Facility Administration Manual · CMWSSB – Chennai Metropolitan Water Supply and Sewerage Board CAG – Comptroller and Auditor General CAPP – community awareness and participation

Project Number: 49107-003 Loan Number: LXXXX September 2018

Proposed Multitranche Financing Facility India: Tamil Nadu Urban Flagship Investment Program

Facility Administration Manual

ABBREVIATIONS

ADB – Asian Development Bank CMSC – contract management and supervision consultant CMWSSB – Chennai Metropolitan Water Supply and Sewerage Board CAG – Comptroller and Auditor General CAPP – community awareness and participation plan CPS – country partnership strategy

CWPS – clear water pumping station DMA – district metering area DMF – design and monitoring framework DPR – detailed project report E&M – electrical and mechanical EARF – environmental assessment and review framework EMP – environmental management plan EOI – expression of interest FAM – facility administration manual FFA – framework financing agreement FMA – financial management assessment FY – fiscal year GePNIC – Government e-Procurement System of the National

Informatics Centre GIS – geographic information system GOTN – Government of Tamil Nadu GRM – grievance redressal mechanism ICB – International Competitive Bidding IEE – initial environmental examination LARRA – Land Acquisition, Rehabilitation and Resettlement Act lpcd – liter per capita per day MAWS – Municipal Administration and Water Supply Department MFF – multitranche financing facility NCB – National Competitive Bidding NGO – nongovernment organization NRW – nonrevenue water O&M – operation and maintenance OCR – ordinary capital resources PAI – project administration instructions PFR – periodic financing request PIU – program implementation unit PMU – program management unit PPMS – project performance management system QCBS – quality- and cost-based selection RRP – report and recommendations of the President SCADA – supervisory control and data acquisition SLB – service level benchmark SOE – statement of expenditure SPS – Safeguard Policy Statement STP – sewage treatment plant TNUIFSL – Tamil Nadu Urban Infrastructure and Financial Services

Limited TNUFIP – Tamil Nadu Urban Flagship Investment Program

TWAD – Tamil Nadu Water Supply and Drainage Board UGR – underground service reservoir

URL – user resource location WTP – water treatment plant

CONTENTS I. PROJECT DESCRIPTION 1

A. Rationale 1 B. Road Map 2 C. Multitranche Financing Facility 2 D. Impact and Outcome 3 E. Outputs 3

II. IMPLEMENTATION PLANS 6 A. Project Readiness Activities 6 B. Overall Project Implementation Plan 7

III. PROGRAM MANAGEMENT ARRANGEMENTS 10 A. Key Persons Involved in Implementation 14 B. Project Organization Structure 16

IV. COSTS AND FINANCING 17 A. Cost Estimates Preparation and Revisions 18 B. Key Assumptions 18 C. Detailed Cost Estimates by Expenditure Category 19 D. Allocation and Withdrawal of Loan/Grant Proceeds 20 E. Detailed Cost Estimates by Financier 21 F. Detailed Cost Estimates by Outputs and/or Components 22 G. Detailed Cost Estimates by Year 23 H. Contract and Disbursement S-Curve 24

V. FINANCIAL MANAGEMENT 25 A. Financial Management Assessment 25 B. Disbursement 35 C. Accounting 36 D. Auditing and Public Disclosure 37

VI. PROCUREMENT AND CONSULTING SERVICES 38 A. Advance Contracting and Retroactive Financing 38 B. Procurement of Goods, Works, and Consulting Services 38 C. Procurement Plan 40 D. Consultant's Terms of Reference 43

VII. SAFEGUARDS 43 A. Environmental Safeguards 44 B. Social Safeguards 46

VIII. GENDER AND SOCIAL DIMENSIONS 50 IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND

COMMUNICATION 51 A. Project Design and Monitoring Framework 51 B. Monitoring 51 C. Evaluation 52 D. Reporting 52 E. Stakeholder Communication Strategy 52

X. ANTICORRUPTION POLICY 53 XI. ACCOUNTABILITY MECHANISM 54 XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL 54

List of Appendixes 1. Design and Monitoring Framework for the Investment Program 2. Design and Monitoring Framework for Tranche 1 3. Criteria for Subproject Selection for Future Tranches 4. Performance-based Governance Improvement Component 5. Procurement Plan 6. Outline Terms of Reference for the Contract Management and Supervision Consultant 7. Draft Outline Terms of Reference for Governance Improvement and Awareness

Consultants 8. Draft Outline Terms of Reference for Project Development Consultant 9. Gender Action Plan 10. Gender Action Plan Monitoring Format 11. Community Awareness and Participation Plan

Facility Administration Manual Purpose and Process

1. The Facility Administration Manual (FAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with the policies and procedures of the government and Asian Development Bank (ADB).

2. The Municipal Administration and Water Supply (MAWS) Department, Government of Tamil Nadu (GOTN), acting through Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL), are wholly responsible for the implementation of ADB-financed projects, as agreed jointly between the borrower and ADB, and in accordance with the policies and procedures of the government and ADB. ADB staff is responsible for supporting implementation including compliance by TNUIFSL of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures.

3. At loan negotiations, the borrower and ADB agreed to the FAM and ensured consistency with the loan and project agreements. Such agreement is reflected in the minutes of the loan negotiations. In the event of any discrepancy or contradiction between the FAM and the loan agreement, the provisions of the loan agreement will prevail.

4. After ADB Board approval of the project's report and recommendations of the President (RRP),

changes in implementation arrangements are subject to agreement and approval pursuant to relevant government and ADB administrative procedures (including the Facility Administration Instructions) and upon such approval, they will be subsequently incorporated in the FAM.

I. PROJECT DESCRIPTION 1. The Tamil Nadu Urban Flagship Investment Program (the program) will develop priority water supply, sewerage, and drainage infrastructure in at least 10 cities located within strategic industrial corridors of Tamil Nadu.1 It will support innovative pilot projects, including India's first solar-powered sewage treatment plant (STP) to offset greenhouse gas emissions and enhance operational efficiency; strengthen urban governance; and build capacity of state and local institutions to enhance urban services delivery, environmental sustainability, and climate resilience. 2

A. Rationale

2. Urban Challenges in Tamil Nadu. Tamil Nadu is the most urbanized of India’s large states—48.5% of its population lives in urban areas, a share that is projected to increase to 67.0% in 2030—and makes the second-largest contribution to the country’s gross domestic product. Although Tamil Nadu is a leader in many areas of manufacturing, managing its rapid urbanization is essential to sustain economic growth, alleviate poverty, and maintain urban livability. Key challenges include (i) acute infrastructure deficits as a result of rapid urbanization; (ii) growth of slum populations; (iii) pollution of waterways; (iv) weak institutional capacity to plan and implement projects; and (v) mixed performance in key areas of governance, including local revenue generation, financial management, and municipal administration. Water-related disasters—such as recurring droughts (once in every 2.5 years) and catastrophic urban floods linked to climate change—are aggravated by the high water losses associated with aging distribution networks, and inadequate drainage systems not adapted to heavier monsoon rains. Addressing these complex challenges requires significant investments and deeper institutional support. 3. Low service level indicators. In Tamil Nadu, urban service levels remain low. As of 2017: (i) 48% of households are served by piped water; (ii) 80% of cities receive less than 80 liters of water per capita per day versus the national standard of 135 liters per capita per day; (iii) nonrevenue water (NRW) is 30%–50%; (iv) 42% of households are covered by a sewerage network; (v) wastewater treatment capacity is 43% of sewage generation; and (vi) urban drainage coverage is 50%.3 Low service levels are primarily the result of inadequate local finances to invest in capital expenditures and a shortage of trained staff. The program will directly support improvement in these areas. 4. National urban flagship programs. To help finance the large-scale investments in Tamil Nadu, the state will take advantage of funds from the three national flagship programs under the Ministry of Housing and Urban Affairs: (i) the Swachh Bharat (Clean India) Mission for Urban Areas, (ii) the Atal Mission for Rejuvenation and Urban Transformation, and (iii) the Smart Cities Mission. The programs are complementary, and each highlights the need to strengthen urban institutions and governance. Nevertheless, these funding sources are not sufficient for the large funding requirements of Tamil Nadu, and the state requested help from Asian Development Bank (ADB) to finance water supply, sewerage, and drainage infrastructure in at least 10 cities within

1 The project will include the following city corporations and municipalities (collectively referred to as cities): Ambur,

Chennai, Coimbatore, Cuddalore, Rajapalayam, Thoothukudi, Tiruppur, Tiruchirappalli, Tirunelveli, and Vellore. The cities were selected based on population size, location in economic corridors, and eligibility for central government funds. Other cities eligible for support under the program are subject to compliance with selection criteria outlined in the Framework Financing Agreement (accessible from the list of linked documents in Appendix 2).

2 ADB. 2015. Technical Assistance to India for State-Level Support for National Flagship Urban Programs. Manila. 3 Government of Tamil Nadu. 2017. State Annual Action Plan, 2017–2020. Chennai.

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strategic industrial corridors, as well as programs to develop institutional capacity, public awareness, and urban governance. B. Road Map

5. Road map, strategic context, policy framework, and investment program. As per its Policy Note (2016-2017),4 the state aims to lead India in addressing the challenges of rapid urbanization and transform its cities into modern, clean, and livable places. The state will achieve these goals through a range of programs focusing on institutional strengthening, green technologies, pro-poor and gender friendly services, and responsive urban governance. Key strategic documents, namely its Twelfth Five-Year Plan (2012–2017), Tamil Nadu Vision 2023,5 the State Annual Action Plan for urban development (SAAP, 2017) and the State Action Plan on Climate Change (2014) outline clear investment plans to achieve the state’s policy goals, including (i) universal access to basic services, (ii) development of world-class cities, (iii) a thrust on industrial corridors, and (iv) climate resilient urban development.6 Vision 2023 estimates $42.7 billion in urban investment, including $7.5 billion for water supply and sanitation prioritizing continuous and full coverage of services. The SAAP identifies a shelf of 136 projects in 27 cities covering water supply, sewerage, and drainage infrastructure and promotes principles of cost recovery, operational efficiency, and citizen participation, amongst others. The road map and policy framework are adequate to guide the program and ensure its sustainability. 6. The total cost of the state’s urban infrastructure investment program under the Road Map is $42.7 billion equivalent, with short-term needs in water supply and sanitation placed at $4.46 billion equivalent (see financing framework agreement [FFA] for details). C. Multitranche Financing Facility 7. Choice of ADB lending modality. An multitranche financing facility (MFF) is a suitable financing modality considering the large-scale investment requirements covering multiple cities and subprojects planned within a clear policy framework. The MFF will facilitate long-term policy dialogue and capacity development, particularly in critical areas of sustainable services delivery and climate change. The Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL) and the implementing agencies have a good track record of implementing donor funded projects. Subprojects under Tranche 1 and the subsequent tranches will be of a similar nature. No Category A safeguards projects will be included in the MFF. The program is aligned with ADB’s country partnership strategy, 2018-2022 for India, particularly the three pillars of growth linked to India’s urban transformation,7 and is included in the country operations business plan, 2018–2020.8 It supports development of the Chennai Kanyakumari Industrial Corridor implemented by the state in partnership with ADB to link the state’s manufacturing sector with value chains in East and Southeast Asia.9

4 Government of Tamil Nadu. 2016. Municipal Administration and Water Supply Department Policy Note. Chennai. 5 Government of Tamil Nadu. 2012. Vision Tamil Nadu 2023. Chennai. 6 Tamil Nadu Vision 2023 lists the following five corridors: Chennai-Hosur, Chennai-Tiruchirappalli, Coimbatore-

Madurai, Coimbatore-Salem and Madurai-Thoothukudi corridors. Two of these corridors, the Chennai–Tiruchirappalli and Madurai–Thoothukudi corridors coincide with the East Coast Economic Corridor supported by ADB.

7 ADB. 2017. Country Partnership Strategy. India, 2018–2022. Manila. Pillars of growth (i) boosting competitiveness of cities in economic corridors, (ii) inclusive infrastructure and services, and (iii) increasing climate change resilience.

8 ADB. 2017. Country Operations Business Plan. India, 2018–2020. Manila. 9 ADB. 2017. Technical Assistance for Supporting Preparation of a Comprehensive Master Plan for Chennai-

Kanyakumari Industrial Corridor. Manila (TA-9446).

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8. Lessons learned. Key lessons learned from past urban sector experience and incorporated into the program design include: (i) developing high project readiness for timely implementation and on-time delivery of outcomes to beneficiaries, (ii) tendering larger sized contract packages to attract good bidders and reduce administrative burden to urban local bodies (ULBs) of managing multiple smaller sized packages, (iii) incorporating water and sewerage connections into the civil works contracts to ensure household connectivity and sufficient flows, (iv) incorporating requirements for ULB financial sustainability and operation and maintenance (O&M), (v) supporting innovative approaches to improve energy efficiency and strengthen climate resilience in project designs, (vi) aligning with broader economic strategy of the state, and (vii) incentivizing ULB performance in key areas of urban governance and project implementation.

9. Framework financing agreement. The FFA records the agreements between India and ADB and establishes the principles by which ADB would provide financing, and India would avail itself of such financing. The FFA outlines the requirements for submitting periodic financing requests (PFR) to ADB. Currently, the MFF comprises three tranches to be implemented over a period of 8 years (2018-2026), indicatively as follows: Tranche 1 (2018-2023), Tranche 2 (2019-2026), and Tranche 3 (2022-2026).

10. Tranches and projects under the multitranche financing facility. Each tranche will constitute a project loan. Tranche 1 is representative of subprojects to be financed under the MFF.10 ADB will approve financing for subsequent tranches under the MFF subject to good performance of ongoing tranches as assessed by Department of Economic Affairs (DEA) and ADB and complying with the requirements set out in the FFA, including compliance with subproject selection criteria and implementation arrangements. D. Impact and Outcome 11. The investment program is aligned with the following impacts: (i) universal access to basic water and sanitation services achieved; (ii) “world-class” cities and industrial corridors across the state developed; and (iii) water security, reduced vulnerability to climate change in urban areas, and enhanced share of renewable energy achieved.11 The investment program will have the following outcome: livability and climate resilience in at least 10 cities in priority industrial corridors enhanced. E. Outputs

12. The MFF investment program will have three outputs.

13. Output 1: Climate-resilient sewage collection and treatment, and drainage systems developed in at least eight cities. This includes (i) 187 million liters per day (MLD) of new and 155 MLD of rehabilitated sewage treatment capacity developed, with solar power systems installed for STP operations on a pilot basis; (ii) treated wastewater reused for industrial purposes in selected areas; (iii) 2,810 kilometers (km) of sewage collection pipelines constructed, with 426,600 households connected; (iv) 173 sewage pump stations with a combined capacity of 6,390 kilowatts (kW) constructed; (v) 20 all-female community water and sanitation committees formed;

10 Tranche 1 corresponds to tranche 1 of the MFF and Tranche 2 corresponds to tranche 2 of the MFF, etc. 11 The design and monitoring framework for the Investment Program is in Appendix 1.

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and (vi) climate-resilient drainage and flood management systems (250 km of tertiary and 50 km of primary and secondary drains) established in selected cities.12

14. Output 2: Water supply systems in at least five cities improved with smart features. This includes (i) smart water supply distribution systems (1,520 km pipelines) established within 110 new district metered areas (DMAs) to reduce NRW and provide regular water supply, with 100% of households (total of 171,000) connected; (ii) 120 km of transmission mains built; (iii) 30 pump stations (1,530 kW capacity) constructed; and (iv) 40 water storage reservoirs (combined capacity of 70 million liters), covering Chennai, Coimbatore, Cuddalore, Tiruppur, and Thoothukudi constructed.

15. Output 3: Institutional capacity, public awareness, and urban governance strengthened. This includes (i) establishing within Commissionerate of Municipal Administration (CMA) (a) a new state-level urban data and governance improvement cell, and (b) a new project design and management center; and (ii) implementing (a) state-wide performance-based urban governance improvement program for Tamil Nadu’s 135 cities to improve revenue, financial management, administration, service delivery, gender mainstreaming, wastewater reuse, and fecal sludge management; and (b) public awareness campaigns on water conservation, sanitation, and hygiene in project cities. The program will intensify the capacity building of key urban institutions and provide incentives for urban governance improvement. Project design consultants will be recruited by the PMU to prepare new projects in subsequent tranches that meet ADB requirements.

16. The scope of Tranche 1 and indicative scopes for Tranches 2 and 3 are included in Table 1.

Table 1: Scope of Tranches 1, 2 and 3 of the Multitranche Financing Facility

Item Descriptions Unit Tranche 1 Tranche 2 Tranche 3 Total

under MFF 2018-2023 2019-2026 2022-2026

Outp

ut 1

Sewage treatment capacity rehabilitated

MLD 37 88 30 155

Sewage treatment capacity newly added

MLD 165 22 0 187

sewage collection pipelines constructed

km 1,864 946 0 2,810

Number of house service connections

nos 297547 129053 0 426600

Sewage pumping capacity added

kW 4473 1917 0 6390

Renewable energy generated from dedicated solar power

GHG 3,400 0 0 3,400

Treated sewage for industrial reuse provided

MLD 8 14 30 52

Primary and secondary storm

km 38 12 50

12 The eight cities are Ambur, Chennai, Coimbatore, Rajapalayam, Tiruchirappalli, Tirunelveli, Tirupur, and Vellore.

Drainage systems are proposed in Chennai, Cuddalore, and Thoothukudi.

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Item Descriptions Unit Tranche 1 Tranche 2 Tranche 3 Total

under MFF 2018-2023 2019-2026 2022-2026

water drains constructed

Tertiary storm water drains constructed

km 190 60 250

Community water and sanitation committees formed

nos 12 4 4 20

Outp

ut 2

Water distribution pipelines constructed

km 275 567 678 1520

Water supply customer connections provided

nos 30,800 63,558 76,206 1,70,564

Pumps replaced /added

kW 231 728 571 1530

DMAs established nos 20 41 49 110

New reservoirs constructed

ml 11 35 24 70

Outp

ut 3

Awareness campaign for 1000 School children, teachers and adminstrators for water conservation and hygeine conducted

no. 6 2 2 10

Project Management and Design Center established in CMA and staff trained

nos 1 0 0 1

Design Manuals and standards Developed

Set 1 0 0 1

New data base with gender disaggregated data established in urban data and governance improvement cell

no. 6 2 2 10

Training on gender and social inclusion in urban governance provided to CMA and ULB staff

nos 110 110

CMA = Commissionerate of Municipal Administration, DMA = district metering area, GAP = gender action plan, GHG = greenhouse gas, km = kilometer, kW = kilowatt, MFF = multitranche financing facility, ml = milliliter, MLD = million liters per day, nos = numbers, ULB = urban local body.

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II. IMPLEMENTATION PLANS

A. Project Readiness Activities

Table 2: Tranche 1 Readiness Activities

Indicative Activities 2017 2018 2019 Responsible Agency

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

ADB loan fact-finding mission Oct GOTN, ADB, DEA

Advance contracting actions for consultant recruitment

Oct

TNUIFSL, ADB

Establishment of project implementation arrangements

Nov

TNUIFSL

Issuance of RFPs for CMSC recruitment

Feb May

TNUIFSL

Consultant mobilization Aug TNUIFSL, PIU

Approval of works bidding documents Nov Feb May

GOTN, TNUIFSL, PIU, ADB

IFB advertisement for all works packages

Dec Feb May

TNUIFSL, PIU

ADB Management Review Meeting May ADB

EOI advertisement of the Capacity Building Consultants

June

TNUIFSL, CMA, ADB

Loan negotiations

Jul

GOI, GOTN, TNUIFSL, PIU, ADB

ADB Board approval Sep ADB

Loan signing Oct GOI, GOTN, ADB

Loan effectiveness Jan GOI, GOTN

ADB = Asian Development Bank, CMSC = construction management and supervision consultant, EOI = expression of interest, GOI = Government of India, GOTN = Government of Tamil Nadu, IFB = invitation for bidding, PIU = program implementation unit, PMU = program management unit, RFP = request for proposal, TNUIFSL= Tamil Nadu Urban Infrastructure Financial Services Limited. Source: Asian Development Bank estimates.

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B. Overall Project Implementation Plan13

Table 3: Tranche 1 Overall Project Implementation Plan Activities 2017 2018 2019 2020 2021 2022 2023

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

A. DMF

1. Climate-resilient sewage collection and treatment, and drainage systems developed in six cities

1.1 Approve DPR of the sewerage packages for Tirunelveli & Vellore

X

1.2 Award the sewerage packages for Tirunelveli & Vellore

X

1.3 Approve DPRs of all remaining sewerage packages

X

1.4 Award all remaining sewerage packages

X

1.5 Complete and commission all civil works

X

2. Water supply systems in one city improved with smart features

2.1 Approve DPRs of water supply packages

X

13 Gantt chart available in e-handbook on project implementation at http://www.adb.org/documents/handbooks/project-implementation/

http://www.adb.org/documents/handbooks/project-implementation/

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Activities 2017 2018 2019 2020 2021 2022 2023

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

2.2 Award water supply packages

X

2.3 Complete and commission all civil works related to water supply packages

X

3. Institutional capacity, public awareness, and urban governance strengthened

3.1 Initiate support to CMA in preparation and implementation of reforms and capacity development plan

X

3.2 Start and complete implementation of capacity building & reforms plan

X

3.3 Start and complete implementation of GAP and CAPP

X

3.4 Prepare action plan for implementation of project development facility

X

3.5 Develop bankable projects

X

3.6 Initiate & complete community awareness activities

X

B. Program Management Activities

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Activities 2017 2018 2019 2020 2021 2022 2023

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Mobilize construction contract management & supervision consultants

X

Mobilise capacity development consultants

X

Establish program management unit with full staff

X

CAPP = community awareness and participation plan, CMA = Commissioner of Municipal Administration, DMF = design and monitoring framework, DPR = detailed project report, GAP = gender action plan. Source: Asian Development Bank.

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III. PROGRAM MANAGEMENT ARRANGEMENTS

17. The Municipal and Water Supply Department (MAWS) acting through TNUIFSL will be the executing agency. A program steering committee, headed by Principal Secretary, MAWS Department, Government of Tamil Nadu (GOTN), will provide overall guidance and strategic directions to the program. A program management unit (PMU), headed by the Managing Director, TNUIFSL acting as Program Director will be established within TNUIFSL for overall management, planning, implementing, monitoring, reporting, and coordinating the program. The CMA will act as the Deputy Program Director in the PMU. The project ULBs, represented by respective Municipal Commissioners, will be the implementing agencies for works in cities/towns and will establish program implementing units (PIUs) headed by a municipal engineer as full-time Project Manager. PIUs will comprise of dedicated staff responsible for overseeing implementation of projects on a day-to-day basis. The PIUs will be supported by a contract management and supervision consultant (CMSC) recruited by TNUIFSL. ULBs under the program with less project implementation experience may utilize implementation support from the Tamil Nadu Water Supply and Drainage Board (TWAD) to strengthen implementation capacity. 14 In such cases, TWAD will establish a PIU and the ULB will appoint counterpart staff to coordinate implementation activities. For sewerage and water supply works in Chennai, The Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB), represented by its Managing Director, will be the implementing agency and establish a PIU headed by a superintending engineer as full-time Project Manager. For the institutional capacity, public awareness, and urban governance component, CMA acting through its Commissioner, will establish a PIU and appoint a governance improvement and awareness consultant (GIAC) responsible for supporting these activities.

18. The PMU staff will be mostly drawn from TNUIFSL, CMA, and municipal services, and, if required, will also be seconded from the other government departments such as TWAD, on deputation. The PIU staff will be drawn from the engineering units of the participating ULBs and augmented from the same government departments mentioned above as required. The CMSC will assist the PIUs implement, manage, and monitor works of the program. TNUIFSL will recruit a project design consultant (PDC) to prepare projects in consultation with ULBs for subsequent tranches. With the help of PMU, PIUs will design infrastructure, manage procurement processes, supervise construction, assure technical quality of designs and construction, and provide support on capacity building, governance improvement, and awareness building. The implementing agencies will procure contractors and manage construction and commissioning activities.15 For social and environmental safeguards, the PMU and PIUs will appoint staff to oversee safeguards monitoring and compliance.

19. The roles and responsibilities are summarized in Table 4.

Table 4: Management Roles and Responsibilities

Program Implementation Arrangements

Management Roles and Responsibilities

Executing Agency: MAWS acting through TNUIFSL

• Negotiate, sign, and execute the program;

• Allocate and release government counterpart funds on time;

• Facilitate obtaining administrative sanction from the government for overall program and for all the subprojects with PIU staffing;

• Facilitate obtaining timely government-level approvals for smooth implementation of the program;

14 These include Rajapalayam (Tranche 1), Coimbatore (Tranche 1), Ambur (Tranche 2), and Cuddalore (Tranche 3). 15 In the case of TWAD supported projects, TWAD will do procurement while ULBs will make payments.

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• Monitor program implementation progress and ensure timely actions for completion of the project;

• Responsible for annual independent audits of program accounts; and

• Plan, implement, and monitor public relations activities; gender mainstreaming initiatives and community participation activities, with the support of PIUs.

Program Steering Committeea (headed by Principal Secretary, MAWS) Members:

• Managing Director, TNUIFSL (Convener)

• Commissioner of Municipal Administration

• Managing Director, CMWSSB

• Managing Director, TWAD

• Managing Director, TUFIDCO

• Provide strategic guidance;

• Provide policy decisions to support smooth program implementation;

• Facilitate inter-departmental coordination and cooperation;

• Support TNUIFSL with government/ministerial level approvals; and

• Review and monitor the physical and financial progress of the subprojects.

Program Management Unit

• Program Director: Managing Director, TNUIFSL

• Deputy Program Director: CMA

PMU Staff (10):

• Technical Expert

• Accounts Officer

• Financial Officer/s

• Safeguards Officers

• Procurement Officer/s

• Administrative Officer

Program and Financial Management

• Overall responsibility of the investment program and financial management and administering program procedures and guidelines;

• Oversee MFF design of all projects in individual tranches;

• Prepare periodic financing requests for tranches;

• Review the DPRs submitted by ULBs / implementing agencies and obtain approval from ADB and government;

• Undertake project appraisals based on technical, financial, economic and safeguards compliance as agreed by GOTN/ TNUIFSL and ADB;

• Undertake financial structuring and obtain approval for the sub-projects from the Sanctioning Committee;

• Sanction and disburse loan and grant funds to sub-projects based on progress and timely provision of counterpart funds from state finance department;

• Manage overall contract award and disbursement performance

• Manage overall fund flow;

• Provide overall technical and implementation guidance to the PIUs as required;

• Facilitate approval of various implementation related requests from the PIUs;

• Develop annual work plans, work schedules and budgets;

• Sign key documents including withdrawal applications and audit reports;

• Timely submit withdrawal applications;

• Establish financial accounting and control systems and ensuring accurate and timely report submissions and funds flow from ADB.

• Monitor safeguards compliance of PIUs;

• Act as focal point for communication with the ADB;

• Ensure compliance with loan covenants, ADB’s guidelines, procedures and policies;

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• Facilitate ADB program review missions; and

• Represent the program at Tripartite Review Meetings.

Accounting and Reporting

• Report the program’s progress to GOTN and ADB (quarterly); and

• Submit audited project accounts to GOTN and ADB (annually).

Safeguards compliance

• Review and monitor safeguards compliance by PIUs and support corrective actions as necessary;

• Submit semi-annual safeguard monitoring reports to ADB; and

• Guide PIUs as and when necessary on safeguards compliance, and arrange capacity building for PIUs.

Recruitment of Consultants

• Recruit consultants in accordance with ADB consultant recruitment guidelines and make payments to them; and

• Obtain ADB’s concurrence for consultants’ recruitment.

Procurement of Works/Goods Contracts

• Support ULB PIUs with preparation of bid documents as required, and with procurement process;

• Obtain ADB concurrence for bid documents, bid evaluation reports and contract awards; and

• Ensure compliance with ADB procurement policies and procedures.

Project Implementing Units

• Project ULBs

• CMWSSB

• CMA

• TWAD Board

A. PIU Staff (5):b

• Project Manager

• Technical Expert

• Accounts/Financial Officer

• Safeguards-gender Officer

• Contract Management Officer

Project Management

• Responsible in managing subprojects; and

• Responsible for day-to-day implementation, monitoring and reporting.

Procurement of works/goods contracts

• Prepare bidding documents for goods and works and submit through PMU to ADB for approval;

• Issue invitation for bids, evaluate bids and submit reports to ADB through PMU for approval and award contracts after approval from ADB; and

• Check all clearances including administrative, regulatory and statutory approvals.

Supervision and Monitoring of the Construction Works

• Oversee, coordinate and monitor works (civil, electrical and mechanical) and supply of equipment and materials ensuring sound works supervision and high-quality control and any other technical matters and issue certificates for acceptance;

• Measure and record acceptable works, check contractor’s/ suppliers’ invoices and recommend payments to the contractors;

• Manage contracts, prepare variation orders; and submit variation requests to approving authority with due intimation to PMU;

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• Coordinate preparation of final measurement and 'as built' drawings; and

• Monitor implementation.

Safeguards Compliance

• Ensure compliance with safeguard frameworks and plans;

• Facilitate consultation with stakeholders and disclose program information in consultation with PMU;

• Address grievances through the GRM;

• Coordinate land acquisition actions, if required;

• Ensure implementation of GAP; and

• Submit quarterly safeguard monitoring reports to PMU.

Accounting and Reporting

• Open and administer project account;

• Prepare monthly, quarterly, mid-term and final progress reports; and

• Payments, accounting and reporting to the PMU.

Manage Disbursements

• Retain supporting documents for safekeeping and audit; and

• Complete all reporting requirements, including the annual audit report and financial statements.

Advance Project Preparation

• Prepare DPRs and bidding documents for future tranches.

Supervise Contract Management and Supervision Consultants

• Review and approve all site investigation subcontracts;

• Monitor, review, evaluate and approve all outputs of the consultants including the DPRs and the tender documents;

• Finalize project components and works packages; and

• Review and recommend all consultants’ invoices.

CMA • Act as Deputy Program Director;

• Implement urban governance and reforms component of the program;

• Establish and manage Urban Data and Governance Improvement Cell; and

• Recruit the Urban Governance and Awareness Consultant.

CMWSS Board

• Establish a dedicated PIU for water and sewerage works in Chennai;

• Provide technical support to the PIUs for speedy resolution implementation related issues such as variations, deviations, time and cost control etc.;

• Review the performance of CMSC and implementation progress of subprojects; and

• Provide technical support for review and finalization of DPRs, bid documents, bidding and award of contracts.

TWAD Board • Provide technical support to ULBs;

• Deploy qualified full-time design, construction supervision and safeguards monitoring staff to ensure timely completion of sub-projects;

14



• Provide additional technical support from the local TWAD Head Office to the PIUs for speedy resolution of implementation related issues such as variations, deviations, time and cost control, among others;

• Provide backup technical support for review and finalization of DPRs, bid documents, bidding and award of contracts; and

• Review and monitor the subprojects implementation when requested by ULBs.

Asian Development Bank • Monitor overall program and subproject performance;

• Communicate with TNUIFSL on program implementation;

• Attend tripartite review meetings;

• Review and approve procurement activities as per agreed Procurement Plan;

• Process withdrawal applications for disbursement;

• Disclose program information to the public as per ADB policy;

• Approve and monitor safeguards documents and implementation compliance including GAP and CAPP implementation;

• Monitor annual audits of program accounts, by private auditing firm or Auditor General of India, as selected by TNUIFSL;

• Field review missions;

• Facilitate knowledge sharing;

• Provide training in program management to PIU staff; and

• Support TNUIFSL, CMA and CMWSSB through various capacity building activities.

ADB = Asian Development Bank, CAPP = community awareness and participation plan, CMSC = contract management and supervision consultant, CMA = Commissioner of Municipal Administration, CMWSSB = Chennai Metropolitan Water Supply and Sewerage Board, DPR = detailed project report, EARF = environmental assessment and review framework, EOI = expression of interest, GAP = gender action plan, GOTN = Government of Tamil Nadu, GRM = grievance redress mechanism, ICB = international competitive bidding, IEE = initial environmental examination, NCB = national competitive bidding, MAWS = Municipal Administration and Water Supply, MFF = multitranche financing facility, PDF = project design facility, PIU = program implementation unit, PMU = program management unit, RFP = request for proposal, TNUIFSL = Tamil Nadu Urban Infrastructure Financing Services Limited, TUFIDCO = Tamil Nadu Urban Finance and Infrastructure Development Corporation Limited, TWAD = Tamil Nadu Water Supply and Drainage Board, ULB = urban local body. a Government of Tamil Nadu constituted a state level inter-departmental coordination committee to discuss and resolve

inter-departmental issues. This committee constitutes heads or state level heads of various GOTN and Government of India departments. The program shall also be included under the ambit of this committee.

b Where TWAD sets up PIUs the following arrangement applies for safeguards and gender activities: (i) TWAD will appoint an environmental safeguards officer, (ii) CMA will appoint social safeguards and gender monitoring experts, and (iii) ULB will provide a safeguards-gender officer to coordinate monitoring activities.

Source: Asian Development Bank.

A. Key Persons Involved in Implementation

Executing Agency MAWS acting through TNUIFSL

Mr. Harmander Singh, IAS Principal Secretary to Government Municipal Administration and Water Supply Department Phone :25670491(O) Email: mawssec(at)tn.gov.in

Secretariat, Chennai - 600 009 Ms. Kakarla Usha, IAS

mailto:Email:

15

Managing Director, TNUIFSL and Program Director Phone:044-2464 3103 / 3104 / 3105 E-mail: md tnuifsl.com 19, TP Scheme Rd, Raja Annamalai Puram, Chennai, Tamil Nadu 600028

Asian Development Bank Urban Development and Water Division South Asia Department

Mr. Sekhar Bonu Director Tel: +63 2 632 5628 Email: [email protected] 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines

Mission Leader Mr. Ron H. Slangen Senior Urban Development Specialist Tel: +94 11 4 455455 Email: [email protected] No. 23, Independence Avenue, Colombo 00700 Sri Lanka

mailto:[email protected]

mailto:[email protected]

16

B. Project Organization Structure

Figure 1: Organization Structure

- - - monitoring role

CMA = Commissionerate of Municipal Administration, CMWSSB = Chennai Metropolitan Water Supply and Sewerage Board, PIU = program implementation unit, TWAD = Tamil Nadu Water Supply and Drainage Board, ULBs = urban local bodies.

ASIAN DEVELOPMENT BANK GOVERNMENT OF TAMIL NADU

I m p l e m e n t i n g A g e n c i e s

ULBs and CMWSSB

Contract Management and Supervision Consultants (as required)

PROGRAM IMPLEMENTATION UNITS in ULBs/TWAD Board/CMWSSB

Program Steering Committee

E x e c u t i n g A g e n c y

Municipal Administration and Water Supply Department through Tamil Nadu Urban Infrastructure and Financial

Services Limited (TNUIFSL)

PIU in CMA

Commissioner of Municipal Administration

(Implementing Agency)

Governance Improvement and

Awareness Consultant

PROGRAM MANAGEMENT UNIT

17

IV. COSTS AND FINANCING

20. The program is estimated to cost $1,268.4 million. The Government of India requested an MFF of up to $500 million from ADB's ordinary capital resources (OCR) to help finance a part of the investment program. The Asian Clean Energy Fund (ACEF)16 under the Clean Energy Financing Partnership Facility will provide grant cofinancing equivalent to $2 million to be administered by ADB. The program will support the medium-term investment requirements envisaged in the GOTN’s Tamil Nadu Vision 2023 and State Annual Action Plan 2016. The Tamil Nadu State Government, CMWSSB, and project ULBs will contribute $766.4 million to the investment costs of the MFF to finance: (i) taxes and duties; (ii) road restoration; (iii) land acquisition and resettlement costs; (iv) incremental administration cost: (v) contingencies: (vi) financing charges during implementation; and (vii) part of the civil works and equipment; and will provide the loan proceeds and counterpart funds to the implementing agency as a mix of loan and/or grant. The program will comprise three tranches (each financed by a respective tranche of the MFF), and will be subject to the government’s submission of related periodic financing requests, execution of the related legal agreements for each tranche, and fulfillment of terms and conditions set forth in the framework financing agreement.17 Cofinancing on a collaborative basis will be explored.18 The investment program is in Table 5.

Table 5: Investment Program ($ million)

Item

Amounta

Tranche 1 Tranche 2 Tranche 3 Total

A. Base Costb 1. Climate-resilient sewage collection and treatment,

and drainage systems developed in at least eight cities

361.9 306.9 74.9 743.7

2. Water supply systems in at least five cities improved with smart features

28.6 209.8 28.2 266.6


28.7 42.2 3.5 74.4

Subtotal (A) 419.2 558.9 106.6 1,084.7 B. Contingenciesc 44.1 80.4 17.8 142.3 C. Financing Chargesd 14.2 21.4 5.8 41.4

Total (A+B+C) 477.5 660.7 130.2 1,268.4 a In early-2018 prices; exchange rate of $1 = ₹64.3 is used. b Includes taxes and duties of $102.4 million to be financed from government resources by cash contribution. c Physical contingencies are computed at 5.0% for civil works and equipment. Price contingencies are computed at

1.5%-1.6% on foreign exchange costs and 4.5%-4.6% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.

d Includes interest and commitment charges. Interest during construction for the ADB loan has been computed at the 5-year United States dollar fixed-swap rate plus a spread of 0.5% and a maturity premium of 0.2%. Commitment charges for an ADB loan are 0.15% per year to be charged on the undisbursed loan amount.

21. Tranche 1 of $477.5 million will be financed by a loan of $169 million from ADB’s OCR and a grant of $2 million from ADB administered ACEF. The loan will have a 25-year term,

16 Established by the Government of Japan. ADB secured approval for the Asian Clean Energy Fund grant amount

outside the MFF but will disburse funding concurrently with Tranche 1. 17 Framework financing agreement (accessible from the list of linked documents in Appendix 2 to the Report and Recommendation of the President to the Board of Directors). 18 During MFF preparation, ADB initiated constructive discussions with the Japan International Cooperation Agency,

German Development Cooperation through KfW, and the World Bank, which currently implement urban projects in similar areas in Tamil Nadu. ADB will continue to explore parallel collaborative cofinancing in future tranches of $194 million from the Japan International Cooperation Agency, $100 million from KfW, and $197 million from the World Bank.

18

including a grace period of 5 years, 10% annuity repayment method, an annual interest rate determined in accordance with the ADB’s LIBOR-based lending facility, a commitment charge of 0.15% every year, a maturity premium of 0.2%19 and such other terms and conditions set forth in the draft loan and project agreements.20 The financing plan is in Table 6.

Table 6: Financing Plan ($ million)

Source

Tranche (estimated year of PFR submission) Share of Total (%) 1 (2018) 2 (2019) 3 (2022) Total

Asian Development Bank Ordinary capital resources (regular loan) 169.0 253.0 78.0 500.0 39.4

Asian Clean Energy Funda 2.0 - - 2.0 0.2 Government of Tamil Nadu, CMWSSB, ULBs 306.5 407.7 52.2 766.4 60.4

Total 477.5 660.7 130.2 1,268.4 100.0 PFR = periodic financing request, CMWSSB = Chennai Metropolitan Water Supply and Sewerage Board, ULB = urban local body. a Established by Government of Japan and administered by the Asian Development Bank (approval on 21 May 2018). Source: Asian Development Bank estimates.

22. The estimated qualifying cost of climate change mitigation is $225.04 million of which ADB will finance 43.8%, and estimated qualifying cost of climate change adaptation measures is $71.82 million, of which ADB will finance 44.3%. Key climate change measures include the use of renewable solar energy for STP operations, greenhouse gas capture through new sewerage systems, water conservation through NRW management in water scarce areas, and raised elevation of critical infrastructure considering high flood levels. A. Cost Estimates Preparation and Revisions

23. The cost estimates were prepared based on the detailed project report, where available, and other relevant details of subprojects. The cost estimate model was prepared using Microsoft Excel and, is available from the project preparation team and the PMU. The cost estimates will be further revised during the implementation by the PMU.

B. Key Assumptions

24. The following key assumptions underpin the cost estimates and financing plan:

(i) Exchange rate: ₹64.3 = $1.00 (as of March 2018) (ii) Price contingencies based on expected cumulative inflation over the

implementation period are as follows:

Table 7: Escalation Rates for Price Contingency Calculation Item 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Average

Foreign rate of price inflation

1.4% 2.9% 4.4% 5.9% 7.5% 9.1% 10.7% 12.3% 13.9% 15.5% 8.4%

Domestic rate of price inflation

4.0% 8.6% 13.1% 17.6% 22.1% 26.6% 31.1% 35.6% 40.1% 44.6% 24.3%

Source: Asian Development Bank estimates.

(iii) In-kind contributions cannot be easily measured and have not been quantified.

19 The maturity-based premium of 0.2% is based on the loan term and the government’s repayment period. 20 Based on these loan terms, the maturity premium payable to ADB is 0.2% per annum.

19

C. Detailed Cost Estimates by Expenditure Category

Table 8: Cost Estimates by Expenditure Category under Tranche 1 ($ million)

Item Foreign

Exchange Local

Currency Total Cost

Total Net Cost

Tax % of Total Base Cost

A. Investment Costs 1. Civil works and equipment 72.9 262.2 335.2 299.2 35.9 79.9%

a. Water supply and sewerage 72.4 260.5 332.9 297.2 35.7 79.4% b. Solar development - 2.2 2.2 2.0 0.2 0.5%

2. Provisional Items, road restoration, etc. - 52.6 52.6 52.6 - 12.5% 3. Resettlement - 2.8 2.8 2.8 - 0.7% 4. Performance based governance improvement incentive - 10.0 10.0 10.0 - 2.4% 5. Consulting services 3.3 12.0 15.4 13.0 2.3 3.7%

a. Contract management, supervision 1.6 5.7 7.3 6.2 1.1 1.7% d. Project design 0.8 3.0 3.9 3.3 0.6 0.9% c. Governance improvement and awareness 0.9 3.3 4.2 3.6 0.6 1.0% Subtotal (A) 76.3 339.6 415.9 377.6 38.3 99.2% B. Recurrent Costs

1. Incremental administrative costs (CMA) - 2.2 2.2 2.2 - 0.8% 2. Incremental administrative costs (PMU) - 1.1 1.1 1.1 0.8%

Subtotal (B) - 3.3 3.3 3.3 - 0.8% Total Base Cost (A+B) 76.3 342.9 419.2 381.0 38.3 100.0% C. Contingencies

1. Physical contingencies 3.1 13.6 16.6 16.6 - 4.0% 2. Price contingencies 6.0 21.5 27.5 27.5 - 6.6%

Subtotal (C) 9.0 35.1 44.1 44.1 - 10.5% D. Financing Charges During Implementation

1. Interest during construction 13.5 - 13.5 13.5 - 3.2% 2. Commitment charges 0.7 - 0.7 0.7 - 0.2%

Subtotal (D) 14.2 - 14.2 14.2 - 3.4%

Total Project Cost (A+B+C+D) 99.5 378.0 477.5 439.2 38.3 113.9% CMA = Commissionerate of Municipal Administration, PMU = program management unit. Notes: 1. Numbers may not sum precisely because of rounding. 2. The costs of the actual audits of the program are minor and will be borne by the government.

3. Minor environmental monitoring and implementation of resettlement plan and gender action plan cost are absorbed in B1. ADB will not finance land acquisition cost.


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D. Allocation and Withdrawal of Loan and Grant Proceeds

Table 9: Allocation and Withdrawal of Loan Proceeds under Tranche 1

No. Item Amount Allocated for

ADB Financing ($) Category

Basis for Withdrawal from the Loan Account

1 Works and equipment (water and sewerage)

145,979,000 43.8% of total expenditure claimed

2 Performance based governance improvement incentive

10,000,000 100.0% of total expenditure claimed*

3 Consulting services 13,021,000 84.7% of total expenditure claimed

Total 169,000,000 Exclusive of taxes and duties imposed within the territory of the Borrower. Source: Asian Development Bank estimates.

Table 10: Allocation and Withdrawal of Grant Proceeds under Tranche 1

No. Item Amount Allocated for

ADB Financing ($) Category

Basis for Withdrawal from the Loan Account

1 Works and equipment (solar development)

2,000,000 89.3% of total expenditure

claimed

Total 2,000,000 Source: Asian Development Bank estimates.

21

E. Detailed Cost Estimates by Financier

Table 11: Tranche 1 Cost Estimates by Financier ($ million)

Item

ADB ACEF GOTN, CMWSSB, ULBs Total Costs $ %

$ %

Tax

Non-Tax

Total %

A. Investment Costs 1. Civil works and equipment 146.0 43.6% 2.0 0.6% 35.9 151.3 187.2 55.8% 335.2

a. Water supply and sewerage 146.0 43.8% - 0.0% 35.7 151.3 186.9 56.2% 332.9 b. Solar development - 0.0% 2.0 89.3% 0.24 0.2 10.7% 2.2

2. Provisional Items, road restoration, etc. - 0.0% - 0.0% - 52.6 52.6 100.0% 52.6 3. Resettlement - 0.0% - 0.0% - 2.8 2.8 100.0% 2.8

4. Performance based governance improvement incentive 10.0 100.0% - 0.0% - - - 0.0% 10.0 5. Consulting services 13.0 84.7% - 0.0% 2.3 - 2.3 15.3% 15.4 a. Contract management, supervision 6.2 84.7% - 0.0% 1.1 - 1.1 15.3% 7.3

d. Project design 3.3 84.7% - 0.0% 0.6 - 0.6 15.3% 3.9 c. Governance improvement and awareness 3.6 84.7% - 0.0% 0.6 - 0.6 15.3% 4.2

Subtotal (A) 169.0 40.3% 2.0 0.5% 38.3 206.6 244.9 58.9% 415.9

B. Recurrent Costs

1. Incremental administrative costs (CMA) - 0.0% - 0.0% - 2.2 2.2 100.0% 2.2 2. Incremental administrative costs (PMU) - 0.0% - 0.0% - 1.1 1.1 100.0% 1.1

Subtotal (B) - 0.0% - 0.0% - 3.3 3.3 100.0% 3.3 Total Base Cost (A+B) 169.0 40.3% 2.0 0.5% 38.3 210.0 248.2 59.2% 419.2

C. Contingencies 1. Physical contingencies - 0.0% - 0.0% - 16.6 16.6 100.0% 16.6 2. Price contingencies - 0.0% - 0.0% - 27.5 27.5 100.0% 27.5

Subtotal (C) - 0.0% - 0.0% - 44.1 44.1 100.0% 44.1 D. Financing Charges During Implementation

1. Interest during construction - 0.0% - 0.0% - 13.5 13.5 100.0% 13.5 2. Commitment charges - 0.0% - 0.0% - 0.7 0.7 100.0% 0.7 Subtotal (D) - 0.0% - 0.0% - 14.2 14.2 100.0% 14.2

Total Project Cost 169.00 35.4% 2.0 0.4% 38.3 268.2 306.5 64.2% 477.5 ADB = Asian Development Bank, ACEF = Asian Clean Energy Fund, CMA = Commissionerate of Municipal Administration, CMWSSB = CMWSSB = Chennai Metropolitan Water Supply and Sewerage Board, GOTN = Government of Tamil Nadu, PMU = program management unit, ULBs = urban local bodies. Notes: 1. Numbers may not sum precisely because of rounding.

2. The costs of the actual audits of the program are minor and will be borne by the government. 3. Minor environmental monitoring and implementation of resettlement plan and gender action plan cost are absorbed in B1. ADB will not finance land acquisition cost.


22

F. Detailed Cost Estimates by Outputs and/or Components

Table 12: Tranche 1 Cost Estimates by Outputs ($ million)

Total Cost

Output 1 Output 2 Output 3

Climate resilient sewage collection and treatment,

and drainage systems improved

Water supply systems improved

Institutional capacity

strengthened

Items $ % $ % $ %

A. Investment Costs 1. Civil works and equipment 335.2 320.2 95.6% 14.9 4.4% - 0.0%

a. Water supply and sewerage 332.9 318.0 95.5% 14.9 4.5% - 0.0% b. Solar development 2.2 2.2 100.0% - 0.0% - 0.0%

2. Provisional Items, road restoration, etc. 52.6 39.6 75.3% 13.0 24.7% - 0.0% 3. Resettlement 2.8 2.1 75.3% 0.7 24.7% - 0.0% 4. Performance based governance improvement incentive 10.0 - 0.0% - 0.0% 10.0 100.0% 5. Consulting services 15.4 - 0.0% - 0.0% 15.4 100.0% a. Contract management, supervision 7.3 - 0.0% - 0.0% 7.3 100.0% d. Project design 3.9 - 0.0% - 0.0% 3.9 100.0% c. Governance improvement and awareness 4.2 - 0.0% - 0.0% 4.2 100.0% Subtotal (A) 415.9 361.9 87.0% 28.6 6.9% 25.4 6.1%

B. Recurrent Costs 1. Incremental administrative costs (CMA) 2.2 - 0.0% - 0.0% 2.2 100.0% 2. Incremental administrative costs (PMU) 1.1 - 0.0% - 0.0% 1.1 100.0%

Subtotal (B) 3.3 - 0.0% - 0.0% 3.3 100.0% Total Base Cost (A+B) 419.2 361.9 86.3% 28.6 6.8% 28.7 6.8%

C. Contingencies 1 Physical Contingencies 16.6 15.9 95.5% 0.7 4.5% - 0.0% 2 Price Contingencies 27.5 23.8 86.7% 1.9 6.7% 1.8 6.6% Subtotal (C) 44.1 39.7 90.0% 2.6 5.9% 1.8 4.1%

D. Financing Charges 1 Interest During Implementation 13.5 11.7 86.7% 0.9 6.7% 0.9 6.6% 2 Commitment Charges 0.7 0.6 86.7% 0.1 6.7% 0.1 6.6% Subtotal (D) 14.2 12.3 86.7% 1.0 6.7% 0.9 6.6%

Total Project Cost (A+B+C+D) 477.5 413.9 86.7% 32.2 6.7% 31.4 6.6% CMA = Commissionerate of Municipal Administration, PMU = program management unit. Notes: 1. Numbers may not sum precisely because of rounding. 2. The costs of the actual audits of the program are minor and will be borne by the government. 3. Minor environmental monitoring and implementation of resettlement plan and gender action plan cost are absorbed in B1. ADB will not finance land acquisition cost


23

G. Detailed Cost Estimates by Year

Table 13: Tranche 1 Detailed Cost Estimates by Year ($ million) Item Total 2018 2019 2020 2021 2022 2023

A. Investment Costs 1. Civil works and equipment 335.2 16.6 50.2 100.3 90.3 50.5 27.2

a. Water supply and sewerage 332.9 16.6 49.9 99.9 89.9 49.9 26.6 b. Solar development 2.2 - 0.2 0.4 0.4 0.6 0.6

2. Provisional Items, road restoration, etc. 52.6 2.6 7.9 15.8 14.2 7.9 4.2 3. Resettlement 2.8 1.4 1.4 - - - -

4. Performance based governance improvement incentive

10.0 - 1.0 2.0 2.0 2.5 2.5

5. Consulting services 15.4 0.6 2.1 4.2 3.9 2.7 1.9 a. Contract management, supervision 7.3 0.4 1.1 2.2 2.0 1.1 0.6 d. Project design 3.9 0.2 0.6 1.2 1.0 0.6 0.3 c. Governance improvement and awareness 4.2 - 0.4 0.8 0.8 1.0 1.0

Subtotal (A) 415.9 21.2 62.5 122.3 110.4 63.6 35.8

B. Recurrent Costs

1. Incremental administrative costs (CMA) 2.2 0.1 0.3 0.7 0.6 0.3 0.2 2. Incremental administrative costs (PMU) 1.1 0.1 0.2 0.3 0.3 0.2 0.1

Subtotal (B) 3.3 0.2 0.5 1.0 0.9 0.5 0.3

Total Base Cost (A+B) 419.2 21.4 63.0 123.3 111.3 64.1 36.1 C. Contingencies

1. Physical Contingencies 16.6 0.8 2.5 5.0 4.5 2.5 1.3 2. Price Contingencies 27.5 0.5 2.5 6.8 8.1 5.8 3.9

Subtotal (C) 44.1 1.3 5.0 11.8 12.5 8.3 5.2 D. Financing Charges

1. Interest During Implementation 13.5 0.1 0.6 1.6 2.9 3.9 4.5 2. Commitment Charges 0.7 0.1 0.2 0.2 0.1 0.1 0.1

Subtotal (D) 14.2 0.2 0.8 1.8 3.0 3.9 4.5

Total Project Cost (A+B+C+D) 477.5 22.9 68.8 136.9 126.8 76.3 45.8 CMA = Commissionerate of Municipal Administration, PMU = program management unit. Notes: 1. Numbers may not sum precisely because of rounding. 2. The costs of the actual audits of the program are minor and will be borne by the government.

3. Minor environmental monitoring and implementation of resettlement plan and gender action plan cost are absorbed in B1. ADB will not finance land acquisition cost.


24

H. Contract and Disbursement S-Curve

25. Projected contract awards and disbursements of the ADB loan are given in Table 14 and Figure 2.

Table 14: Projected Contract Awards and Disbursements

Year Contract Awards ($ million) Disbursements ($ million)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2018 - 156.20 166.50 166.50 - 8.74 9.25 19.09

2019 168.00 168.00 168.00 168.00 21.05 24.10 25.65 31.40

2020 168.00 169.50 169.50 169.50 38.74 47.99 52.12 59.19

2021 169.50 171.00 171.00 171.00 63.17 68.80 72.94 77.79

2022 171.00 171.00 171.00 171.00 92.78 108.68 139.84 171.00

2023 171.00 171.00 171.00 171.00 171.00 171.00 171.00 171.00

Figure 2: Contract Award and Disbursement S-Curve

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

2018 2019 2020 2021 2022 2023 2024

Contract Awards Disbursements

25

I. Fund Flow Diagram

Figure 3: Fund Flow Diagram

Requesting Withdrawal Applications Transfer of Funds

CMWSSB = Chennai Metropolitan Water Supply and Sewerage Board, GOI = Government of India, GOTN = Government of Tamil Nadu, TNUIFSL = Tamil Nadu Urban Infrastructure Financial Services Limited, TUFIDCO = Tamil Nadu Urban Finance and Infrastructure Development Corporation Limited, ULBs = urban local bodies, a Fund from ADB loan will pass-through only GOTN to the PMU.

V. FINANCIAL MANAGEMENT

A. Financial Management Assessment

26. The financial management assessment (FMA) was conducted for the proposed Tranche 1 of the program in accordance with the Guidelines for the Financial Management and Analysis of Projects (2005), Financial Due Diligence: A Methodology Note (2009), and Financial Management Technical Guidance Note (2015) of ADB. 27. The FMA considered the capacity of the executing agency and the implementing agencies which will implement Tranche 1. As the executing agency, the MAWS under the GOTN will

26

execute Tranche 1 through TNUIFSL. The TNUIFSL, through its PMU, will manage the ADB loan funds, project accounts, and consultancy work.21 28. As the implementing agencies, the five project ULBs22 and CMWSSB23 will implement works/goods components and the Commissionerate of Municipal Administration (CMA) will deal with the governance components. The project ULBs and CMWSSB will be responsible for implementing sewerage (output 1) and water supply subprojects (output 2), whereas, the CMA will be implementing largely the urban governance and management improvement program (output 3). 29. The PMU to be based in TNUIFSL will be responsible for all day-to-day management of Tranche 1, including but not limited to: (i) preparing an overall project implementation plan and detailed work program; (ii) providing overall monitoring and guidance on implementation; (iii) monitoring and supervising all management activities; (iv) preparing periodic project progress and project completion reports; (v) preparing financial planning and budgeting; and (vi) ensuring full compliance with ADB’s resettlement, environmental, and other safeguard policies. 30. With dedicated staff, the PIUs to be located within implementing agencies (five project ULBs, CMWSSB and CMA) will support the PMU in the implementation of Tranche 1. The PIUs will be responsible for all day-to-day implementation of Tranche 1 of the program in works/goods components. Accounts staff to be located in PIUs will support the PMU in consolidating the project accounts and preparing periodical financial reports. The PMU and the Governance Improvement and Awareness Consultants (GIACs), proposed to be recruited under Tranche 1, will train and guide the PIUs in the accounts and finance related activities. 31. A key aspect of FMA is evaluating the risks associated with financial arrangements of Tranche 1. ADB’s principal concern is to ensure that the project funds are used economically and efficiently for the purposes intended. In support of this, FMA seeks assurance that the financial management system of executing agency and implementing agencies can report on the source and use of the project funds. The FMA covered the financial management capacity of executing agency and implementing agencies through FMA questionnaire, discussions with officials, and information available through various reports. 32. The major risk factors identified during the assessment that need to be addressed include:

(i) Lack of executing and implementing agencies’ experience in implementing ADB funded projects may cause delays in timely preparation and submission of periodical financial reports; and

(ii) Delays in setting up dedicated PMU and PIUs may hamper the timely and effective implementation of Tranche 1.

33. Despite the highlighted risks, the financial management arrangements are satisfactory taking into account the ongoing actions of GOTN, TNUIFSL, CMWSSB, project ULBs and CMA, and proposed reforms and capacity development under Tranche 1 into consideration. In addition, the GIAC, proposed to be recruited under Tranche 1, will support executing agency and implementing agencies in enhancing the financial management capacity. The overall risk

21 A part of the loan funds towards governance improvement component of the facility shall be managed by CMA. CMA

shall however make available project accounts to TNUIFSL and allow TNUIFSL to cause auditing of project accounts 22 Coimbatore Municipal Corporation (CMC), Tirunelveli Municipal Corporation (TNMC), Vellore Municipal Corporation

(VMC), Tiruchirapalli Municipal Corporation (TMC) and Rajapalayam Municipality (RM). 23 The Chennai Metro Water Supply and Sewerage Board (CMWSSB) is responsible for water supply and sewerage

operation in Chennai City.

27

assessment for the proposed Tranche 1 is “Moderate.” Considering sufficient experience handling externally funded projects of GOTN and implementation arrangement for the project established by GOTN and TNUIFSL, the advance fund limit was set to the forthcoming 6 months. The action plan for mitigating the foreseen risks includes the following measures (Table 15).

Table 15: Risk Assessment and Mitigation Plan

Area Current scenario Risk Mitigation measure

suggested Target date

Managing externally assisted projects

Tranche 1 will be the first ADB funded program to executing agency and implementing agencies.

This may cause delays in timely preparation and submission of periodical financial reports of Tranche 1.

Extending full training and capacity building support to enhance the financial management capacity of executing agency and implementing agencies.

June 2018 onwards

Setting up dedicated PMU and PIUs

PMU and PIUs have not been established yet.

This may hamper the timely and effective implementation of the Tranche 1.

Commitment of GOTN to ensure the timely setting up of PMU and PIUs with qualified staff.

May 2018

ADB = Asian Development Bank, GOTN = Government of Tamil Nadu, PIU = program implementation unit, PMU = program management unit, ULBs = urban local bodies.

34. The FMA has considered two types of risks, (i) inherent risks, i.e., risks outside the direct control of the entity financial management, and (ii) control risks, i.e., risks concerning the internal functioning and control of the entity’s accounts division. The following key risks have been identified (Table 16).

Table 16: Financial Management Inherent and Control Risk Assessment

Risk Risk Assessment Proposed Mitigation Measures

A. Inherent Risks

1. Country-Specific Risks (India)

LOW

• The financial standards and capacity in Government of India’s public and private sector are sound. India has a strong accounting profession although most levels of the government still use a cash basis of accounting.

• Not applicable

2. Entity-Specific Risks (GOTN)

LOW

• There are strong institutional mechanism and legislative framework for budgeting, accounting, and audit in a time-bound manner.

• Not applicable

3. Project-Specific Risks

SUBSTANIAL

• Tariff revisions in water and sewerage have been delayed. This may hamper the financial sustainability of subprojects in CMWSSB and the project ULBs under Tranche 1.

• GOTN, CMWSSB, and project ULBs need to prepare and effectively implement systematic plans for enhancing revenues and reducing costs including enhancement of coverage, rationalization of tariffs, reduction of NRW and operations costs, improvement of billing and collection efficiencies.

Overall MODERATE

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Inherent Risk While project-specific risks exist, these risks might be mitigated through cordial efforts of the CMWSSB, project ULBs and GOTN with support of ADB. In particular, the GOTN needs to support the CMWSSB and project ULBs in implementing the regular tariff revisions for ensuring the sustainability of the assets created under Tranche 1.

B. Control Risks – TNUIFSL and PMU (executing agency)

1. Implementing Entity

SUBSTANTIAL

• TNUIFSL will be responsible for implementation of Tranche 1.

• TNUIFSL has already implemented several externally projects funded by World Bank, KfW, and JICA.

• However, TNUIFSL do not have experience in handling ADB funded projects.

• Appropriate training on ADB procedures is necessary to the accounts staff of TNUIFSL and its PMU.

2. Funds Flow

LOW

• Funds flow for Tranche 1 has been finalized. No major problems are expected in flow of funds.

• Not applicable

3. Staffing LOW

• TNUIFSL's Finance Section, which will be responsible for Tranche 1 is adequately staffed with competent and experienced personnel.

• Not applicable

4. Accounting Policies and Procedures

LOW

• Policies and procedures are well documented.

• TNUIFSL uses Indian accounting standards as laid down by ICAI.

• Not applicable

5. Internal Audit LOW

• TNUIFSL has outsourced internal audit to an independent firm of chartered accountants. Quarterly and Annual internal audit reports are prepared. Internal audit for Tranche 1 will also be done by an independent firm of chartered accountants.

• Not applicable.

6. External Audit (project level)

LOW

• External audit for Tranche 1 will also be done by an independent firm of chartered accountants.

• Not applicable

7. External Audit (entity level)

LOW

• TNUIFSL’s annual financial statements are audited by an independent firm of Chartered Accountants. There have been no delays. External audits were done up to FY 2016-2017.

• Not applicable

8. Reporting and Monitoring

LOW

• Routine reports are produced from the Accounting System – others are prepared on spreadsheets with figures extracted from the accounting system.

• Not applicable

9. Information Systems

LOW

• TNUIFSL’s accounts are computerized.

• Not applicable

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Overall Control Risk

MODERATE Being the first ADB funded project, procedural risk is recognized. However, appropriate training to the account staff can remove the risk for TNUIFSL and PMU.

C. Control Risks – Chennai Metro Water Supply and Sewerage Board (CMWSSB, Implementing Agency)

1. Implementing Agency

MODERATE

• CMWSSB does not have experience in handling ADB funded projects.

• The dedicated PIU has not been established.

• Appropriate training on ADB procedures is required for PIU staff.

• Setting up of dedicated PIU with adequate accounts staff is necessary.

2. Funds Flow LOW


• Not applicable

3. Staffing SUBSTANTIAL

• Dedicated PIU with adequate accounting staff is required for Tranche 1. Delays in staffing will affect the financial management of PIUs.

• GOTN and CMWSSB need to commit for setting up of dedicated PIU at CMWSSB with qualified accounts staff.


LOW

• Policies and procedures are well documented. CMWSSB uses Indian accounting standards laid down by Institute of Chartered Accountants of India.

• Not applicable.


• There is an in-house internal audit system. Staff is on deputation from the Indian Audit & Accounts Service and / or state Government. Internal audit covers all units of CMWSSB.

• Not applicable.

6. External Audit (Project level)

MODERATE

• External audit for Tranche 1 will also be done by an independent firm of chartered accountants

• GOTN and CMWSSB need to ensure timely audit of project accounts to be sent to TNUIFSL-PMU for consolidation.


MODERATE

• CMWSSB’s financial statements are audited by independent firm of Chartered Accountants and is also subject to audit by CAG. Audit is completed up to financial year 2014-2015 and audit issues are resolved on an ongoing basis.

• GOTN and CMWSSB need to co-ordinate with CAG for clearing the backlogs in audits (pending for FY 2016 and FY 2017).


LOW

• Reports are prepared using computerized platform as well as word/ excel.

• Not applicable


LOW

• CMWSSB is adequately managing information system.

• Not applicable


MODERATE Some financial management risks are recognized, but all of them are not high. Delays in external audits in CMWSSB are found as risks, but these can be tackled with the co-ordination with CAG.

D. Control Risks – Coimbatore Municipal Corporation (CMC, Implementing Agency)

1. Implementing SUBSTANTIAL

30


Agency

• CMC does not have experience in handling ADB funded projects.


• Appropriate training on ADB procedures is required for CMC and staff.

2. Funds Flow LOW



• Dedicated PIU with adequate accounting staff is required for Tranche 1. Delays in staffing will affect the financial management of PIU.

• GOTN and CMA need to commit for setting up of dedicated PIU at CMC with qualified accounts staff.


LOW

• Accounts are maintained under accrual-based accounting system. CMC uses Tally Accounting Software for maintenance of accounts.

• Not applicable.


• There is no in-house internal audit system. LFAD of GOTN conducts the concurrent audit in CMC by doing post audit of day to day transactions through its staff stationed in CMC.

• Not applicable


MODERATE

• External audit for Tranche 1 will also be done by LFAD. In case there is delay in audit by LFAD, will be done by an independent firm of chartered accountants.

• GOTN and CMC need to ensure timely audit of project accounts to be sent to TNUIFSL-PMU for consolidation.


MODERATE

• LFAD conducts external audit of the CMC’s annual financial statements and issues audit certificate. LFAD audit completed up to FY2014-2015 in CMC

• CAG also conducts the external audit of CMC. CAG’s audit was completed up to FY 2015-2016 in CMC.

• GOTN and CMC need to co-ordinate with LFAD and CAG for clearing the backlogs in audits.


LOW

• Reports are prepared using Tally accounting software and / or word / excel.

• Not applicable


LOW

• CMC is adequately managing information system by installing the Tally accounting software.

• Not applicable


MODERATE Some financial management risks are recognized, but all of them are not high. Delays in setting up PIU and in external audits in CMC are found as risks, but these can be tackled with adequate experienced additional staffs and the co-ordination with LFAD and CAG.

E. Control Risks – Tirunelveli Municipal Corporation (TNMC, Implementing Agency)


SUBSTANTIAL

• TNMC does not have experience in handling ADB funded projects.


• Appropriate training on ADB procedures is required for TNMC and staff.

31


2. Funds Flow LOW




• GOTN and CMA need to commit for setting up of dedicated PIU at TNMC with qualified accounts staff.


LOW

• Accounts are maintained under accrual-based accounting system. TNMC uses CMA developed integrated accounting software for maintenance of accounts.

• Not applicable.


• There is no in-house internal audit system. LFAD of GOTN conducts the concurrent audit in TNMC by doing post audit of day to day transactions through its staff stationed in TNMC.

• Not applicable


MODERATE

• External audit for Tranche 1 will also be done by LFAD. In case there is delay in audit by LFAD, will be done by an independent firm of chartered accountants

GOTN and TNMC need to ensure timely audit of project accounts to be sent to TNUIFSL-PMU for consolidation.


MODERATE

• LFAD conducts external audit of the TNMC’s annual financial statements and issues audit certificate. LFAD audit completed up-to FY2014-2015 in TNMC

• CAG also conducts the external audit of TNMC. CAG’s audit was completed up to FY 2015-2016 in TNMC.

• GOTN and TNMC need to co-ordinate with LFAD and CAG for clearing the backlogs in audits.


LOW

• Reports are prepared using CMA developed integrated accounting software and / or word / excel.

• Not applicable


LOW

• TNMC is adequately managing information system by installing the CMA developed integrated accounting software.

• Not applicable


MODERATE Some financial management risks are recognized, but all of them are not high. Delays in setting up PIU and in external audits in TNMC are found as risks, but these can be tackled with adequate experienced additional staffs and the co-ordination with LFAD and CAG.

F. Control Risks – Vellore Municipal Corporation (VMC, Implementing Agency)


SUBSTANTIAL

• VMC does not have experience in handling ADB funded projects.


Appropriate training on ADB procedures is required for VMC and staff.

2. Funds Flow LOW

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GOTN and CMA need to commit for setting up of dedicated PIU at VMC with qualified accounts staff.


LOW

• Accounts are maintained under accrual-based accounting system. VMC uses CMA developed integrated accounting software for maintenance of accounts.

Not applicable.


• There is no in-house internal audit system. LFAD of GOTN conducts the concurrent audit in VMC by doing post audit of day to day transactions through its staff stationed in VMC.

Not applicable


MODERATE


GOTN and VMC need to ensure timely audit of project accounts to be sent to TNUIFSL-PMU for consolidation.


MODERATE

• LFAD conducts external audit of the VMC’s annual financial statements and issues audit certificate. LFAD audit completed up-to FY2014-2015 in TNMC

• CAG also conducts the external audit of TNMC. CAG’s audit was completed up to FY 2015-2016 in TNMC.

• GOTN and VMC need to co-ordinate with LFAD and CAG for clearing the backlogs in audits.


LOW


• Not applicable


LOW

• VMC is adequately managing information system by installing the CMA developed integrated accounting software.

• Not applicable


MODERATE Some financial management risks are recognized, but all of them are not high. Delays in setting up PIU and in external audits in VMC are found as risks, but these can be tackled with adequate experienced additional staffs and the co-ordination with LFAD and CAG.

G. Control Risks – Tiruchirapalli Municipal Corporation (TMC, Implementing Agency)


SUBSTANTIAL

• TMC does not have experience in handling ADB funded projects.


Appropriate training on ADB procedures is required for TMC and staff.

2. Funds Flow LOW


33




GOTN and CMA need to commit for setting up of dedicated PIU at TMC with qualified accounts staff.


LOW

• Accounts are maintained under accrual-based accounting system manually. TMC is in the process of installing the CMA developed integrated accounting software for maintenance of accounts.

Not applicable.


• There is no in-house internal audit system. LFAD of GOTN conducts the concurrent audit in TMC by doing post audit of day to day transactions through its staff stationed in TMC.

Not applicable


LOW


GOTN and TMC need to ensure timely audit of project accounts to be sent to TNUIFSL-PMU for consolidation.


LOW

• LFAD conducts external audit of the TMC’s annual financial statements and issues audit certificate. LFAD audit completed up-to FY2015-2016 in TMC

• CAG also conducts the external audit of TMC. CAG’s audit was completed up to FY 2015-2016 in TNMC.

• Not applicable.


LOW

• Reports are prepared using word / excel. CMA developed software is in the process of installation.

• Not applicable


LOW

• TMC is adequately managing information system through manual records. TMC is in the process of installing the CMA developed integrated accounting software.

• Not applicable


MODERATE Some financial management risks are recognized, but all of them are not high. Delay in setting up PIU is found as risk, but this can be tackled with adequate experienced additional staffs.

H. Control Risks – Rajapalayam Municipality (RM, Implementing Agency)


SUBSTANTIAL

• RM does not have experience in handling ADB funded projects.


Appropriate training on ADB procedures is required for RM and staff.

2. Funds Flow LOW


3. Staffing SUBSTANTIAL GOTN and CMA need to commit for setting up of dedicated PIU at

34



Rajapalayam Municipality with qualified accounts staff.


LOW

• Accounts are maintained under accrual-based accounting system. RM uses CMA developed integrated accounting software for maintenance of accounts.

Not applicable.


• There is no in-house internal audit system. LFAD of GOTN conducts the concurrent audit in RM by doing post audit of day to day transactions through its staff stationed in RM.

Not applicable


LOW


GOTN and Rajapalayam Municipality need to ensure timely audit of project accounts to be sent to TNUIFSL-PMU for consolidation.


MODERATE

• LFAD conducts external audit of the RM’s annual financial statements and issues audit certificate. LFAD audit completed up-to FY2015-2016 in RM

• CAG also conducts the external audit of RM. CAG’s audit was completed up to FY 2014-2015 in RM.

• GOTN and Rajapalayam Municipality need to coordinate with CAG for clearing the backlogs in audits.


LOW


• Not applicable


LOW

• RM is adequately managing information system by installing the CMA developed integrated accounting software.

• Not applicable


MODERATE Some financial management risks are recognized, but all of them are not high. Delays in setting up PIU and in external audit in RM are found as risks, but these can be tackled with adequate experienced additional staffs and the co-ordination with CAG.

I. Control Risks – Commissionerate of Municipal Administration (CMA, Implementing Agency)


SUBSTANTIAL

• CMA does not have experience in handling ADB funded projects.


Appropriate training on ADB procedures is required for CMA and staff.

2. Funds Flow LOW




GOTN and CMA need to commit for setting up of dedicated PIU at CMA with qualified accounts staff.

35



LOW

• Accounts are maintained under GOTN accounting system.

Not applicable.


• There is no in-house internal audit system. Being a GOTN department, CAG audit covers this aspect as well.

Not applicable


LOW

• External audit for Tranche 1 will also be done by CAG.

GOTN and CAG need to ensure timely audit of project accounts to be sent to TNUIFSL-PMU for consolidation.


LOW

• CAG conducts the external audit of CMA which is under MAWS, a department of GOTN. CAG’s audit was completed up to FY 2015-2016.

• Not applicable.


LOW

• Reports are prepared using reports generated under GOTN accounting system as well as word / excel.

• Not applicable


LOW

• CMA is adequately managing information system through GOTN computerized accounting system.

• Not applicable


MODERATE Some financial management risks are recognized, but all of them are not high. Delay in setting up PIU is found as risk, CMA needs to commit to set up its PIU on time with qualified staff.

ADB = Asian Development Bank, CAG= Comptroller and Auditor General, CMA = Commissionerate of Municipal Administration, CMC = Coimbatore Municipal Corporation, CMWSSB = Chennai Metro Water Supply and Sewerage Board, FY = fiscal year, ICAI = Institute of Chartered Accountants of India, LFAD = Local Fund Audit Department, GOTN = Government of Tamil Nadu, JICA = Japan International Cooperation Agency, MAWS = Municipal Administration and Water Supply Department, NRM = nonrevenue water, PIU = program implementation unit, PMU = program management unit, RM = Rajapalayam Municipality, TNMC = Tirunelveli Municipal Corporation, TMC = Tiruchirapalli Municipal Corporation, TNUIFSL = Tamil Nadu Urban Infrastructure Financial Services Limited, ULBs = urban local bodies, VMC = Vellore Municipal Corporation.

B. Disbursement

1. Disbursement Arrangements for ADB and ADB-administered cofinancier Funds

35. The loan proceeds will be disbursed in accordance with the ADB’s Loan Disbursement Handbook (2017, as amended from time to time), and detailed arrangements agreed upon between the Government of India and the ADB. The PMU will be responsible for: (i) preparing annual contract awards and disbursement projections, (ii) requesting budgetary allocations for counterpart funds, (iii) collecting supporting documents, and (iv) preparing and sending withdrawal applications to the ADB through the Treasury, Ministry of Finance. Online training for project staff on disbursement policies and procedures is available.24 Project staff are encouraged to avail of this training to help ensure efficient disbursement and fiduciary control.

24 Disbursement eLearning. http://wpqr4.adb.org/disbursement_elearning

http://wpqr4.adb.org/disbursement_elearning

36

36. Advance fund procedure. An advance account should be established and maintained by Controller of Aid, Accounts and Audit (CAAA) for the ADB loan. The PMU will be responsible for the preparation of liquidation/replenishment of the advance fund. The currency of the advance account is US dollar. The advance account is to be used exclusively for the ADB’s share of eligible expenditures. The CAAA, who established the advance account in its name, is accountable and responsible for proper use of advances to the advance account. The sub-account will be maintained by the PMU receiving the Indian Rupee from CAAA/GOTN and will transfer appropriate funds to sub-accounts at PIUs (for each subproject) based on demand. The exception is CMA PIU which will receive a share of the ADB rupee fund directly from CAAA/GOTN to its sub-account.

37. The total outstanding advance to the advance account should not exceed the estimate of ADB’s share of expenditures to be paid through the advance account for the forthcoming 6 months. The PMU may request for initial and additional advances to the advance account based on an Estimate of Expenditure Sheet25 setting out the estimated expenditures to be financed through the account for the forthcoming 6 months. Supporting documents should be submitted to ADB or retained by the PMU in accordance with the ADB’s Loan Disbursement Handbook (2017, as amended from time to time) when liquidating or replenishing the advance account.

38. Statement of expenditure procedure. The statement of expenditure (SOE) procedure will not be adopted for reimbursement of eligible expenditures per individual payment. Reimbursement and liquidation of individual payments should be supported by full documentation when submitting the withdrawal application to ADB. 39. Before the submission of the first withdrawal application, the borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the government, together with the authenticated specimen signatures of each authorized person. The minimum value per withdrawal application is set in accordance with ADB’s Loan Disbursement Handbook (2017, as amended from time to time). Individual payments below this amount should be paid (i) by the GOTN and/or PMU and subsequently claimed to the ADB through reimbursement, or (ii) through the advance fund procedure, unless otherwise accepted by the ADB.

2. Disbursement Arrangements for Counterpart Fund

40. Counterpart funds will be provided by MAWS from its annual budgets, which in turn will be based on the amounts provided for the investment program in the budget of GOTN. The PMU will be responsible for: (i) preparing disbursement projections, (ii) requesting budgetary allocations for counterpart funds, and (iii) collecting supporting documents. Taxes and duties will be borne by the counterpart by way of cash contribution.

C. Accounting 41. The PMU and PIU will maintain, or cause to be maintained, separate books and records by funding source for all expenditures incurred on the project following relevant standards provided in the loan agreements. For their respective components, the PMU and PIUs will prepare the project financial statements in accordance with the accounting laws and regulations of the Government of India which are consistent with international accounting principles and practices acceptable to ADB. Project accounts will follow generally accepted accounting principles followed

25 ADB. 2017. Loan Disbursement Handbook. Manila.

37

in the government and the accounting standards followed by the government and GOTN. Each project’s financial statements will adhere to the generally accepted accounting principles followed in India, and the cash basis accounting standards followed by the Template financial statements provided in the standardized terms of reference for audit of ADB assisted projects, agreed with the Comptroller and Audit General (CAG), the DEA, and ADB can be referred to as a guide for preparing financial statements. Financial statements for individual tranches will not be consolidated. D. Auditing and Public Disclosure 42. The PMU, in cooperation with the implementing agencies, will cause the detailed project financial statements to be audited in accordance with the government’s audit regulations, as supplemented by the terms of reference agreed between the ADB, the DEA, and the CAG India in September 2013, by a firm of chartered accountants acceptable to the ADB. The audited project financial statements, together with the auditor’s opinion, will be presented in English to the ADB within 6 months from the end of the fiscal year by the executing agency. 43. The audited entity’s financial statements of the TNUIFSL together with the auditor’s report and management letter, will be submitted in English to ADB within a month after their approval by the relevant authority. The entity level audit shall be done by firms of chartered accountants for TNUIFSL. 44. The audit report for the project financial statements will include a management letter and auditor’s opinions, which cover: (i) whether the project financial statements present an accurate and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting standards; (ii) whether the proceeds of the loan and grant were used only for the purpose(s) of the project; and (iii) whether India and/or the state/ TNUIFSL/ implementing agencies was in compliance with the financial covenants contained in the legal agreements (where applicable). 45. Compliance with financial reporting and auditing requirements will be monitored by review missions and during normal program supervision, and followed up regularly with all concerned, including the external auditor. 46. The government, and the TNUIFSL have been made aware of the ADB’s approach to delayed submission, and the requirements for satisfactory and acceptable quality of the audited project financial statements.26 The ADB reserves the right to require a change in the auditor (in a manner consistent with the constitution of the borrower), or for additional support to be provided to the auditor, if the audits required are not conducted in a manner satisfactory to ADB, or if the audits are substantially delayed. The ADB reserves the right to verify the project's financial

26 ADB’s approach and procedures regarding delayed submission of audited project financial statements:

(i) When audited project financial statements are not received by the due date, ADB will write to the executing agency advising that (a) the audit documents are overdue; and (b) if they are not received within the next 6 months, requests for new contract awards and disbursement such as new replenishment of imprest accounts, processing of new reimbursement, and issuance of new commitment letters will not be processed.

(ii) When audited project financial statements are not received within 6 months after the due date, ADB will withhold processing of requests for new contract awards and disbursement such as new replenishment of imprest accounts, processing of new reimbursement, and issuance of new commitment letters. ADB will (a) inform the executing agency of ADB’s actions; and (b) advise that the loan may be suspended if the audit documents are not received within the next 6 months.

(iii) When audited project financial statements are not received within 12 months after the due date, ADB may suspend the loan.

38

accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures. 47. Public disclosure of the audited project financial statements, including the auditor’s opinion on the project financial statements, will be guided by the ADB’s Public Communications Policy 2011.27 After the review, ADB will disclose the audited project financial statements and the opinion of the auditors on the project financial statements no later than 14 days of ADB’s confirmation of their acceptability by posting them on the ADB’s website. The management letter, additional auditor’s opinions, and audited entity financial statements will not be disclosed.28

VI. PROCUREMENT AND CONSULTING SERVICES

A. Advance Contracting and Retroactive Financing

48. All advance contracting and retroactive financing will be undertaken in conformity with ADB Procurement Guidelines (2015, as amended from time to time) and ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time). The issuance of invitations to bid under advance contracting and retroactive financing will be subject to ADB approval. The borrower and TNUIFSL have been advised that approval of advance contracting and retroactive financing does not commit ADB to finance the project. 49. Advance contracting. Advance contracting for the MFF will be approved by ADB upon request from the executing agency and will include the engagement of the CMSC packages, and the procurement of civil works package for Chennai, Coimbatore, Rajapalayam, Tirunelveli, Tiruchirappalli, and Vellore. 50. Retroactive financing. Subject to ADB’s approval, retroactive financing will be for eligible expenditures up to the equivalent of 20% of the total ADB loan, incurred before loan effectiveness, but not more than 12 months before the signing of the loan agreement. For Tranche 1 of the MFF, the maximum loan amount is $169 million and the maximum amount of retroactive financing is therefore $33.8 million. B. Procurement of Goods, Works, and Consulting Services

51. All procurement of goods and works will be undertaken in accordance with ADB’s Procurement Guidelines (2015, as amended from time to time). 52. International competitive bidding (ICB) procedures will be used for civil works contracts estimated to cost $40 million or more, and supply contracts valued at $10 million or higher. The national competitive bidding (NCB) procedures will be used for civil works contracts estimated to cost less than $40 million, and supply contracts valued at less than $10 million. Shopping may be used for contracts for procurement of works and equipment worth less than $100,000. 53. Before the start of any procurement, ADB and the government will review the public procurement laws of the central and state governments to ensure consistency with ADB’s Procurement Guidelines (2015, as amended from time to time). All procurement of works and

27 Public Communications Policy: http://www.adb.org/documents/pcp-2011?ref=site/disclosure/publications 28 This type of information would generally fall under public communications policy exceptions to disclosure. ADB. 2011.

Public Communications Policy. paragraph 97(iv) and/or 97(v).

http://www.adb.org/documents/pcp-2011?ref=site/disclosure/publications

39

goods under NCB using any type of standard procurement document agreed upon shall be subject to prior review by ADB.

54. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is presented in Section C. 55. All consultants will be recruited according to ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time).29 There will be one CMSC for each implementing agency (except for municipalities to be assisted by TWAD) to assist it in all aspects of the program. One agency will be recruited to support CMA in implementation of incentivized reforms, capacity building Information Education & Communication (IEC), gender action plan (GAP) and resettlement plan and awareness campaign activities. 56. The construction management and supervision consultants (CMSCs) will require an estimated 1,224 person-months national experts and will be responsible for the contract management and construction supervision, data collection and assessment, assisting ULBs to evaluate bids, supervising construction, monitoring and reporting to PMU on progress and compliances, assisting in the disbursement of funds and ensuring safeguard compliance in line with ADB requirements. 57. The GIAC will be recruited to assist the CMA (which is the implementing agency for governance and capacity building component and has administrative control over the ULBs) to support in implementing community participation, gender action plan, public awareness campaigns, resettlement plan, and incentivized governance improvement component. The GIAC will require 768 person-months of national experts. 58. The PDC will be recruited to assist the PMU to carry out design and preparation of detailed project reports for future investments in Tamil Nadu cities. Indicative person months are 6 person-months of international experts and 470 person-months of national experts. The inputs of the PDC will be firmed up at the time subprojects of future tranches are confirmed and final TOR prepared. 59. The consultants will be engaged using the quality- and cost-based selection (QCBS) method with a standard quality: cost ratio of 90:10. Individual consultants will be recruited using individual consultant selection. 60. In later tranches of the MFF, the bidders will be given option for electronic procurement. Accordingly, an e-procurement assessment consistent with the requirements outlined in Project Administration Instructions (PAI) 3.08 needs to be conducted prior to approving this modality to ensure that there exists a robust system, which generally meets the principles of economy, efficiency, transparency, and award of contract to the lowest evaluated substantially responsive bid through a fair and open competitive bidding system. Furthermore, it should be ascertained that it follows the key principles of transparency, open competition, accountability and security of process. ADB and GOTN will closely monitor and record receipt of amendments, substitutions, and clarifications by bidders is not tracked and recorded by the TNUIFSL and/or the IAs as is required under ADB guidelines. Once approved by ADB, e-Procurement can be applied to ICB,

29 Checklists for actions required to contract consultants by method available in e-Handbook on Project Implementation

at: http://www.adb.org/documents/handbooks/project-implementation/

http://www.adb.org/documents/handbooks/project-implementation/

40

NCB, limited international bidding and shopping modes of procurement for the program. The use of e-procurement does not apply to the recruitment of consultants. C. Procurement Plan

61. Before the start of any procurement, ADB and the government will review the procurement procedures of the relevant agencies (executing agency, PMU and PIU) to ensure consistency with ADB’s Procurement Guidelines (2015, as amended from time to time), and audit and disbursement procedures of the relevant agencies (Finance Department, Audit Office, executing agency, PMU, PIU) to ensure consistency with ADB’s disbursement procedures. The Procurement Plan indicating the threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is given in Appendix 5. Table 17: Procurement Plan Summary for the Multitranche Financing Facility (Indicative)

General Description Estimated Value

($ million) Advertisement Date

(quarter/ year) Tranche

Civil Work Packages

TNUFIP/TEVL/01: Providing sewerage collection system in Zone-1,2 & 3 for UGSS in Tirunelveli Corporation under Phase-II

36.97 Q4/2017 Tranche 1

TNUFIP/TEVL-2/01: Providing sewerage collection system in Zone - 4, 5, 6, PCB, PM and construction of Sewage Treatment Plant of capacity 27 MLD with Waste Stabilization Pond technology for UGSS in Tirunelveli Corporation Phase-III

57.64 Q1/2018 Tranche 1

TNUFIP/CBE/01: Providing UGSS to Kurichi and Kuniamuthur Area Wards 87 to 100 of Coimbatore Corporation-Phase-II in Coimbatore District

64.85 Q1/2018 Tranche 1

TNUFIP/CBE/03: Construction of Sewage Treatment Plant of capacity 30.53 MLD on DBO basis for UGSS in Coimbatore Corporation under Package – 3

6.80 Q2/2018 Tranche 1

TNUFIP/CBE/GR1: Supply, erection installation and commissioning of 2 MW PV Solar power plant for STP in Coimbatore corporation

2.00 Q3/2018 Tranche 1

TNUFIP/TIRP/01: Providing sewerage collection system in the extended areas of Corporation for UGSS in Trichy Corporation under Package – 1

32.37 Q4/2017 Tranche 1

TNUFIP/TIRP/02: Providing sewerage collection system in left out areas of erstwhile Corporation

11.58 Q4/2017 Tranche 1

41




for UGSS in Trichy Corporation under Package – 2

TNUFIP/TIRP/03: Construction of Sewage Treatment Plant of capacity 37 MLD on DBO basis for UGSS in Trichy Corporation under Package-3

5.50 Q2/2018 Tranche 1

TNUFIP/VEL/01: Providing sewerage collection system in Zone 3,4 &5 for UGSS in Vellore Corporation under Package – 1

18.91 Q4/2017 Tranche 1

TNUFIP/VEL/02: Providing sewerage collection system in Zone 6,7, PCB & PM for UGSS in Vellore Corporation under Package-2

20.55 Q4/2017 Tranche 1

TNUFIP/VEL/03: Construction of Sewage Treatment Plant of capacity 50 MLD on DBO basis for UGSS in Vellore Corporation under Package-3

9.24 Q1/2018 Tranche 1

TNUFIP/RPM/01: Providing sewerage collection system for UGSS in Rajapalayam Municipality under Package – 1

27.87 Q1/2018 Tranche 1

TNUFIP/RPM/02: Construction of Sewage Treatment Plant of capacity 21.85 MLD – 2 modules on DBO basis for UGSS in Rajapalayam Municipality under Package-2

3.40 Q2/2018 Tranche 1

TNUFIP/CMWSSB/01: Providing Water Supply Improvement Scheme for the 5 added areas of Chennai City

14.91 Q1/2018 Tranche 1

TNUFIP/CMWSSB/02: Providing Sewerage Collection System in 4 added areas of Chennai city for UGSS in Greater Chennai Corporation

21.33 Q4/2017 Tranche 1

TNUFIP/CBE/04: Providing 24X7 Water Supply and Smart Water Management in Tirupur Corporation (Multiple Packages)

96.26 Q3/2018 Tranche 2

TNUFIP/CBE/05: Water Supply Source Augmentation Works Pillur Phase III in Coimbatore Corporation (Multiple Packages)

98.89 Q3/2018 Tranche 2

TNUFIP/TCR/04: Providing sewage collection system for UGSS in Trichy Phase III (Multiple Packages)

65.71 Q4/2018 Tranche 2

42




TNUFIP/ABR/01: Providing sewage collection system and STP for UGSS in Ambur Municipality (Multiple Packages)

36.26 Q4/2018 Tranche 2

TNUFIP/RJP/01: Providing storm water drainage in Kosathalayar sub basin in Chennai City

79.12 Q4/2018 Tranche 2

TNUFIP/VLR/04: Providing sewage collection system in for UGSS in Vellore Corporation Phase III (Multiple Packages)

46.79 Q4/2018 Tranche 2

TNUFIP/TPR/01: Providing sewage collection system and STP for UGSS in Tiruppur Corporation Phase III (Multiple Packages)

58.02 Q4/2018 Tranche 2

TNUFIP/CDLR/01: Providing integrated water resources management for Cuddalore Municipality (Multiple Packages)

13.18 Q3/2019 Tranche 3

TNUFIP/TTCN/01: Providing integrated water resources management for Tuticorin Municipality (Multiple Packages)

13.18 Q3/2019 Tranche 3

TNUFIP/CBE/06: Waste Water Recycling Project for Coimbatore City (Multiple Packages)

13.18 Q3/2019 Tranche 3

TNUFIP/CHN/03: Providing 24X7 Water Supply and Smart Water Solutions in Pilot Area of Chennai Corporation (Multiple Packages)

48.23 Q2/2019 Tranche 3

Note: The estimated cost is the base cost and includes taxes at an average of 12% in 2017 prices; Exchange rate of US$ 1 = ₹64.27 is used.

Table 18: Procurement Plan Summary–Consulting Services (Indicative)


($ million) Advertisement

Date Comments

Consultancy Services

Construction Management and Supervision Consulting firm to assist Tirunelveli Corporation (CMSC-I)

1.88 Q4/2017 Tranche 1

Construction Management and Supervision Consulting firm to assist Tiruchirappalli Corporation (CMSC-III)

1.74 Q4/2017

Tranche 1

Construction Management and Supervision Consulting firm to assist Vellore Corporation (CMSC-IV)

1.74 Q4/2017

Tranche 1

Construction Management and Supervision Consulting firm to assist Chennai Metropolitan Water Supply and Sewerage Board (CMSC V)

1.95 Q4/2017

Tranche 1

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($ million) Advertisement

Date Comments

Governance Improvement and Awareness Consultancy – Firm (Includes hardware and software)

3.50 Q2/2018

Tranche 1

Project Design Consultants – Firm (PDC) 3.90 Q2/2018 Tranche 1

Individual Consultants for Governance Improvement administration

0.70 Q4/2018 Tranche 1

Contract Management & Supervision Consultancy Tirupur WS

3.78 Q4/2018 Tranche 2

Contract Management & Supervision Consultancy Coimbatore WS Phase III

6.07 Q4/2018 Tranche 2

Contract Management & Supervision Consultancy Trichy UGSS Phase III

2.10 Q4/2018 Tranche 2

Contract Management & Supervision Consultancy Vellore UGSS Phase III

1.63 Q4/2018 Tranche 2

Contract Management & Supervision Consultancy Tirupur UGD Phase III

0.96 Q4/2018 Tranche 2

Contract Management & Supervision Consultancy Chennai SWD (for GCC)

2.80 Q4/2018 Tranche 2

Governance Improvement and Awareness Consultancy

1.00 Q2/2020 Tranche 2

Contract Management and Supervision Consultancy for Chennai Corporation (for CMWSSB)

1.87 Q2/2021 Tranche 3

Contract Management and Supervision Consultancy for Coimbatore Corporation(Water Recycling)

0.39 Q2/2021 Tranche 3

Contract Management and Supervision Consultancy for Thoothukkudi Corporation

0.38 Q2/2021 Tranche 3

D. Consultant's Terms of Reference

62. The terms of reference is available in Appendix 6 for the CMSC, in Appendix 7 for the GIAC, and Appendix 8 for the PDC.

VII. SAFEGUARDS

63. The PMU will ensure that all the requirements prescribed in Schedule 5 of the FFA, and the following frameworks that have been prepared with respect to the Facility, are complied with during the processing and implementation of the program:

(i) Environmental assessment and review framework (EARF); (ii) Resettlement framework; and (iii) Indigenous peoples planning framework.

64. Prohibited investment activities. Pursuant to ADB’s Safeguard Policy Statement (SPS 2009), the ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth at Appendix 5 of the ADB SPS, 2009.

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A. Environmental Safeguards

65. The ADB SPS, 2009 requires that adverse impacts of projects on the environment and people are avoided, and where not possible, should be minimized, mitigated, and/or compensated. ADB financed projects must comply with its SPS, 2009 and also with the borrower country’s environmental laws, including the international laws/conventions to which the country is a signatory. The environment safeguard requirements are to ensure the environmental soundness and sustainability of projects and support the integration of environmental considerations into the project decision-making process. 66. Screening and Categorization. Tranche 1 is classified as category B for environmental safeguards as per the ADB SPS 2009 as the proposed subprojects are unlikely to cause any significant or irreversible environmental impacts. Subprojects projected to have potentially significant adverse environmental impacts (Category A) will not be considered for implementation under the program.

67. Environmental assessment and management plans. Under Tranche 1, initial environmental examination (IEE) with environmental management plans (EMPs) were prepared.30 The subprojects demonstrate that the program is likely to have only small-scale, localized impacts on the environment which can be readily mitigated. Subproject locations are not within or adjacent to environmentally sensitive areas. Sewage pumping and lifting stations, which collect sewage to pump to a higher elevation manhole, pump station or sewage treatment plant (STP), are likely to generate odor. Although utmost care is taken to locate these, due to lack of alternative technically suitable government lands, some pump stations may need to be located close to houses. Appropriate design and operational measures are included in the project to prevent and control odor generation, including close monitoring during operation phase. The potential adverse environmental impacts of subprojects are mainly related to the construction period, which can be minimized by applying mitigating measures and environmentally sound engineering and construction practices. All draft IEEs will be updated during detailed engineering design and cleared by ADB prior to start of construction activities. No contracts will be awarded until final IEEs are submitted by TNUIFSL and approved by ADB. 68. The IEEs including EMPs will form part of the bid and contract documents. The EMPs of each IEE outline specific mitigation measures, environmental monitoring requirements and related institutional arrangements, including budget requirements for implementation, will be further updated during the construction phase. If some residual impacts are likely to remain significant after mitigation, the EMP will also include appropriate compensatory measures (offset) that aim to ensure that the subproject does not cause significant net degradation to the environment. 69. Environmental assessment and review framework. An EARF was developed in accordance with ADB SPS 2009 and applicable Government of India laws and regulations. The EARF will guide subproject selection, screening and categorization, environmental assessment, preparation of environmental management and implementation of subprojects and will facilitate compliance with the requirements specified in ADB SPS, 2009. It will be reviewed regularly and, if necessary, updated during implementation, if indicated by unanticipated new types of impacts

30 IEEs were prepared for (i) Underground sewerage system subproject covering Kuruchi and Kuniamuthur Areas of

Coimbatore Municipal Corporation; (ii) Underground sewerage system subproject covering western part of municipal area in Tirunelveli Municipal Corporation; and (iii) Subproject for providing six water supply schemes in Chennai corporation area. STP site in Coimbatore is located within a large compound reserved for waste management facility, outside the city. No significant impacts envisaged.

45

or if there is any change in legal and regulatory framework. None of the provisions of EARF will be relaxed or lowered if subsequent revisions and updates are required. 70. Environmental audit. For subprojects involving facilities and/or business activities that already exist or are under construction, environmental audit including an on-site assessment to identify past or present concerns related to impacts on the environment will be undertaken. The objective of this environmental audit is to determine whether actions were in accordance with ADB’s safeguard principles and requirements for borrowers/clients, and to identify and plan appropriate measures to address outstanding compliance issues. Where non-compliance is identified, a corrective action plan agreed on by ADB, executing agency and implementing agencies will be prepared. The plan will define the necessary remedial actions, the budget for such actions, and the timeframe for resolution of non-compliance. The environmental audit report (including the corrective action plan, if any) will be made available to the public in accordance with the information disclosure requirements of ADB SPS. If a subproject involves an upgrade or expansion of existing facilities that has potential impacts on the environment, the requirements for environmental assessments and planning specified in the EARF will apply in addition to compliance audit. 71. Environmental safeguard implementation arrangements. Environmental and social safeguards (ESS) managers in the PMU, TNUIFSL (executing agency) will have overall responsibility of safeguard compliance with EARF and ADB SPS, 2009. ESS Managers report to Head, Projects Wing. At PIU level, a ULB-appointed Safeguards Officer will coordinate safeguard tasks.31 The Environmental Specialist of the CMSC will assist PIU in preparing, implementing, and monitoring of safeguard activities at PIU level. Contractor staff will include an Environment, Health and Safety (EHS) supervisor. The PIU Safeguards Officer will play a critical role to coordinate, oversee the implementation of safeguard tasks, grievance redress and reporting. Necessary budgetary resources are included in the program. 72. Training and capacity building. The PMU ESS Managers will undergo training through programs periodically conducted by the ADB for executing agency and implementing agencies on safeguards. PMU ESS Managers, with the support of external trainers as required, will conduct safeguard orientation and training programs to PMU, Implementing agencies, and PIUs. At PIU level, CMSC Environmental Specialist will conduct training programs on EMP implementation, including occupational health and safety, and monitoring. A training and capacity building program is included in the EARF. 73. Environmental safeguard compliance requirements are summarized in Table 19.

Table 19: Summary of Environmental Safeguard Compliance Requirements

Project Stage Compliance Requirements

Prior to loan effectiveness

• ESS Managers of PMU, TNUIFSL trained in ADB SPS 2009.

Project preparation (preliminary and detailed design)

• Prepare subprojects conforming to subproject environment selection guidelines: (i) Subproject conforms to the exclusion criteria provided in the EARF;

and (ii) Subproject conforms to the selection guidelines provided in EARF.

31 Where TWAD sets up PIUs the following arrangement applies for safeguards and gender activities: (i) TWAD will

appoint an environmental safeguards officer; (ii) CMA will appoint social safeguards and gender monitoring experts; and (iii) ULB will provide a safeguards-gender officer to coordinate monitoring activities.

46

Project Stage Compliance Requirements

• Subproject is categorized as per the EARF provisions.

• Category A subprojects not considered for funding under TNUFIP.

• All the regulatory clearances and approval requirements of the subprojects are identified.

• IEEs conducted for the Category B subprojects;

• Conduct audit of associated facilities;

• Meaningful consultations with stakeholders and affected people are conducted, and information disclosed; and

• EMPs are prepared.

Bidding process • IEEs updated as per the detailed designs and are approved by ADB prior to bid invitation.

• The EMP is included in the tender documents.

• EMP provisions and compliance requirements as per EARF are explained to bidders in the pre-bid meetings.

• All the regulatory clearances and approvals are in place for the subproject prior to the award of the contract; and

• For design-build type bids/ contracts, contractor scope includes update of IEE as per the detailed designs, and implementation of updated EMP.

Construction

• The GRM is established prior to the start of construction; and

• Organize workshops/ training on EMP implementation to contractors and supervising staff.

• Contractor complies with all pre-construction procedures including preparation of the construction health and safety plan, traffic management plan and the establishment of labor camps as per the EMP provisions etc.

• The EMPs are implemented by contractors during construction,

• Update IEE and EMP if there is any change in project (location, alignment, design, construction methodology etc.,) and/or if any unanticipated impacts noticed during implementation;

• Monitoring is conducted by the PIU with the support of the CMSC;

• Address any grievances brought about through the GRM in a timely manner as per the IEEs; and

• Conduct continuous public consultation and awareness.

• Semi-annual EMRs are submitted to the ADB in the format given in EARF.

• All the sites are cleaned up and restored as required prior to issuance of work completion certification to the contractor.

Operation • All the operational stage regulatory clearances and approvals, as required, are in place prior to start of operation; and

• Implement operational stage EMP. ADB = Asian Development Bank, CMSC = contract management and supervision consultant, EARF = environmental assessment review framework, EMP = environmental management plan, EMRs = environmental monitoring reports, ESS = environmental and social safeguards, GRM = grievance redress mechanism, IEE = initial environmental examination, PMU = program management unit, SPS = Safeguard Policy Statement, TNUFIP = Tamil Nadu Urban Flagship Investment Program.

B. Social Safeguards

74. Multitranche Financing Facility. A resettlement framework has been prepared for the MFF conforming to national and state laws; mainly Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (LARR Act), 2013 and LARR Rules, 2017; the Environmental and Social Management Framework (ESMF) of TNUIFSL; and ADB’s Safeguard Policy Statement (SPS 2009). The resettlement framework outlines the objectives,

47

policy principles, and procedures for land acquisition, compensation, and other assistance measures for displaced persons under the program. The involuntary resettlement safeguards objectives governing resettlement planning and implementation under the investment program are to: (i) avoid involuntary resettlement wherever possible; (ii) minimize involuntary resettlement by identifying non-displacing or least displacing subproject and design alternatives; (iii) improve, or at least restore, the livelihoods of all displaced persons; (iv) improve the standards of living of the displaced persons, including vulnerable groups; and (v) ensure all compensation and resettlement assistance is paid prior to displacement. The resettlement framework includes guidance on screening and categorization, assessment, planning, institutional arrangements, and processes to be followed for all subprojects. An entitlement matrix has been prepared, which identifies and lists the various types of losses resulting out of the program and specific compensation and resettlement packages for each category.

75. ADB SPS, 2009 defines indigenous peoples as “a distinct, vulnerable, social and cultural group possessing the following characteristics in varying degrees: self-identification as members of a distinct indigenous cultural group and recognition of this identity by others; Collective attachment to geographically distinct habitats or ancestral territories in the project area and to the natural resources in these habitats and territories; Customary cultural, economic, social, or political institutions that are separate from those of the dominant society and culture; and a distinct language, often different from the official language of the country or region.” An indigenous peoples planning framework (IPPF) has been prepared and provides guidance in mitigating indigenous people impacts if any identified in future tranches, as stipulated in ADB SPS, 2009, SR3.

76. Tranche 1 of the MFF.32 Tranche 1 of the MFF is classified as Category B for involuntary resettlement and Category C for indigenous peoples impacts. Tranche 1 will minimize land acquisition and resettlement impacts by prioritizing rehabilitation and optimization work within existing facilities’ premises while the new construction (like pump stations, lift stations, water tanks etc.) is proposed on vacant government lands. Resettlement plans are prepared for all proposed subprojects under Tranche 1; for sewerage subprojects in Chennai, Tirunelveli, Coimbatore, Vellore, Tiruchirappalli, and Rajapalayam, and water supply subproject in Chennai. The anticipated impact includes 100% residential structure loss leading to relocation of 87 vulnerable affected persons (Male=40, Female=47) to new government housing and the potential temporary loss of income for 408 (Male=341 Female=57, Absentees=10) hawkers and vendors on proposed pipe alignments. No private land acquisition is anticipated for the sample subprojects; all sites identified for subproject components are municipal or government lands (463,811 square meters). Temporary impacts to mobile vendors and shops along roads with linear works will be avoided through careful EMP implementation. Resettlement plans also include land plan schedule/ enter upon permission for subproject sites that belong to other government agencies (other than corporation lands). The draft resettlement plans will be finalized during detailed engineering design.33 Consultations with potential temporary and permanent affected persons were conducted and documented in the resettlement plans. The budget for identified impacts is included in the overall project budget and the borrower is committed to provide timely budget prior to commencement of civil works. Resettlement plans will be disclosed on ADB’s website. TNUIFSL to ensure ULBs disclose resettlement plans in a language and form understandable to

32 For subprojects proposed under subsequent tranches, the PIUs will be responsible for conducting the social

assessment and preparing and implementing resettlement plans as per the procedures outlined in the resettlement framework.

33 Comprehensive baseline data on affected persons will be included in the updated resettlement plans during detailed design. The baseline data will serve as the basis for end-term evaluation.

48

stakeholders and project communities. Tranche 1 is categorized as C for indigenous peoples’. There are no indigenous peoples as defined by SPS in any of the areas of Tranche 1.

77. Program Management Unit. The ESS managers in the PMU, TNUIFSL (executing agency) will have overall responsibility of safeguard compliance under the program. ESS Managers report to Head, Projects Wing. The PMU will: (i) review and monitor compliance of social safeguard frameworks under the program, (ii) guide PIUs in safeguards compliance as and when necessary, and (iii) prepare and submit semi-annual monitoring reports to ADB. 78. Program Implementation Unit. PIUs will be established in each of the participating ULBs. The PIUs will be responsible for implementation of the resettlement plan/IPP. At PIU level, a ULB appointed PIU Safeguards Officer will coordinate safeguard tasks to coordinate, oversee the implementation of social safeguard tasks, and grievance redress and reporting. Necessary budgetary resources are included in the program. PIU Safeguards Officer will be responsible for: (i) conducting briefing to contractors on safeguards requirements including grievance redress mechanism (GRM); (ii) implementing and monitoring safeguards compliance activities, public relations activities, gender mainstreaming activities, and community participation activities; (iii) coordinating with district administration for land acquisition and resettlement and rehabilitation (R&R) aspects and addressing any problems and/or delays; (iv) monitoring physical and financial progress on land acquisition and R&R activities; and (v) organizing monthly meetings to review the progress on R&R. The CMSC Social and Resettlement Safeguards Expert (SRSE) will support the PIU Safeguards Officer. The SRSE: will (i) update the existing resettlement plans based on the detailed design; (ii) assist in the monitoring and supervision of ongoing subprojects and resettlement plan and indigenous people planning implementation (IPP); (iii) prepare resettlement plan and/or IPPs for new subprojects, where required, to comply with national law and/or ADB procedures; (iv) ensure all subprojects meet safeguard requirements as agreed in the loan covenant and in line with this resettlement framework; and (v) review and finalize all reports in consultation with the PIU. 79. Capacity Building. Training and capacity building will be required for compliance in relation to ADB policies, transfer of duties and candidates training of new/additional staff and officers of the program that will be involved in project preparation and implementation of this Project. There will be a GIAC attached to the CMA. The GIAC Social Safeguards Specialist (GIAC SSS) will be responsible for training PMU SPO and PIUs Safeguards Officer and other staff on aspects such as resettlement planning and implementation, social protection, and gender, including the specific recording, reporting, and disclosure requirements. The GIAC SSS will provide a training and capacity building program on resettlement management for the PMU and PIU staff on issues concerning: (i) principles and procedures of land acquisition; (ii) public consultation and participation, (iii) entitlements and compensation disbursement mechanisms, (iv) grievance redressal, and (v) monitoring of resettlement operation. Specific modules customized for the available skill set will be devised after assessing the capabilities of the target participants and the requirements of the project. Costs of trainings will be borne by project’s capacity building program under CMA consultants budget. It will mainly include three training modules on: (i) introduction and sensitization to social/ resettlement issues, (ii) resettlement plan implementation, and (iii) experiences and best practices sharing.

80. Civil Works Contracts. The PIUs will ensure that bidding and contract documents include specific provisions requiring contractors to comply with all (i) applicable labor laws and core labor standards on prohibition of child labor as defined in national legislation for construction and maintenance activities, on equal pay for equal work of equal value regardless of gender, ethnicity or caste, on elimination of forced or bonded labor; and (ii) the requirement to disseminate

49

information on sexually transmitted diseases including HIV/ AIDS to employees and local communities surrounding the project sites. Relevant provisions of the GAP will be shared with the contractors’ responsibilities by the PIUs. Contractors will carry out all environmental and social mitigation and monitoring measures outlined in their contract. CMSC and GIAC specialists will assist the PMU and PIUs in monitoring contractor’s compliance activities.

81. Grievance Redress Mechanism. A common GRM will be in place for social, environmental, or any other grievances related to the project. The multi-tier GRM for the project is proposed, each tier having time-bound schedules and with responsible persons identified to address grievances and seek appropriate persons’ advice at each stage, as required. In case of grievances that are immediate and urgent in the perception of the complainant, the contractor, and supervision personnel from PIU the CMSC on-site will provide the most easily accessible or first level of contact for quick resolution of grievances. Contact phone numbers and names of the concerned PIU Assistant Safeguards Officer, contractors, will be posted at all construction sites at visible locations.

(i) 1st level grievance. The contractor and CMSC supervision personnel and PIU supervision personnel can immediately resolve issues on-site in consultation with each other, and will be required to do so within 3 days of receipt of a complaint/grievance.

(ii) 2nd level grievance. All grievances that cannot be redressed within 3 days at field/ward level will be brought to the notice of SSO of PIU. PIU will resolve the grievance within 7 days of receipt of compliance/ grievance in discussion with the CMSC and the Contractor. The PIU SSO will be supported by the CMSC SSS at this stage.

(iii) 3rd level grievance. All the grievances that are not addressed by PIU within 7 days of receipt will be brought to the notice of the Town Level Committee (TLC), of which ULB Commissioner will be the Chairperson, and will be assisted by the concerned city level engineers. The TLC will meet twice a month and determine the merit of each grievance brought to the committee. The PIU SSO will be responsible to see through the process of redressal of each grievance. The TLC will resolve the grievance within 15 days of receiving the complaint.

(iv) 4th level grievance. All grievances that are not addressed by the TLC within 15 days, and which require the District Collector’s intervention, will be escalated to the district level Grievance Redress Committee (GRC), chaired by the District Collector.

(v) The district level GRC will have the District Collector as chair, PIU head as Convenor, and Safeguard Officers of the PIU, representative of TNPCB, one elected representative, one prominent person/member of the community, and a representative of affected persons/ community as members. At least one member of the GRC will be a woman. The GRC will resolve the grievance within 30 days of registration.

(vi) 5th level grievance. Any grievance that remains unresolved by the GRC will be escalated to the state level steering committee.

82. The project GRM notwithstanding, an aggrieved person will have access to the country's legal system at any stage, and accessing the country's legal system can run parallel to accessing the GRM and is not dependent on the negative outcome of the GRM. In case of grievance related to land acquisition, R&R, the affected persons will have to approach a legal body/court specially proposed under LARR, 2013; Land Acquisition, Rehabilitation and Resettlement Authority (LARRA). In the event that the established GRM is not in a position to resolve the issue, the affected person also can use the ADB Accountability Mechanism through directly contacting (in

50

writing) the Complaint Receiving Officer (CRO) at ADB headquarters or the ADB India Resident Mission. The complaint can be submitted in any of the official languages of ADB’s DMCs. The ADB Accountability Mechanism information will be included in the PID to be distributed to the affected communities, as part of the project GRM.

Figure 4: Grievance Redress Process

VIII. GENDER AND SOCIAL DIMENSIONS

83. The project is classified as effective gender mainstreaming (EGM). The program adopts several pro-poor and gender inclusive elements within overall design. The activities are planned to benefit women and socially excluded groups. Water supply and sewerage improvements and house service connections in the subproject areas will increase women’s access to piped water and sewerage interventions would facilitate better sanitation especially in poor areas. The GAP activities will contribute to human capital development through creating awareness and opportunities for women’s participation in project activities; economic empowerment by way of: (i) ensuring that project-related employment opportunities are accessed equitably, (ii) voice and rights through affirmative actions to ensure women’s representation in decision making created at every level of project planning and implementation, and (iii) gender capacity building of all stakeholders specifically in context to gender in urban infrastructure, sexual harassment policy, other relevant legislations of the central and state government and gender responsive monitoring and impact assessments to ensure that all beneficiary data is sex disaggregated and progress monitored and updated.

84. Relevant stakeholders should be actively and effectively involved in the project to ensure an inclusive and participatory approach to project planning, implementation and monitoring. Active participation of key stakeholders influences a sense of ownership regarding the project and this

Affected Person

1st Level

Grievance Redress

2nd Level

Grievance Redress

3rd Level

Grievance Redress

4th Level

Grievance Redress

Field Level

Contractor, Supervision staff of CSMC

& PIU

PIU Level

PIU Head, PIU Safeguards Officer &

CSMC Env & social specialists

Town Level

ULB Commissioner & Engineering Head

of IA in the town,

District GRC

District Collector (chair), PIU head

(Convener), Safeguard Officer (PIU),

representative of TNPCB, one elected

representative, one prominent person,

and a representative of APs/Community

Grievance

Redressed

Grievance

Redressed

Grievance

Redressed

Grievance

Redressed

Not Redressed

Not Redressed

Not Redressed

3 days

7 days

15 days

Court of Law

Not Redressed

30 days

State Steering Committee

CMA (chair), MDs of TNUIFSL,

CMWSSB, TWADB

5th Level

Grievance Redress

Not Redressed

Grievance

Redressed

45 days

51

is crucial for sustainability of investments. Given the importance of community participation, a community awareness and participation plan (CAPP) was developed. The primary purpose of the CAPP is to disseminate program information and open lines of communication between the PIUs and stakeholders to facilitate early resolution of any conflict issues that may arise in the implementation phase. Stakeholder mapping was carried out to identify key stakeholders. Socioeconomic survey was also planned in project ULBs to help collect and analyse information regarding socio economic status, service gaps, satisfaction levels, aspirations, intersections of vulnerability, etc., of the community. The CAPP activities were planned with the intent to create and ensure project awareness through: (i) multi-media outreach programs and community ownership of assets, and (ii) smooth interaction between stakeholders and the PIUs and provide channels to support conflict resolution that may arise during implementation. The CMSC and GIAC will assist PIU in implementation of GAP and CAPP. The GAP and CAPP (Appendixes 9 and 11) will ensure an inclusive and participatory approach to project planning, implementation and monitoring.

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND

COMMUNICATION

A. Project Design and Monitoring Framework

85. The design and monitoring frameworks (DMF) for the MFF and Tranche 1 are in Appendix 1 and Appendix 2, respectively. B. Monitoring

86. Project performance monitoring. The PMU will establish a project performance management system (PPMS) using targets, indicators, assumptions, and risks in the investment program DMF. An expanded DMF will be developed that can serve as a monitoring and evaluation framework considering the important monitoring parameters in addition to those included in the DMF. The baseline data corresponding to indicators and targets set out in the DMF and the monitoring and evaluation framework could be generated through primary data, collected while preparing the detailed project reports and further through the data collected by the CMSCs. Such baseline data, disaggregated by income levels, sex, caste, and ethnicity, should be established within 12 months of loan effectiveness. After establishing the baseline, the PMU will prepare annual, mid-term and end of investment program monitoring reports using the same indicators and submit the reports to ADB.34 87. Compliance monitoring. The CMSC and GIAC will support the PMU/ PIU in monitoring performance based on the DMF, monitoring and evaluation framework and the PPMS for the investment program. The PMU/ PIU, with support from CMSC and GIAC, will prepare a quarterly progress report, which among other items will include compliance of implementation with: (i) assurances, covenants, conditions; (ii) safeguards; (iii) GAP; (iv) CAPP; and (v) reforms, etc. 88. Safeguards monitoring. The status of implementation of environmental safeguards documents (IEE, EMPs and EARF), and social safeguards documents (resettlement plan and resettlement framework) will be discussed at ADB review missions apart from being integrated into quarterly progress reports. The PMU/ PIU will also submit to ADB separate environmental

34 ADB's project performance reporting system is available at http://www.adb.org/Documents/Slideshows/PPMS/default.asp?p=evaltool.

http://www.adb.org/Documents/Slideshows/PPMS/default.asp?p=evaltool

52

safeguard semi-annual monitoring reports (ESMR) and social safeguards semi-annual monitoring reports (SSMR) in the standard templates advised by the ADB. 89. Gender and Social Dimensions Monitoring. Status of the implementation of the GAP action plan and the CAPP will be discussed at each ADB review mission. The GAP monitoring matrix (Appendix 10) with updated data on progress will be included with quarterly progress reports. C. Evaluation

90. ADB provides financing for projects that will effectively contribute to the economic and social development of the country concerned and have the strongest poverty reduction impact in conformity with the country and ADB strategies. The government and ADB will jointly review the investment program at least twice a year. This includes: (i) the performance of the PMU, PIU, consultants and contractors; (ii) physical progress of projects and effectiveness of safeguards, CAPP and the action plan; (iii) inclusion of women and vulnerable groups, including the poor, in investment program planning and implementation; (iv) achievement of DMF indicators; (v) compliance with loan assurances; (vi) implementation of the incentivized reforms; and (vii) assessment of investment program sustainability in technical and financial terms. In addition to the regular loan reviews, the GOTN and the ADB will undertake a comprehensive mid-term review in the third year of investment program implementation to identify problems and constraints encountered and suggest measures to address them. Specific items to be reviewed will include: (i) appropriateness of scope, design, implementation arrangements, and schedule of activities; (ii) assessment of implementation pace against investment program indicators; (iii) effectiveness of capacity building and reform programs; (iv) compliance with safeguard measures; (v) extent to which the GAP and CAPP are being implemented; (vi) need for additional support for operation and maintenance (O&M) of the facilities established under the investment program; (vii) lessons learned, good practices, and potential for replication; and (viii) changes recommended.

91. Project completion report. The PMU will submit to the ADB, within 6 months of the completion of the project, a project completion report that will cover the details of implementation (including changes in scope), costs, monitoring and evaluation of activities, problems encountered, actions taken, and other information requested by ADB and implementing agency.35 D. Reporting

92. The PMU will provide ADB with: (i) quarterly progress reports in a format consistent with the ADB's project performance reporting system; (ii) consolidated annual reports including (a) progress achieved by output as measured through the indicator's performance targets, (b) key implementation issues and solutions, (c) updated procurement plan, and (d) updated implementation plan for the next 12 months; and (iii) a project completion report within 6 months of physical completion of the project. To ensure that projects will continue to be both viable and sustainable, project accounts and the executing agency audited financial statement together with the associated auditor's report, should be adequately reviewed.

E. Stakeholder Communication Strategy

93. The primary stakeholders of the program include:

35 Project completion report format is available at: http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-

Sector-Landscape.rar

http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-%20%20Sector-Landscape.rar

http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-%20%20Sector-Landscape.rar

53

(i) Government agencies and their employees; (ii) Beneficiaries: residents in the project area, particularly the poor and vulnerable; (iii) Community leaders, public representatives; (iv) Community-based organizations (CBOs), nongovernment organizations (NGOs),

social and cultural groups, ward level citizen forums; (v) Committees and sub-committees of the wards; (vi) Schools/ student groups; (vii) Women’s groups; (viii) Contractors and their workers; (ix) Vendor associations and labor union federations; (x) Self-help groups; and (xi) Special groups formed for socially excluded segments of the population.

94. The investment program has prepared a CAPP, which is included in Appendix 11. The primary purpose of the CAPP is to disseminate information and open lines of communication between the implementation agencies and all stakeholders to facilitate the implementation of the program and the early resolution of any conflict issues that may arise. The CAPP includes the following key activities which will take place throughout the course of program implementation:

(i) Generate community awareness of the program and its benefits; (ii) Provide stakeholders with advance knowledge of the social safeguard frameworks

and associated documents and the applicable mitigation measures; (iii) Provide stakeholders with advance knowledge of the program’s GRM; (iv) share messages regarding good water supply and sanitation practices and

operation; (v) Educate contractors and workers on key program issues, contractor obligations,

on-site safety and ensure smooth interaction with other stakeholders; (vi) Share work schedules and progress updates to facilitate program implementation;

and (vii) Monitor and evaluate the program’s progress.

95. An initial baseline survey has been conducted under the project preparatory technical assistance (PPTA). This will be expanded and updated by the GIAC and will target the collection of information on the socioeconomic profile of the program beneficiaries including current water supply and sanitation access and service levels, together with the current water pricing and willingness to pay. The survey will cover all elements of society including the vulnerable, marginalized and poor.

X. ANTICORRUPTION POLICY

96. The Government of India, state government, TNUIFSL, executing and other implementing agencies are advised of ADB’s Anticorruption Policy (1998, as amended to date). Consistent with its commitment to good governance, accountability and transparency, implementation of the Projects under the MFF shall adhere to ADB’s Anticorruption Policy. ADB reserves the right to review and examine, directly or through its agents, any alleged corrupt, fraudulent, collusive, or coercive practices relating to the Projects. In this regard, investigation of government officials, if any, would be requested by ADB to be undertaken by the government.

97. To support these efforts, relevant provisions of ADB’s Anticorruption Policy are included in the Loan Regulations and the bidding documents. In particular, all contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts

54

of the state, TNUIFSL, the executing and implementing agencies and all contractors, suppliers, consultants, and other service providers as they relate to the Projects. Individuals/entities on ADB’s anticorruption debarment list are ineligible to participate in ADB-financed activity and may not be awarded any contract under the Projects. 36

XI. ACCOUNTABILITY MECHANISM

98. People who are, or may in the future be, adversely affected by the project may submit complaints to ADB’s Accountability Mechanism. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice and seek a resolution of their problems and report alleged violations of ADB’s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, the affected people should try in good faith to solve their problems by working with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism.37

XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL

99. This FAM was prepared at the loan fact-finding mission in October 2017. All revisions and/or updates during implementation will be retained in this section to provide a chronological history of changes to be implemented, arrangements recorded in the FAM, including revision to contract awards, and disbursement S-curves.

36 GACAP II Guidelines available at: http://www.adb.org/Documents/Guidelines/GACAP-II-Guidelines.pdf. See also

Sourcebook: Diagnostics to Assist Preparation of Governance Risk Assessments: http://www.adb.org/documents/books/Diagnostics-to-Assist-Preparation-of-GRAs/default.asp.

37 Accountability Mechanism.http://www.adb.org/Accountability-Mechanism/default.asp.

http://www.adb.org/Documents/Guidelines/GACAP-II-Guidelines.pdf

http://www.adb.org/documents/books/Diagnostics-to-Assist-Preparation-of-GRAs/default.asp

http://www.adb.org/Accountability-Mechanism/default.asp

Appendix 1 55

DESIGN AND MONITORING FRAMEWORK FOR THE INVESTMENT PROGRAM Impacts the Investment Program is Aligned with Universal access to basic water and sanitation services achieved (Vision Tamil Nadu 2023)a “World-class” cities and industrial corridors across the state developed (Vision Tamil Nadu 2023)a Water security, reduced vulnerability to climate change in urban areas, and enhanced share of renewable energy achieved (Tamil Nadu Sustainable Water Security Mission, State Action Plan on Climate Change)b

Results Chain Performance Indicators with Targets and Baselines

Data Sources and Reporting Mechanisms Risks

Outcome

Livability and climate resilience in at least 10 cities in priority industrial corridors enhancedc

By 2027 a. Collection and treatment of sewage in program coverage areas of eight cities increased to 100% of householdsd (2017 baseline: sewage collected from 7.6% of households in coverage areas) b. Flood risk reduced in 100% of flood-prone areas covered by new drainage systems adapted to climate change in three cities (2017 baseline: 0) c. Frequency and duration of water supply improved to at least 6 hours/day provided to 100% of households in coverage areas in four cities (2017 baseline: water provided on average 1–2 hours/day, once in 1–2 days, 48% piped water coverage). d. NRW in coverage areas in four cities reduced to 20% (2017 baseline: on average 30%) e. At least 3,400 tons of carbon dioxide equivalent per year in greenhouse gas emissions avoided (2017 baseline: 0) f. At least 52,000 cubic meters/day of treated wastewater reused for industrial purposes in three cities (2017 baseline: 32,000 cubic meters/day of treated wastewater reused in Chennai) g. Collection efficiency of sewerage user fees in eight cities with piped sewerage systems increased by at least 15% (2017 baseline: 49% collection efficiency)

a–f. MAWS annual policy note, program quarterly progress reports g. ULB annual reports on revenue data, State Finance Commission reports and recommendations (once every 5 years)

Water shortages from intensified droughts linked to climate change which exceed projections lead to the poor performance of water and sewerage facilities. Political pressure prevents regular revisions or collection of water and sewerage tariffs constraining the sustainability of services.

Outputs

1. Climate-resilient sewage collection and treatment, and drainage systems developed in

By June 2026 1a. Three STPs with combined capacity of 155 MLD rehabilitated and seven new STPs with combined capacity of 187 MLD added (2017 baseline: 0 rehabilitated and new) 1b. One solar photovoltaic-powered (clean energy) STP with 2-megawatt solar capacity piloted and commissioned (2017 baseline: 0)

1a–e. Periodic ULB records, program quarterly progress reports

Construction delays from heavy monsoons that exceed projections and sudden price surges of materials

56 Appendix 1



at least eight citiese

1c. 2,810 km of new sewage collection pipelines commissioned and connected to 426,600 households, including 100% poorf and women headed households in the coverage area (2017 baseline: 0) 1d. 173 sewage pump stations with combined capacity of 6,390 kilowatts added (2017 baseline: 0) 1e. 250 km of new tertiary and 50 km of primary and secondary stormwater drains constructed and improved with climate-resilient designs (2017 baseline: 0) 1f. 20 all-female community-based organizations trained as water and sanitation committees and 100% participants reporting improved knowledge of benefits of sewage collection systems and household connections (2017 baseline: 0)

1f. Post-training surveys

result in cost overruns and delays in the work completion.

2. Water supply systems in at least five cities improved with smart featuresg

By June 2026 2a. 1,520 km new water distribution pipelines commissioned within 110 new DMAs and metered connections provided to 171,000 households (100% households including poor and women-headed households in coverage area) (2017 baseline: 0) 2b. 30 new pump stations with combined capacity of 1,530 kilowatts installed, and 120 km of new transmission mains constructed (2017 baseline: 0) 2c. 40 new reservoirs with combined capacity of 70 million liters constructed (2017 baseline: 0) 2d. At least 80% technical staff from each implementing agency in four cities reported improved knowledge and/or skills in NRW reduction as a result of training, with 75% participation of women technical staff (2017 baseline: 0)

2a–d. ULB records and program quarterly progress reports


3a. By 2026, 1,000 school students, teachers, and administrators (at least 50% women); and 30 women SHGs reported improved awareness on water conservation and hygiene (2017 baseline: 0) 3b. By 2023, PDMC established in CMA (2017 baseline: not established) 3c. By 2020,h at least 80% of technical staff in PDMC (75% participation of female technical staff) trained in the design and implementation of urban infrastructure projects reported improved knowledge and/or skills (2017 baseline: 0) 3d. By 2020, project design and implementation manuals for urban service delivery, with applicable standards for PDMC, developed (2017 baseline: 0)

3a. Post-awareness campaign sample survey 3b–f. MAWS Annual Policy Note, and program quarterly progress reports

Competing priorities within ULBs and staff turnover hinder participation in capacity building

Appendix 1 57



3e. By 2023, new database for at least 10 project cities established at urban data and governance improvement cell, with sex-disaggregated data where applicable (2017 baseline: 0) 3f. By 2026, 10 CMA and 100 ULB staff (including 100% of eligible women staff) reported knowledge on approaches to integrating gender and social inclusion in urban governance, implementing gender action plans, and monitoring and reporting on gender equality results (2017 baseline: 0)

Key Activities with Milestones 1. Climate-resilient sewage collection and treatment, and drainage systems developed in at least eight

cities 1.1 Award all sewerage contracts in Tranche 1 by December 2018, complete all civil works in Tranche 1 by April

2023, and conduct user satisfaction surveys in April 2023 1.2 Award all sewerage contracts in Tranche 2 in April 2019, complete all civil works in Tranches 2 and 3 by April

2026, and conduct user satisfaction surveys in April 2026 1.3 Award all sewerage contracts in Tranche 3 in April 2022 2. Water supply systems in at least five cities improved with smart features 2.1 Award all water supply contracts in Tranche 1 by December 2018, complete all civil works in Tranche 1 by

April 2023, and conduct user satisfaction surveys in April 2023 2.2 Award all water supply contracts in Tranche 2 in April 2019, complete all civil works in Tranches 2 and 3 by

April 2026, and conduct user satisfaction surveys in April 2026 2.3 Award all water supply contracts in Tranche 3 in April 2022 3. Institutional capacity, public awareness, and urban governance strengthened 3.1 Mobilize urban governance and awareness consultants by December 2018 3.2 Evaluate reform indicators and decide on incentives annually through September 2026

Inputs Asian Development Bank: $500 million (regular OCR loan) $1 million (technical assistance) Asian Clean Energy Fund under the Clean Energy Financing Partnership Facility: $2 million (grant) Government: $766.4 million CMA = Commissionerate of Municipal Administration, DMA = district metered area, km = kilometer, MAWS = Municipal Administration and Water Supply Department, MLD = million liters per day, NRW = nonrevenue water, OCR = ordinary capital resources, PDMC = project design and management center, SHG = self-help group, STP = sewage treatment plant, ULB = urban local body. a Government of Tamil Nadu. 2012. Vision Tamil Nadu 2023: Strategic Plan for Infrastructure Development in Tamil Nadu.

Chennai. Vision Tamil Nadu 2023 defines “world-class” cities as those that are free from garbage and open defecation and whose infrastructure is upgraded with continuous (24/7) water supply access, and efficient mass transit and sanitation systems.

b Government of Tamil Nadu. 2015. Tamil Nadu Sustainable Water Security Mission. Chennai; and Government of Tamil Nadu. 2014. State Action Plan on Climate Change: Towards Balanced Growth and Resilience. Chennai.

c The city corporations and municipalities (collectively referred to as cities) are Ambur, Chennai, Coimbatore, Cuddalore, Rajapalayam, Thoothukudi, Tiruchirappalli, Tirunelveli, Tiruppur, and Vellore. Other cities eligible for support under the MFF are subject to compliance with selection criteria outlined in the framework financing agreement (accessible from the list of linked documents in Appendix 2 of the report and recommendation of the President).

d Based on output target 1c, 100% of households is 426,600. e The eight cities are Ambur, Chennai, Coimbatore, Rajapalayam, Tiruppur, Tiruchirappalli, Tirunelveli, and Vellore. Drainage

systems are proposed in Chennai, Cuddalore, and Thoothukudi. f “Poor” is defined as those households classified by the state as below the poverty line (BPL). g The five cities are Chennai, Coimbatore (bulk water), Cuddalore, Tiruppur, and Thoothukudi. h Activities for completion by December 2020 are linked to the attached technical assistance. Source: Asian Development Bank.

58 Appendix 2

DESIGN AND MONITORING FRAMEWORK FOR TRANCHE 1 Impacts the Investment Program is Aligned with Universal access to basic water and sanitation services achieved (Vision Tamil Nadu 2023)a “World-class” cities and industrial corridors across the state developed (Vision Tamil Nadu 2023)a Water security, reduced vulnerability to climate change in urban areas, and enhanced share of renewable energy achieved (Tamil Nadu Sustainable Water Security Mission, State Action Plan on Climate Change)b

Results Chain Performance Indicators with Targets

and Baselines Data Sources and

Reporting Risks

Outcome Livability and climate resilience in six cities in priority industrial corridors enhancedc

By 2024: a. Collection and treatment of sewage in program coverage areas of six cities increased to 100% householdsd (2017 baseline: sewage collected from 7.6% households in coverage areas) b. Frequency and duration of water supply improved to at least 6 hours/day provided to 100% of households in the coverage area of one city (2017 baseline: water provided on average 1-2 hours/day, once in 1-2 days, 48% pipe water coverage) c. NRW in coverage areas of 1 city reduced to 20% (2017 baseline: on average 30%) d. At least 3,400 tons of carbon dioxide equivalent per year in greenhouse gas emissions avoided (2017 baseline: 0) e. At least 8,000 cubic meters/ day of treated wastewater reused for industrial purposes in one city (2017 baseline: 32,000 cubic meters/day of treated wastewater reused in Chennai) e. Collection efficiency of sewerage user fees in six cities with piped sewerage systems increased by at least 15% (2017 baseline: 49% collection efficiency)

a–d. MAWS annual policy note, and program quarterly progress reports e. ULB annual reports on revenue data, State Finance Commission reports, and recommendations (once every 5 years)

Water shortages from intensified droughts linked to climate change which exceed projections lead to poor performance of water and sewerage facilities. Political pressure prevents regular revisions or collection of water and sewerage tariffs constraining the sustainability of services.

Outputs 1. Climate-resilient sewage collection and treatment, and drainage systems developed in six cities.

By June 2023: 1a. One existing STP of 37 MLD capacity rehabilitated and five new STPs with combined capacity of 165 MLD added (2017 baseline: 0 rehabilitated and new) 1b. One solar photovoltaic-powered (clean energy) sewage treatment plant with 2-megawatt solar capacity piloted and commissioned (2017 baseline: 0)

1a–e. ULB records (periodic), and program quarterly progress reports

Construction delays from heavy monsoons that exceed projections and sudden price surges of materials result in cost overruns

Appendix 2 59



Reporting Risks

1c. 1,864 km of new sewage collection pipelines commissioned and connected to 297,547 households including 100% poor and women headed households in the coverage area (2017 baseline: 0) 1d. 124 sewage pump houses with combined capacity of 4,473 kilowatts added (2017 baseline: 0) 1e. 12 all-female community-based organizations trained as water and sanitation committees and 100% participants reporting improved knowledge of benefits of sewerage collection systems and household connections (2017 baseline:0)

and delays in the work completion.

2. Water supply systems in one city improved with smart features.

2a. 275 km new water distribution pipelines commissioned within 20 new DMAs and metered connections provided to 30,800 households (100% households including poor and women-headed households in coverage area) (2017 baseline: 0) 2b. Five new pump stations with combined capacity of 231 kilowatts installed, and 11 km of new transmission mains constructed (2017 baseline: 0) 2c. Nine new reservoirs with combined capacity of 11 million liters constructed (2017 baseline: 0) 2d. At least 80% technical staff from implementing agency reporting improved knowledge and/or skills in NRW reduction as a result of training with 75% participation of women technical staff (2017 baseline: 0)

2a–d. ULB records, and program quarterly progress reports

3. Institutional capacity, public awareness, and urban governance strengthened.

3a. By 2026, minimum 50% of 600 school students, teachers and administrators (with at least 50% women) and 18 women SHGs reported improved awareness on water conservation and hygiene in six project cities (2017 Baseline: 0) 3b. By 2023, PDMC established in CMA (2017 baseline: 0) 3c. By 2020,e at least 80% of technical staff in PDMC (75% participation of female

3a. Post-awareness campaign sample survey 3b–f. MAWS Annual Policy Note, and program quarterly progress reports

Competing priorities within ULBs and staff turnover hinder participation in capacity building

60 Appendix 2



Reporting Risks

technical staff) trained in the design and implementation of urban infrastructure projects reported improved knowledge and/or skills (2017 baseline: 0) 3d. By 2020, project design and implementation manuals for urban services delivery with applicable standards for PDMC developed (2017 baseline: 0) 3e. By 2023, new database for at least six cities established at urban data and governance improvement cell, with sex-disaggregated data where applicable (2017 baseline: 0) 3f. By 2026, 10 CMA and 60 ULB staff (including 100% of eligible women staff) reported knowledge on approaches to integrating gender and social inclusion in urban governance, implementing gender action plans, monitoring and reporting on gender equality results (2017 baseline: 0)

Key Activities with Milestones

1. Climate-resilient sewage collection and treatment, and drainage systems developed in 6 cities. 1.1 Award all sewerage contracts in Tranche 1 December 2018, and complete all civil works in Tranche 1 by June 2023 2. Water supply systems in at one city improved with smart features. 2.1 Award all water supply contracts in Tranche 1 by December 2018, and complete all civil works in Tranche 1 by June 2023 3. Institutional capacity, public awareness, and urban governance strengthened 3.1 Mobilize urban governance and awareness consultants (December 2018) 3.2 Evaluate reform indicators and decide on incentives (Annually from 2018 through 2023)

Inputs

ADB: $171 million ($169 million [regular OCR loan] and $2 million grant from ACEF) Government: $306.5 million

ACEF = Asian Clean Energy Fund, ADB = Asian Development Bank, CMA = Commissionerate of Municipal Administration, DMAs = district metered areas, MAWS = Municipal Administration and Water Supply Department, km = kilometer, lpcd = liters per capita per day, m = meter, MLD = millions of litres per day, NRW = nonrevenue water, OCR = ordinary capital resources, PDMC = project design and management center, SHGs = self-help groups, STP = sewage treatment plant, ULB = urban local body. a Government of Tamil Nadu. 2012. Tamil Nadu Vision 2023: Strategic Plan for Infrastructure Development in Tamil Nadu. Chennai. Vision Tamil Nadu 2023 defines “world-class cities” as those that are free from garbage and open defecation and whose infrastructure is upgraded with continuous 24/7 water supply access, and efficient mass transit systems and sanitation systems.

b Government of Tamil Nadu. 2015. Tamil Nadu Sustainable Water Security Mission. Chennai; and Government of Tamil Nadu. 2014. State Action Plan on Climate Change. Chennai.

c The city corporations and municipalities (collectively referred to as cities) are Ambur, Chennai, Coimbatore, Cuddalore, Rajapalayam, Thoothikudi, Tiruchirappalli, Tirunelveli, Tiruppur, and Vellore. Other cities are eligible for support under the MFF are subject to compliance with selection criteria outlined in the framework financing agreement (LD 4).

d Poor households are defined as those defined by the state as those below the poverty line (BPL). e Activities for completion by December 2020 are linked to attached technical assistance. Source: Asian Development Bank

Appendix 3 61

CRITERIA FOR SUBPROJECT SELECTION FOR FUTURE TRANCHES

1. The Tamil Nadu Flagship Investment Program (program) supports investment measures to achieve the objectives of the state’s urban sector strategy, and is aligned with Ministry of Urban Development’s (MOUD’s) urban flagship programs. A. SELECTION OF CITIES

1. Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Smart Cities

to extent possible 2. Population size >100,000 (unless vulnerable to climate change – e.g., coastal cities,

or city identified as having economic growth potential by state) 3. Preferably located in economic corridor or industrial nodes:

(i) Chennai-Kanyakumari Industrial Corridor;

(ii) Madurai-Tuticorin Industrial Corridor;

(iii) Coimbatore-Salem Corridor;

(iv) Chennai-Bengaluru corridor; and

(v) Chennai-Kanyakumari Industrial Corridor.

4. Cities vulnerable to climate change impacts (flood, drought): e.g., Chennai,

Cuddalore, Nagapattinam, Velankanni, Tuticorin, Vedaranyam, Ramanathapuram,

Rameshwaram, amongst others to be considered based on vulnerability assessment.

5. Minimal overlap with cities and components funded from other development partners

(e.g., World Bank, Japan International Cooperation Agency [JICA], KfW, and Agence

Francaise de Developpement [AFD], etc.). Asian Development Bank (ADB) may

consider taking up unfinished works/components where appropriate.

2. A summary table capturing indicative metrics for the $500 million investment component

is summarized below. ADB recommends the focus of the program should preferably be to identify

transformative projects in larger cities to maximize service delivery impact and ensure transaction

efficiencies.

Consideration Indicative Guidance for Project Portfolio

Cities selection Minimum 60% investment in cities with population > 300,000; minimum population size of 100,000 (unless vulnerable to climate change or city with economic growth potential);

Located in critical economic/industrial corridors, to extent possible; and

Cities vulnerable to climate change, preferred.

Sub-sectors Minimum 70% for water supply and sewerage/ septage; and

Maximum 30% for non-remunerative sectors/subprojects (drainage).

Project Size At least 50% investment should be in subprojects >$30 million;

Average sub project size for investment portfolio kept above $15-20 million; and

Minimum size of subproject > $5 million.

B. SELECTION OF COMPONENTS 3. Support urban local bodies (ULBs) in developing three basic urban infrastructure services

essential in creating a green, inclusive, and competitive city: (i) water supply, (ii) sewerage/

septage, (iii) stormwater drainage and flood management, and (iv) urban governance reforms and

capacity buliding. Subprojects should introduce innovative approaches, including technology and

institutional approaches, to enhance efficiency and sustainability where suitable (e.g., smart

62 Appendix 3

metering, supervisory control and data acquisition [SCADA], reuse of treated wastewater, waste-

to-energy, GPS tracking for vehicular management, ring-fencing of accounts, etc.). Measures

which adapt to or mitigate impacts of climate change are encouraged.

C. SELECTION OF SUBPROJECTS 4. The following are criteria for selecting subprojects under the program:

(i) The subprojects shall be in line with the finance-plus criteria set forth by Department

of Economic Affairs (DEA), GOI;

(ii) Subprojects shall be designed following sustainability principals considering but not

limited to operational efficiency, energy efficiency, climate change, and environment

benefits on an economic basis;

(iii) The feasibility studies shall assess current level of services, the needs and preference

of stakeholders, the financial and institutional capacity of the implementing agencies,

and the norms and standards prescribed by state and central authorities. Subprojects

should demonstrate an effective economic internal rate of return calculated over 30

years above the economic opportunity cost of capital (EOCC) estimated at 12%.

Subprojects should demonstrate cost-effectiveness in comparison with alternative

schemes, and where relevant, these would include assessments of the investments

with and without future climate resilience measures;

(iv) The implementing agencies shall make available encumbrance-free land for the

executing agency for implementing the works. Any land acquisition and resettlement

completed before award of related contract;

(v) Should demonstrate financial sustainability for payment of operation and maintenance

(O&M) costs and servicing debt through user fees and/or taxes (i.e., property taxes);

(vi) Minimal number of contract packages by taking an integrated procurement approach.

ADB prefers larger contract packages, to extent feasible. This helps in reducing

administrative and transaction costs during project implementation;

(vii) All subprojects will have prepared necessary environmental and social safeguard

documents (i.e., resettlement plans, initial environmental examinations, indigenous

people’s plans) as required, in accordance with the Investment Program’s

environmental and social safeguard frameworks;

(viii) Subproject design shall include gender and pro-poor features both in terms of

planning and design (i.e., community participation) and implementation. Examples

include improving access to services to women and urban poor, affordability, and

institutional arrangements of utility/ ULB for O&M (e.g., women staff), to extent

feasible; and

(ix) Subprojects with high readiness are preferred (detailed project report [DPR] finalized,

draft bidding documents prepared, safeguard documents completed, encumbrance

free land available, technical and administrative sanctions)

5. Water supply. Water supply subprojects shall ensure source sustainability, a minimum

per capita supply level of 135 liters per capita per day (lpcd), have an agreement for fixation of an

appropriate volume-based water tariff, show willingness to pay by consumers, ensure 100%

house connections and metering, ensure coverage of urban poor and establish a ring-fenced

accounting system. Households can be required to pay for connection but cost would be covered

by the project, and recovered by the municipality either through a "cess" on the monthly utility bill

or property taxes or other special financing vehicle suitable to the municipality. Nonrevenue water

Appendix 3 63

(NRW) pilots and city-wide projects with focus on distribution efficiencies and service level

improvements in large cities ought to be encouraged (esp. zone level 24x7 pilots in Chennai and

in other large corporations etc.). Water conservation measures to be introduced where feasible.

6. Sewerage and septage subprojects shall ensure 100% house connections funded under the project, collection, treatment, and reuse using latest technologies, consider treated effluent and byproducts as sources of revenue, and comply with effluent disposal standards. Households can be required to pay for connection but cost would be covered by the project, and recovered by the municipality either through a "cess" on the monthly utility bill or property taxes or other special financing vehicle suitable to the municipality. Projects can include centralized and decentralized systems (or combination of both) to ensure full coverage of households, fecal sludge management in unserved/ remote/ isolated areas, treated wastewater re-use and related. 7. Stormwater drainage and flood management subprojects shall focus on core economic and residential areas considering future rainfall under climate change scenarios. Projects can include waterbody restoration and interconnections with existing drainage. Focus should be on maximum impact (e.g., macro drainage to be give preference vis-à-vis street drains). Technology based public safety systems for early hazard warning and communication support systems during natural disasters are also encouraged. D. ADB SAFEGUARDS 8. Category A safeguard projects (environmental or social) will not be included in the multritranche financing facility (MFF). All subprojects are to comply with ADB’s Safeguards Policy and agreed safeguard frameworks. E. IMPLEMENTATION ARRANGEMENTS 9. MAWS acting though TNUIFSL will be the executing agency for the investment program.

Specific roles of ULBs, state agencies, and TNUIFSL are clearly defined in Schedule 3.

F. APPROVAL PROCEDURE 10. Each implementing agency will prepare a feasibility study/ detailed project report, which

may include all or any of the above services components, and will forward these to the program

management unit (PMU) for review. The PMU will review and forward eligible subproject

proposals to ADB for consideration. These shall be in the form of summary appraisal reports

following a prescribed format provided by ADB with supporting documents (safeguards, economic

and financial analysis, etc.). ADB will review the proposals and advise TNUIFSL whether the

subprojects are eligible and ready to be funded under the program. As part of ADB’s review, ADB

may conduct comprehensive due diligence including site visits to ensure the subprojects comply

with its policies.

64 Appendix 4

PERFORMANCE-BASED GOVERNANCE IMPROVEMENT COMPONENT A. Background 1. Performance-based grant incentive urban governance program. The Government of Tamil Nadu (GOTN) requested support for a performance-based grant Governance Improvement Component (GIC). Allocation for GIC in Tranche 1 is $10 million and $25 million for remaining tranches. In Tranche 1, improvements include financial management, revenue improvement, filling of vacancies, and gender mainstreaming activities. Tranche 1 will cover all 135 urban local bodies (ULBs) (total population 16,700,000) in Tamil Nadu except Chennai and town panchayats which are not under the administrative control of the Commissionerate of Municipal Administration (CMA). Tranche 2 will focus on ADB project towns with functioning wastewater systems and focus on improved service delivery and innovation including household coverage, wastewater reuse, and gender mainstreaming activities, and project implementation performance. CMA will administer the GIC. 2. Use of performance grant funds. Eligible expenditures for ULBs receiving performance grants will be defined by the CMA. ADB’s list of ineligible expenditures (Safeguards Policy Statement, 2009) will be included in the official order from CMA issued to ULBs. Grants cannot be used as ULB counterpart funding. The ULBs will be required to sign an MoU with the CMA under which the ULBs agree to utilize the grants only for defined “Eligible Expenditures.” A ULB’s participation in the GIC will be conditional on its signing the Memorandum of Understanding (MOU). CMA may take corrective measures and improvements in the design and administration of GIC.

3. The CMA will establish an Urban Data and Governance Improvement Cell (UDGIC). This cell will undertake research on urban finance and performance improvement. In the first three years of the Program, the cell will primarily focus on administering the GIC and will be supported by the Governance Improvement and Awareness Consultants (GIAC) hired under the program and two senior level experts hired on contract basis for this purpose. From year 4 onwards, it will take up research on urban finance and management of all incentive programs across the state. The GIAC will serve as an independent verification agency (IVA) to conduct annual performance assessments, regular data collection, field verifications and recommending incentive payouts.

4. The GIC will incentivize ULBs to implement governance priorities. This component has been designed in response to the following situation:

(i) Need for focus on the priorities of GOTN. Tamil Nadu ranks high in reform scores as compared to other states. Under Jawaharlal Nehru National Urban Renewal Mission, Tamil Nadu ranked second in reforms on mission completion; under Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Tamil Nadu ranked fourth in reforms in the year 2015-16. However, GOTN has identified further areas for improvement. For example, even though ULBs in Tamil Nadu complete audit of their financial statements, the process is delayed and the observations of the Local Fund Auditor remain unattended; as on June 2017, more than 148,672 audit observations were pending resolution. Completion of audit takes more than twelve months for most ULBs; as on February 2017, audit for the year 2015-16 was completed for only 11 out of 135 ULBs. Only 71.1% of households were connected to underground drainage and water networks as compared to the project targets; collection efficiency of user charges for underground drainage is only 49%; underground drainage projects are delayed by more than 24 months. Sanctioned posts remain unfilled and there is an average

Appendix 4 65

vacancy of 18.8% in key positions. New areas such as fecal sludge management and wastewater reuse need attention.

(ii) Lack of an incentive fund that covers the cross section of ULBs and which has Tamil Nadu specific targets: The incentive funds in operation are too focused. The Model Cities component of the Tamil Nadu Sustainable Urban Development Project supports only three ULBs. The incentive fund recommended by the fifth State Finance Commission focuses only on property tax. The performance component of 14th Central Finance Commission (CFC) supports all ULBs, but the targets are based on all India averages and are not relevant to Tamil Nadu. For example, the 14th CFC requires ULBs to demonstrate positive growth in own revenue. Own revenues of ULBs in Tamil Nadu grew by a CAGR of 13.46% between 2010-11 and 2014-15.

(iii) The design of GIC has taken into consideration the learning from other incentive programs which include: (i) deepening national incentive programs such as AMRUT; (ii) focused initiatives as compared to a wide agenda; (iii) setting targets relevant to Tamil Nadu; (iv) focusing on regular functions of ULBs since their capacity and attention are divided between several parallel programs (which also offer higher incentives than GIC); (v) preference for incentivizing outputs and for actions within the control of ULBs; and (vi) simple and objective evaluation methodology to provide clarity to ULBs.

(iv) The per capita incentive for GIC is ₹13 per capita per annum which is lesser than other ongoing incentive programs. In the year 2015-16, AMRUT provided performance-based incentive of ₹45 per capita. Conditional grants available under 14th CFC is ₹98 per capita per annum. Own source revenues of municipalities in the year 2014-15 was ₹1112 per capita. Therefore, GIC is only a marginal addition to the revenues of ULBs and cannot trigger performance in difficult areas. It can only serve as recognition of performance in routine activities; when applied to select ULBs like ADB project towns, it can focus attention on priority activities, like timely project completion. Therefore, GIC will target performance measures which are already a priority for state Government and ULBs.

(v) The GIC will have an outlay of $10 million in Tranche 1 and $25 million for the overall program. In Tranche 1, improvements with potential for immediate implementation in financial management, revenue improvement and filling of vacancies will be focused on. These are applicable to all ULBs and therefore Tranche 1 will cover all ULBs except Corporation of Chennai and town panchayats which are not under the administrative control of the CMA which will be the implementing agency for this component. The total number of ULBs covered in tranche 1 is 135 and the total population covered is 16,700,000. Tranche 2 will focus on more difficult improvements such as project implementation, household coverage, wastewater reuse etc. It will cover ADB project ULBs and ULBs with functioning wastewater systems. In both Tranche 1 and Tranche 2, implementation of gender equality and social inclusion plan will be incentivized for ADB project ULBs.

5. Use of funds. ULBs will utilize the grants for ‘Eligible Expenditure” to be defined by the CMA. Activities which are not permitted under ADB funding will be excluded from the list of Eligible Expenditure. The grants will also not be used as ULB counterpart funding. The ULBs will be required to sign a MOU with the CMA under which the ULBs agree to utilize the grants only for the defined “Eligible Expenditure.” Further, the ULBs will also authorize CMA to take corrective measures and improvements in the design and administration of GIC. A ULB’s participation in the GIC will be conditional on its signing the MOU. 6. Tranche 1 of the GIC will operate from 2018-2019 until 2020-2021. Disbursements will be made within the first six months of the completion of the financial year. The first disbursement is

66 Appendix 4

targeted in June-July 2019 and the last disbursement is targeted in June-July 2021. Tranche 2 will operate from 2020-2021 until 2023-2024.

B. Performance Indicators 7. The GIC will have the following performance parameters

(i) Tranche 1 - Accessible by all ULBs (except Chennai and town panchayats) a. Financial management

• Preparation of accounts;

• Settling LFA audit observations; and

• No dues on statutory and institutional payments – debt, electricity, bulk water supply and contributory pension scheme.

b. Revenue improvement

• Collection efficiency of user charges for underground drainage; and

• Increase in the number of professional tax assessments. c. Administration

• Filling vacancies in sanctioned posts. d. Gender equality and social inclusion

• Implementing GAP (only for ADB Project ULBs).

(ii) Tranche 2 - Limited to ADB project ULBs only, unless specified otherwise a. Project management

• Achieving targeted number of new household connections for water and underground drainage projects; and

• Timely completion of projects. b. New initiatives

• Sale of treated wastewater/ Use of treated wastewater (applicable to all ULBs with functioning wastewater systems)

• Fecal sludge management in areas not covered by underground drainage c. Gender equality and social inclusion

• Implementing gender equality and social inclusion plan1 (only for ADB Project ULBs)

8. Definitions, eligible ULBs, performance requirement and corresponding incentives are summarized in Annexure I. The Verification methodology is provided in Annexure II. 9. Other performance measures were examined but not considered in the final framework.

(i) Property tax improvements were not considered since these are the focus of 5th TN SFC incentive component. Apart from property tax, underground drainage charges and professional tax were considered as the top two priorities. Therefore, revenue sources such as water supply charges have not been chosen;

(ii) To keep the verification process simple, E-Governance has not been chosen as a performance measure. E-Governance is wide in scope and quality of implementation requires detailed verification;

1 Draft, to be confirmed after discussions with CMA.

Appendix 4 67

(iii) The preference of GOTN stakeholders was to consider outputs instead of input measures in the first phase of GIC. Therefore urban planning and other financial planning measures were not considered; and

(iv) Citywide improvement in service delivery parameters (such as 24 x 7 water supply) have not been considered since the experience under JNNURM in reform linked investments has been poor.

10. The performance indicators deepen the AMRUT reform agenda. For example, Under AMRUT a common target is specified for all ULBs across India in revenue improvement, and the focus has been on two broad heads, taxes and user charges. GIC specifically focuses on collection efficiency in underground drainage charges and increase in the number of professional tax assessments. Overlap with 14th CFC has been avoided by clearly defining the performance relevant to Tamil Nadu. For example, 14th CFC specifies audit of accounts as a performance requirement. The ULBs in Tamil Nadu have chosen to secure an external audit to comply with this requirement. However, under GIC, they need to complete the audit through Local Fund Audit which is the legal requirement for ULBs in Tamil Nadu. Further, resolution of audit objections is also included as a performance measure. There is no overlap with 5th TN SFC. Property tax is the only performance measure recommended by the SFC and it has not been included in GIC. C. Implementation Arrangements

11. The CMA will administer the GIC. It is responsible for administrative oversight of the participating ULBs. It has experience in funds flow management from higher levels of Government to the ULBs and monitors expenditure and performance of ULBs. In addition, CMA has experience in administering conditional grant release under the 13th and 14th Finance Commissions and the Model Cities component of the World Bank funded Tamil Nadu Sustainable Urban Development Project. 12. The CMA will establish an UDGIC. This cell will undertake research on urban finance and performance improvement. In the first three years of the program, the cell will primarily focus on administering the GIC and will hire two experts on contract basis for this purpose. From year 4 onwards, it will take up research on urban finance and management of all incentive programs across the state. The Centre will be responsible for engaging an IVA to conduct annual performance assessments, regular data collection, field verifications and recommending incentive payouts. 13. The GIC will be implemented from 01 April 2018 in the target ULBs. The financial year 2018-19 will be the first year of performance. CMA will take up the following responsibilities for implementation of GIC:

(i) Pre-launch activities. Communicated to all target ULBs along with toolkits and guidelines on performance requirements, data collection and reporting requirements. Dissemination workshops to familiarize ULBs prior to 31 March 2018;

(ii) Change in data collection methodology prior to launch. The total number of employees under each professional tax assessment is not collated, though it is available in the ULB as part of the individual assessment. This needs to be aggregated at the ULB level. This is the only change in data collection methodology that needs to be introduced prior to launch (01 April 2018);

(iii) Preparatory activities in 2018-19 to carryout first performance assessment in May 2019. The performance of the ULBs in the year 2018-18 will be assessed starting from May 2019. Annexure III details the changes required in data collection, reporting requirement and IT systems. The changes other than for professional tax can be

68 Appendix 4

completed during the year 2018-19 after the launch of GIC. Two experts in UDGIC will be responsible for preparatory activities. During 2018-19, the experts will also collect baseline information as on 31 March 2018 and support CMA to procure consultants for annual performance assessment. Outline terms of reference (TOR) for the experts is provided in Annexure IV;

(iv) Annual performance assessments: Prepare a model annual calendar for performance assessment; conduct annual performance assessment of ULBs through IVA; calculate incentive payments and release payments; organize dissemination workshop with participating ULBs on regional basis. Outline TOR for independent verification agency (IVA) is included in Annexure IV; and

(v) Management of GIC framework: Annual review of performance indicators; baseline data collection; updating information technology and other reporting systems; revising performance indicators; forecast of performance and revision of yearly budgets; expedite state level actions required to improve performance (such as sanctioning of recruitment requests).

14. Annual performance assessment will follow the indicative cycle given below.

Table A4.1: Annual Performance Assessment Activity Time period Responsibility

Publish annual performance assessment calendar

By March 31 of preceding year CMA (UDGIC Cell)

Routine quarterly reports Within 15 days of end of quarter ULBs, Local Fund Audit

Annual reporting of data Within 30 days of completion of the financial year

TWAD, TNUIFSL, TUIFDCO

Independent verification Within 60 days of completion of financial year

Independent Verification Agency (IVA)

Approval of final incentive allocation

Within 90 days of completion of financial year

CMA

Release of payments Within 90 days of financial year CMA CMA = Commissionnerate of Municipal Adminsitration, IVA = Independent Verification Agency, TNUIFSL = Tamil Nadu Urban Infrastructure Financial Services Limited, TUIFDCO = Tamil Nadu Urban Finance and Infrastructure Development Corporation Ltd., TWAD = Tamil Nadu Water Supply & Drainage Board, UDGIC = Urban Data and Governance Improvement Cell, ULBs = urban local bodies

15. The following are the consulting/ procurement requirements for administering GIC. The implementation support for ADB Program includes expenditure provisions for these.

(i) Two experts to be hired on contract basis in UDGIC; (ii) IVA for annual performance assessments. The IVA responsibilities are part of the IEC,

Governance and GAP consultant; and (iii) Information technology systems for performance reporting by ULBs or modifications in

the existing information technology system for data collection and reporting. These will be procured under the ADB program loan.

16. The yearly forecast of incentive payouts from 2018-2019 is provided below.

(i) The payouts are for a performance year and will be paid in the first half of the next financial year;

(ii) The payouts are estimates and will be revised for Tranche 2 by CMA as per baseline data for Tranche 2 and after considering revisions in the GIC framework based on the experience of Tranche 1;

Appendix 4 69

(iii) Performance indicator 2 expires by the last year of payout and cannot be carried forward. However, if minimum performance is achieved earlier, incentive payout can be claimed in the earlier year itself;

(iv) Payout for performance indicator 8 will commence from the performance year when the minimum performance is achieved until the last performance year;

(v) Payout for performance indicator 9 will be applicable for the performance year when project completion occurs; and

(vi) Performance indicators 1, 3, 4, 5, 6, 7, 10, 11 and 12 are for achievement in each performance year. If minimum performance is not achieved by a ULB in a particular performance year the incentive expires for that performance year and cannot be carried forward to the next year. If a ULB did not receive the incentive in a particular performance year, it is still eligible for incentive payout for the next performance year provided minimum performance in the next performance year is achieved.

Table A4.2: Forecast Incentive Payouts

Incentive payout for the performance year (Disbursed in the

next financial year), $ million Total

($ million)

Tranche 1 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2018-2024

1. Audited accounts 0.5 0.5 0.5 - - - 1.6

2. Audit Paras 0.2 1.5 0.0 - - - 1.6

3. Clearing mandatory payments 0.5 0.5 0.5 - - - 1.4

4. UGD Charges 0.6 0.6 0.6 - - - 1.7

5. Professional Tax 0.4 0.5 0.5 - - - 1.4

6. Vacancies 0.3 0.5 0.8 - - - 1.6

7. GAP Implementation 0.2 0.2 0.2 - - - 0.7

Total Tranche 1 2.6 4.2 3.2 - - - 10.0

Tranche 2

8. New Connections - - 1.3 1.9 2.5 0.6 6.3

9. Project Completion - - 0.4 1.2 1.9 0.4 3.8

10. Wastewater reuse - - 0.2 0.3 0.4 0.4 1.2

11. Fecal sludge management - - 0.4 0.6 0.7 0.8 2.4

12. GAP Implementation - - 0.3 0.3 0.3 0.3 1.2

Total Tranche 2 - - 2.5 4.2 5.8 2.5 15.0 UGD = underground drainage, GAP = gender action plan.

70 Appendix 4

ANNEXURE I: PERFORMANCE INDICATORS AND INCENTIVES A. Definitions 1. Performance Year – Year in which performance is achieved. For example, for completion of audit of year 2017-18, the Performance Year will be the year 2018-19. 2. Payment Year – Year in which the payment of incentive is made. This will be the year following the Performance Year.

3. Scaling of incentives – Incentives will be scaled on two factors: (i) based on population or households or other relevant parameters. For example, on successful completion of audit, urban local bodies will receive an incentive per capita. Thus, larger ULBs will receive a larger incentive in Rs, in relation to their population; and (ii) the second scaling factor will be the level of performance. For example, if audit is completed before September 30, the urban local body (ULB) would receive a higher per capita incentive as compared to a ULB that completed the audit between September 30 and December 31. The formula for scaling is listed along with the definition of the indicators.

4. Reference Population – Census 2011 population is used as reference population. Where ULB limits have been expanded since Census 2011, the combined population of the merged areas as per Census 2011 will be used for calculations. The Commissionerate of Municipal Administration (CMA) will publish the population figures as per Census 2011 to be used for calculations.

5. Minimum Performance or Threshold Performance – The performance level below which no incentive is payable. For example, if finalization of audit of the accounts of year 2019-20 is not completed by December 31 in the year 2020-21, no incentive will be payable for this indicator.

Maximum Performance – The performance level above which the incentive is not scaled. For example, for clearing audit objections, the maximum performance assumed is clearing 95% objections. If performance at or above this level, the per capita incentive payable would remain the same, whereas between performance levels of 75% and 95%, the per capita incentive would vary between ₹2 and ₹3.

6. PI – Performance Indicator

7. GAP – Gender Action Plan.

8. Data sources for Indicator 1 and 2 are from the report of the Local Fund Auditor of the Government of Tamil Nadu. Data sources for indicators 3-6, 8-10 are CMA.

Appendix 4 71

Tranche 1: Financial Management

Indicator Eligible ULBs Yearly or one time

target Incentive

per capitaa Minimum

performanceb Maximum

performancec

Incentive for achievement in

between

PI 1 – Preparation of accounts Audited accounts of the previous year submitted to CMA

All ULBs except Chennai and town panchayats

Yearly target. First performance year 2018-19. Last performance year 2020-21

₹2 per year Audited accounts submitted to CMA by Dec 31 of each financial year; by Mar 31 in the year 2018-19.

Audited accounts submitted before Sep 30 of each financial year; By Dec 31 in year 2018-19.

At maximum - 1.5 times, i.e. ₹3.0 per capita per year. No scaling of incentive for performance levels in between.

Remarks Since accounting transactions are being carried out online, accounts will be ready within a fortnight of completion of financial year. Therefore audit of accounts is being chosen as the indicator. As per the statement of LFA Department dated 28/02/17, audit of 2014-15 (two years prior) was completed for 132/135 ULBs and audit for 2015-16 was completed for 11/135 ULBs. As per LFA statement dated 27/07/17, audit of accounts of 2015-16 (two years prior) was completed for 120 out of the 135 ULBs. Audit was completed for the year 2016-17 for only 1 out of 135 ULBs. Accounts are expected to be submitted to LFA early with online transactions and therefore audit milestones have also been fixed accordingly. For the first year of incentive (2018-19), the threshold milestone for completion of audit of accounts of the year 2017-18 will be March 31, 2019 and the milestones for maximum incentive will be December 31, 2018. Given the financial incentives, ULBs may find it easier to appoint an external auditor for the limited purpose of achieving the milestone. Therefore, external audit is not being taken as a substitute for local fund audit.

CMA = Commissionerate of Municiipal Administration, LFA = Local Fund Audit, PI = performance indicator, ULB = urban local body. a As per Census 2011 population. In case of ULBs where additional areas have been merged, the population of the merged areas as per Census 2011 may be

added. b To be eligible for incentive. c Beyond which no additional incentive is payable.

72 Appendix 4

Indicator Eligible ULBs

Yearly or one time target

Incentive per capita

Minimum performance

Maximum performance


between

PI 2 – Resolution of audit objections Percentage of audit objections from LFA pertaining to financial year 2015-16 or earlier that are pending settlement


Year 2019-20 or 2018-19, whenever status of less than 5% pending settlements is achieved.

₹5 25% 5% Pro rata ₹5 X [25% - Achievement] / [20%]

Remarks Clearing audit objections paras is one of the priorities of CMA. Audit objections are classified as “ordinary” or “special” based on materiality. As per LFA statement dated 28/02/2017, the pending audit objections are 1,78,183. As per LFA statement dated 27/07/17, the pending audit objections are 148,672. This indicator is a one-time target. ULBs will receive this incentive when they achieve this target. To help focus the efforts of ULBs, a cutoff date of objections pertaining to the year 2015-16 or before has been adopted which must be cleared by March 31, 2020. Settling the audit paras for this period and prior period will make the ULBs eligible for this incentive. ULBs are eligible to receive the incentive for Performance Year 2019-20 (year in which performance is achieved, actual payment of incentive will be in the following financial year after verification). If the percentage of objections outstanding is less than 5% in the year 2018-19 itself, they are eligible to receive the incentive for the performance year 2018-19.

CMA = Commissionerate of Municipal Administration, LFA = Local Fund Audit, PI = performance indicator, ULB = urban local body.




Minimum performance

Maximum performance

Incentive for achievement in between

PI 3 – Timely debt and statutory payments Zero dues in electricity payments; interest and principal payment to TUFIDCO and TNUIFSL; contributory pension scheme; and bulk water charges to TWAD



₹2 per year No outstanding payments in these accounts

Not applicable Not applicable

Appendix 4 73




Minimum performance

Maximum performance


ULBs meeting the payment obligations in these accounts will be provided an incentive, each year. The target is zero pending payments in these accounts as on March 31 of the Performance Year.

PI = performance indicator, TNUIFSL = Tamil Nadu Urban Infrastructure Financing Services Limited, TUFIDCO = Tamil Nadu Urban Finance Infrastructure Development Corporation, TWAD = Tamil Nadu Water and Drainage Board, ULB = urban local body.

Revenue improvement

Indicator Eligible ULBs Yearly or one time target

Incentive Minimum performance

Maximum performance


PI 4 –User charges for Underground Drainage Collection efficiency in user charges collected from house connection for under ground drainage

All ULBs with completed, ongoing or proposed UGD projects; eligible list to be drawn up by CMA. Chennai and town panchayats not included.


₹50 per connection

Collection of 60% of current year’s charges

Collection of 100% of current year’s charges

Pro rata Achievement in % X ₹50 per connection

Underground drainage schemes have been completed in 32 ULBs and are planned/ under implementation in another 29 ULBs. As of 31/07/2017, 522545 house service connections have been given. The collection efficiency of current year charges was 49.69% in the year ending 31 March 2017. The incentive would be paid per connection based on actual collection efficiency achieved. The more the number of connections in a ULB and the higher the collection efficiency, greater would be the incentive received by the ULB. The ULBs need to achieve a minimum collection efficiency of 60% of current year charges to be eligible for the incentive.

CMA = Commissionerate of Municiipal Administration, PI = performance indicator, UGD =underground drainage, ULB = urban local body.

Indicator Eligible ULBs Yearly or one

time target Incentive Minimum

performance Maximum performance


PI 5 – Professional tax collections Increase in average number of assessments from which professional


Yearly target. First performance year 2018-19. Last

₹800 per additional assessment that is realized.

Not applicable Not applicable Not applicable

74 Appendix 4



Maximum performance


tax is realized in the two immediately prior six monthly assessment periods (current period) compared to average number of assessments from which professional tax is realized in the two assessment periods prior to current period.

performance year 2020-21

Total number of assessments in the year 2016-17 was 4,07,990. Data is not available in consolidated form prior to 2016-17. Increase in current year collections between the years 2013-14 and 2016-17 was 6.64% per annum. Based on an assumed per employee rate of ₹2000 per year (75% of employees pay the maximum slab of ₹2500 per annum and the rest pay an average of ₹600 per annum), the number of employees from whom professional tax is realized for the current year is assumed to be 6.66 lakhs in the year 2016-17. Professional tax is paid by employers or owners of business. Each assessment contains payment for multiple employees. The ULBs record the details of the number of employees in individual assessment forms. But this is not aggregated across assessments. The ULBs only report the total number of assessments, not the number of employees from whom professional tax is collected. ULBs need to aggregate and report the actual number of employees for which assessments have been made and collections realized. For the purposes of calculation of the incentive, assessment refers to the number of employees. When payments are collected from an organization, each employee for whom payment is received will be treated as an individual assessment, although the entire organization is treated as a single assessment at present.



performance Maximum

performance


between

PI 6 - Key staff positions filled Number of vacancies filled in Grade C and above positions in general administration, engineering, public health and town planning



₹500,000 per vacancy1

Each vacancy filled

- -

Appendix 4 75



Maximum performance


Note 1. The vacancies in the positions of Grade II and above (including commissioners and Jt Directors) are about 120 in the key departments of general administration, engineering, public health and town planning. The incentive of ₹500,000 per vacancy needs to be revised proportionately (prior to launch of GIC) based on the number of vacancies in Grade C and above, so as to fit within the budget for this indicator. If the total vacancies are 600, then the incentive would be ₹500,000 x 120/600 = ₹100,000 per vacancy filled.

PI = performance indicator, ULB = urban local body.


Yearly or one time target Incentive

Minimum performance

Maximum performance


between

PI7 – Implementation of GAP Equal opportunity employment across all positions and maintenance of sex disaggregated data on applicants including short listed and selected candidates

ADB Project ULBs


₹2,800,000 per ULB per year

Conformance NA NA

This component is applicable for ADB project towns. From the year 2020-21 onwards, the progress in implementing the plan will be evaluated on a yearly basis. Those ULBs that achieve conformance will be incentivized.

ADB = Asian Development Bank, PI = performance indicator, ULB = urban local body.

76 Appendix 4

Project Management and Service Delivery



performance Maximum

performance


between

PI 8 - Achieving targetted household connections Number of new house service connections added under the Project for water supply and/or underground drainage

ADB Project ULBs2

Yearly from 2020-21 onwards; for individual ULBs, on achievement of threshold percentage of connections and every year thereafter till 2023-24

₹800 per house service connection

Minimum of 60% of targeted house service connections achieved


Note 2: This component may also cover, based on availability of budget, other ULBs (except Chennai and town panchayats) where UGD projects have been completed. Prior to Trance 2, based on the baseline the feasibility of extending coverage will be assessed by CMA. The ULB will be provided incentive for each new house service connection under the project for water supply and sewerage. Based on per capita costs, 6,20,380 new connections are assumed to be targeted under the proposed water supply and sewerage projects. In 32 towns where underground sewerage projects have been completed/ near completion, the actual number of connections achieved as on 31/07/2017 has been 71.1% as compared to the estimates in the DPR. This incentive is applicable in those projects where the responsibility for providing house connections is with the ULB and not with a parastatal. However, if a project is being implemented by a parastatal but the operations are the responsibility of the ULB and house connections are being provided by the ULB then the incentive would be payable to the ULB. If the parastatals are responsible for providing the connections, then the ULB is not eligible for this indicator.

CMA = Commissionerate of Municipal Administration, DPR = detailed project report, PI = performance indicator, ULB = urban local body.

Appendix 4 77



performance Maximum

performance


between

PI 9 - Project management and completion Timely completion of construction as per construction contract

ADB Project towns

One time target. On project completion3

0%- 2% of original contract value

Projects completed within fifteen months of original completion date as per construction contract

Projects completed by completion date as per construction contract

Pro rata in between

Projects completing within deadline as per construction contract will receive an incentive of 2% of original contract value which will progressively reduce to zero if completion date is delayed by 15 months or beyond from deadline. This is applicable to projects implemented by the ULB only. This incentive is not applicable where projects are implemented by a parastatal. Since time overrun is a likely occurrence in most projects, completing within 15 months of original targeted date, without considering authorized extensions later on, will be incentivized. These targets also implicitly recognize that targets set during contracting stage are optimistic. Note 3: Partial commissioning will also be considered (pro rata based on the actual number of households benefitted as compared to target) provided the entire service delivery chain has been commissioned for that portion of households. For example, if 30% of the households as compared to the targets in DPR have been connected to the UGD collection system, and the required pumping and treatment facilities have also been commissioned, then 30% of the project would be deemed to have been completed (partial commissioning). The incentive would be payable on 30% of the project cost.

ADB = Asian Development Bank, UGD = underground reservoir, PI = performance indicator, ULB = urban local body.



performance Maximum

performance


between

PI10 – Reuse of treated wastewater

ULBs with functioning sewage treatment plants except Chennai Corporation and town panchayats


Normative ₹10 Lakh per mld of treated wastewater sold for reuse4

At least 10% of the installed capacity of STP


About 62 ULBs have implemented/ implementing underground drainage systems and sewage treatment plants. In addition, some of the ULBs under the proposed ADB project will also take up investments in underground drainage. Amongst these ULBs, those that are able to sell treated wastewater will be incentivized.

78 Appendix 4

Note 4: Wastewater reused without sale (such as for agricultural purposes) will also be considered with 1/5 th of the weightage as for wastewater sold.

PI = performance indicator, STW = sewage treatment plant, ULB = urban local body.



performance Maximum

performance


between

PI11 – Fecal sludge management Number of houses where septic tanks are emptied to an approved treatment facility through an authorized fecal sludge emptying service

ADB Project ULBs


₹200 per household per year

Not applicable Not applicable Not applicable

This component is open to ADB Project ULBs where the coverage of underground drainage is not universal. ULBs will be encouraged to develop fecal sludge management practices to serve the uncovered areas. The ULBs will be provided an incentive per household that is serviced through septic tank emptying services. The administration of this incentive is based on households emptied by public or private service providers. A transparent and auditable mechanism of verification will be required if this indicator is chosen.




Minimum performance

Maximum performance


between

PI12 – Implementation of GAP i) All non- statutory committees of the elected representatives of the ULB have at least 33% participation of women and ii) ULBs prepare, maintain & publish sex disaggregated database

ADB Project ULBs


₹2,800,000 per ULB

Conformance NA NA

Appendix 4 79



Minimum performance

Maximum performance


between

on staff, elected representatives and members of Standing committees

This component is applicable for ADB project towns. From the year 2020-21 onwards, the progress in implementing the plan will be evaluated on a yearly basis. Those ULBs that achieve conformance will be incentivized.


80 Appendix 4

ANNEXURE II: VERIFICATION PROTOCOL

Performance Indicator Definition and Description of Achievement

and Incentive Payable Information Source and

Frequency

Verification Responsibility and

Procedure

PI 1 – Preparation of accounts Audited accounts of the previous year submitted to CMA

Submission of (i) audit completion certificate issued by the Local Fund Audit office to the ULB, and (ii) copy of the accounts audited by the LFA to the CMA. Threshold achievement – Submission of the audited accounts for the previous year by December 31 of the performance year (March 31 for the year 2018-19). Incentive = ₹2 x Population of ULB as per Census 2011 Maximum achievement – Submission of the audited accounts of the previous year by September 30 of the performance year (December 31 for the year 2018-19). Incentive = ₹3 x Population of ULB as per Census 2011 If the statutory audit procedure for urban local bodies is modified by the GOTN, this protocol will be revised to reflect such changes.

Audit completion certificate for each ULB from LFA Monthly status reports submitted to CMA by LFA.

The IVA will verify the date of completion of audit as per the records/ communication from the office of the Local Fund Audit. CMA will request the LFA to certify status as on March 31 of each financial year, not later than April 30 of the following year. Other aspects to be assessed during evaluation The audit of accounts of preceding years should also have been completed.

PI 2 Percentage of special para objections and special letter objections from LFA pertaining to [financial year 2015-16 or earlier] pending settlement.

Sum of special para objections and special letter objections settled as on cut off date divided by baseline. Baseline is the sum of special para objections and special letter objections pending settlement pertaining to the year 2015-16 or before as on March 31, 2018.

Baseline as per statement from the office of the LFA. Status of pending objections as per monthly status report of the LFA.

The IVA will verify the number of audit objections settled as per the statement from the office of Local Fund Audit. CMA will request the LFA to provide status as on March 31 of each financial

Appendix 4 81



Frequency


Procedure

Threshold achievement - Percentage equal to 25% Incentive = ₹6 x Population of ULB as per Census 2011 Maximum achievement - Percentage equal to or less than 5% Incentive = ₹9 x Population of ULB as per Census 2011 For performance in between the incentive will be pro rata The performance year for this indicator will be the year 2019-20. If a ULB achieves threshold performance in the year 2018-19, it can receive the first incentive for 2018-19 and an incremental incentive for the year 2019-20. The incentive payable for performance year 2019-20 will be incentive payable for performance as per year 2019-20 less incentive paid for the performance year 2018-19.

year, not later than April 30 of the following year.

PI 3 – Timely debt and statutory payments Debt service (interest and principal repayment) and electricity bills pending as on December 31 of current year

Outstanding payments as on March 31 of the performance year in the following items

a) Interest and principal repayment on any short or long term borrowing from TNUIFSL, TUFIDCO or any other lender(s). (Clarification – Interest or principal repayment due from April 1 of the next financial year will be excluded.)

b) Electricity bills payable by the ULB on or before March 31 of the financial year

Statement from ULB Statement from TNUIFSL and TUFIDCO Electricity Bills of Electricity Distribution agency From the ULB

a) Statement from ULB regarding each payment due by March 31

IVA to verify a) Dues and payment

as per accounting entries

b) outstanding dues from electricity distribution agency

c) debt service details from lenders

82 Appendix 4



Frequency


Procedure

c) Contributory pension scheme payments liable to be deposited on or before March 31 of the financial year

d) Payments for bulk water payable to TWAD on or before March 31 of the financial year

Achievement = No pending payments as on March 31 of the performance year. Incentive = ₹2 x Population of the ULB as per Census 2011

b) Evidence of payment Statement from TWAD, TNUIFSL and TUFIDCO CMA to modify accounting system to record liabilities for the financial year as per a) bills received from TWAD or electricity supplier, b) debt service schedule and c) pension deposits in accordance with salary payments.

PI 4 User charges for Underground Drainage User charges collected from house connection for under ground drainage

Revenue collected in the performance year against demand for underground drainage for the performance year divided by demand for underground drainage for the performance year Threshold Achievement = 60% Collection efficiency as measured above Incentive = Averagea1 number of connections for underground drainage for which demand was raised during the performance year x ₹50 x Collection efficiency as measured above. 1Average will be determined by dividing the total number of unique demand bills raised during the performance year by the number of billing cycles.

Billing cycle wise demand – collection statement from ULB for underground drainage stating (i) number of connections for which demand was raised during the billing cycle, (ii) total current demand and (iii) total current collection. Evidence of collection as per financial statements. Connection-wise monthly statement of demand and collection.

IVA to verify demand collection statement with accounting entries.

PI 5 – Professional tax collections

Average number of assessments in the two assessment periods in the performance year for which professional tax is realized less average

ULB to provide statements of demand and collection for each assessment period in the

IVA to verify demand and collection statements of the ULB.

Appendix 4 83



Frequency


Procedure

Increase in average number of assessments from which professional tax is collected in the two six monthly assessment periods (performance year) compared to average number of assessments from which professional tax is collected in the two assessment periods in prior year.

number of assessments from which professional tax was realized in the two assessment periods prior to the performance year. Assessments refer to the number of employees for which professional tax is paid and NOT to the number of companies submitting professional tax returns. Incentive = Number of additional assessments as determined above x ₹800

performance year and in the previous year with the following information

a) number of returns for which professional tax was realized

b) Number of employees for which professional tax was realized.

CMA to modify online system to record information on number of employees from whom professional tax is realized. ULBs to enter data pertaining to number of employees for the year 2017-18; and thereafter for each performance year.

PI 6 - Key staff positions filled Vacancies filled in Grade C and above positions in general administration, engineering, public health and town planning

Achievement = Number of vacancies as on 31st March 2018 filled through recruitment. Vacancies filled due to transfers will not be considered as filled. Vacancies filled due to promotions will not be considered since the net effect is nil. Incentive = ₹500,0001 per vacancy filled. Note 1; Incentive per vacancy to be finalized based on baseline number of vacancies to fit within available budget.

CMA Sanctioned posts, excluding posts in Grade D where the state has taken a policy decision to outsource tasks. CMA to finalize baseline based on a) sanctioned posts that would be monitored under this indicator, b) status of vacancies as on March 31, 2018 ULB Yearly statement, sanctioned posts, vacancies, department wise and designation wise

IVA to verify status of vacancies

84 Appendix 4



Frequency


Procedure

PI7 – Implementation of GAP Equal opportunity employment across all positions and maintenance of sex disaggregated data on applicants including short listed and selected candidates

Achievement = Conformance ULB Documentary proof of equal opportunity employment in all recruitment undertaken by ULB Documentary proof of maintenance of sex disaggregated data

IVA to verify conformance

PI 8 - Improvement in service delivery Number of new house service connections added under the Project for water supply and/or underground drainage

Additional house service connections provided under the Project for which connection fees as per prevailing policy have been recovered for water supply and/ or underground drainage as the case may be. For ULBs implementing both water supply and underground drainage project under the ADB Project the total of water supply and underground drainage connections will be taken. Achievement Additional house service connections as above provided Minimum of 60% of house connections targetted as per the approved detailed project report have been provided and connection fees as per policy have been recovered. Incentive = ₹800 x Number of connections added as above In case of subsequent claims Incentive =

ULB to provide

• Number and list of house connections provided and status of payment of connection fees from such connections.

• Total number of targeted connections as per approved DPR

IVA to verify

• Additional connections as per the connection database

• Receipt of connection fees as per accounting system

• On sample basis, new connections

Appendix 4 85



Frequency


Procedure

₹800 x Number of connections added after previous claim As a matter of clarification, if the prevailing policy provides for recovering connection fees in installments, then the number of households from which the installments due till March 31 of the performance year have been recovered will be eligible for incentive calculations.

PI 9 - Project management and completion Timely completion of construction as per construction contract

Delay in months for completion of project and issue of completion certificate as against the originally targeted date of completion as per construction contract. Any fraction of a month to be ignored. Threshold Achievement Delay less than or equal to 15 months Maximum achievement No delay Incentive = [15- Delay in months] / 12 x 2% or original contract value Partial commissioning would be considered as per definition.

From ULB Original targeted date of completion as per construction contract Completion certificate CMA to define date of completion taking into account materiality of physical completion of construction.

IVA to verify validity of completion certificate and status of construction.

PI10 – Reuse of treated wastewater

Average wastewater supplied to customers (in mld) Threshold achievement Average wastewater supplied to customers is at least 10% of the installed capacity of the respective wastewater treatment plant

ULB to provide

• Capacity of wastewater treatment plant

• Meter readings for quantity of wastewater sold to customers

IVA to verify a) Quantity of wastewater

sold and the price at which it has been sold and revenue realized

b) Materiality of waste water reuse and

86 Appendix 4



Frequency


Procedure

End use of wastewater to be a substitute for raw/ fresh or treated water use from ULB or other sources Incentive = ₹10 lakhs per MLD of wastewater sold. Reuse of wastewater will be considered with weightage as per definition.

• Agreement for purchase of wastewater if applicable

• Revenue collected from customers for sale of wastewater

confirmation that wastewater reuse is a substitute for raw/ fresh/ treated water use from ULB or other sources

PI11 – Fecal sludge management Number of houses where septic tanks are emptied through an authorized fecal sludge emptying service

Number of households whose septic tanks have been emptied by an authorized fecal sludge removal/ transportation service of the ULB or the ULB itself at least once within the last two years. Provided such households are not in area covered by underground drainage and the locality of such households is declared by the ULB as covered under a formal/ licensed fecal sludge management system. Threshold achievement Not applicable Incentive = Number of households as above x ₹200 If the household has not been emptied in the performance year, but has been emptied in the previous year, incentive would be paid at the rate of ₹200 per household, even if incentive has been paid for the household in the previous year, i.e each household whose septic tank has been emptied at least once in two years is eligible for an incentive of ₹400 every two years.

ULB to provide a) Localities listed as covered

under formal fecal sludge management program, and households in these localities

b) Monthly report of households whose septic tanks are emptied with details of individual household as per property tax database, with details of emptying service such as a) agency, b) data and time etc.

c) Total number of households covered under formal fecal sludge management program

IVA to verify a) Functioning of fecal

sludge management program

b) On sample basis, septic tank emptying status of households

c) Service acknowledgement from households and/or charges collected for emptying service

Appendix 4 87



Frequency


Procedure

Maximum incentive per household per year will be ₹200 even if it is emptied more than once a year.

PI12 – Implementing GAP All non-statutory committees of the elected representatives of the ULB have at least 33% participation of women and ii) ULBs prepare, maintain and publish sex disaggregated database on staff, elected representatives and members of Standing committees

Progress in implementation of Gender Action Plan as finalized by the CMA. The CMA would finalize the Gender Action Plan and nominate ULBs from ADB project towns that may implement the plan on a voluntary basis. The GAPwill include: (i) milestones in implementation, (ii) methodology for measuring and verifying progress, and c) an annual score to measure progress. Incentive Payable = ₹10 per capita for minimum progress ; = ₹20 per capita for maximum progress and pro rata in between

ULBs Progress report on implementing Gender Action Plan

IVA to field verify conformance

CMA = Commissionerate of Municipal Administration, DPR =detailed project report, GAP = gender action plan, GOTN = Government of Tamil Nadu, IVA = Independent Verification Agency, TNUIFSL = Tamil Nadu Urban Infrastructure Financing Services Limited, TUFIDCO = Tamil Nadu Urban Finance Infrastructure Development Corporation, TWAD = Tamil Nadu Water and Drainage Board, ULB = urban local body

88 Appendix 4

ANNEXURE III: ACTIONS TO IMPROVE DATA COLLECTION AND REPORTING 1. The Governance Improvement Cell (GIC) will utilize the existing systems in urban local bodies (ULBs) and Commissionerate of Municipal Administration (CMA) including the new E-Governance system that is being implemented. The first phase of E-Governance implementation focuses on revenue and accounts modules. This is in advanced stage of implementation. This system can provide most of the information required for performance assessment. Further, for an ongoing rewards program, CM awards for ULBs, a separate data entry module has been developed. ULBs upload the required information in this module. A similar module can be created for the performance based governance reforms fund (performance assessment module). Information available in the E-Governance system can be updated into this module directly; information that is not captured in the E-Governance system can be separately entered by the ULBs. 2. The following paragraphs summarize changes that are required in data collection, reporting and E-Governance systems. These changes will be implemented by CMA with the support of Urban Data and Governance Improvement Cell (UDGIC) in the year 2018-19. The only change required prior to launch of GIC is in the aggregation of data regarding employees in professional tax. This needs to be completed before April 1, 2018. The other changes that are required are minor and can be implemented during the year 2018-19. However, if these are delayed beyond 31 March 2019, the performance assessment will require manual compilation of data and additional field verification. 3. Financial management

i) Data entry module of performance assessment system to capture the milestones in Local Fund Audit (LFA), a) submission of accounts to the LFA by ULB, b) intimation of corrections by LFA to ULB, c) submission of revised accounts by ULB to LFA, and d) date of LFA certificate of completion of accounts;

ii) Status of audit completion to be provided ULB-wise; iii) Audit paras pending settlement – To be provided ULB-wise, separated by financial

year and separated into special para/ ordinary para. ULBs also need to enter this information into the performance assessment module;

iv) ULBs need to modify bookkeeping procedures to track bills that are due and are pending payment. These should be reflected as current liabilities. Out of long-term loan liabilities, repayment due in the next financial year should be reflected as current liabilities. Revisions in E-Governance accounting module to allow ULBs to enter the bills as current liability; and

v) Based on data maintained by the ULBs and the data entered into the E-Governance system, a status report on settlement of statutory dues.

3. Revenue

i) The E-Governance module should provide a data field for the number of employees on whose behalf the assessment for professional tax is being filed (before 01 April 2018);

ii) The E-Governance module should also provide data fields to enter the details of each individual employee for professional tax (preferable), and this can be made accessible to professional tax payers to that the data entry load on the ULB is minimized;

iii) The baseline data on employees for professional tax for 2017-18 needs to be entered into the system manually by the ULBs;

Appendix 4 89

iv) The E-Governance module should report the number of employees on whose behalf professional tax has been collected in the year and the corresponding number for the previous year (and the total collections in each of the years).

4. A vacancy status report may need to be generated for input into the performance assessment module. 5. Project implementation and service delivery

i) Target number of connections for new projects as per the detailed project report in the E-Governance module as a data field, and generating a report of the number of new connections that have paid the connection fee;

ii) For each ULB that proposes to sell wastewater, the E-Governance module should include provisions for: a) Details of sewage treatment plant (STP) from which sale will be made; b) Updating monthly production of wastewater and sale of wastewater; c) Revenues from the sale of wastewater, as accounted for in the revenue

statements of the ULB; and d) Details of customers and sale agreements.

iii) Tracking wards earmarked for fecal sludge management by the ULB; iv) Database of households intended to be covered through fecal sludge management; v) Details of emptying of septic tanks, either through ULB service or through authorized

service provider; and vi) Evidence of fee collection from the household (or) service completion

acknowledgement for fecal sludge management.

90 Appendix 4

ANNEXURE IV: DRAFT OUTLINE TERMS OF REFERENCE FOR INDIVIDUAL CONSULTANTS TO SUPPORT THE GOVERANCE IMPROVEMENT COMPONENT

A. Tranche 1 Requirements 1. Position on contract –Senior Expert in Year 1, transitioning as General Manager

Urban Data and Governance Improvement Cell (UDGIC) in Year 4 Qualification: Graduate in engineering, planning, science or commerce Experience: At least ten years of experience in monitoring and evaluation or financial management of Government agencies. Experience within ULBs would be preferred. Key tasks:

1) Implementation activities of Governance Improvement Cell (GIC): (i) Preparatory. (i) Procure consultants for annual performance assessment;

(ii) identify changes required in data collection and information technology systems; Organize dissemination workshop with participating urban local bodies (ULBs) on regional basis; (iii) prepare baseline information as on 31 March 2018; and (iv) prepare a model annual calendar for performance assessment;

(ii) Carry-out annual performance assessment of 135 ULBs covered under GIC; oversee field verification and independent verification of ULB performance as may be required; and calculation of incentive payments and release of payments;

(iii) Monitor use of funds provided to ULBs under GIC to ensure compliance with financial management safeguards of Tamil Nadu Urban Flagship Infrastructure Program (program); and

(iv) Annual review of performance indicators; baseline data collection; updating information technology and other reporting systems; revising performance indicators; forecast of performance and revision of yearly budgets; and expedite state level actions required to improve performance (such as sanctioning of recruitment requests).

2) Administer other incentive linked grants entrusted to UDGIC; 3) Support the Government of Tamil Nadu (GOTN) in developing a statewide

performance management framework for ULBs; 4) Develop, with the support of management information system (MIS) and

information technology specialist, data collection and online monitoring tools to facilitate performance assessment of ULBs on a single window approach; and

5) Provide guidance and leadership to the team. 2. Position on contract- Information Technology and MIS specialist (engaged from

Year 1) Qualification: Graduate in information technology/ computer science or engineering graduate Experience: At least five years of experience in providing information technology support in reform implementation or program management in Government agencies. Experience within ULBs would be preferred.

Appendix 4 91

Key tasks 1. Support UDGIC in developing management information system (MIS) for

performance assessment, online data collection and integration with E-Governance modules;

2. Support other divisions of CMA in designing changes/ additions to E-Governance system and co-ordinate with information technology vendors; and

3. Support General Manager Research in annual performance assessment and in reporting to funding agencies and the GOTN.

General qualifications

1. The independent consultant will have at least ten years of experience in monitoring and evaluation of programs in urban, education, health or utility sectors. The independent consultant will have experience of at least three years in reform monitoring and /or evaluation in urban sector;

2. The independent consultant will not deploy any current or past employees of the Government of Tamil Nadu or urban local bodies of Tamil Nadu in the evaluation team of GIC; and

3. None of the members of the evaluation team of GIC shall be part of project team of any consultancy or other projects with the Municipal Administration and Water Supply Department/ CMA/ Tamil Nadu Urban Infrastructure Financial Services of the GOTN or any of the participating ULBs for the duration of the independent verification assignment. This restriction does not apply to other team members who are not part of the independent verification.

92 Appendix 5

PROCUREMENT PLAN

Basic Data Project Name: Tamil Nadu Urban Flagship Investment Program (TNUFIP) Tranche 1

Loan No./ Project No.: P49107-IND Approval No. ----------------

Country: India Executing Agency: Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL)

Procurement Risk: Moderate Implementing Agencies:

• Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB)

• Coimbatore City Corporation

• Tirunelveli City Corporation,

• Vellore City Corporation

• Tiruchirappalli City Corporation

• Rajapalayam Municipality

• Commissionerate of Municipal Administration

• Tamil Nadu Water Supply and Drainage Board

Project Procurement Classification: Category B

Project Financing Amount: $477.5 million ADB Financing: $169 million Asian Clean Energy Fund under the Clean Energy Financing Partnership Facility: $2 million Non ADB Financing: $306.5 million

Project Closing Date: December 2023

Date of First Procurement Plan: 15 December 2017

Date of This Procurement Plan: 15 December 2017

A. Methods, Thresholds, Review and 18-Month Procurement Plan

1. Procurement and Consulting Methods and Thresholds

Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works.

Procurement of Goods and Works Method Threshold

International Competitive Bidding (ICB) for Works $ 40,000,000 and above International Competitive Bidding (ICB) for Goods $ 10,000,000 and above National Competitive Bidding (NCB) for Works Beneath that stated for ICB, Works National Competitive Bidding (NCB) for Goods Beneath that stated for ICB, Goods Shopping for Works Below $ 100,000 Shopping for Goods Below $ 100,000

Consulting Services

Method Comments

Quality- and Cost-Based Selection (QCBS) Quality-based selection (QBS) Consultants’ Qualification Selection (CQS) Least Cost Selection (LCS) Fixed Budget Selection (FBS) Individual Consultant Selection (ICS)

2. ADB Prior or Post Review

Except as ADB may otherwise agree, the following prior or post review requirements apply to the various procurement and consultant recruitment methods used for the project.

Appendix 5 93

Procurement Method Prior or Post Comments

Procurement of Goods and Works

ICB Works Prior

ICB Goods Prior

NCB Works Prior All bid document and bid evaluation reports shall be subject to ADB’s Prior review.

NCB Goods Prior All bid document and bid evaluation reports shall be subject to ADB’s Prior review.

Shopping for Works Post

Shopping for Goods Post

Recruitment of Consulting Firms

Quality- and Cost-Based Selection (QCBS) Prior

Other selection methods: Consultants Qualifications (CQS), Least-Cost Selection (LCS), Quality-Based Selection (QBS), Fixed Budget Selection method (FBS) and Single Source (SSS)

Prior

Recruitment of Individual Consultants

Individual Consultants Prior

94 Appendix 5

3. Goods and Works Contracts Estimated to Cost $ 1 Million or More

The following table lists goods and works contracts for which the procurement activity is either ongoing or expected to commence within the next 18 months.

General Description

Estimated Value

($ million)a Procurement

Method

Review (Prior/ Post)

Bidding Procedure

Advertise-ment Date

(quarter/ year) Comments

TNUFIP/TEVL/01: Providing sewerage collection system in Zone-1,2 & 3 for UGSS in Tirunelveli Corporation under Phase-II.

36.97 NCB Prior Single-stage Two-envelope

Q4/2017 Advance Contracting: Yes; Without Pre-qualification: Yes; Bidding Document: SBD Works (Large); Domestic preference applicable: No; Contract Completion Period: 36 months followed by Defect Liability Period.

TNUFIP/TEVL-2/01: Providing sewerage collection system in Zone - 4, 5, 6, PCB, PM and construction of Sewage Treatment Plant of capacity 27 MLD with Waste Stabilization Pond technology for UGSS in Tirunelveli Corporation Phase-III under Package-1.

57.64 ICB Prior Single-stage Two-envelope


TNUFIP/CBE/01: Providing UGSS to Kurichi and

64.85 ICB Prior Single-stage Two-envelope

Q1/2018 Advance Contracting: Yes;

Appendix 5 95

General Description

Estimated Value


Method


Bidding Procedure

Advertise-ment Date


Kunjamuthur Area Wards 87 to 100 of Coimbatore Corporation Phase II in Coimbatore District

Without Pre-qualification: Yes; Bidding Document: SBD Works (Large); Domestic preference applicable: No; Contract Completion Period: 36 months followed by Defect Liability Period.

TNUFIP/CBE/03: Construction of Sewage Treatment Plant of capacity 30.53 MLD on DBO basis for UGSS in Coimbatore Corporation under Package – 3


Q2/2018 Advance Contracting: Yes; Without Pre-qualification: Yes; Bidding Document: SBD Plant-Design, Build, Supply and Installation; Domestic preference applicable: No; Contract Completion Period: 24 months

TNUFIP/CBE/GR1: Supply, erection installation and commissioning of 2 MW PV Solar power plant for STP in Coimbatore corporation

2.0 NCB Prior Single-stage Two-envelop


96 Appendix 5

General Description

Estimated Value


Method


Bidding Procedure

Advertise-ment Date


TNUFIP/TIRP/01: Providing sewerage collection system in the extended areas of Corporation for UGSS in Trichy Corporation under Package – 1



TNUFIP/TIRP/02: Providing sewerage collection system in left out areas of erstwhile Corporation for UGSS in Trichy Corporation under Package – 2



TNUFIP/TIRP/03: Construction of Sewage Treatment Plant of capacity 37 MLD on DBO basis for UGSS in Trichy Corporation under Package-3


Q2/2018 Advance Contracting: Yes; Without Pre-qualification: Yes; Bidding Document: SBD Plant-Design, Build, Supply and Installation; Domestic preference applicable: No; Contract Completion

Appendix 5 97

General Description

Estimated Value


Method


Bidding Procedure

Advertise-ment Date


Period: 24 months

TNUFIP/VEL/01: Providing sewerage collection system in Zone 3,4 &5 for UGSS in Vellore Corporation under Package – 1



TNUFIP/VEL/02: Providing sewerage collection system in Zone 6,7, PCB & PM for UGSS in Vellore Corporation under Package-2



TNUFIP/VEL/03: Construction of Sewage Treatment Plant of capacity 50 MLD on DBO basis for UGSS in Vellore Corporation under Package-3


Q1/2018 Advance Contracting: Yes; Without Pre-qualification: Yes; Bidding Document: SBD Plant-Design, Build, Supply and Installation; Domestic preference applicable: No;

98 Appendix 5

General Description

Estimated Value


Method


Bidding Procedure

Advertise-ment Date


Contract Completion Period: 24 months

TNUFIP/RPM/01: Providing sewerage collection system for UGSS in Rajapalayam Municipality under Package – 1



TNUFIP/RPM/02: Construction of Sewage Treatment Plant of capacity 21.85 MLD – 2 modules on DBO basis for UGSS in Rajapalayam Municipality under Package-2


Q2/2018 Advance Contracting: Yes; Without Pre-qualification: Yes; Bidding Document: SBD Plant-Design, Build, Supply and Installation; Domestic preference applicable: No; Contract Completion Period: 36 months followed by Defect Liability Period.

TNUFIP/CMWSSB/01: Providing Water Supply Improvement Scheme for the 5 added areas of Chennai city


Q1/2018 Advance Contracting: Yes; Without Pre-qualification: Yes; Bidding Document: SBD Works (Large);

Appendix 5 99

General Description

Estimated Value


Method


Bidding Procedure

Advertise-ment Date


Domestic preference applicable: No; Contract Completion Period: 36 months followed by Defect Liability Period.

TNUFIP/CMWSSB/02: Providing Sewerage Collection System in 4 added areas of Chennai city for UGSS in Greater Chennai Corporation.



AMRUT = Atal Mission for Rejuvenation and Urban Transformation; ICB = international competitive bidding; NCB = National Competitive Bidding; O&M = operation and maintenance; SBD = standard bidding document. a Costs include taxes.

4. Consulting Services Contracts Estimated to Cost $ 100,000 or More

The following table lists consulting services contracts for which recruitment activity is either ongoing or expected to commence within the next 18 months.

General Description

Estimated Value

($ million) Recruitment

Method


Advertisement Date

(Quarter/ year) Type of

Proposal Comments

Construction Management and Supervision Consulting firm to assist Tirunelveli Corporation (CMSC-I)

1.88 QCBS (90:10)

Prior Q4/2017 FTP Advance Contracting: Yes; Short-listing: National; Contract Type: Time Based; Contract Duration: 36 months.

Construction Management and Supervision

1.74 QCBS (90:10)

Prior Q4/2017 FTP Advance Contracting: Yes;

100 Appendix 5

General Description

Estimated Value


Method


Advertisement Date


Proposal Comments

Consulting firm to assist Tiruchirappalli Corporation (CMSC-III)

Short-listing: National; Contract Type: Time Based; Contract Duration: 36 months.

Construction Management and Supervision Consulting firm to assist Vellore Corporation (CMSC-IV)

1.74 QCBS (90:10)


Construction Management and Supervision Consulting firm to assist Chennai Metropolitan Water Supply and Sewerage Board (CMSC V)

1.95 QCBS (90:10)


Governance Improvement and Awareness Consultancy – Firm (Includes hardware and software)

3.50 QCBS (90:10)


Project Design Consultants – Firm (PDC)

3.90 QCBS (90:10)


Appendix 5 101

QCBS = quality- and cost-based selection method, FTP = full technical proposal, STP = simplified technical proposal, ICS = individual consultants selection, NA = not applicable, CMWSSB = Chennai Metropolitan Water Supply and Sewerage Board, TWAD = Tamil Nadu Water Supply and Drainage Board.

5. Goods and Works Contracts Estimated to Cost Less than $1 million and Consulting Services Contracts Less than $ 100,000 (Smaller Value Contracts)

The following table groups smaller-value goods, works and consulting services contracts for which procurement/ recruitment activity is either ongoing or expected to commence within the next 18 months.

Goods and Works

General Description

Estimated Value

($ million) Procurement

Method


Bidding Procedure

Advertisement Date


Office Furniture

0.50 Shopping Post Single-stage one-envelope

2017, 2018 Multiple Contracts Each below $10,000;

Regular office supplies and consumables.

0.50 Shopping Post Single-stage one-envelope

2017, 2018, 2019, 2020 and 2021

Multiple Contracts Each below $10,000;

Consulting Services

General Description

Estimated Value


Method


Advertisement Date


Proposal Comments

Individuals

Individual Consultants (multiple positions) for Monitoring and Review of Compliance and other support as required time to time.

0.70 ICS Prior 2017, 2018, 2019, 2020,

2021

NA Multiple Contracts: Nationality: National; Contract Type: Time Based;

ICS = Individual Consultant Selection method acceptable to ADB; NA = not applicable

B. Indicative List of Packages Required Under the Project

Goods and Works

General Description

Estimated Value

Procurement Method Review

Bidding Procedure

Advertisement Date

(quarter/year) Comments

102 Appendix 5

Consulting Services

General Description

Estimated Value

Recruitment Method Review

Type of Proposal

Advertisement Date (quarter/year) Comments

C. List of Awarded and On-going, and Completed Contracts

The following table lists the awarded and on-going contracts, and completed contracts.

1. Awarded and On-going Contracts

Goods and Works

General Description

Contract Value

($ million)

Procurement Method

Advertisement Date

(quarter/ year)

Date of ADB

Approval of

Contract Award

Scheduled Date of

Completion Comments

Nil

Consulting Services

General Description

Contract Value

($ million)

Recruitment Method

Advertisement Date

(Quarter/ year)

Date of ADB

Approval of

Contract Award

Scheduled Date of

Completion

Comments

Nil

2. Completed Contracts

Goods and Works

General Description

Contract Value

($ million)

Procurement Method

Advertisement Date

(quarter/

year)

Date of ADB

Approval of

Contract Award

Date of Completion

Comments

Nil

Consulting Services

General Description

Contract Value

($ million)

Recruitment Method

Advertisement Date

(Quarter/ year)

Date of ADB Approval of

Contract Award

Date of Completion

Comments

Nil

Appendix 5 103

C. Non-ADB Financing

The following table lists goods, works and consulting service contracts over the life of the project, financed by Non-ADB source.

Goods and Works

General Description

Contract Value -Cumulative ($ million)

Estimated Number of Contracts

Procurement Method

Comments

Nil

Consulting Services

General Description

Contract Value - Cumulative ($ million)

Estimated Number of Contracts

Recruitment Method

Comments

Nil

104 Appendix 6

OUTLINE TERMS OF REFERENCE FOR THE CONTRACT MANAGEMENT AND SUPERVISION CONSULTANT (CMSC)

DRAFT TERMS OF REFERENCE FOR CONSTRUCTION MANAGEMENT AND SUPERVISION CONSULTANCY SERVICES FOR IMPLEMENTATION OF WATER SUPPLY/ UNDERGROUND SEWERAGE SCHEME

A. Background

1. The Government of Tamil Nadu (GOTN), one of the most urbanized states in India is committed to improve urban infrastructure and simultaneously address institutional strengthening, and targets reforms in urban governance. Therefore, Government of Tamil Nadu has proposed to undertake “Tamil Nadu Urban Flagship Investment Program (program)”. The proposed Program will support the GOTN in improving the infrastructure facilities and implementing reforms in urban sector.

2. The GOTN has been implementing urban investment projects with funds assistance from World Bank, Japan International Cooperation Agency (JICA) and KfW. The investments have made improvements in the living standards of the public, yet there is further scope and accordingly, GOTN is in discussion with the Asian Development Bank (ADB) seeking funds for implementing the program.

3. The proposed program is expected to support both the infrastructure needs and the reform program of the GOTN for sustainable urban infrastructure development and service delivery. The funds will provide financial support to the GOTN to implement reforms that will unlock the potential of various stakeholders, including municipal bodies, individual households, and private sector investors. The loan is expected to support catalytic investments that enhance productivity and leverage finances from various other sources in the project areas. The project will also explore possibilities of applying innovations in water supply and wastewater management, storm water drainage and flood management and reduce water loss in the form of nonrevenue water (NRW).

4. The impact of the program will be improved quality of life for all including the poor and the disadvantaged in Tamil Nadu. The project is envisaged to be implemented in three tranches having an aggregated amount of investment to the tune of around $715 million. The Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL) will implement program through a program management unit (PMU).

5. The ULB now intends to provide Water Supply / Underground sewerage schemes under the program. The cost of the project is about $XXXXXX million (₹XXXXXX Crores). XXXXXX will implement the project under multiple packages and proposes to employ a Contract Management and Supervision Consultancy firm through TNUIFSL.

B. Objective of the Assignment

6. On behalf of the ULB (hereinafter “the Client”), TNUIFSL shall recruit a competent and professional Contract Management and Supervision Consulting firm (“the Consultant”). The said Consulting firm on behalf of TNUIFSL shall work with XXXXXX. All day-to-day reporting of the Consultant shall be to XXXXXX. The objective of the assignment is to assist and support the XXXXXX in contract management and construction supervision of works covered under the proposed underground sewerage / water supply project taken up under the program.

C. Scope of Services, Tasks (Components) and Expected Deliverables

7. Scope of Services: The Consultants’ services will be used for carrying out contract and

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construction management including supervision of works and overall responsibility to deliver the outputs will rest with the Consulting firm through the Team Leader. The Consultant shall ensure timely delivery of the documents and completion of various works assigned, establish coordination among all stakeholders and within the team members of the Consultant, scheduling mobilization/demobilization of team members and to interact with the client on regular basis.

8. The scope of services inter-alia intended to be provided by the Consultant under this terms of reference (TOR) shall include but not limited to the following:

(i) Setting out of sites for various components involved in the project including field verification of lines and levels;

(ii) Carrying out its duties as Engineer/ Engineer’s Representative within the context of provisions of Works and Supply Contracts;

(iii) Support and assist the XXXXXX in contract administration and compliance with contractual conditions;

(iv) Field level supervision and monitoring of progress of works and preparation of progress reports;

(v) Review of designs, drawings, technical specifications and estimation. Ensure compliance with standard Engineering practice by the Contractors;

(vi) Develop Quality Assurance System & Quality Control Plan and prepare quality compliance reports;

(vii) Map all the utilities above and below ground that are falling within the alignment and assist in shifting of the same as required;

(viii) Coordinate with all the stakeholders to achieve timely completion of contractual obligations on the part of Contractors and the Client;

(ix) Assist in compliance with regulatory clearances. Assist in obtaining various permits, for the implementation of the project. Preparing Traffic Management Plan for project implementation;

(x) Assist in monitoring progress of work including financial progress, preparing status reports;

(xi) Develop and promote usage of advanced tools for project scheduling and monitoring;

(xii) Developing and Setting up of management information system (MIS) system; (xiii) Advise and supervise on safety and security of the labourers, supervising and

monitoring officials and public during project implementation; (xiv) Ensure compliance of ADB safeguard requirements and prepare various

documents related to safeguards implementation and monitoring; (xv) Carry-out capacity building of XXXXXX on environmental/social safeguards, good

construction practices, environmental assessment and monitoring, gender action plan, and grievance redressal

(xvi) Prepare and submit progress reports capturing physical, financial progress, environmental, social safeguards and gender action plan (GAP) compliance, critical issues, etc., at regular intervals;

(xvii) Assist Client in forecasting the progress of works and finalization of periodic targets for the expenditure and disbursement;

(xviii) Obtain as-built drawings from the contractors and submit the same to the client after verification in the field and certification for its correctness;

(xix) Prepare and submit work completion report including as built drawings; (xx) Assist the client in settling contractual disputes; (xxi) Assist and support the client in processing and dealing with contract variations; (xxii) Advise the client on best practices and innovative approaches in construction,

develop site specific construction methodology and supervise such works;

106 Appendix 6

(xxiii) Taking into account the details of the entire project including the plants & equipment furnished by the manufacturers, suppliers & contractors, prepare an Operation and Maintenance Manual for the entire project; and

(xxiv) Prepare an asset management plan and asset register for all the assets created under the project.

9. Detailed Task and Expected Deliverables: The scope of Consultant under various activities will include but not necessarily be limited to the following:

a. Construction Supervision and contract management: The Consultant shall assist and be responsible to carry out the tasks appended hereunder. The Tasks appended hereunder are neither limited nor conclusive; the consultant shall be obliged to support the XXXXXX in performing their tasks and responsibilities.

(i) Review construction contracts/ documents and conduct site visit of all ongoing contracts and identify a) potential initial activities to be complied with by the Construction contractors, and b) the obligations of the Client, if any. Bring to the attention of the Client any potential contractual issue and construction Problem that warrants their early attention;

(ii) The Consultant shall maintain sufficient site-based staff, with clear allocation of duties, to supervise day-to-day construction activities;

(iii) Review the Contractor’s construction methodology, work proposal and working drawings to the extent required by respective contract. Submit comment on requirement of modifications, if any, and recommend for approval as appropriate;

(iv) Proof checking of the Contractors’ drawings, designs and recommend to the client for approval of contractors’ design and drawings for execution as required;

(v) Examine, check, comment and recommend for necessary action on the Contractor’s proposals, plans, detail designs, drawings, request for change, if any. Monitor and report on physical progress of the works and financial disbursements, environmental and social compliance reports;

(vi) Ensure required instructions received and complied with the requirements of the contract;

(vii) Be responsible for management and supervision of Construction contracts under the current Law of the Employer’s country;

(viii) Check the adequacy and quality of Contractor’s input in terms of material, equipment and machinery, workers and safety requirement prior to commencement of the works and time-to-time during construction activity;

(ix) Facilitate in setting out the works and ensure its correctness during the implementation;

(x) Checking the line level, layout of the construction to ensure conformity with the contract, proposal for approval of any changes in the plans that may be deemed necessary duly indicating the effects due to the change on contract and preparation of variation orders accordingly;

(xi) Inspect and supervise the day-to-day operations and activities of the contractors to ensure that the works follow the approved drawings and specifications of relevant construction contracts;

(xii) Monitor the contractor’s compliance with safety requirements during and prior to the commencement of construction activity. Assist in preparation of Accident report in the event of unfortunate occurrence of any accident on the site;

(xiii) Monitor and report the engagement of child labour by the contractor, if any. Ensure the compliance by the contractor of the Labour protection clause in the Contract or required by the regulatory authority including all relevant statutory provisions on

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labour- equal pay for equal work, health, safety, welfare, sanitation and working conditions;

(xiv) Ensure the compliance by the contractor of the Environmental Monitoring/ Environmental Management Plan in the Contract or required by the regulatory authority;

(xv) Ensure the compliance by the contractor of the ADB’s safeguard policy and the requirements;

(xvi) Ensure that the Labour Camps are complying with regulations and take steps to conduct frequent health camps, HIV awareness, etc. in the labour camps. Ensure the facilities are provided separately for women in the labour camps;

(xvii) Maintain at site or at project office, all duplicates of the Contracts, technical drawings, catalogues and drawings, and specifications, survey notes, quality control documents and any other documents, as necessary;

(xviii) Ensure that the contractor is setting up all labs, testing facilities as per contract conditions and the equipment are calibrated;

(xix) Assist the Client and the Contractor to develop alternative methods to overcome unexpected obstacles which may affect the execution of the works;

(xx) Assist the Client in identification and documentation of underground utilities and removal designs, as required;

(xxi) Cooperate, facilitate and report on all removal/ relocation of on-site activities pertaining to ground or underground utilities;

(xxii) Review the aspect of Traffic management in the Contractor’s programs and, ensure and facilitate its compliance by the contractors during the execution of construction activity and removal/ relocation of utilities;

(xxiii) Examine and ensure the completion drawings/ as built drawings prepared and submitted by the Contractor (hard & soft copies), submit recommendations in the event of change or correction is required therein prior to acceptance by the Client;

(xxiv) Ensure maintenance of documentations on the Quality control and Quality assurance, test reports, log books etc by the Contractors in an acceptable manner;

(xxv) Check internal quality management system of the contractors- documentation, quality management method, quality control reporting, quality control staffing. Submit its recommendation any change if warranted/ deemed necessary. Periodically audit contractor’s compliance with quality control/ quality assurance requirements and submit report to the Client;

(xxvi) In case of any new items or modifications of works, prepare specifications, carry out rate analysis (with supporting documents) for justifying / negotiating the rates quoted by the contractors and furnish these to the client for their approval. Check to ensure that type and frequency of test requirements for material on site and in laboratory comply with technical specifications as required in the contract. Test equipment to be used or installed prior to its incorporation in the works;

(xxvii) Carry out, witness and supervise testing of materials and equipment’s to be incorporated in the works at site, laboratory, at source of materials and equipment or any other location. Check testing results to ensure compliance with the provisions of the contract;

(xxviii) Ensure contracts are progressing in time and for any deviation initiate imposing of Fine, LD etc.;

(xxix) Ensure that the all the required insurances are available and up to date with the contractor;

(xxx) Ensure that no additional claims (both for quantity as well as additional scope) shall be admitted without the prior written approval of the client;

108 Appendix 6

(xxxi) Store all records and documents related to quality assurance/ quality control at safe custody and make available when required;

(xxxii) In case of such of those works where measurements are hidden after completion as in the case of foundations, reinforcements in RCC structures etc., measurements and check measurements are to be carried out immediately after each activity is completed;

(xxxiii) To check the laboratory and field tests carried out by the contractors and to develop a mechanism in consultation with the client in carrying out independent tests, if necessary, other than the regular testing done;

(xxxiv) To order special tests of materials and/or, completed works, and/or order removal and substitution of improper materials and/or works as required;

(xxxv) Maintain daily notes/ site order book/diary of execution progress for each construction activity on site as well as notes of arising potential problem on site that may affect the execution progress or require change or variation;

(xxxvi) Attend periodic meetings with Client and the contractors to discuss, approve the execution progress, remaining progress, difficulties, and any potential problem anticipated that may affect on execution, progress, propose constructive solutions/ remedies to overcome problem and difficulties for smooth operations of execution progress;

(xxxvii) Attend, facilitate constructively and report all feedback/ complaints of community related to execution of works;

(xxxviii) Recording measurements of works executed at site from beginning to completion of project; sector experts will ensure that work are carried out as per the approved design/ drawings & specification and shall supervise pre-construction, construction activities and commissioning tests at works;

(xxxix) certification that quality is confirming to all relevant specifications and drawings; (xl) Measurement and certification of the works completed and for certifying and

recommending payments to the contractors; (xli) Approve and/or issue working drawings including variations thereof, in this

connection, give instructions to the contractor; Verify and get corrected the “as-built” drawings supplied by the contractor and certify the same;

(xlii) To assist the Client in taking over of completed works from the contractors in particular by preparing list of defects to be corrected by the contractor;

(xliii) To prepare specific engineering reports when required, which shall include an analysis of the problems encountered and proposed solutions;

(xliv) To identify and agree with the contractors on measures necessary to remedy unsatisfactory performance to remain within the cost and time period of the contract; and

(xlv) The Consultants shall carry out their assignment according to the Schedule of the Contractor, including late working hours, weekends and holidays, overtime etc., when approved by the Client.

b. Project Management and Monitoring:

(i) Identify all necessary approvals and permissions etc. that would be required during the implementation of the Contracts in accordance with the Government regulations and provisions of the Contracts;

(ii) Planning and managing the project, and assisting on the project management, including risk management, cost control, scheduling, monitoring, auditing, reporting, and compliance monitoring for the project required under both the government and ADB rules and guidelines;

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(iii) Prepare and submit detailed work program, including all pertinent activities and critical paths, responsibility and function of each team member, co-ordination mechanism and procedures between the Consultant, contractor and the Employer; reporting system and the procedure etc. to ensure orderly and uninterrupted progress of the works. The mechanism and procedures set by the Consultant shall be subject to the approval by the Client;

(iv) Plan and assist in obtaining, in a timely manner, the required clearances, permits, approvals, sanctions or any other information from relevant competent authorities so that the project activities are not unduly delayed;

(v) Flag the critical issues encountered during project implementation including social impacts;

(vi) Establish document control and proper filing system for project offices, including official correspondence, drawings, site instructions, variation orders and site records. Establish channel and mode of communications;

(vii) Develop program management and tracking system, using commonly available Computer soft-wares to schedule and monitor all aspects of construction activities;

(viii) Review, comment, and recommend approval of the Construction contractor’s proposed implementation schedule and programs, including time over-run aspect and cost over-run, if any. Monitor the schedule and proactively instruct the Contractors to take corrective action to complete the works in time;

(ix) To prepare as necessary detailed recommendations for contract variations and addenda to ensure the best possible technical results, achieved with the available funds. To issue variation orders, fix rates for unpriced works, all after obtaining prior approval of the Client, and to make recommendations to the Client;

(x) To control and appraise the progress of the works, to order suspension of works and to authorize, extensions of the period of completion of works;

(xi) Assist, cooperate, facilitate and submit recommendations on the Traffic management during the removal/ relocation of underground utilities and during the execution of construction works;

(xii) Review and recommend on the Contractor’s claim for progress payments; (xiii) Assist in resolution of contractual issues including review, evaluation and

confirmation of contract Variation Orders; (xiv) Review and examine the Contractor’s request for variation orders, extra items, new

rates, time extension etc. and submit recommendations for approval, if appropriate;

(xv) Assist in constructively and submit recommendations in resolving any potential difficulty or dispute that may arise between the Contractors and the Client;

(xvi) Examine, evaluate and submit recommendations on any claims for additional time or payment submitted by the contractors. Assist in certification of partial, substantial and final completion of the works in accordance with the provisions of the Contracts, including stage certification and final acceptance test;

(xvii) Assist on liaison with local authorities and state/ central government agencies, liaison with ADB. Assist in reporting to these agencies;

(xviii) Assist the Client as may be necessary in meeting its obligations under the Loan agreement/ Project Agreement and assist in reporting;

(xix) Prepare essential works, documents including quick report on progress, quality, disbursement or any other relevant matter as may be required by the Client or the ADB;

(xx) Planning, scheduling and monitoring of the projects using MS project office software or similar software;

110 Appendix 6

(xxi) Assist in conducting regular meetings with all stakeholders, XXXXXX, contractors, and other government entities, etc, to discuss progress and issues related to implementation, and prepare minutes for recording and circulation;

(xxii) Establish all necessary records and the procedures of maintaining/ updating such records for each package and for the entire project;

(xxiii) Develop and implement procedure for timely payments to the contractors and monitor for compliance;

(xxiv) Assist in ensuring compliance with all loan covenants during project implementation;

(xxv) Inspect the works at appropriate intervals during defect liability period and issue Defects Liability Certificates after the rectification, by the Contractor, of possible defects. Ensure that the contractor attends to all kinds of construction defect brought to his notice during defects liability period; and

(xxvi) Monitor implementation of mitigation measures and compliance with the Governance Risk Assessment and Management Plan for the project, and update the Plan as per requirement.

c. Social, Environmental, Archaeological, Occupational Health and Safety aspects:

(i) Review the Resettlement Framework already prepared for the project and Identify any further resettlement requirements/including social impacts identified during project implementation and costs that may be required and provide all information required in relation to right-of-way access as well as the relocation of existing utilities, if required, and other obstructions at the proposed work sites, including vendor stalls;

(ii) Support in establishing grievance redress mechanism acceptable to ADB under the project;

(iii) Monitor implementation of the Community Participation and Gender Action Plan; (iv) Review the Initial Environmental Examination report already prepared and assist

the client in obtaining all necessary permissions and complying with statutory requirements as required prior to construction, such as permissions from Railway, National Highway, Department of Archaeology, Department of Forests and National Parks, and tree-cutting etc;

(v) Monitor the implementation of the EMP during construction and pre/post construction phases;

(vi) In compliance with the EMP, develop a strategy to overcome the difficulties of construction/ traffic management in narrow streets and also prepare detailed plans for detour of traffic during excavation for pipe laying. Propose and implement mechanism for coordination among all stakeholders such as traffic police, roads department, user committees, etc, for smooth construction execution;

(vii) Ensure adequate special measures for working near buildings and structures of cultural significance and in heritage zones involving close coordination with the Department of Archaeology etc. If required;

(viii) Lead design of surveys and investigations required for the protection of archaeological sites and heritage areas, if any, and prepare Archaeological Impact Assessments, or other agreed upon document to be approved by the Department of Archaeology (DOA) for the sections that are classified as archaeologically sensitive;

(ix) As part of the EMP, prepare a project focused Occupational Health and Safety Plan (OHS) to be adopted by the Client and the Contractor; and

(x) Provide awareness training on OHS, environmental impacts and mitigation

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measures, social and gender aspects to the Client and the contractors including contractors' workers.

d. Other Important activities:

(i) Identify need of training to the Client’s personnel; (ii) Conduct formal and on-job training to the Client’s personnel in construction

management and supervision activities and maintain sex disaggregated data on participants;

(iii) Establish project performance monitoring system (PPMS) as per the Design and Monitoring Framework (DMF); updating the PPMS on quarterly basis in accordance with ADB guidelines and loan covenant and carry out all necessary benchmark survey, and subsequent monitoring and evaluation surveys as required;

(iv) Preparing initial base line PPMS report and update the status on quarterly basis. Update the Design Monitoring Framework (DMF) and project outputs/ outcomes etc. on regular basis in ADB format by doing the necessary surveys and collecting data in field;

(v) Provide additional services to those specified above, if so required by the Client: 1. Preparation of reports or additional contract documents for consideration

of proposals for carrying out additional work. 2. Any other specialist services by the Consultant or other specifications as

may be agreed upon.

e. Team Composition and Qualification Requirements for the Key Experts (and any other requirements which will be used for evaluating the Key Experts)

10. Team Composition with estimated Input: The Consultant team comprises of National Key-experts with estimation of 162 person-months and national Non-key experts of 144 person-months, excluding those required for Consultant’s administrative, clerical and support staff. Tentative engagement of the Consulting firm is envisaged to be for a period of Three years. The experts’ positions with their estimated inputs are provided in Table A6.1 and Table A6.2 below:

Table A6.1: Team Composition-Key Experts Sl. No. Position Person Months

A National Key Experts

1 Team Leader cum Construction Management Expert 36

2 Construction Manager 36

3 Waste Water and Drainage Expert 12

4 Water Supply Expert 12

5 Process Engineer – Water Treatment Plant 8

6 Process Engineer – Sewage Treatment Plant 8

7 Structural Engineering Expert 6

8 Electrical / Mechanical Engineering Expert 8

9 Environmental Safeguard Assistant 12

10 Social cum Resettlement Safeguard Assistant 12

11 Gender and community development/participation assistant 12

National Key Experts Sub-Total 162

Table A6.2: Team Composition–Non-Key Experts

S. No. Position Person Months

1. Support Engineers - Construction Supervision & others (4 Nos – 36 man 144

112 Appendix 6

S. No. Position Person Months

months each)

Total of Non-Key Experts 144

11. Expected Qualification Requirements and Tasks assigned to the Key experts. The Consultant is expected to propose experts adequately qualified and experienced to undertake efficiently the task/ responsibility assigned to them. The tasks/ responsibility assigned and detailed educational qualification and experience requirement for the respective expert are as mentioned below.

12. Team Leader Cum Construction Management Expert (National). Team leader will be responsible for overall project management and administration, appraisal of subproject as required, advice on procurement and bid process management, construction supervision, quality control and monitoring, contract management, establishment of Construction Management and Project Performance Monitoring and Reporting System, Training advice on Institutional matters, assist in resolving contractual issue, preparation of Progress and other Reports as required. Leader cum Construction Manager shall preferably i) be Graduate Civil Engineer and Post graduate in environmental / public health engineering or management (full time, from accredited institutes), ii) have 15 years of working experience in similar works and 10 years of experience in construction management of waste water projects, and iii) experience in the similar capacity and sound knowledge of FIDIC contract conditions, Contract management shall be an added advantage.

13. Construction Manager (National). Construction Management Expert will be Responsible for overall construction management, quality assurance/ control and administration of multiple contracts, Supervise the construction activity diligently during the implementation of the work, Provide Training on best practices in construction management, Contract management and Performance Monitoring of various contractors, Support in preparing Project Completion Report and progress reports, Assist in resolving contractual issue, ensure safety at works and compliance with ADB’s safeguard policies and procedure. Construction Management Expert shall preferably i) be Graduate Civil Engineer and Post graduate in PHE/ Environmental Engineering, ii) have 10 years of experience in construction management of waste water projects, and iii) experience in similar capacity and sound knowledge of Contract management and experience in FIDIC contract conditions, experience in computer-based contract management tools shall be preferred. Experience in externally funded projects shall have added advantage.

14. Waste Water and Drainage Expert (National). Waste Water and Drainage Expert will be responsible for implementation of Sewerage network and drainage system collection system and Sewage Treatment Plants, Pumping/ Lift Stations, oversee contract management and performance monitoring, ensuring the quality and progress during construction activities and implementation stage, assist in preparation of Project Completion Report. Waste Water and Drainage Expert shall preferably i) Graduate Civil Engineer with post-graduation in Environmental Engineering/ Public Health Engineering ii) have 10 years of experience in urban Sewerage and Drainage projects, and iii) experience in similar capacity and sound knowledge of FIDIC contract conditions, Contract management, Construction Supervision of Sewerage and drainage system. Experience in externally funded projects shall have added advantage.

15. Water Supply Expert (National). NRW Cum Water Supply Expert will be responsible for design and implementation of Water supply works including appraisal, distribution Network and Water Treatment Plants, Pumping Stations, Engineering Design, assist Procurement in activities, oversee contract management and performance monitoring, ensuring the quality and progress during construction activities and implementation stage, assist in preparation of Project

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Completion Report. Experience in externally funded projects shall be preferred. Water Supply Expert shall preferably i) be Graduate Civil Engineer, ii) have 10 years of experience in urban Water supply projects, and iii) experience in similar capacity and sound knowledge of FIDIC contract conditions, ADB procedures/ policies, Contract management, Construction Supervision and Design of Water supply system. Experience in externally funded projects shall have added advantage.

16. Process Engineer–Water Treatment Plant (National). Process Engineer – Water Treatment Plant will be responsible for design of municipal Water treatment plant, review and approval of designs/ drawings/ details submitted by contractor, identification and appraisal of subproject for subsequent tranches, assist in contract management and performance monitoring, ensure the progress and quality of construction activities, assist in commissioning of water treatment plants (WTP), ensure correctness of as-built drawings and operational manuals, establish operation and maintenance (O&M) procedures and capacity building and training, contribute for preparing Project Completion Report. Process Engineer – Water Treatment Plant shall preferably i) be Graduate Civil/ Engineer and Post-graduation in PHE/ Chemical Engineering, ii) have Experience of 10 years in design, construction and O&M of municipal Water treatment plants, and iii) sound knowledge of ADB procedures/ policies, Contract management, Construction supervision and design of municipal Water treatment plants with using innovative technologies shall be preferred. Experience in externally funded projects shall have added advantage.

17. Process Engineer–Sewage Treatment Plant (National). Process Engineer – Sewage Treatment Plant will be responsible for review and approval of designs / drawings / details of sewage treatment plant and recycling of waste water using innovative technologies submitted by contractor, assist in contract management and performance monitoring, ensure the progress and quality of construction activities, assist in commissioning of sewage treatment plant (STP), ensure correctness of as-built drawings and operational manuals, establish O&M procedures and capacity building and training, contribute for preparing Project Completion Report. Process Engineer–Sewage Treatment Plant shall preferably i) be Graduate Civil Engineer and Post graduation in PHE/ Chemical Engineering, ii) have experience of 10 years in design, construction and O&M of municipal sewage treatment plants, and iii) sound knowledge of Contract management, construction supervision and design of municipal STPs with re-use of treated wastewater shall be preferred. Experience in externally funded projects shall have added advantage.

18. Structural Engineering Expert (National): Structural Engineering Expert shall be responsible for review and approval of structural designs/ drawings/ details submitted by various contractors. Assist in monitoring and ensure quality assurance and control. Structural Engineering Expert shall preferably i) be Graduate Civil/ Structural Engineering and Post graduate in Structural Engineering, ii) have 10 years of experience in Structural designs and 10 years of experience in review and design of Structural engineering elements related to Water supply system, sewage and drainage system urban Sewerage and Drainage projects, and iii) Construction Supervision, design and implementation of municipal Water supply and Sewerage system and experience in use of latest Design soft-wares shall be preferred. Experience in externally funded projects shall have added advantage.

19. Electrical/ Mechanical Engineering Expert (National). Electrical/ Mechanical Engineering Expert shall be responsible for review and approval of designs/ drawings/ details submitted by various contractors, ensure quality assurance and quality control. Assist in resolving technical and contractual issues. Mechanical Engineering Expert shall preferably i) be Post graduate Electrical/ Mechanical Engineering, ii) have 10 years of experience in Electro-

114 Appendix 6

mechanical designs and 10 years of experience in review and design of Electro-mechanical engineering elements related to water supply system, sewage and drainage system under urban Sewerage and Drainage projects, and iii) construction Supervision, design and implementation of municipal water treatment plant and sewage treatment plant shall be preferred. Experience in externally funded projects shall have added advantage.

20. Environmental Safeguard Personnel (National): Post graduate in Environmental Science/ Engineering / Planning or in any related discipline with overall experience of 10 years in environmental impact assessment (EIA) studies and implementation of EMPs, of which a minimum of 3 years shall be on infrastructure projects funded by multilateral organizations like ADB The Tasks: (i) Identify regulatory clearance requirements and assist PIU in obtaining the same; ensure all necessary clearances are obtained timely; (ii) guide contractor on updating EMP /preparing Site Environmental Plan at the start of the project; (ii) update IEE and EMP; ensure that IEE reflects the final design being implemented by contractor; (iii) assist program implementation unit (PIU) in public consultation and information disclosure activities; (iv) supervise day-to-day EMP implementation on site by contractor, including the environmental monitoring plan; (v) conduct awareness and training programs to PIU and supervision staff (including contractor’s) on EMP implementation; (vi) ensure contractor compliance with staff resources as per the IEE/ EMP/ Bid; (vii) review Contractor’s compliance with the measures set forth in the EMP and any corrective or preventative actions set forth in a safeguards monitoring report that the program management unit (PMU) will prepare from time to time; (viii) advise/ guide on any corrective or preventative actions to be implemented by contractor in case of non-compliance or new/ unanticipated impacts; (ix) inform PIU and PMU promptly in case if any significant impacts surfaces, which were not identified in the IEE and develop necessary corrective actions as necessary and ensure implementation by the contractors; include all such impacts and suggested actions in the quarterly EMPs; (x) assist PIU in implementation of grievance redress system, and advise the PIU and contractor on appropriate actions to redress the complaints; ensure that complaints/ grievances are addressed in a timely manner and resolutions are properly documented; (xi) review and approve monthly progress report on EMP implementation submitted by Contractor; prepare quarterly environmental monitoring reports and submit to PIU for further submission to PMU/ TNUIFSL; and (xii) Assistance in any other environmental safeguard related tasks as required by PIU and PMU.

21. Social cum Resettlement Safeguard Personnel (National). (i) Post graduate in Social science (Sociology/ Social Work/ Economics/ Development Studies); and ii) have 10 years of experience in carrying out Resettlement/ Social/ Gender safeguard policies for urban infrastructure projects. The tasks are: i) based on final designs, carry out census and socioeconomic surveys/ verification surveys for the affected people and update resettlement plan in line with the program resettlement framework; ii) Identify requirement for any EUPs/ NOCs for subproject sites and assist PIUs in obtaining the same prior to start of civil works; (ii) prepare any additional safeguard documentation, if required, such as due diligence reports; iii) assist PIU in day-to-day implementation of resettlement plan activities and ensure contractors comply with conditions of resettlement framework/ resettlement plan; (iv) take proactive action to anticipate and avoid delays in implementation, and ensure gender equality and social inclusion during implementation; (v) assist PIU in conducting public consultation and disclosure activities, v) Prepare periodic social safeguard monitoring reports as per project administration manual (PAM) requirements; (vi) establish a system and indicators, focusing on gender and vulnerable households, to monitor social safeguards including grievance redress mechanism (GRM) activities; vii) extend assistance to PIU/ PMU/ Contractors in carrying out awareness campaigns/training focused on involuntary resettlement; and viii) assistance to PIU/ PMU in any other social safeguard related tasks.

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22. Gender and community development assistant (National). Gender and community development/participation assistant will be responsible for developing the workplan, time lines, monitoring and data collation modalities to ensure smooth implementation and monitoring of the GAP and community awareness and participation plan. The candidate shall be Graduate in Social Science/ gender studies or relevant subject and have 5 years of domain experience within the relevant sector.

23. Expected Qualification Requirements and Tasks assigned to the Non-Key Experts. The Consultant is expected to deploy non-key Experts having qualified and experienced as described hereunder to undertake efficiently their task/ responsibility as below.

24. Support Engineers - Construction Supervision (Non-key Expert). Support Engineers - Construction Supervision shall assist in Construction supervision, Quality assurance and quality control, conduct various surveys, tests, investigations and data collection, Contract administration, Project management, recording of measurement and billing, Preparation of reports and ensure compliance with Safeguard requirements. Support Engineers - Construction Supervision shall preferably be Graduate in Civil Engineering, and have 5 years of relevant experience in implementation and Construction supervision of urban infrastructure projects, Water supply and Sewerage project.

25. Support and Administrative Staff. The Consultant shall be required to deploy adequate support staff in the cadre of site supervisors for ensuring minimum level of supervision at all the sites and required number of administrative staff in the cadre of Manager, Clerk, Accountant, CAD Operator etc. for smooth operation of office function.

D. Reporting Requirements and Time Schedule for Deliverables

a. Reporting Requirements: During the performance of the Services, the Consultant shall prepare required reports for submission to the Client in electronic form and/ or hard copies as per Client’s instructions and in English language. The report format shall be consistent with ADB’s project performance reporting system (PPMS) and to be proposed by the Consultant in its preliminary report. The reporting formats shall be amended as required from time-to-time in consultation with the Client. As a minimum, the Consultant shall submit following reports at periods stated in Table A6.3 hereunder.

Table A6.3: Reporting Requirements

Reports Number of

Copies Time Schedule

Preliminary Report 5 Within a period of 15 days from the date of issuance of Notice to Proceed.

Monthly Progress Reports

5 Every month within 5 days of the commencement of next calendar month.

Quarterly Progress Reports

5 Every quarter within 10 days of commencement of next quarter.

Annual Progress Report 5 Every year within 15 days of commencement of next year. For the purpose of Annual Progress Report the year shall mean and refer either to Calendar year or other suitable period as the Client may decide in consultation with the Consultant.

Reports of surveys and studies individually for each study

5 As and when required

Operations manual and As-built drawings

5 Within 10 days of completion of works for each of the packages and for the overall completion of the project.

116 Appendix 6

Reports Number of

Copies Time Schedule

Completion Report 5 Within 10 days of completion of works for each of the packages and for the overall completion of the project.

Any other reports As required As and when required by the Client.

b. Since the Services consist of the supervision of civil works, the following action will require prior approval by the Client: Taking any action under a civil works contract designating the Consultant as “Engineer”, for which action, pursuant to such civil works contract, the written approval of the Client as “Employer” is required.

26. Consultant’s Payment. The consultant’s payment for remuneration shall be based on approved rates / time sheets. The out of pocket expenses shall be on a lump sum basis as per the agreed rates for each category. The payment will be done on monthly basis. Timely execution of the project is critical and therefore the client shall impose suitable penalties on delays of works attributable to the consultant at such rates as that of liquidated damages provided under the construction contract. If there is a bonus provision in the construction contract for early completion, the same will be applicable at the same rate for the consultant as well.

E. Client’s Input and Counterpart Personnel

(i) Services, facilities and property to be made available to the Consultant by the Client: Office accommodation with power and water supply facility for office at XXXXXX. The internal requirements in the office, such as furniture, consumables, office equipment, softwares, refreshments, telephones / communication expenses, office upkeeping, others etc, should be arranged by the consultants at their own cost.

(ii) Professional and support counterpart personnel may be assigned by the Client to the Consultant’s team: Client may provide the counterpart staff for supervision of works in field as available with the client; it will be discussed during contract negotiations and agreed. Quantities in the contract will be adjusted accordingly.

27. Inputs, project data and reports to facilitate preparation of the Proposals. The Consultant shall have access to the following inputs, project data and reports available with Client to facilitate preparation of the Proposals:

(i) Data, reports, maps etc as available with the Client; (ii) DPR as available with the client.

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DRAFT OUTLINE TERMS OF REFERENCE FOR GOVERNANCE IMPROVEMENT AND AWARENESS CONSULTANTS (GIAC)

I. Background 1. The Tamil Nadu Urban Flagship Investment Program (program) is a $500 million financial assistance through a multi tranche financing facility (MFF) from ADB to support Tamil Nadu Government achieve the objectives of urban development as envisaged in the GOTN 12th Five Year Plan, Vision Tamil Nadu 2023 and National Flagship Urban Programs such as - AMURT, Smart Cities Mission and Swachh Bharat. the Municipal Administration and Water Supply Department (MAWS) through Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL) is the state-level Executing Agency for the program. The investment program will primarily focus on water supply and sewerage sub projects in project cities and its outcome shall be ‘livability and climate resilience in at least 10 cities in priority industrial corridors enhanced’. Tranche 1 of the MFF will be implemented in 5 major city corporations of Tamil Nadu- Chennai, Coimbatore, Tiruchirappalli, Vellore, Tirunelveli – and 1 municipality - Rajapalayam. The project ULBs are designated cities for AMRUT and except Rajapalayam all other cities are included under the Smart Cities Mission. The investment program aims to achieve three outputs- (1) climate resilient sewage collection and treatment, and drainage systems in at least 8 cities developed; (2) Access to reliable water supply systems in at least 5 cities improved with smart features, and (3) institutional capacity, public awareness, and urban governance strengthened. As a part of ADB’s “finance plus feature,” the program will include a performance-based governance improvement component to achieve Output 3. All 135 ULBs shall be incentivized to carry out priority governance improvements through performance linked incentives. This is in line with the objective to advance the urban reform agenda in the State. Output 3 is implemented through the Commissionerate of Municipal Administration (CMA). 2. The CMA shall be the Implementing Agency for the urban governance improvement, participation, gender equality, awareness and capacity building components of the program. In order to support various activities of CMA as an implementing agency particularly those related to output 3, a consultancy firm, Governance Improvement and Awareness Consultant (GIAC, the Consultant), shall be recruited under this TOR. The consultancy assignment shall be for a period of about five years starting from September 2018 to June 2023. The Consultant will be located in the CMA and will work under the overall guidance, supervision and direction of the Commissioner of Municipal Administration. The consultant will mobilize local staff/consultants at the PIU level, for field level implementation, coordination and reporting. Adequate provisions for field level functionaries will be established for effective and timely implementation of activities. To ensure seamless coordination, the consultants will prepare workplans with timelines in close coordination with CMA, PMU, PIU, and the Contract Management & Supervision Consultant (CMSC). 3. One component of the Governance Improvement Program is developing a Project Management and Design Centre (PMDC) within CMA. PMDC shall support and oversee the engineering designs, project preparation and management of various urban infrastructure development programs bringing in best case practices and state of art technologies. Necessary capacity building of the PMDC shall be done through a Transaction Technical Assistance using ADB grant fund. All the works related to establishing and managing the PMDC is outside the scope of this TOR.

118 Appendix 7

B. Objective, Scope and Tasks

4. The objective of the consultancy is supporting the program in achieving its output of strengthening institutional capacity, public awareness, and urban governance with proper gender focus and social inclusion. The scope broadly includes (i) establishing an Urban Data and Governance Improvement Cell with new urban data base; (ii) developing and successfully implementing a performance based incentive program with state specific target and goals and ensuring at least 50% of the 135 ULBs under CMA receiving such grants; (iii) designing and carrying out various awareness campaigns specifically those related to water conservation and Hygiene; (iv) imparting knowledge on approaches in integrating gender and social inclusion in urban governance, implementing the gender action plan already prepared and monitoring and reporting on gender equality results; (v) preparing policy notes related to municipal finances and other urban governance issues; (vi) providing support to project implementing units in matters related to project accounts and audits; (vii) monitoring and reporting the implementation of resettlement plan prepared for various sub projects under the program and preparation and/or updating of resettlement plans in ULBs where Tamil Nadu Water Supply & Drainage (TWAD) Board has established PIUs for supporting sub project implementation and (viii) imparting training to CMA and Municipal staff in matters related to the above mentioned tasks. 5. Towards successfully achieving these objective and scopes, the Consultant will refer to all background documents including the Reports and Recommendations to the President for the MFF Program; the Facility Administration Manual; preliminary design document for governance improvement; relevant Government Orders; MoUs signed between CMA and the ULBs etc. 6. Below sections give list of major tasks among others required for fully achieving the objective and scope as stated above.

(i) Establishing an Urban Data and Governance Improvement Cell (UDGIC) with new urban data base (a) UDGIC shall be established within CMA by deploying qualified staff (IT and

others) from within the Government. The cell shall function as a nodal point for all urban data required for planning and implementation of various programs/projects and also for evaluating the performance of the ULBs. This cell shall also be coordinating the implementation of the Governance Improvement component of the program. The cell will have its own computer infrastructure as well as access to related state-owned computer hardware and software. Most of the computer hardware required for this is already available as part of TN Government’s e-Governance program, and any gap in hardware assessed by GIAC for the purpose of establishing a functional UDGIC is to be procured under the program. Necessary software assessed by GIAC as required for UDGIC shall also be procured using the provisional sum under this consultancy assignment. The cell should work by seamlessly accessing data generated through various E-Governance initiatives and the Urban Tree software, building its own data base and sharing the same with various stakeholders. The program shall cover the staff cost and maintenance related expenditure of the cell through the incremental administration cost earmarked under the program. The Consultant shall support in designing, constituting and managing this Cell. The major tasks related to this are:

Appendix 7 119

(i) Prepare baseline information as on March 31, 2018 for all 135 ULBs; identify shortcomings in data availability, reporting requirements and E Governance/IT systems

(ii) Develop methodology and timelines for initial data collection, desk verification with access to the relevant E Governance modules and sample field verification.

(iii) Study the various sources of urban data as available and develop methods /mechanisms for capturing these for developing the proposed database. The consultant shall develop methods and build data base by extracting data from the E Governance modules and where necessary through additional information from ULBs and seeking data from other agencies (such as Local Fund Audit, TNUIFSL, electricity utilities etc.)

(iv) Prepare and submit required questionnaire to various related agencies and collect additional data wherever necessary

(v) Study related E Governance programs and the Urban Tree software and prepare ways for seamlessly operating these with the UDGIC through mutual data capture and sharing.

(vi) Take a survey of the computer hardware and software already available, find the gaps, prepare list of additional requirements and assist in procuring and deploying the same through the funds available under the provisional sum.

(vii) Identify the positions and required qualification of staff to be deployed and support CMA in identifying suitable staff from within government to fill the positions.

(viii) Prepare a concept paper on establishing, operating and maintaining the UDGIC with all necessary guidelines for data collection and management. The paper should include successful case studies and propose an appropriate model specifically suitable for Tamil Nadu.

(ix) Through the computers and software deployed help generate standard templates and procedures for dissemination of data

(x) Support in all aspects related to developing and maintaining the cell as a nodal center for all urban data.

(ii) Developing and successfully implementing a performance-based incentive

program with state specific target and goals and ensuring at least 50% of the 135 ULBs under CMA receiving such grants

7. The GOTN has requested support for a Governance Improvement Component (GIC). This component will incentivize ULBs to implement governance priorities. This component has been designed in response to the following situation.

a) Need for focus on the priorities of GOTN. Tamil Nadu ranks high in reform scores as compared to other States. Under Jawaharlal Nehru National Urban Renewal Mission, Tamil Nadu ranked second in reforms on mission completion; under Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Tamil Nadu ranked fourth in reforms in the year 2015-16. However, GOTN has identified further areas for improvement. For example, even though ULBs in Tamil Nadu complete audit of their financial statements, the process is delayed and the observations of the Local Fund Auditor remain unattended; as on June 2017, more than 148,672 audit observations were pending resolution. Completion of audit

120 Appendix 7

takes more than twelve months for most ULBs; as on February 2017, audit for the year 2015-16 was completed for only 11 out of 135 ULBs. Only 71.1% of households were connected to underground drainage and water networks as compared to the project targets; collection efficiency of user charges for underground drainage is only 49%; underground drainage projects are delayed by more than twenty-four months. Sanctioned posts remain unfilled and there is an average vacancy of 18.8% in key positions. New areas such as fecal sludge management and wastewater reuse need attention.

b) Lack of an incentive fund that covers the cross section of ULBs and which has Tamil Nadu specific targets: The incentive funds in operation are too narrow in focus. The Model Cities component of the Tamil Nadu Sustainable Urban Development Project supports only three ULBs. The incentive fund recommended by the fifth State Finance Commission focusses only on property tax. The performance component of 14th Central Finance Commission supports all ULBs, but the targets are based on all India averages and are not relevant to Tamil Nadu. For example, the 14th CFC requires ULBs to demonstrate growth in own revenue. Own revenues of ULBs in Tamil Nadu grew by a CAGR of 13.46% between 2010-11 and 2014-15.

8. The program aims to enhance urban governance in the state so as it could maintain and improve upon the high standards established in urban development. This is targeted through recognizing performance of individual ULBs related to key governance tasks and by suitably incentivizing them. An initial concept has been developed towards this while preparing the program that has identified a set of potential indicators such as timely conduction of audit and clearing pending audit paras, filling up sanctioned posts and key positions, expanding water and sewerage connections, enhancing collection efficiency related to water and sewage tariff collection, timely completion of infrastructure projects and introduction of faecal sludge management and waste water reuse. An amount of USD 10 million is earmarked under Tranche 1 of the program for distribution as performance grant. 9. The initial design of GIC has taken into consideration the learnings from other incentive programs which include, a) deepening national incentive programs such as AMRUT, b) focused initiatives as compared to a wide agenda, c) setting targets relevant to Tamil Nadu, d) focusing on regular functions of ULBs since their capacity and attention are divided between several parallel programs (which also offer higher incentives than GIC), e) preference for incentivizing outputs and for actions within the control of ULBs and f) simple and objective evaluation methodology to provide clarity to ULBs. 10. The Consultant shall support CMA in designing, rolling out and implementing this component. The Consultant shall develop this incentive program further adhering to the broad concepts and support in rolling out this with effective participation by the ULBs. The Consultant shall also develop a mechanism for performance evaluation and help in carrying out the evaluation and assessing the eligibility and amount of incentives to be given to various ULBs. 11. The major tasks related to this are:

(i) Design the Governance Improvement Program (GIP) in line with the concept paper already developed and agreed upon.

(ii) Review the Definitions and verification protocol for GIP and recommend modifications that may be required in the verification protocol including in the methodology for data collection, reporting and the E Governance system.

Appendix 7 121

(iii) Propose a verification methodology consistent with the approved verification protocol that would include methodology and timelines for initial data collection, desk verification with access to the relevant E Governance modules and sample field verification.

(iv) Propose an annual calendar for performance assessment clearly outlining a) the timelines for initial submissions from the ULBs, b) desk verification, c) field verification for sample ULBs, d) finalization of performance assessment and incentive calculation, e) release of incentive payments to ULBs and f) receipt of expenditure statements from ULBs.

(v) Provide an online data submission tool for performance assessment extracting data from the E Governance modules and where necessary additional information submission (data, supporting documents)

(vi) Support CMA in dissemination and awareness building workshops with ULBs; support specific queries of ULBs regarding the performance assessment.

(vii) Based on the approved verification methodology and annual calendar for performance assessment carryout performance assessment of participating ULBs; As per the performance assessment requirement seek data from other agencies (such as Local Fund Audit, TNUIFSL, electricity utilities etc).

(viii) Based on the methodology identified for selecting sample ULBs for field verification (10% of the number of participating ULBs), propose the list of ULBs where field verification would be carried out

(ix) Submit questionnaire to ULBs for listing databases and documents to be made available to the field verification team

(x) Conduct field verification, with an entry meeting for the officials of the ULBs and an exit meeting listing issues identified (in writing); receive written feedback.

(xi) Based on the desk and field verifications and feedback received from ULBs and other stakeholders, complete the annual performance assessment of participating ULBs and calculate the incentive payment; identify factual errors and seek clarifications as may be required; receive and incorporate written feedback from stakeholders.

(xii) Submit written report to CMA with recommended incentive payments (xiii) Present the results of annual performance assessment to CMA; based on written

feedback received from CMA, carryout revisions in the report and document the reasons for revisions.

(xiv) Prepare ULB specific summaries of shortfall in performance and corrective measures in performance, data collection, reporting, documentation etc. that the ULBs should take

(xv) Based on the annual performance assessment, suggest modifications in the verification methodology and/or other changes required in the Governance Improvement Component.

(xvi) Repeat the performance assessment cycle till end of assignment; based on the experience of performance assessment, propose revisions to the second tranche of Governance Improvement Component

(xvii) On completion of the performance assessment cycles for tranche 1, submit a final report to CMA documenting the implementation of the Governance Improvement Component. Prepare a case study in the form of a short report, a power point presentation and a 12minute audio visual clip with participation and feedback from stakeholders.

(xviii) Support CMA in all other aspects of performance assessment and incentivizing

122 Appendix 7

(iii) Designing and carrying out various awareness campaigns specifically those related to water conservation and hygiene

12. The program targets water security, reducing vulnerability to climate change and enhanced livability in at least 10 cities. Tamil Nadu is highly stressed on water availability and it is getting worsened due to the effect of climate change. A community awareness and participation plan (CAPP) has been developed during preparation of the program. An awareness program mainly targeting school students, teachers, administrators and women Self Help Group aiming improved awareness of water conservation and hygiene is planned as part of the investment program. The program being the first urban ADB investment program in Tamil Nadu providing information related to the program to the public with a view to educate them on the targeted investments, expected benefits etc. is important. The Consultant shall conduct the awareness campaign and also shall develop and implement a suitable IEC campaign. 13. The major tasks related to this include:

(i) Mapping of relevant stakeholders. Identify stakeholders in each ULB through participatory interactions with key stakeholders. Ensure that stakeholder mapping process includes the most disadvantaged and vulnerable. Also ensure that GAP relevant stakeholders are included in the mapping and activities are planned keeping in mind special needs of women and other socially excluded groups.

(ii) Develop a customized/appropriate communication strategy. (iii) Review existing Information Education & Communication (IEC) materials, media

campaigns of various departments - specifically examine ongoing works of Swachh Bharat Mission- and suggest options to converge.

(iv) Develop all IEC materials including those for print and visual media, ensuring that IEC material is gender focused and messaging does not reinforce stereotypes. and spearhead in rolling out IEC activities.

(v) Conduct campaigns on water supply, sewerage, solid waste management (SWM), waste segregation, reforms in WATSAN service delivery

(vi) Create awareness on grievance redressal mechanisms available under the program.

(vii) Conduct awareness campaigns on the project related to benefits, user charges, implementation timelines. The stakeholders will include elected representatives (counsellors) and community members with equitable representation of women/girls. The objective is to facilitate PMU/PIUs towards smooth implementation of civil works and provide support towards addressing concerns and mis-conceptions of general public affecting project progress at each ULB.

(viii) Conduct awareness campaigns in water conservation in at least 4 ULBs where water supply distribution improvement works are undertaken under the program. The program should capture worldwide best practices and elements from internationally acclaimed Water Sanitation and Hygiene (WASH) programs. Materials developed by UNDP can be based on for developing a suitable campaign. Conduct evaluation of the program and report. Technical staff of implementing agencies involved in water supply projects should report improved knowledge and/or skills in designing and implementing water conservation programs as a result of training

(ix) The awareness campaigns related to water conservation and hygiene should target at least 1000 school children, teachers and administrators, 30 women self-help groups(SHG) in the 10 project cities. Ensure at least 50% women participation. The consultants will ensure maintaining proper documentation and record of each activity. Local media – print, radio and television- will be used to

Appendix 7 123

showcase important events. The PMU and PIU will be given prior intimation of the same;

(x) Documentation of mass events, consultations, workshops, seminar, trainings etc will include participant list, sex disaggregated participant data, event objectives, methodology, agenda and feedback from participants. A template that covers all these aspects can be created to ensure consistency in reporting; and

(xi) Short term impact assessment methodology will be developed to assess impacts created within community of awareness generation campaigns and activities. This will be supplemented with photographic evidence where ever applicable.

(xii) Conduct evaluation of all the awareness programs and report.

(iv) Imparting knowledge on approaches in integrating gender and social inclusion in urban governance, implementing the gender action plan already prepared and monitoring and reporting on gender equality results

14. Gender equality and social inclusion are of critical importance to the proposed investment program. A Gender Action Plan (GAP) with clear cut measurable indicators are developed during project preparation. The Consultant shall support CMA in implementation and reporting of the GAP. 15. The major tasks under this shall include:

(i) Carryout a baseline socioeconomic sample survey to identify and quantify the poor and female headed households to be benefitted by the program in all Tranche 1 program towns. Shall prepare survey methodology including questionnaire for baseline survey- to include at least 250 vulnerable households in the project location of each town.

(ii) Employ stratified sampling to ensure data collection from all project covered municipal wards, inclusive of slum localities.

(iii) Collect information on socioeconomic status, gender, service gaps, vulnerability, poverty and marginalization, available social capital through specifically designed questionnaire.

(iv) Collect data on community expectations and aspirations through survey questionnaire and Focus Group Discussions.

(v) Prepare an analytical report by the end of the survey. (vi) Collate and provide data disaggregated based on sex and other relevant exclusion

indicators. (vii) Conduct a baseline user satisfaction sample survey in project ULBs that would

help to measure livability in project cities with respect to the population’s satisfaction with improved sewage collection, as well as drinking water, and in particular, to ascertain that poor and female headed households are in fact benefiting as intended.

(viii) Collect information through surveys to assess whether the desired behavior changes taught through the planned awareness campaigns are really achieved

(ix) Conduct GAP workshops for PMU, PIUs and ULB staff & awareness activities as indicated in the GAP for all relevant stakeholders. At least 10 CMA and 100 ULB staff should report greater awareness on approaches in integrating gender and social inclusion in urban governance, gender action plan implementation, monitoring and reporting on gender equality results

(x) Conduct gender and other related trainings to contractors and laborers.

124 Appendix 7

(xi) Conduct focus group discussions (FGDs) at regular intervals with relevant stakeholders with an objective to address social concerns without affecting planned project progress.

(xii) Assistance to PMU in implementation of Gender Action Plan. Assist in implementing all actions identified in the GAP (gender action plan) for the project. Ensure that project monitoring formats include GAP indicators and reflect sex disaggregated data.

(xiii) Document and report GAP implementation progress every quarter. (xiv) Assist the PMU and CMA in ensuring participation of women and socially excluded

groups (specially slum dwellers) in all relevant committees of user groups that are constituted as part of the project.

(xv) Conduct campaigns on menstrual hygiene, gender and safe mobility etc. for key stakeholders

(v) Preparing policy notes related to municipal finances and other urban governance issues. Providing support to project implementing units in matters related to project accounts and audits.

16. The project implementing ULBs have no previous experience in implementing ADB assisted program, though most of them have implemented other externally aided programs. Thus, these ULBs shall require support and training in ADB specific requirements related to accounting and auditing. Improved financial management is a key aspect in sustainability of the investment program. Though the investment program is not directly targeting policy level interventions, it aims to support the implementing ULBs and CMWSSB in preparing systematic Financial Improvement Plans for CMWSSB and project ULBs. The Consultant shall also prepare policy notes related to municipal finances and related urban governance issues. 17. The major tasks related to this include:

(i) Help executing agency and implementing agencies enhance their financial management capacity;

(ii) Support implementing agencies to prepare and submit account and audit related information required by ADB and PMU in a timely manner

(iii) Prepare systematic Financial Improvement Plans for CMWSSB and project ULBs. (iv) Provide recommendations to the state Government on revenue improvement and

financial management of ULBs. (v) Complete quarterly and annual review reports on financial management and

revenue generation of ULBs (vi) Develop ULB specific proposals for user charges/non-tax revenue and user charge

management system. (vii) Review financial statements and budgets and provide support to ULBs in

improving accounting and budgeting practices (viii) Prepare policy notes related to municipal finances and related urban governance

issues and submit to CMA and MAWS Department.

(vi) Monitoring and reporting the implementation of resettlement plan prepared for various sub projects under the program and preparation and/or updating of resettlement plans in ULBs where Tamil Nadu Water Supply & Drainage (TWAD) Board has established PIUs for supporting sub project implementation

18. The investment program is designed as not to have any major or critical resettlement and rehabilitation issues. However, Resettlement Plans have been prepared for the subprojects

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implemented under the program. The Construction Management and Supervision Consultants (CMSC) recruited under the program in each ULBs shall oversee, monitor and report the implementation of the resettlement plan.39 The GIAC shall oversee the implementation of RPs. But in ULBs wherever the implementation of the project done through TWAD, there shall not be any CMSC. In these ULBs the Consultant shall prepare and/or update RPs in addition to monitoring and reporting the implementation of the Resettlement Plan.

19. The major tasks under this shall include:

(i) Assist in implementing all actions identified in the resettlement plan (ii) Monitor and guide PIUs on resettlement plan implementation, with particular

reference to significant impacts; (iii) Ensure providing compensations and establishing skill development and

employment linkage of affected persons facing loss of livelihood and vulnerable affected persons.

(iv) Lead involuntary resettlement training and capacity building on IR/Indigenous Peoples safeguards to project PIUs and CMA;

(v) Guide PIUs to set up grievance redress mechanisms, record keeping and feedback mechanisms;

(vi) Guide PIUs in keeping detailed records of progress and establishing monitoring and reporting systems for resettlement;

(vii) Provide guidance to PIUs on specific requirements for IPP implementation, if SR-3 triggered.

(viii) Based on final designs, carry out census and socio-economic surveys/verification surveys for the affected people and update resettlement plan in line with the program resettlement framework in ULBs where implementation is done through TWAD Board

(vii) Imparting training to CMA and Municipal staff in matters related to the above-mentioned tasks.

20. The consultant shall support CMA in developing institutional capacity within itself and in implementing ULBs for successful implementation and ensuring sustainability. This shall be done through designing and implementing various training and capacity building programs.

21. The major scope under this shall include:

(i) Identifying the gap in capacities in various agencies directly responsible for project implementation

(ii) Designing an appropriate capacity building program. (iii) Identifying institutions and programs available within India which could be

effectively utilized for training project stakeholders. (iv) Developing inhouse training programs with suitable training modules (v) Conducting and/or Co-ordinating such trainings and evaluating performance. (vi) Conducting periodic review of implementation capacity and suggesting corrective

measures. (vii) Building the institutional capacity for resettlement plan preparation and

implementation (viii) Building capacity for GAP implementation

39 Out of the 10 ULBs where investment is proposed as of now all except Coimbatore, Rajapalayam, Ambur and Cuddalore shall be

implementing the program on their own. In these ULBs CMSC’s shall support implementation. However, in the four mentioned ULBs TWAD Board shall support implementation by establishing PIUs.

126 Appendix 7

(ix) Building financial management capacity related to ADB project implementation.

22. Outputs /report requirements. The outputs/reports shall include (i) Inception report with work plan, implementation framework, monitoring formats

and time lines; (ii) Concept Plan for Urban Data and Governance Improvement Cell (iii) For Governance Improvement component

(a) GIC Design Report (b) Updated definition and verification methodology (c) Baseline information for all ULBs as on March 31,2018 (d) Report on data shortfalls, gaps in IT and reporting systems, ULB wise (e) Guidance manual for ULBs (f) Annual performance assessment calendar (g) Annual Independent verification reports for each ULB; (h) Annual performance assessment reports (i) Annual incentive calculation reports (j) Report on recommendations for Tranche 2

(iv) Baseline Socioeconomic Report with data of vulnerable and female headed households to be benefitted by the investment program in project ULBs

(v) User satisfaction survey reports (vi) Updated/ New RPs in ULBs where TWAD is the PIU. (vii) Monthly progress update to PMU/ on CAPP, GAP and resettlement and

rehabilitation (R&R) implementation; (viii) GAP and resettlement plan quarter updates and reports; (ix) Evaluation reports of campaigns and training programs (x) Quarterly and annual review reports on financial management and revenue

generation of ULBs (xi) All required IEC materials (xii) Assignment Completion Report and (xiii) Any other reports as appropriate

23. Suggested Team Composition. The team shall comprise of the below mentioned Key and Non-Key Experts with adequate support staff. Suggested Team Composition

Sl. No. Position Person Months

A International Key Experts Nil

B National Key Experts

1 Team Leader 58

2 M&E Cum IT Expert 12

3 Financial Management Specialist 24

4 Social & Community Development Specialist 12

5 Public Communication Specialist 24

6 Resettlement/Rehabilitation Specialist 12

7 Gender Specialist 24

8 Documentation Specialist 12

9 Expert on Innovative recycle uses of treated water 6

10 Water Conservation Expert 6

11 Capacity Development Expert 12

12 Faecal Sludge Management Expert 6

National Key Experts Sub-Total 208

Appendix 7 127

Sl. No. Position Person Months

C Non- Key Experts (Social, Awareness, Communication, Gender, IT, Accounts, Field Verification Staff etc.)

560

A. Qualification, Experience and Terms of Reference of Key Experts

(i) Team Leader with at least 15 years’ experience in urban sector with at least five

years of experience in urban reforms. Should be at least Bachelor’s degree in Engineering/ Urban Planning or a Chartered Accountant or Masters in Business Administration or a bachelor’s degree in other equivalent and relevant discipline. Shall be responsible for overall implementation of all tasks related to the consultancy.

(ii) M&E cum IT Expert with at least 5 years’ experience in design and review of M&E systems/MIS systems preferably in urban sector. Should be a graduate in Engineering or Computer Science or Statistics or equivalent. Guide procurement of software and hardware required for setting up Urban Data Centre & PMDC. Shall support developing urban data centre in CMA. Develop tools required for performance evaluation, monitoring and disbursement of grant.

(iii) Financial Management Specialist with at least 5 years’ experience in financial accounting, with CPA qualifications, cost accounting, cost management in urban sector. Support in developing mechanism for governance improvement performance evaluation and assessment in financial reforms, audit, revenue enhancement etc. Support in calculating and disbursing as well as certifying performance related grants to various ULBs

(iv) Social and Community Development Specialist. Post Graduate Degree in relevant filed with 10 years’ experience. Advise CMA and TNUIFSL on timely actions on various social development and inclusion issues. Oversee awareness program design and implementation. Support in training CBOs as Water and Sanitation Committees.

(v) Public Communication Specialist – Post Graduate Degree in relevant filed with 10 years’ experience. Support in developing and rolling out various information, education and communication activities including print and visual media materials and awareness programs.

(vi) Resettlement / Rehabilitation Specialist. Post Graduate Degree in relevant filed with 10 years’ experience. Oversee the resettlement and rehabilitation related issues in implementing ULBs, and guide PIUs on resettlement plan implementation. Lead involuntary resettlement training and capacity building on IR/Indigenous Peoples safeguards to project PIUs and CMA. Help in developing suitable rehabilitation and livelihood programs. Guide PIUs to set up grievance redress mechanisms, record keeping and feedback mechanisms Support in monitoring and reporting and grievance redressal.

(vii) Gender specialist. Post Graduate Degree in relevant field with 10 years’ experience. Update and oversee implementation of GAP program. Ensure that sex-disaggregated data is maintained for all GAP activities including awareness programs and trainings, and impact assessments conducted post training and awareness generation as envisaged under GAP. Monitor and report compliance and achievements. Support in monitoring and reporting and grievance redressal.

(viii) Documentation Specialist. Post Graduate Degree in relevant filed with 10 years’ experience. Work with other experts in documentation related to all IEC and Governance activities.

128 Appendix 7

(ix) Expert on Innovative recycle uses of treated water. Post Graduate Degree in environmental engineering with 10 years’ experience. Develop awareness programs in waste water reuse. Plan and conduct awareness programs in program ULBs, help in identifying potential uses, organize interaction with users and educate with suitably designed cost benefit analysis.

(x) Water Conservation Expert. Post Graduate with specific demonstrated experience in designing and implementing WASH programs. Must have conducted targeted water conservation programs suitable for Indian cities of similar characteristics

(xi) Capacity Building Expert. Post Graduate with experience in designing and implementing capacity development programs for urban local bodies.

(xii) Faecal Sludge Management Expert. Post graduate preferably with engineering background. At least 5 years implementation experience in faecal sludge management. Should have working experience in designing and constructing FSM facilities in conditions similar to India.

Appendix 8 129

DRAFT OUTLINE TERMS OF REFERENCE FOR PROJECT DEVELOPMENT CONSULTANT (PDC)

1. The Tamil Nadu Urban Flagship Investment Program (program) is a $500 million financial assistance as a multi-tranche financing facility (MFF) from ADB to support Tamil Nadu Government achieve the objectives of urban development as envisaged in the Government of Tamil Nadu (GOTN) 12th FYP, Vision Tamil Nadu 2023 and National urban flagship programs such as - AMURT, Smart Cities and Swachh Bharat.The Tamil Nadu Urban Infrastructure Financial Services Ltd. (TNUIFSL) under the Municipal Administration and Water Supply Department (MAWS) is the state-level executing agency (for the program. Tranche 1 of the MFF will be implemented in six city corporations/municipality of Tamil Nadu- Chennai, Coimbatore, Tiruchirappalli, Vellore, Tirunelveli and Rajapalayam. The project ULBs are designated cities for AMRUT as well as the Smart Cities Mission. The investment program will primarily focus on water supply, sewerage and drainage sub projects in project cities. The investment aims to achieve three outputs- Sewage collection and treatment systems rehabilitated and expanded in project cities; Access to reliable and smart water supply improved in project cities and Urban governance improved and urban management strengthened in the participating cities. As a part of ADB’s “finance plus feature,” the program will also include a performance-based governance reforms component. ULBs will be incentivized to carry out priority governance reforms through performance linked incentives. This is in line with the objective to advance the urban reform agenda in the state. 2. It is proposed to recruit a consulting firm as project design consultants (PDC) for carrying out design and preparation of detailed project reports that support future investments in selected Tamil Nadu cities A. OBJECTIVES 3. PDC objectives of service will include, but not restricted to, preparation of investment grade sub projects for water supply, sewerage and urban drainage sub projects in selected cities and towns (with population more than 100,000). The consultant will be working with the PMU of the program formed in TNUIFSL and will work under the overall guidance, supervision and direction of the program director. B. SCOPE OF SERVICES 4. The consultancy will cover the following cities/towns: To be determined. 5. This scope of services shall include but not limited to:

(i) Primary and secondary data collection and assessment; (ii) Review and updating of existing plans and proposals; (iii) Rehabilitation and expansion of, sewerage network including separation of

sanitary sewers from drains, and property connections; (iv) Modernization and expansion of wastewater treatment plants; (v) Use of wastewater as a resource including recycling of wastewater, and energy

generation through sludge digestion and gasification; (vi) Automation and instrumentation of system; (vii) Septage management and decentralized wastewater treatment systems in

suitable areas; (viii) Network modelling; (ix) Asset condition assessments;

130 Appendix 8

(x) Topographical and geotechnical surveys; (xi) Preparing Energy Optimization Reports; (xii) Developing geographic information system (GIS); (xiii) Conducting a command-area wide NRW study; (xiv) Preliminary and detailed designs as appropriate; (xv) Developing a supervisory control and data acquisition (SCADA) system for the

treatment plants, transmission/trunk mains and distribution/collection system; (xvi) Preparing Detailed Project Reports (DPRs); (xvii) Undertaking an organization review; (xviii) Economic and Financial Analysis; (xix) Preparing recommendations and reports for ensuring environment and social

safeguard compliance, includes IEE & resettlement plans; and (xx) Procurement plan and contract packages with bid documents having embedded

O&M contract. B. TASKS AND EXPECTED DELIVERABLES 6. Consultant will be responsible for preparation of all required documents such as detailed design reports; review and update of designs if any carried out as available and bid documents. 7. Consultant will follow the holistic approach in carrying out the surveys and investigation in such a way that it can be used to create/ update GIS/Data base and requirements of all sectors1 without any repetition of efforts. As far as possible, piecemeal approach will be avoided to have duplicity of surveys. 8. Project documents will be prepared adopting finance plus criteria of Government of India which includes but not limited to Systemic and Transformational Innovations, piloting of new approaches, Impact Innovations in financing and leveraging etc. 9. Project activities will include pro-poor and social inclusive activities without any discrimination in service delivery levels. Consultant will prepare policy and documents for pro-poor and social inclusiveness etc. 10. The scope of Design under various activities will include but not necessarily be limited to the following:

(i) The scope of consultancy services includes Detailed Topographic Surveys, soil investigation, condition survey, hydrological data analysis, generating/updating the digital elevation model (DEM) of the project area, detailed Designing of Water Supply, Sewerage & Drainage Network, Preparation of EIA Report, preparation of specification, rate analysis based on accepted Composite schedule of Rates, preparation of detailed bill of quantities (BoQ), preparation of tender drawings, preparation of bid documents etc.

(ii) The Consultancy services will be completed in following three stages:

1. Stage – 1: Concept Design Preliminary Design Detailed Design. The scope of works of Concept Design will comprise (not limited) to following activities:

1 Consultant will transfer records of all surveys in hard and soft copies to TNUIFSL and will be used for all sectors

where ever required.

Appendix 8 131

(i) Review of the available data and reports to ascertain its adequacy for collection of the requisite additional data. Collection of data (primary/ secondary), Identification of basic issues/ problems and solution thereof;

(ii) Prepare or Update the hydraulic model; (iii) Based on review of the available plans and other documents (DPR’s

prepared if any) and in consultation with PMU: a. prepare a due diligence report on the way forward to address the

transmission, distribution or collection systems, intakes/treatment systems, storage systems, disposal and management options for water, sewage and storm water and,

b. prepare conceptual plans and preliminary design reports for priority actions as agreed to with PMU. The consultant will carry out alignment study in order to identify the most suitable alignment. The consultant will compare the identified alignments on the basis of the following two broad criterions: ▪ Criterion based on requirements of Engineering Design through

gravity flow. However, consultant will be responsible for looking into other suitable options, during alignment study, as considered necessary for selection of a least cost option.

▪ Criterion based on factors relating to functional, economical, social and environmental qualification of proposed alignment.

Due consideration will be given while finalizing the proposed alignment: ▪ Following the natural contours.

▪ Capable of conveying through gravity.

▪ Accessible through existing infrastructure of roads / trails/tacks.

▪ The minimum damages to local water resources, monuments.

▪ Least interference with the social setup of the area.

▪ Minimum social and environmental impacts.

▪ Socially acceptable.

(iv) Selection of appropriate / suitable material type for structural member; (v) Preparation of strategic plan using the existing system as much as

possible; (vi) Assessment of the catchments area & corresponding storm water flow; (vii) Selection of suitable route and design of pumping/force main of appropriate

material; (viii) Study different possible options for Treatment/ recycle Plant and

recommendation for the technically most feasible and financially viable option;

(ix) Study of the uses of treated waste water and designing of proper infrastructure;

(x) Assessment of requirement of land acquisition for intakes, treatment plants, pumping stations, storage tanks etc.; and

(xi) On the basis of all above studies prepare a strategic plan delineating a short term (05 year), medium term (10 year) and a long term 20-year implementation strategy

2. Stage – 2 Preliminary Design

Detailed Topographic Survey. The consultant will carry out topographic survey along the alignment in sufficient details to prepare plan and profile drawings of effluent conveyance

132 Appendix 8

pipeline. The survey is to depict the existing ground features which include all natural and manmade features that exist on the ground.

Detail of Services:

(i) Establishment of permanent control stations at safe and stable locations at suitable interval or as required as per site conditions. The station will be a concrete marker of approved design. Detailed Description sheet on standard format will be prepared for each of the temporary and permanent station;

(ii) Establishment of horizontal control through traversing in the form of closed loop traverse with survey of India (SOI) bench mark. The consultant will establish the control points with the help of DGPS;

(iii) Establishment of vertical control through BM levelling and check levelling using automatic instrument with SOI bench mark or established control points;

(iv) Topographical Survey of road width to property boundary on either side; (v) Where drain, canal or nullah crossings the proposed alignment, minimum

of 5 cross sections will be surveyed in the upstream direction and the same number in the downstream direction. The interval between two consecutive cross sections will be adjusted as per site conditions. The skew angle between proposed alignment and the alignment of drain or stream will be marked on the drawing;

(vi) Cross sections at 25 m interval in straight reaches and at 10m interval in curved reaches plus at change of slope will be taken;

(vii) In the case of open drain or water course or road running parallel to the proposed alignment of effluent carrier pipe line, the cross sections survey (Levels) will be modified accordingly to completely depict the site situation;

(viii) Trees (1 foot diameter and above) located within the right of way (ROW) will be counted and information about their number provided from chainage to chainage on the topo sheet; and

(ix) The topo survey data will be plotted at a suitable scale and Vertical profile at specified scale. This data will be AutoCAD compatible.

C. REFERENCE DATA 11. SOI, GOI datum (which has already been established) will be adopted as reference datum for the survey, if SOI survey control station is available close to the site area or within about 3Km reach of the site. In case SOI datum is not available the consultant will establish the control points with the help of DGPS. D. GEO-TECHNICAL INVESTIGATIONS 12. The Consultant will carry out soil/geotechnical investigations along the proposed alignments and of the storage, intake or treatment plant site. Necessary laboratory testing will be carried out to assess the engineering properties of the soil strata for detailed design of component of works. Laboratory testing will be conducted by reputed laboratories. The result of the sub soil investigation will be submitted in the form of report.

Appendix 8 133

E. HYDROLOGY 13. The consultant will carry-out hydrological study along proposed alignments in order to identify the requirements of cross sections of drains. The consultant will collect the required Meteorological data which will be analyzed and projected for design life of the proposed system. The consultant will also develop digital map (3D) for the catchment area / basin of the project area. F. ENVIRONMENTAL IMPACT ASSESSMENT STUDY 14. Consultant will carry out Environmental Studies identifying the adverse effects and their mitigation measures due to construction /laying of sewerage network and recycle /disposal system. G. PRELIMINARY DESIGN 15. The Consultants will carry out the design of conveyance system, pump stations, treatment plants (water/ waste water/ recycle treatment plant) based on appropriate technology in line of CPHEEO/ CPCB standard. 16. Where required, the Consultants will propose relocation of existing lines. Preparation of existing network will be the responsibility of the consultant. 17. The consultant will carry-out hydraulic design of the pipeline/drains. Hydraulic design assumptions and criteria will be established. The design calculation and design criteria will be presented in design report. For gravity-based flow design the consultant will recommend the appropriate flow formulas for hydraulic design. Detail calculation for hydrological analysis and hydraulic structure will be provided by the consultant. 18. Selection of suitable Pipe Material and adoption of appropriate values describing the physical properties of the material will be adopted for design. Suitable permissible velocities will be assumed to base the hydraulic design, calculation of losses in transit and ultimately most suitable and economical size of pipe. Hydraulic capacity will be rechecked on the basis of adopted material properties and pipe diameter. 19. For ease of operation and maintenance manholes will be proposed at suitable intervals and at every change of direction. In order to optimize the design the consultant will study and investigate the other options such as adoption closed conduit to follow the natural contours. 20. The Consultant will design of WTP/STP at location finalized with consultation of PMU. Design Standards & Criteria- Following design standard will be followed:

• For Pipeline

• For Material & Testing 1. Structures 2. Structure Loads

• Seismic Design 1. Drainage 2. Materials & testing

134 Appendix 8

H. PRELIMINARY ESTIMATES 21. The Consultant will prepare preliminary engineering estimates of all components of project such as drains, pipe line, pumping stations, TP etc. along with electric equipment as per relevant SOR or market rates if not a listed item as per SOR. The rates would be analyzed based on standard format / procedure of ULB.

3. Stage – 3 Detailed Design

22. Upon approval of Preliminary Design, the consultant will carry out detailed designs. The Consultant will prepare construction drawings (Contract Plans) in a clear, concise and uniform manner in Digital Format using AutoCAD and will submit final copy of complete drawing after approval to client in DWG format as well as the consultant will submit hard copies of the drawings. 23. Tender documents & BOQ: Contract Documents- performance based O&M embedded contract documents using approved standard bidding documents, with due consideration of appropriate procedures - National Competitive Bidding (NCB), International Competitive Bidding (ICB) etc. Tender Documents will comprise of the following: Volume-I

o Instruction of Bidders. o Conditions of Contract (Part-I) (General Conditions). o Conditions of Contract (Part-II), (Conditions of Particular Application). o Forms and Appendices.

Volume-II o General Specifications. o Mode of measurements.

Volume-III Particular Specifications, Special Provisions and Bills of Quantities. Volume-IV

• Drawings as per the following detail: • Cover Sheet. • Key plan: Province and Project site Indicated. • Location Plan • Structural Plans and Design Drawings for structures. • Horizontal and Vertical Alignment sheets (1:1000, horizontal 1:100 vertical) for proposed

alignment. • Typical Cross-sections. • Miscellaneous Details/ Ancillary Works • Detail drawing folders of Utilities/Infrastructure for Land Acquisition and removal of all

utilities/ infrastructure etc., having all the requisite information. • Details plan and cost for shifting of utilities /HT/LT poles etc.

24. Technical Specifications- The consultants will prepare particular specification for the project for specified items nor covered in the General Specifications. 25. Bill of Quantities-The Consultant will prepare comprehensive Bill of Quantities to be calculated to accuracy of +5% encompassing all the items of work, properly cross referenced to the Technical Specifications. Standard format of Bill of Quantities will be adopted based on General Specifications. The Consultant will prepare taking off sheets of the quantities and submit to client along with BOQ.

Appendix 8 135

26. Engineer’s Estimate-The consultant will prepare Engineers Estimate of the project based on detailed design, drawings and final BOQ.

i. SAFEGUARDS, STATUTORY CLEARANCES AND REGULATORY ISSUES

27. Below are the detailed tasks on safeguards and clearances: (i) Prepare, review and update the Resettlement Plan2 for the project based on

detailed designs or review the already prepared resettlement plan and prepare/update resettlement plan accordingly;

(ii) Prepare, Review and update the initial environmental examination (IEE) if already prepared for the project; prepare/ update IEE accordingly for new sub projects;

(iii) Identify any further resettlement requirements and costs that may be required and provide all information required in relation to right-of-way access as well as the relocation of existing utilities, if required, and other obstructions at the proposed work sites, including vendor stalls;

(iv) Obtain all necessary permissions and complying with statutory requirements as required prior to construction;

(v) Ensure that all bidding documents and contract documents contain the Environmental Management Plan (EMP) and such items are included in BOQ; also monitor the implementation of the EMP during construction and pre/post construction phases;

(vi) In compliance with the EMP, develop a strategy to overcome the difficulties of construction/traffic management in narrow streets and also prepare detailed plans for detour of traffic during excavation for pipe laying. Propose and implement mechanism for coordination among all stakeholders such as traffic police, roads department, user committees, etc, for smooth construction execution. Adequate special measures will be taken for working near buildings and structures of cultural significance and in heritage zones involving close coordination with the Department of Archaeology etc.;

(vii) Design of surveys and investigations required for the protection of archaeological sites and heritage areas and prepare Archaeological Impact Assessments, or other agreed upon document to be approved by the Department of Archaeology (DOA) for the sections that are classified as archaeologically sensitive;

(viii) Ensure that all bidding documents contain specific measures for working and excavating in archaeologically sensitive areas;

(ix) As part of the EMP, prepare a project focused Occupational Health and Safety Plan (OHS) to be adopted by PIU on project work sites: and

(x) Provide awareness training on OHS, environmental impacts and mitigation measures to PIU and contractors including contractors' workers.

ii. TEAM COMPOSITION AND QUALIFICATIONS

28. The team will comprise of 6 person months of international consultants and 470 person months of National experts. A more detailed breakdown of the type of consultants, and individual inputs is given in Table 1. The overall responsibility to deliver the outputs will be of the firm through the Team Leader.

2 Adopt the available/ adopted resettlement framework for similar projects.

136 Appendix 8

29. Requirements for key experts (and any other requirements which will be used for evaluating the Key Experts

Table A8.1: Team Composition

Position Requirements

Indicative Person Months

International Consultants

Waste Water Reuse Specialist

Degree in engineering and PG in environmental engineering with 15 years experience

3

Drainage Specialist Degree in engineering and PG in environmental engineering with 15 years experience

3

National Consultants

Team Leader Degree in Civil with 20 years relevant experience in water and sewer system design.

8

Water Supply Expert Degree in Civil with 20 years relevant experience specific experience in water systems design

5

NRW Expert Degree/PG with 20 years experience with experience in design of NRW reduction program using DMA approach, leak detection etc.

4

Sewerage and Drainage Expert

Degree in Civil with 20 years relevant experience specific experience in sewerage and drainage design including treatment plants

5

Water Supply/Sewerage/ Drainage Engineer (3 positions per cluster of tows)

Degree in Civil with 10 years relevant experience 15

Hydraulic Engineer (2 positions per cluster of towns)

Degree in Civil/Mechanical with 20 years relevant experience. 10

Structural Engineer Degree / Masters in Structures with 10 years relevant experience 5

Mechanical Engineer Degree in Mechanical Engineering with 20 years relevant experience

4

Electrical Engineer Degree in Electrical Engineering with 15 years relevant experience 4

Environmental Specialist

Degree in Environmental Engineering 10 years relevant experience in EIA/ EMP of infrastructure project with special reference to UGR.

4

Urban Planner Master in Urban Planning with 15 years experience in Master/ Infrastructure Planning

3

Social Safeguards Specialist

Masters in Social Science with 10 years experience in resettlement planning.

5

Survey Engineer Degree in Civil 10 years relevant experience or Diploma + 15 years relevant experience

4

Contract Specialist Degree in Civil Engineering with 20 years relevant experience in contract design and management.

4

Quantity Surveyor (2) Degree / Diploma with 10 years relevant experience 4

AutoCAD Draftsman (2)

Degree / Diploma with 10 years relevant experience 4

Support Staff 6

Total National Consultant Per Package

94

Total for 5 Packages 470

Appendix 8 137

** Note: The person months are indicative specific assignments and will be finalized at the time of preparation of project specific Terms of Reference.

iii. REPORTING REQUIREMENTS AND TIME SCHEDULES FOR DELIVERABLES 30. The Consultant will submit following reports:

(i) Inception Report. Within two weeks after the commencement of the assignment. (ii) Data Review Report and conceptual plan. Within two months after the

commencement of the assignment. (iii) Asset Condition and Valuation Report. Within three months after the

commencement of the assignment. (iv) Service Level Report. Within four months after the commencement. (v) Hydraulic Model Report. Within six months after the commencement of the

assignment-including survey, Geotechnical Investigation Report and Hydraulic Report

(vi) Preliminary Design Report within seven months after the commencement. (vii) Preliminary Tender Documents within seven months after the commencement. (viii) Draft Final Report within 11 months after the commencement. (ix) Final Report. Within four weeks after receipt of comments.

I. PAYMENT SCHEDULE 31. The consultant will be paid 10% of agreed fee against each milestones listed above, on acceptance of reports. The final 10% shall be given after final approval of DPR and Bid Documents.

J. DURATION OF THE ASSIGNMENT 32. Duration of consultancy services assignment will be 12 months.

138 Appendix 9

GENDER ACTION PLAN

Activities Indicators and Targetsa Responsibility Time

Output 1. Climate -resilient sewage collection and treatment, and drainage systems developed in six cities.

1.1. Provide sewage connections to poor and poor-women headed households

1. 1,864 km of new sewage collection pipelines commissioned and 297,547 households connected, including 100% poor and poor women headed households identified through GIAC- and ULB-led survey in the coverage area (2017 baseline: 0)

GIAC with ULB Years 1–3

1.2. Train existing community-based organizations in slums in coverage area

2. 12 all-female community-based organizations trained as water and sanitation committees and 100% participants reporting improved knowledge of benefits of sewerage collection systems and household connections (2017 baseline: 0)

3. All water and sanitation committee members provided an estimated two trainings/ year (6 trainings) in each town (6), total 36 with certifications in areas of leadership and management, water conservation, sanitation, health and hygiene (2017 baseline: 0)

1.3. Build skills for sewer and sanitary workers

4. 200 sewers and sanitary workers provided an estimated one training/year (3) total 6 on skills building training in mechanized equipment and safety gear and reporting knowledge of equipment and safety gear with preference to women workers (2017 baseline: 0 women [sewer workers] and 20% women [sanitary workers])

GIAC with ULBs and CMA

Years 2–4

Output 2. Water supply systems in one city improved with smart features

2.1 Provide water connections to poor and poor-women households

(i) 275 km new water distribution pipelines commissioned within 20 new district metered areas and metered connections provided to 30,800 households (100% households in coverage area, including 100% poor and poor women headed households) (2017 baseline: 0)

GIAC with ULBs, and CMSC

Year 5

2.2 Organize water and sewerage connection campaigns in slum areas

(ii) Community members living in notified and non-notified slums (250/ town [6 towns], total 1,500) participated in water and sewerage connections campaigns on: water and sewerage connection procedure and tariff rules (including pro-poor connection and tariff policies)

2.3 Conduct training program on NRW for implementing agencies with water projects

(iii) All trainings (1/year, total 3) maintain sex disaggregated data on implementing agencies trainees (Target: 75% women technical staff participation)

CMSC with GIAC, PIUs, and ULBs

Years 1–3

Appendix 9 139

Activities Indicators and Targetsa Responsibility Time

(iv) At least 80% technical staff of implementing agency reporting improved knowledge and/or skills in NRW reduction as a result of training with 75% participation of women technical staff (2017 baseline: 0)

Output 3. Institutional capacity, public awareness, and urban governance strengthened

3.1 Conduct awareness campaigns for water conservation and hygiene targeting local communities in coverage area

(i) Community members (300/city [6 cities], total 1,800) participated in awareness campaigns on water conservation and hygiene, targeting 50% women participation (2017 baseline: 0)

(ii) By 2026, minimum 50% of 600 school students, teachers and administrators (100/city [6 cities], at least 50% women); and 18 women SHGs (3/city [6 cities]) reported improved awareness on water conservation and hygiene, based on post awareness campaign sample survey.

GIAC Year 2 onwards

3.2 Encourage appointment of women staff in technical positions in newly constituted project units

(iii) 10% women recruited to technical positions in newly constituted Urban Data and Governance Improvement Cell and PDMC in CMA. (2017 baseline: 0)

CMA

3.3 Conduct training on gender-related aspects of project design and implementation targeting CMA and ULB staff

(iv) By 2020, at least 80% of PDMC technical staff trained in the design and implementation of urban infrastructure projects reporting improved knowledge/skills (Target: 75% participation of women technical staff) (2017 baseline: 0)

(v) By 2026, 10 CMA and 60 ULB staff (including 100% of eligible women staff) trained and reported knowledge on approaches in integrating gender equality and social inclusion in urban governance, gender action plan implementation, monitoring and reporting on gender equality results (2017 baseline: 0)

GIAC with CMA, with ADB support

Year 1 onwards

3.4 Establish a PPMS to collect sex-disaggregated data from ULBs

(vi) By 2023, new database established at urban data and governance improvement cell, with sex-disaggregated data where applicable, in six cities (2017 baseline: 0)

CMSC in partnership with GIAC, PIUs, PMU, and ULBs

Years 2–5

ADB = Asian Development Bank, CMA = Commissionerate of Municipal Administration, CMSC = construction management and supervision consultants, GIAC = governance improvement and awareness consultants, km = kilometer, NRW = nonrevenue water, PDMC = project design and management cell, PIU = program implementation unit, PMU = program management unit, PPMS = project performance management system, SHG = self-help group, ULBs = urban local bodies. a The estimated number of female beneficiaries in tranche 1 (Outputs 1 and 2) is 163,000 of a total estimated 328,000 beneficiaries.

140 Appendix 10

GENDER ACTION PLAN MONITORING FORMAT

Date Prepared:

Project Title: Country: Project No.: Loan No.: Type of Project: Approval and Timeline/Duration of the Project: Gender Category: Mission Leader: Name of Gender Specialist/ Gender Focal Point: Quarter Covered by Update: Project Impact: Project Outcome:

Activities, Indicators, Baseline, Targets, Time Frame and Responsibility

Progress to Date Issues and Challenges (Please include reasons why an activity was not fully implemented, or if targets fall short, or reasons for delay, etc.)

Progress for the Quarter (This should include information on progress for the current quarter-- qualitative and quantitative updates (sex-disaggregated data))

Cumulative Progress (This should include information on progress (qualitative and quantitative updates including sex-disaggregated data) from the start of the implementation of the GAP to the previous quarter’s progress report.)

Output 1. Climate -resilient sewage collection and treatment, and drainage systems developed in six cities.

1.

Targets/Indicators:

Baseline:

Responsibility:

Time Frame:

2.

Targets/Indicators

Baseline:

Responsibility:

Time Frame:

Appendix 10 141

Activities, Indicators, Baseline, Targets, Time Frame and Responsibility

Progress to Date Issues and Challenges (Please include reasons why an activity was not fully implemented, or if targets fall short, or reasons for delay, etc.)

Progress for the Quarter (This should include information on progress for the current quarter-- qualitative and quantitative updates (sex-disaggregated data))

Cumulative Progress (This should include information on progress (qualitative and quantitative updates including sex-disaggregated data) from the start of the implementation of the GAP to the previous quarter’s progress report.)

Output 2. Water supply systems in one city improved with smart features.

1.

Targets/Indicators:

Baseline:

Responsibility:

Time Frame:

2.

Targets/Indicators

Baseline:

Responsibility:

Time Frame:

Output 3. Institutional capacity, public awareness, and urban governance strengthened. 1.

Targets/Indicators

Baseline:

Responsibility:

Time Frame: Year 1-5

2.

Targets/Indicators

Baseline:

Responsibility:

Time Frame:

Comments/ Remarks: Accomplished by: _________________________________ Date Accomplished: _________________________________

142 Appendix 11

COMMUNITY AWARENESS AND PARTICIPATION PLAN

Activity Target

Stakeholders Objectives and Methodology Time Frame Expected Outcome

CAPP planning and activity calendar and Monitoring format

GIAC To prepare a work plan and activity calendar including monitoring format for CAPP activities by the GIAC

Year 1 (after finalization of DPR)

CAPP implementation and monitoring calendar developed, reviewed and approved by the executing agency

Pre-Construction Phase

Project Information and orientation on ADB Policies

PMU and PIU Project orientation workshops (half a day) with equitable representation of female staff/members MOV: Agenda, brief report of the workshop, participants feedback and sex disaggregated data will be maintained and reported after each workshop

Year 1–after finalization of DPR and before start of construction activities 1 half day workshop every six months for each stakeholder

Participants will better understand the project components; link between improved water supply and sanitation infrastructure and development outcomes (good health, women’s empowerment, environmental conservation); ADB policies and relevant social and environmental safeguard plans and requirements; labor laws and compliance; data requirements; grievance redressal mechanisms; implementation, monitoring and reporting requirements; GAP and CAPP; their role in project implementation and monitoring

Project Steering committee members

Counsellors

Project Consultants

Contractors

ULB committee members

Community members

Information sharing and consultation through group events, meetings, door to door activities etc. on project benefits, implementation schedule, water conservation- benefits and methods, health and sanitation linkages, judicious use of infrastructure (UGD); women’s safety and security, menstrual hygiene, waste segregation, employment opportunities within the project, grievance redressal mechanisms; tariff schedules, discussion on community concerns etc. in coordination with councilors

Year 1 and 2: Just before start of civil work

Community members, community groups and school students will be aware of project scope, water sanitation and health linkages, improved knowledge of menstrual hygiene including disposal, water conservation, project grievance mechanisms etc.

Other groups – SHGs, School students, CBOs, etc.

Appendix 11 143

Activity Target


Two behavior change communication events/ Project ULBs organized (Target: 50% female participation) Door to door activity will be organized in slums in coordination with solid waste management department Events for school students- essay writing, painting etc. will be planned in consultation with the education department in each ULB MOV: Brief report of the consultation, meeting, school events etc. with photographs and sex disaggregated data will be maintained and reported after each activity

Affected people Consultation/ meetings on project resettlement plans and framework. The objective will be to mitigate potential conflict, understand views of affected persons on resettlement and compensation and agree on resettlement processes, location, timing and compensation Minimum of three meetings in all program cities with identified affected persons MOV: Consultation reports that reflect affected person issues, safeguard implementation status and follow up actions is prepared and submitted. Social and sex disaggregated data is maintained on affected person consultations

Year 1 to 3 Affected person understand the project and safeguard requirements; Issues if any are mitigated by appropriate actions

Develop and disseminate strategic visual and audio material

Community members

Mass information sharing by developing and disseminating visual and audio material- radio programs, TV advertisements, flex boards etc. The material should include gender responsive and socially inclusive messaging MOV: Pictures, visual and audio programs

Years 1 to 4 Key stakeholders are informed about the program and their contribution. The audio visuals will enhance understanding of water sanitation and health linkages, importance of water conservation, waste segregation

144 Appendix 11

Activity Target


and other relevant social messages on gender discrimination, women empowerment, safety and security

Construction Phase

Project orientation workshop for contractors

Contractors and workers

Awareness meetings related to health and hygiene, HIV/AIDS, other communicable diseases and labor right with special focus on female workforce and requirements; Workshops will also include information of good practices for safety during construction activities and minimizing community inconvenience during construction phase; The contractors will be apprised of the need to encourage female workforce participation in construction and reflection of labour data in muster rolls in a sex disaggregated matter; Partnership with the State Aid control society for HIV awareness MOV: Reports on consultations and rapid assessments of sample work sites post consultations

Years 1 to 4: Upon contractor mobilization 100% contractors 100% worksites

Contractors as key stakeholders sensitized to community issues and contract requirements relating to social and gender. Labor aware of their rights and other issues – health, hygiene, social security, special provisions for female workers, etc.

Water and sewerage connection camp

Potential consumers in partnership with local counsellors

To create awareness regarding the procedure of water and sewerage connection, tariff rules, user charges, application procedure Three camps in each ULB with equitable female participation MOV: Report on community participation, camp proceedings and number of new applications received. Data on participation will be maintained in a sex disaggregated manner

Year 3 to 4 Increased awareness and demand for new water supply and sewerage connections

Refresher training/ orientation on ADB policies

PMU and PIU; Project Steering committee members;

A refresher training on ADB policies and implementation progress. One session will be dedicated to GAP implementation progress and reporting requirements

Year 3 to 4 Participants will better understand project progress, bottlenecks, mitigation strategies; The participants will also be aware of

Appendix 11 145

Activity Target


and project progress

Counsellors; Project Consultants; Contractors; ULB committee members

MOV: Agenda, brief report of the workshop, participants feedback and sex disaggregated data will be maintained and reported after each workshop

GAP implementation and progress on the same.

PMU and PIU monitoring meetings

PMU and PIU

Quarterly (half-day) meetings organized before finalization of QPRs to discuss progress and issues; The GAP progress report to be discussed in these meetings MOV: Minutes of monitoring meetings

Entire Implementation period

Executing agency and implementing agency staff will better understand project progress and take appropriate measures to mitigate implementation delays.

Field level Monitoring every quarter to oversee GAP and CAPP implementation progress

At the community level, affected persons; and labor camp sites/ work sites along with implementation consultants. Key informant interviews and FGDs can be organized.

Quarterly field monitoring to assess progress; interaction with community members (specially women) on any concerns; GAP and Social safeguard implementation; community participation, etc. MOV: Reports of field level monitoring

Entire Implementation period

Better understanding of CAPP, GAP and social safeguard implementation. Will assist in mid-course corrections and mitigation.

ADB = Asian Development Bank, CAPP = community awareness and participation plan, CBO = community-based organization, DPR = detailed project report, FGD = focus group discussion, GAP = gender action plan, GIAC = governance improvement and awareness consultant, MOV = means of verification, PIU = program implementation unit, PMU = program management unit, QPRs = quarterly progress reports, SHG = self-help group, UGD = underground drainage, ULB = urban local body.