and climate-proofed by March 2010. 2.2. Road infrastructure rehabilitated and climate-proofed by August 2011. 2.3 Water supply intake structures repaired and climate-proofed by December 2010.

Inputs ADB $17.56 million Government $2.43 million Co-financing Others

DNR = Department of National Roads

18 Appendix 2

SUMMARY OF PROJECT OUTPUTS

Table A2.1: Summary of Subprojects

Subproject Description Subproject Costs

ADB and GovtShares of Total Project Costs

ADB Govt Total ADB Govt Total $ million % 1. Emergency Response Actions Retroactive financing of emergency civil works for road and culvert repairs

2.72 0.33 3.06 16.0 4.5 12.6

2. Agricultural drainage scheme repairs

0.63 0.08 0.71 3.7 11.0 2.9

3. Road Rehabilitation and Repairs

a Rehabilitation of Kings Road (Rakiraki–Tavua Depot)

3.61 0.44 4.05 16.7

b Regravelling of Koronivia–Lokia, Toga and Waila roads

1.20 0.15 1.35 5.6

c Regravelling of Nadarivatu and Monasavu roads

0.82 0.10 0.93 3.8

d Lomaloma (Vanua Levu) land slip stabilization

2.17 0.13 2.29 12.7 17.9 9.4

e Construction of Rakiraki Bridge 1.57 5.11 6.69 9.2 70.2 27.5 Total Roads 9.37 5.93 15.31 55.0 81.5 63.0 Water Supply Rehabilitation and Repair

a Construction of Laqere Pipe Bridge

0.34 0.04 1.6

b Vatukoula intake strengthening; 1.68

0.20 7.7 Sigatoka Bridge pipeline; Varaciva Dam repair c Matovo intake upgrading 1.80 0.44 2.25 9.3 Waiwai pipeline construction Total Water 3.82 0.68 4.50 22.4 9.4 18.5 Consulting Services 0.52 2.1 Finance Charges 0.20 0.1 Total 17.02 7.28 24.29

Source: Asian Development Bank

A. Summary description of subprojects

1. Agriculture Drainage Scheme Repairs: Nine contracts were financed retroactively by

the Asian Development Bank (ADB) under the Emergency Flood Recovery (Sector) Project in Fiji. They were procured under advance action and works were completed during the first quarter of 2010. More than 40 small schemes or parts of schemes were included within the nine contracts: (i) Rehabilitation drainage schemes in Nausori by the Central Division Drainage

Board ($89,096); (ii) Rehabilitation drainage schemes in Navua, by the Central Division Drainage

Board($23,256); (iii) Rehabilitation drainage schemes in Labasa by the Labasa Drainage Board

($103,863); (iv) Rehabilitation drainage schemes in Labasa by the Labasa Drainage Board

($64,383);

Appendix 2 19

(v) Rehabilitation of seawall and Drasa drainage scheme by Western Division Drainage Board ($76,670);

(vi) Rehabilitation of drainage schemes in Sigatoka and Nadi by Western Division Drainage Board ($30,533);

(vii) Rehabilitation of drainage schemes in Lautoka and Ba by Western Division Drainage Board ($120,010);

(viii) Rehabilitation of drainage schemes in Tavua and Rakiraki by Western Division Drainage Board ($75743);

(ix) Construction of slipway structure in Drasa drainage scheme by Western Division Drainage Board ($48,940.

2. Road Rehabilitation and Repairs: More than 160 road and road–related subprojects were considered for repairs and rehabilitation, including the resealing of main roads and regraveling of minor roads, repairs and rehabilitation of five bridge structures, and four land stabilization schemes. The project steering committee was responsible for vetting and prioritizing all the proposals.

3. The committee initially proposed that ADB include the rehabilitation of the Rakiraki, Namado, and Waivaka bridges under the project, together with land stabilization proposals for Wailevu and Lomaloma (Vanua Levu). Only the Rakiraki Bridge and Lomaloma stabilization subprojects went ahead with ADB financing. Two stretches of the Kings Road between Rakiraki and Tavua was resealed (3.0 kilometers (km) and 12.4 km in length). Part of the minor roads connecting Koronivia, Lokia, Toga, and Waila to the main road, and minor roads connecting Nadarivatu, and Monasavu were regraveled (30 km in total). 4. Water Supplies: Two water intakes (Vatukoula and Matovo) and two bridge pipelines (Laqere and Sigatoka) were repaired and strengthened. The Varaciva Dam was repaired, and a new pipeline was constructed at Waiwai to improve the intake usage. B. Key Subproject Descriptions and Summary Justification for Selection

(a) Road Rehabilitation Projects:

(i) Kings Road: Tavua–Rakiraki section: Floodwaters had badly scoured 12.4 km of road between the towns of Rakiraki and Tavua, and they needed restoration. The towns are major growth centers for sugar production and gold mining. The is the only road around the northern and eastern shore of the main island of Viti Levu, and is the main trade access road linking the country’s Western Division and Northern Division (comprising the second main island Vanua Levu) providing access to the ferry jetty at Ellington Wharf. It connects to the Eastern Division and the capital city of Suva. Transport for fuel, other supplies, and the sugar cane industry was disrupted. Tourism is also important, since north Viti Levu is targeted as a growth area. An environment impact assessment (EIA) was not required for this project, because it was to restore existing infrastructure. (ii) Regraveling of Monasavu and Nadarivatu roads: flood waters had scoured and removed the gravel surface of many stretches of these roads. The project regraveled 10 km of the Monasavu road, the main link between Monasavu dam and Wailoa Power station, and to Suva. The project also regraveled 6 km of the nearby Nadaivatu road, linking villages to Tavua, and to Monasavu. The rehabilitation work included side drains and culverts.

20 Appendix 2

(iii) Koronivia, Lokia, Toga and Waila Roads: flood waters had scoured and removed the gravel surface of many stretches of these roads. The project regraveled and improved the drainage along each of the following stretches: (a) 3.8 km of the road linking Lokia and Lokia landing to the Kings road and 3.1 km of the road linking the end of Koronivia road to Lokia and Lokia landing. The landing serves many villages in Rewa delta that have no road access. (b) 5 km of the Toga road which provides access to rich farming areas on the banks of the Rewa river. The road subsurface is predominantly sand, and there were many wash outs. (c) 3km of key parts of the Waila feeder road, which serves a residential and farming community in a flood prone area adjacent to Rewa river and which links to the main Sawani road. The justification for all subprojects was restoration of access for inhabitants for both farming and residential purposes

(iv) Lomaloma Land slip: the road links Savuavu with Seaqaqa and Labasa, the two main trade centres on Vanua Levu. The road has been constructed on ridges and gullies as it traverses a high mountain range with steep slopes on both sides. Due to further damage to the slip during the floods in January 2012, the IA re-visited the initial design to cater for the recent damages. Reinstated access was the key justification. The profile refers to access for the local population to schools and health centres. There is no local agriculture in the area but access to markets from towns and settlements along the road is important. The road is the only trade route linking Savuavu with Seaqaqa and Labasa, with 500 vehicles a day using the road. Tourism is also important. It was a core subproject at the RRP stage. (v) Wailevu Land Slip: the contract was delayed due to review of the design; this was terminated in August 2013 and the subproject officially removed from the project. The main rationale focused on access for farming communities and villages along the river, linked by the road. Traffic was estimated at 500 vehicles a day. The justification quotes population numbers, and access to health, education. Economic impact focused on production of bananas, cocoa, ginger, vegetables, dalo, forestry, and limited tourism. It was a core subproject at RRP stage.

(b) Bridge Projects (i) Rakiraki Bridge: the bridge is on the Kings road linking the Western Division to the North and East Divisions. During the floods the deck was submerged and impassable and was closed for two weeks. Rakiraki is a large town of 12,000 people and access for them and for many nearby villages to markets and social services was cut. As noted above, the Kings Road provides important economic links, including access for sugar production to the Penang Mill. It is an important growth area for vegetables due to downturn in sugar prices and production. Tourism is important along the north coast. However, as noted in the main text (para. 14), no economic evaluation was done of alternative designs and sizes. (ii) Namado Bridge: The contract for this bridge was terminated in September 2012 due to concerns with the design, and deleted from the project. The bridge was key for the road linking Serua and Namosi towns providing access for villages to health and education services. There is little agricultural potential, but there is potential for mining.

Appendix 2 21

(c) Water Supply Projects (i) Varaciva Dam repair works: Flood damage occurred at the Varaciva Dam where waters overflowed the dam and scoured out both abutments. There was no significant land slippage into the lake on either side, but the raw water pipeline to the treatment plant was partly blocked and exposed and could not accommodate the output from the two intake basins of the dam to operate simultaneously. This resulted in high pumping costs. The raw water intake and abutments were rehabilitated. In addition, the gabion weirs at both the Nadrou and Varaciva raw water pump stations were washed away in the floods and needed replacement. (ii) Sigatoka bridge pipe relocation: The floods destroyed the old railway bridge across the Sigatoka River. It was also used by pedestrians and carried the main pressurized sewage pipeline from Sigatoka to the treatment plant. A temporary polythene sewer pipeline was constructed across the pedestrian walkway of the new Sigatoka Bridge by WAF, but it was vulnerable to damage from traffic and vandalism and thus was replaced under the project by a permanent pipeline. (iii) Matovo intake: The raw water intake at Matovo consisted of five wells located in a stretch of gravel bank on the Sigatoka River. The intakes were covered with about 5 meters of water during the flooding, which destroyed the electrical supply and inundated the wells with mud. The result was the loss of water supply in much of the Sigatoka area. The intakes were repaired under the project but remain vulnerable to floods that inundate the site roughly every 2 years. WAF plans to protect the wells and power supply from further flood damage and silt inundation. (iv) Vatukoula intake strengthening works: The floods destroyed pump screens, the power supply, and some of the intake structure. The site was exposed to flood damage and lost screens; it suffered other damage during flooding in 1989, 1992, and 2000. Screens and the power supply were temporarily repaired under the project, but the town of Tavua and the surrounding villages continued to suffer frequent water supply interruptions due to the unreliability of the intake. The intake is located in a particularly high velocity section of the river. While the repair of screens and power supply provides a temporary solution, further floods could damage or destroy the intake screens again and WAF has planned further strengthening work.

22 Appendix 2

Table A2.2: Benefits–GDP and Agriculture Production Data Contribution to Growth from 2009-2013 FSIC

GDP at Constant Basic Price Growth Rates

2009 2010 2011 2012 2013p

2010 -1.4 3.0 2.7 1.8 4.6 A Agriculture, Forestry and Fishing -1.0 -0.3 0.9 0.4 0.3 B Mining and Quarrying 0.4 0.2 0.1 0.0 -0.1 C Manufacturing -0.2 0.7 0.3 0.1 0.5 D Electricity 0.1 0.2 0.0 0.0 0.1 E Water Supply and Sewerage 0.0 0.0 0.0 0.0 0.0 F Construction -0.1 0.2 -0.1 0.1 0.6 G Wholesale and Retail -0.7 0.1 -0.1 0.2 0.4 H Transport and Storage -1.1 1.0 0.4 0.4 0.6 I Accommodation and Food Service Activities -0.3 0.4 0.4 0.0 0.1 J Information and Communication 1.9 -0.2 0.1 0.3 0.4 K Financial and Insurance Activities -0.7 0.2 0.4 -0.4 1.2 L Real Estate Activities 0.1 0.1 0.0 0.1 0.0 M Professional, Scientific and Technical Activities 0.1 0.1 0.2 0.2 0.0 N Administrative and Support Service Activities 0.0 0.2 0.1 0.2 0.0 O Public Administration and Defense 0.3 -0.2 -0.4 0.3 0.3 P Education -0.2 0.2 0.2 0.0 0.2 Q Human Health and Social Activities 0.1 0.1 0.0 -0.1 0.0 R Arts, Entertainment and Recreation 0.0 0.0 0.0 0.0 0.0 S Other Services Activities 0.0 -0.1 0.0 0.0 0.0

Source: Fiji National Statistics Office

Appendix 2 23

Table A2.3: 5 Years Production Data by Province

2009 2010 2011 2012 2013 2014

Province

Total Production

(Mt)

Total Production

(Mt)

Total Production

(Mt)

Total Production

(Mt)

Total Production

(Mt)

Total Production

(Mt)

Ba

4,590.70

5,605.33

15,377.50

8,399.30

19,646.29

25,382.75

Bua

24,001.50

17,109.75

15,756.92

13,862.35

20,964.98

12,414.95

Cakudrove

20,188.25

27,336.83

25,003.49

24,753.81

72,719.28

17,859.15

Kadavu

7,151.70

4,721.30

5,549.00

8,232.40

6,946.30

4,133.11

Lau

9,965.30

8,112.20

9,346.00

9,929.25

9,933.50

3,410.93

Lomaiviti

12,018.00

11,102.02

10,508.20

14,548.20

22,319.00

16,572.21

Macuata

21,108.92

10,633.11

19,107.65

18,565.33

26,595.64

25,847.45

Nadroga/Navosa

5,157.10

8,301.80

9,212.32 11,228.53

12,059.90

11,093.13

Naitasiri

27,737.10

27,976.00

30,762.42

3,523.55

31,035.84

33,782.36

Namosi

8,890.00

3,754.95

1,937.20

490.64

10,674.10

16,318.70

Ra

6,527.10

7,626.90

8,257.80

6,728.08

8,670.83

8,771.20

Rewa

8,883.20

11,820.65

10,225.15

1,047.14

10,709.33

14,647.85

Rotuma

2,461.70

2,770.00

6,886.90

2,329.20

2,363.20

3,783.18

Serua

12,448.58

6,013.70

9,632.75

1,796.34

24,599.80

23,457.80

Tailevu

15,074.14

46,598.45

62,627.76

1,792.91

38,751.42

31,461.75

Grand Total 186,203.29 199,482.99 240,191.06 127,227.03 317,989.40 248,936.52

2009 2010 2011 2012 2013 2014 Source: Fiji National Statistics Office

24 Appendix 3

CHRONOLOGY OF MAJOR EVENTS

Date Event 2009 22–28 March, 13–21 May Fact–finding missions (intermittent) 29-30 July Loan negotiations 27 August Board approval 05 November Loan agreement 25 November Loan effectiveness 2010 25 January–9 February Loan inception mission 24 February Letter of invitation issued to negotiate with the design phase consultants 24 February First change in method of procurement approved to include direct contracting

that does not exceed $50,000 for individual procurement during the period of declaration of national disaster

30 July Design phase contract signed between Intercontinental Consultants & Technocrats and Ministry of Works, Transport, and Public Utilities

25 October–8 November Loan review mission 19 November Second change in method of procurement approved to extend the applicable

time period from 30 days after the declaration of national disaster to 90 days. 22 November Project coordinator contract signed (after the position was advertised twice) 2011 26 April Contract for construction supervision phase consultants signed between Egis

BCEOM International 20–28 June Loan review mission 11 August First extension of loan closing date to 28 February 2014 28 August Original expected completion date of physical works 4 October First works contract signed—WSC 69-2011: restoration of sealed Kings Road

(Rakiraki–Tavua Depot), with Fairdeal Earthmoving Contractors 2012 24 January First Works Contract Signed–WAF 23/2011: Construction of Laqere Pipe Bridge,

J. S. Hill and Associates 28 February Original Loan Closing Date 18 April Second works contract signed—WSC 150/2011: Regraveling of Koronivia, Lokia

and Toga roads, Fairdeal Earthmoving Contractors 4–8 June Midterm review mission 2 July Third works contract signed—WSC 149/2011: Regraveling of Monasavu and

Nadarivatu roads, TF Jan Bulldozing 12 July Fourth works contract signed—WSC 166/2011: Construction of Rakiraki Bridge,

China Railway No.5 Engineering Group Co. 26 July Fifth works contract signed—WAF 24/2011: Fiji water supply flood recovery

works (Vatukoula intake, Sigatoka Bridge pipework, Varaciva Dam), Fletcher Construction (Fiji)

25–29 October Loan review mission 21 November Ministry of Works, Transport, and Public Utilities terminated contract with Egis

BCEOM International due to lack of response after notice to proceed was issued in April 2012

2013 4–8 March Loan review mission 23 August Sixth works contract signed—WSC 152/2011: Land stabilization at Lomaloma,

Vanua Levu, China Railway First Group 25 November–4 December Loan review mission

Appendix 3 25

Date Event 2014 24 February Second extension of loan closing date to 28 October 2014 28 July–4 August Loan review mission 1 August 7

th works contract signed—WAF 24/2014: Fiji water supply flood recovery works

(Waiwai Pipeline and Matovo Intake), Pacific Engineering Project 2015 9 July Final disbursement from the loan account 17 July Cancellation of undisbursed loan balance and close of account WAF = Water Authority of Fiji. Source: Asian Development Bank.

26 Appendix 4

APPRAISAL AND ACTUAL PROJECT COSTS

Item

Appraisal Cost Actual Cost Financing

ADB Govt Total ADB Govt Total A. Base Cost 1.Civil Works a. Emergency response costs 0.84 0.12 0.96 2.72 0.33 3.06 (Retroactive Financing Costs) b. Major road rehabilitation. 2.45 0.35 2.8 3.61 0.44 4.05 3.61 0.44 4.05

c. Landslips (major roads) 2.94 0.42 3.36 2.17 0.13 2.29 2.17 0.13 2.29 d. Secondary road rehabilitation

5.88 0.84 6.72 2.03 0.25 2.27

1.20 0.15 1.35 0.82 0.10 0.93

e. Bridge

0 0 0 1.57 5.11 6.69

f. Water supplies 0.92 0.13 1.05 3.82 0.68 4.50 0.34 0.04 0.38

1.68 0.20 1.88

1.80 0.44 2.24

g. Agricultural drainage scheme repairs 1.16 0.17 1.33 0.63 0.08 0.71 0.63 0.08 0.71

2. Consulting services

a. Design 0.29 0.04 0.33 0.16 0.02 0.18 b. Supervision and project management 0.77 0.11 0.88 - 0.23 0.23 PMU Salary & Wages - 0.07 0.07

Operational Cost - 0.16 0.16

c. Project coordinator (PCSS 0014: Vuetasau Buatoka)

0.19 0.03 0.22 0.10 0.01 0.11

Subtotal (A) 15.44 2.21 17.65 16.82 7.28 24.09 B. Contingencies a. Physical 0.77 0.11 0.88 - - - b. Price contingencies 0.77 0.11 0.88 - - - Subtotal (B) 1.54 0.22 1.76 - - - C Financing Charges during Implementation

a. Interest during construction 0.54 0 0.54 0.20 0 0.20 b. Commitment charges 0.03 0 0.03 Subtotal (C) 0.57 0 0.57 0.20 0 0.20

Total 17.55 2.43 19.98 17.02 7.28 24.29

Appendix 5 27

CURRENCY EQUIVALENTS (1 January–31 December)

Year F$1 = $ 2009 0.5185 2010 0.5496 2011 0.5429 2012 0.5595 2013 0.5314 2014 0.5044 2015a 0.4686

F$ = Fiji Dollar. a 2015 exchange rate is based on average for 1 January–31 July 2015 periods.

Source: Asian Development Bank.

28 Appendix 6

SUMMARY OF CONTRACTS FUNDED BY THE ASIAN DEVELOPMENT BANK

PCSS No.

Contractor/ Supplier

Description of Work Performed

Awarded Contract

Amount Financed by ADB

(Contract Amount)

FJD US$

Category 01: Civil Works / Consulting Services

0001 Power Plant & Equipment

Central Division: Maintenance of Completed Drainage Schemes—

Nausori

FJ$ 604,710.55 [=$344,019.86]

FJ$ 174,389.50 89,095.91

0002 Power Plant & Equipment

Central Division: Maintenance of Completed Drainage Schemes–Navua

FJ$ 214,825.60 [=$122,214.30]

FJ$ 43,952.26 23,255.79

0003 Penaia Contractors & Buses

Northern Division: Maintenance and Rehabilitation of Drainage Works–Labasa

FJ$ 248,504.30 [=$141,374.11]

FJ$ 211,104.39 103,863.36

0004 Tabua Power (Fiji) Northern Division: Maintenance and Rehabilitation of Drainage Works–Labasa

FJ$ 349,734.00 [=$198,963.69]

FJ$ 125,875.79 64,382.81

0005 Fairdeal Earthmoving Contractors

Western Division: Rehabilitation of Seawall, Drasa Drainage Schemes–Lautoka

FJ$ 218,511.56 [=$124,311.24]

FJ$ 154,208.83 76,669.97

0006 National Bulldozing & Transport

Western Division: Maintenance and Rehabilitation of Drainage Schemes–Sigatoka/Nadi

FJ$ 422,940.10 [=$240,610.65]

FJ$ 60,031.45 30,532.89

0007 Sivam’s Digging Works

Western Division: Maintenance and Rehabilitation of Drainage– Lautoka/Ba

FJ$ 273,491.31 [=$146,126.38]

FJ$ 239,304.90 120,010.57

0008

Singh’s Civil Engineering & General Contractors

Western Division: Maintenance and Rehabilitation of Drainage Schemes–Tavua/Rakiraki

FJ$ 325,930.00 [=$185,421.59]

FJ$ 148,798.83 75,742.54

0009 Sivam’s Digging Works

Western Division: Construction of Slipway Structure–Drasa Drainage Scheme–Lautoka

FJ$ 145,403.50 [=$82,720.06]

FJ$ 94,072.55 48,940.52

0010 Daya’s Quarries Western Division: Pavement Rehabilitation

FJ$ 1,641,885.00

[=$845,899.06]

FJ$ 1,436,649.38

746,743.41

0011 Various Western Division: One-off Purchase of Equipment for Rehabilitation Works

FJ$ 270,792.15 [=$140,216.15]

FJ$ 236,943.13 122,452.21

0012 Intercontinental Consultants & Technocrats

Consulting Services for Design Phase

$280,000.00 FJ$100,000.00 [=$53,650.00] =$333,650.00

$ 129,776.84 FJ$54,789.00 [=$30,860.24]

160,637.08

0013 Various (WA no. 00006)

Plant Hire FJ$691,786.66 [=$366,439.40]

FJ$605,313.33 328,685.14

0014 Vuetasau Buatoka Project Coordinator FJ$100,000.00 [=$56,480.01]

FJ$175,000.00 98,642.74

0015 Various (WA no. 00012)

Purchase of Goods and Services–Hire of Machinery

FJ$10,541.56 [=$5,768.34]

FJ$10,541.56 5,810.51

0016 Various (WA no. 00013)

Purchase of Goods and Services–Plant Hire, e.g. Tipper truck, etc.

FJ$11,325.30 [=$6,197.21]

FJ$11,325.30 6,448.63

0017 Various (WA no. 00013)

Purchase of Goods and Services - Plant Hire, e.g. Tipper truck, etc

FJ$56,586.61 [=$30,964.20]

FJ$56,586.61 32,220.41

0018 Various (WA no. 00016)

Purchase of Goods and Services – Hire of Plant

FJ$123,094.60 [=$67,357.38]

FJ$123,094.60 68,231.34

Appendix 6 29

PCSS No.

Contractor/ Supplier

Description of Work Performed

Awarded Contract

Amount Financed by ADB

(Contract Amount)

FJD US$

0019 Various (WA no. 00017

Purchase of Goods and Services – Hire of Transport

FJ$59,413.55 [=$32,511.10]

FJ$59,413.55 32,926.99

0020 Various (WA no. 00018)

Purchase of Goods and Services – Hire of Transport

FJ$80,370.15 [=$43,978.56]

FJ$80,370.15 44,541.14

0021 Various (WA no. 00019)

Purchase of Goods and Services – Hire of Transport

FJ$58,376.22 [=$31,943.47]

FJ$58,376.22 32,352.10

0022 Various (WA no. 00020)

Purchase of Goods and Services – Hire of Transport

FJ$32,219.15 [=$17,630.32]

FJ$32,219.15 18,007.28

0023 Various (WA no. 00021)

Purchase of Goods and Services – Hire of Plant

FJ$33,629.16 [=$18,401.88]

FJ$33,629.16 18,913.04

0024 Various (WA no. 00022)

Purchase of Goods and Services – Hire of Transport

FJ$349,129.63 [=$191,043.77]

FJ$349,129.63 198,445.28

0025 Various (WA no. 00023)

Purchase of Goods and Services -

FJ$65,966.08 [=$36,096.65]

FJ$65,966.08 37,099.32

0026 Various (WA no. 00027)

Purchase of Goods and Services – Plant Hire / Trucks

F$97,465.03 [=$53,332.88]

FJ$97,465.03 55,720.76

0027 Various (WA no. 00028)

Purchase of Goods and Services – Plant Hire / Transport

FJ$50,867.45 [=$27,834.67]

FJ$50,867.45 29,080.92

0028 Various (WA no. 00029)

Purchase of Goods and Services - Crane Hire Services, Hire of Plant

FJ$25,102.74 [=$13,736.22]

FJ$25,102.74 14,162.97

0029 Various (WA no. 00030)

Purchase of Goods and Services – Hire of Transport

FJ$24,488.34 [=$13,400.02]

FJ$24,488.34 13,816.32

0030 Various (WA no. 00031)

Purchase of Goods and Services – Hire of Transport

FJ$92,415.12 [=$50,569.56]

FJ$92,415.12 52,833.73

0031 Various (WA no. 00032)

Purchase of Goods and Service – Hire of Truckers

FJ$137,060.70 [=$74,999.63]

FJ$137,060.70 78,878.43

0032 Various (WA no. 00033)

Purchase of Goods and Services – Hire of Transport

FJ$183,687.77 [=$100,513.97]

FJ$183,687.77 105,014.29

0033 Various (WA no. 00034)

Purchase of Goods and Services – Hire of 3-ton Truck, Tipper Truck

FJ$ 27,715.63 [=$15,166.00]

FJ$ 27,715.63 15,845.03

0034 Various (WA no. 00035)

Purchase of Goods and Services – Hire of Plant / Transport

FJ$ 171,075.28 [=$93,612.41]

FJ$ 171,075.28 97,085.22

0035 Various (WA no. 00036)

Purchase of Goods and Services – Truck Hire

FJ$ 62,485.23 [=$35,602.44]

FJ$ 62,485.23 35,516.60

0037 Various (WA no. 00052-00061)

Various -00052 – Hire of Truck -00053 – Hire of Plant -00054 – Hire of Plant -00055 – Hire of Transport to cart asphalt -00056 – Hire Plant / Transport -00057 – Hire of Plant (excavator) -00058 – Hire of Plant / Vehicle -00059 – Hire of Plant -00060 – Hire of Plant -00061 – Hire of Plant

FJ$ 78,602.72 [=$45,754.64]

FJ$ 78,602.92 45,402.99

0038 Various (WA no. 00043-00051, 00062-00068)

Various -00043 – Hire of Plant / Vehicle -00044 – Hire of Plant -00045 – Hire Plant/ Transport

FJ$ 279,492.77 [=$152,770.78]

FJ$ 277,948.50 159,649.27

30 Appendix 6

PCSS No.

Contractor/ Supplier

Description of Work Performed

Awarded Contract

Amount Financed by ADB

(Contract Amount)

FJD US$

-00046 – Hire of Plant -00047 – Hire of Plant -00048 – Hire of Plant / Transport -00049 – Hire of Plant / Vehicle -00050 – Hire of Plant / Vehicle -00051 – Hire of Plant / Vehicle -00062 – Hire of Plant -00063 – Hire Plant -00064 – Hire of Plant -00065 – Hire of Plant -00066 – Hire of Plant -00067 – Hire of Plant -00068 – Hire of Plant

0039 Various (WA no. 00069-00077)

Various -00069 – Hire of Trucks -00070 – Purchase of Bitumen, emulsion catonic -00071 – Hire of Plant -00072 – Hire of Plant/ Vehicle, transporting workmen to road upgrading project. -00073 – Hire of Vehicle / Twin Cab -00074 – Hire of Plant/ Vehicle -00075 – Hire of Plant/ Vehicle, e.g. grader, -00076 – Hire of Plant -00077 – Hire of Digger

FJ$ 79,749.27 [=$43,590.96]

FJ$ 79,518.27 45,418.98

0040 Various (WA no. 00078-00088)

Various -00078 – Hire of Machinery -00079 – Hire of Machinery -00080 – Hire of Plant / Machinery -00081 – Hire of Plant / Machinery -00082 – Hire of Plant / Machinery -00083 – Hire of Plant / Machinery -00084 – Hire of Transport -00085 – Hire of Plant / Transport -00086 – Hire of Plant / Machinery -00087 – Hire of Plant -00088 – Hire of Plant / Machinery

FJ$ 126,836.14 [=$71,522.90]

FJ$ 126,836.14 72,808.63

0041 Various (WA no. 00089-00107)

Various -00089 – Hire of Plant -00090 – Hire of Plant -00091 – Hire of Plant -00092 – Hire of Plant -00093 – Hire of Plant -00094 – Hire of Plant -00095 – Hire of Plant -00096 – Hire of Plant

FJ$ 253,277.81 [=$138,441.68]

FJ$ 253,277.65 146,697.90

Appendix 6 31

PCSS No.

Contractor/ Supplier

Description of Work Performed

Awarded Contract

Amount Financed by ADB

(Contract Amount)

FJD US$

-00097 – Hire of Plant -00098 – Hire of Plant -00099 – Hire of Plant -00100 – Hire of Plant -00101 – Hire of Plant -00102 – Hire of Plant -00103 – Hire of Plant -00104 – Hire of Plant -00105 – Hire of Plant -00106 - Hire of Plant -00107 – Hire of Plant

0042 Various (WA no. 00108-00116)

Various -00108 – Hire of Plant -00109 – Hire of Plant -00110 – Hire of Plant -00111 – Hire of Transport -00112 – Hire of Plant -00113 – Hire of Plant / Transport -00114 – Hire of Excavator, Digger -00115 – Hire of Plant /Vehicle -00116 – Hire of Plant /Vehicle– cartage of r/rocks

FJ$ 112,899.67 [=$61,710.97]

FJ$ 110,560.88 62,760.47

0043 Fairdeal Earthmoving Contractors

Rehabilitation of Kings Road (from Rakiraki to Tavua Depot)

FJ$ 6,861,870.00

[=$3,476,223.24]

FJ$ 6,522,825.39

3,611,929.87

0044 JS Hill & Associates Construction of Laqere Pipe Bridge

FJ$ 757,445.00 [=$410,232.23]

FJ$ 615,020.55 342,677.34

0045 Fairdeal Earthmoving Contractors Ltd

Regraveling of Koronivia, Lokia, Toga andWaila Roads

FJ$ 2,567,560.00

[=$1,300,725.86]

FJ$ 2,173,067.59

1,202,065.54

0046 China Railway Fifth Engineering Group (Fiji)

Constructions of Rakiraki Bridge FJ$

2,672,827.44 [=$1,327,860.97]

FJ$ 3,010,603.70

1,574,838.12

0047 Fletcher Construction

Fiji Flood Recovery Works– Vatukoula Intake Strengthening, Sigatoka Bridge Pipeline Works and Varaciva Dam Repair

FJ$ 7,189,177.85

[=$3,893,658.92]

FJ$ 3,027,183.24

1,684,551.36

0048 TF Jan Bulldozing Company

Regraveling of Nadarivatu and Monasavu Roads

FJ$ 2,376,299.00

[=$1,239,477.50]

FJ$ 1,531,194.78

824,742.65

0049 China Railway First Group Company

Lomaloma Landslip Stabilization FJ$

5,399,871.00 [=$2,557,918.58]

FJ$ 4,133,261.03

2,167,259.26

0050 Pacific Engineering Project

Fiji Flood Recovery Works– Matovo Intake Upgrading and Waiwai Pipeline Construction

FJ$ 4,454,378.00

[=$2,212,935.48]

FJ$ 3,506,998.18

1,798,653.80

Total 16,822,061.43

32 Appendix 7

PROJECTED AND ACTUAL DISBURSEMENTS (CUMULATIVE)

($ million)

Year

Projected (Original Appraisal

Allocation) Actual

2009 0 0

2010 1.543 1.543

2011 2.673 2.673

2012 2.923 4.450

2013 4.572 3.270

2014 3.525 4.224

2015 1.440 0.866

Total 16.676 17.026 Source: Asian Development Bank Loan Financial Management System

Ap

pe

ndix

8

33

PROJECT IMPLEMENTATION SCHEDULE

34 Appendix 9

STATUS OF COMPLIANCE WITH LOAN COVENANTS

Covenant Reference in

Loan Agreement

Status of Compliance

Particular Covenants (a) The Borrower shall cause the Project to be

carried out with due diligence and efficiency and in conformity with sound administrative, financial, engineering, environmental and road rehabilitation practices.

Article IV, Section 4.01

Complied with

(b) In the carrying out of the Project and operation of the Project facilities, the Borrower shall perform, or cause to be performed, all obligations set forth in Schedule 5 to this Loan Agreement.

Complied with

The Borrower shall make available, promptly as needed, the funds, facilities, services, land and other resources which are required, in addition to the proceeds of the Loan, for the carrying out of the Project and for the operation and maintenance of the Project facilities.

Article IV, Section 4.02

Complied with

(a) In the carrying out of the Project, the Borrower shall cause competent and qualified consultants and contractors, acceptable to ADB, to be employed to an extent and upon terms and conditions satisfactory to the Borrower and ADB.

Article IV, Section 4.03

Complied with

(b) The Borrower shall cause the Project to be carried out in accordance with plans, design standards, specifications, work schedules and construction methods acceptable to ADB. The Borrower shall furnish, or cause to be furnished, to ADB, promptly after their preparation, such plans, design standards, specifications and work schedules, and any material modifications subsequently made therein, in such detail as ADB shall reasonably request.

Article IV, Section 4.03

Complied with

The Borrower shall ensure that the activities of its departments and agencies with respect to the carrying out of the Project and operation of the Project facilities are conducted and coordinated in accordance with sound administrative policies and procedures.

Article IV, Section 4.04

Complied with

(a) The Borrower shall (i) maintain, or cause to be maintained, separate accounts for the Project; (ii) have such accounts and related financial statements audited annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB; (iii) furnish to ADB, as soon as available but in any event not later than 6 months after the end of each

Article IV, Section 4.05

(i)–iv) Complied with

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related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto (including the auditors’ opinion on the use of the Loan proceeds and compliance with the financial covenants of this Loan Agreement), all in the English language; and (iv) furnish to ADB such other information concerning such accounts and financial statements and the audit thereof as ADB shall from time to time reasonably request.

(b) The Borrower shall enable to ADB, upon ADB’s request, to discuss the Borrower’s financial statements for the Project and its financial affairs related to the Project from time to time with the auditors appointed by the Borrower pursuant to Section 4.05(a) here above, and shall authorize and require any representative of such auditors to participate in any such discussions requested to ADB, provided that any such discussion shall be conducted only in the presence of an authorized officer of the Borrower unless the Borrower shall otherwise agree.

Article IV, Section 4.05

Complied with, but with some delays

The Borrower shall enable ADB’s representative to inspect the Project and the Works financed out of the proceeds of the Loan, and any relevant records and documents.

Article IV, Section 4.06

Complied with

The Borrower shall ensure that the Project facilities are operated, maintained and repaired in accordance with sound administrative, financial, engineering, environmental, road asset management and maintenance and operation practices.

Article IV, Section 4.07

Complied with

Project Steering Committee A Project Steering Committee shall be established comprising representatives from the MNP, the Ministry of Finance, the Permanent Secretary for MWTPU, the Divisional Commissioners, the Director of LWRM, the Director of Roads & Airfields, the Director of Water Supply and the Divisional Engineers (as required). The PSC shall oversee and monitor all aspects of Project implementation including (a) policy guidance and coordination, (b) subproject selection, (c) project progress reports and other project documentation, and (d) audited accounts and financial statements.

Schedule 5, para. 3

Partly complied with The PSC was set up at the beginning of the project to decide and approve subprojects to be financed under the loan. Thereafter, the PSC was not involved much in the project’s implementation.

Project Management Team Established, Staffed, and Operating PMU or PIU Schedule 5,

para.4

Complied with late Project start-up was slow due to lack of capacity in the PMU. The project

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coordinator started work 1 year after project effectiveness. PCRs were completed for some components, but not for overall consolidated project

Subproject Eligibility Criteria The Borrower shall ensure that all Subprojects shall rehabilitate infrastructure with high importance based on their contributions to the objectives of the development policy objectives as set out in the Borrower's Sustainable Economic and Empowerment Development Strategy 2008-2010 and shall focus on rehabilitation of efficient and cost effective infrastructure which shall facilitate economic and social development and private sector investment. Subprojects shall meet one or more of the following general eligibility criteria: (a) improved accessibility to social services among poor and rural households, including schools, health facilities, and the Borrower's extension services; (b) restored opportunities for employment and income generation among poor and rural households; (c) contribution to economic growth and poverty reduction among poor and rural households

Schedule 5, para.5

Complied with

The Borrower shall assess Subprojects for their contribution to (a) potential for restoration of agricultural production; (b) potential for restoration of exports of agricultural products; (c) potential for restoration of tourism; (d) employment of local communities and contractors for maintenance and small scale works; (e) restoration of incomes, particularly among poor and rural households; (f) contribution to economic growth.

Schedule 5, para.6

Complied with

Subproject Approval Process MNP shall identify and prioritize a list of potential Subprojects based on assessments of (a) existing facilities and levels of usage including the number of potential beneficiaries; and (b) positive and negative economic, social and environmental impacts. Subprojects shall be restricted to facilities damaged in the January 2009 disaster. Community consultations shall be held in the preparation of the list. These consultations shall involve broad representation from the community and must include women.

Schedule 5, para.9

Complied with. Lists of identified subprojects were submitted by the EA, covering road rehabilitation (submitted on 11 May and 9 Aug 2011), bridge construction (2 Aug 2011), landslip stabilization (8 Aug 2011) and water supply (11 May 2011).

MNP, assisted by the PMT, shall prepare an assessment report for each Subproject proposed for detailed design and preparation of bidding documents. Each Subproject assessment shall included (a) a technical feasibility assessment, including detailed cost estimates; (b) a narrative assessment of economic impact; and (c) an IEE

Schedule 5, para.10

Complied with EMP submitted with subprojects proposals considered appropriate in place of IEE/EIA

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and a full EIA if warranted, in accordance with the EARP. Each component of the assessment shall confirm acceptable ratings against the criteria, or recommend further work to complete the assessment. The PSC shall review and endorse the Subprojects that meet all the Eligibility Criteria. Prior to the detailed design of any Subproject, the Borrower shall obtain ADB's concurrence on the inclusion of the Subproject for financing under the Project, based on the appraisal and selection criteria agreed between the Borrower and ADB.

Schedule 5, para.11

Complied with. Subprojects selected and approved by PSC

The contracts for repairs to agricultural drainage schemes, and described in the Procurement Plan are deemed to be approved by ADB and eligible for financing from the Loan proceeds provided that such contracts include provisions of environmental management during implementation. This shall include enforceable environmental management and monitoring plans acceptable to ADB.

Schedule 5, para.12

Complied with After the loan became effective, it was learned that all agricultural drainage scheme contracts had either already been completed or were close to completion. Land and Water Resource Management, Ministry of Agriculture allowed a 12-month period for maintenance contracts every year starting in June (i.e., they had been issued in 2008). These had already carried maintenance and/or rehabilitation works after the flood of January 2009. No new contracts were awarded for the duration of the implementation of the project.

Counterpart Funds Without limiting the generality of Section 4.02 above, the Borrower shall allocate, on a timely basis, adequate counterpart funds from its budget for each fiscal year during Project implementation including the requisite funds required for implementation of resettlement, environment measures, and other specific actions.

Schedule 5, para.13

Complied with

Land Acquisition and Resettlement (f) The Borrower shall ensure that any obligations in excess of the Resettlement Plan budget estimates are met.

Schedule 5, para.14

Complied with

(e) The Borrower shall ensure that timely provision of counterpart funds for land acquisition and resettlement activities.

Schedule 5, para.14

Complied with

(a) The Borrower shall ensure that all the Subprojects are screened for resettlement impacts and those Subprojects with impacts have Resettlement Plans prepared and approved in accordance with the Resettlement Framework.

Schedule 5, para.14

Complied with

(c) The Borrower shall ensure that all land and rights-of-way required by the Project are made available in a timely manner.

Schedule 5, para.14

Complied with

(b) The Borrower shall ensure that all Resettlement Plans are implemented in accordance with their terms

Schedule 5, para.14

Complied with

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(d) The Borrower shall ensure that the provisions of the Resettlement Plan, including compensation and entitlements for affected persons, shall be implemented in accordance with all applicable and regulations of the Borrower, the Resettlement Framework and ADB's Involuntary Resettlement Policy (1995).

Schedule 5, para.14

Complied with

Environment (b) The Borrower shall ensure that no Subproject Works contracts shall be awarded until the Borrower and ADB have cleared the IEE of the relevant Subproject in accordance with the EARP.

Schedule 5, para.15

Partly complied with The IA failed to provide in its regular progress reporting the monitoring work of the EMPs. SPSO agreed that the IA would be permitted instead to provide an environmental closure report for the entire project for disclosure on ADB’s website, and this was done.

(e) The Borrower shall ensure that the IEE for each Subproject is prepared in accordance with the EARP, reviewed and updated at the engineering design stage, and submitted to ADB for approval.

Schedule 5, para.15

(a) The Borrower shall ensure that the Project is carried out in accordance with applicable laws and regulations of the Borrower and ADB's Environment Policy (2002).

Schedule 5, para.15

(c) The Borrower shall ensure that if the EARP are revised, no Works contract shall be awarded until ADB has cleared the revised EARP endorsed by the Borrower.

Schedule 5, para.15

(d) The Borrower shall ensure that the mitigation and monitoring measures provided in the IEE for each Subproject are reflected as part of bidding documents and Works contracts.

Schedule 5, para.15

Gender and Employment The Borrower shall (a) encourage project contractors to employ women in rehabilitation and labor-intensive maintenance; (b) provide equal pay to men and women for work equal type, in accordance with national laws and international treaty obligations; (c) provide safe working conditions for male and female workers; (d) ensure that project contractors comply with applicable labor laws and abstain from child labor. Specific provisions to this effective shall be included in the bidding documents.

Schedule 5, para.16

Complied with

Health Risks The Borrower, through MNP, shall ensure that all works contractors engaged under the Project participate in an HIV/AIDs prevention program to be funded under the Project in construction campsites. In addition, MNP shall ensure that information on the risk of transmission of HIV/AIDs and other sexually transmitted diseases is disseminated to local communities in coordination with national agencies working on the issue. MNP shall also include specific

Schedule 5, para.17

Complied with

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provisions to this effect in Works contracts and strictly monitor compliance. Project Performance Monitoring and Evaluation

Within 3 months of the Effective Date, the Borrower, through MNP, shall finalize and adopt a Project performance and monitoring system acceptable to ADB, based on indicators in the design and monitoring framework and following procedures agreed between the Borrower and ADB. MNP shall monitor the indictors according to the agreed framework on a quarterly basis to determine the efficiency and effectiveness of the Project, and shall provide to ADB monitoring reports from the commencement of the Project implementation until completion

Schedule 5, para.18

Partly complied with. Quarterly reports were not all submitted, and the quality often inadequate for the purposes of full monitoring. The reports lacked reporting on the indicators in the design and monitoring framework.

Anticorruption The Borrower shall: (a) undertake necessary measures to create and

sustain a corruption-free environment; (b) ensure that its anticorruption laws and

regulations and ADB’s Anticorruption Policy (1998, as amended to date) are strictly enforced and are being complied with during project implementation, and that relevant provisions of ADB’s Anticorruption Policy (1998, as amended to date) are included in all bidding documents for the Project;

(c) facilitate ADB’s exercise of its right to investigate, directly or through its agents, any alleged corrupt, fraudulent, collusive or coercive practices relating to the Project;

(d) ensure that MNP conducts periodic inspections on the contractors’ activities related to fund withdrawals and settlements; and

(e) ensure that all contracts financed by ADB in connection with the Project include provisions specifying the right of ADB to audit and examine the records and accounts of MNP, MWTPU, LWRM and all contractors, suppliers, consultants and other service providers as they relate to the Project.

Schedule 5, para.19

Complied with

Special Audit The Borrower shall carry out a special audit focusing on governance and financial accountability on completion of the Project.

Schedule 5, para. 20

Complied with

Project Review ADB and the Borrower shall undertake semi-annual reviews of the Project to consider (a) compliance with the covenants of this Loan Agreement; (b) the scope of the Project; (c) the

Schedule 5, para. 21

Complied with

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implementation arrangements; (d) Loan disbursements and financial progress; and (e) Project implementation issues requiring resolution or action.