Mongolia Ministry of Finance, Mongoliastorage.embersoft.mn/d1af1f/page/42/FINAL ToR for... · Project Name: Mining Infrastructure Investment Support Project (MINIS) Credit# 4888-MN

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Mongolia

Ministry of Finance, Mongolia

Ref:WB/MOF/MINIS/CS/QCBS/1.1.4 (c)/2015

Project Name: Mining Infrastructure Investment Support Project

(MINIS)

Credit# 4888-MN

Terms of Reference for the Feasibility Study for

“Shuren hydropower plant” project

Funded by:

International Development Association

Date: October2015

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Terms of Reference for a Feasibility Study of

‘Shuren Hydropower Plant’ Project

CONTENTS

A. GENERAL INFORMATION ..................................................................................................... 5

A 1. Introduction ..................................................................................................................... 5

A 1.1. Background .............................................................................................................. 5

A 1.2. The Government Policy of Mongolia ....................................................................... 6

A 1.3 Project Region .......................................................................................................... 7

A 1.4. Project initial screening ........................................................................................... 8

A 2. Overall Scope of the Study .............................................................................................. 8

A 2.1. The Purpose of Feasibility Study .............................................................................. 8

A 2.2. Integration with the ESIA ......................................................................................... 9

A 2.3. Advisory Committee ................................................................................................ 9

B. UPDATE OF PROJECT CHARACTERISTICS .................................................................. 10

B 1. Review of Previous Studies and Site Visits ................................................................... 10

B 2. Power Demand and Sector Review ............................................................................... 10

B 3. Updated Surveys and Investigations ............................................................................. 11

B 3.1. Engineering Topographic Survey ........................................................................... 11

B 3.2. Geological and Geotechnical Investigations .......................................................... 11

B 3.3. Seismic Studies ...................................................................................................... 13

B 3.4. Construction Material Studies ............................................................................... 13

B 3.5. Geotechnical Baseline Report ................................................................................ 14

B 4. Updated Hydrology and Climate Change Assessment .................................................. 14

B 4.1. Meteorological and Hydrological Studies .............................................................. 14

B 4.2. Water Consumptions ............................................................................................. 14

B 4.3. Climate Change Assessment .................................................................................. 15

B 5. Assessment of power evacuation alternatives and integration to CES .......................... 15

B.5.1 Integration to CES .................................................................................................. 15

B 5.2. Transmission and Grid Connection ........................................................................ 15

B 6. Reservoir Modeling and Power Simulations ................................................................. 15

B 6.1. Reservoir Operation ............................................................................................... 15

B 6.2. Flood Routing ......................................................................................................... 16

B 7. Conceptual Scheme Layout ........................................................................................... 16

B 7.1 Basic Data Defining the Project Design.................................................................. 16

B 7.2. Dam Design ............................................................................................................ 17

B7.3. Stability and Structural Analysis ............................................................................ 18

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B7.4. Dewatering and Water Diversion .......................................................................... 19

B 7.5. Design of Hydro-Mechanical and Electro-Mechanical Equipment ........................ 19

B 7.6. Infrastructure and Access Roads ........................................................................... 19

B 8. Site Selection ................................................................................................................. 20

B. 8.1 Costs and Benefits of Alternatives ......................................................................... 20

B 8.2. Multi-criteria Analysis for Site Selection ................................................................ 20

B 8.3. Site Selection Report and Workshop ..................................................................... 20

B 9. Feasibility Level Design ................................................................................................ 20

B. 9.1 Complementary Surveys and Investigations ......................................................... 20

B. 9.2 Design, Drawings and Bill of Quantities ................................................................. 21

B 10. Implementation Plans ................................................................................................ 21

B 10.1. Contract and Procurement Planning ..................................................................... 21

B 10.2. Implementation Schedule...................................................................................... 21

B 10.3. Project Operation Organization ............................................................................. 22

B 11. Dam Safety Measures ................................................................................................ 22

B 12. Legal Analyses ............................................................................................................ 22

B 12.1. Laws, Regulations and Electricity Tariff ................................................................. 22

B 12.2 Management and Financing Alternatives .............................................................. 23

B 13. Financial and Economic Analyses ............................................................................. 23

B13.1. Capital and Investment Costs ................................................................................ 23

B 13.2.Operating Expenses .................................................................................................... 23

B13.3. Direct and Indirect Benefits ................................................................................... 24

B 13.4 Financial and Economic Analyses .......................................................................... 24

B 14. Risk Register .............................................................................................................. 24

B 15. Final Recommendation .............................................................................................. 25

B 16. Feasibility Report and Workshop .............................................................................. 25

C. REPORTING REQUIREMENTS AND DELIVERABLES ................................................. 25

C1. Deliverables and Reporting ........................................................................................... 25

C1.1. Progress Reporting ................................................................................................ 25

C1.2. Main Reports ......................................................................................................... 26

C 2. Management of the Feasibility Study ............................................................................ 26

C 2.1 Roles and Responsibilities ..................................................................................... 26

C 2.2 Time Schedule ........................................................................................................ 27

C 2.3. Ownership and Control of Information, Data and Documents ............................. 27

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D. REQUIRMENT FOR THE CONSULTANT TEAM ............................................................... 29

D1. Consultants Required .......................................................................................................... 29

D 2.Key Professional Qualifications and Competence for the Assignment .............................. 29

F IDENTIFIED RELEVANT STUDIES .................................................................................. 35

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A. GENERAL INFORMATION

A 1. Introduction

A 1.1. Background

The Government of Mongolia (GoM) has received a Technical Assistance Credit from

the International Development Association (the Bank) in an amount equivalent to US$25

million, toward the cost of Mining Infrastructure Investment Support Project (MINIS)

and intends to apply a portion of the proceeds of this credit to eligible payments under

this Contract.

The Mining Infrastructure Investment Support Project (MINIS) financed by the World

Bank aims to facilitate investments in infrastructure to support mining related activities

and downstream value-added processes (regardless of funding source) and to build local

capacity to prepare and transact infrastructure Projects. In the scope of “Shuren

hydropower plant” (“Project”), a Feasibility Study will be carried out.

Due to its growing population, Mongolia’s primary energy consumption has steadily

increased over the last years while consumption intensity remained the same. Mongolia is

in danger of a serious energy shortfall as early as 2012, at which point the maximum

imported capacity of 255 MW from Russia may not meet demand. Russian power has

become more expensive. This shortfall will grow with rapid expansion of the country`s

mining sector.

To address energy shortfall, the Government cabinet meeting (November 2011) discussed

the Shuren hydropower plant (HPP) along with several other energy projects and

recognized the Shuren HPP as a priority project.

The MINIS is funding a feasibility study to look at constructing a Shuren hydropower

plant on the Selenge River. Within the framework of the MINIS Project, it is planned to

hire a consulting teams to develop the Feasibility Study and Environmental and Social

Impact Assessment of Shuren Hydropower Plant.

The basic goal of the ‘Shuren Hydropower Plant’ Project is to supply the electricity

demanded by the mining sector and to fill electricity shortfall faced by the country.

Secondary goals are to provide renewable energy, enable energy independence from the

Russian power system and a low-cost supply of renewable energy.

The proposed Project could be both technically and economically feasible, however it

cannot be considered further without taking into account direct environmental and social

impacts. The Project has been classified as Category “A” according to the World Bank

Environmental Assessment Operational Policy 4.01, and therefore the proposed project

must be reviewed by conducting a Detailed Environmental and Social Impact Assessment

(EISA) with public consultation.

The work to be done under this TOR is the technical and economic components of the

Feasibility Study stage, while the ESIA will be contracted separately. The Feasibility

Study work must however be closely coordinated with the ESIA activities and

deliverables

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The Shuren project has been studied at pre-feasibility level, which is reported in the

“Technical Study Report for the Shuren Hydropower Plant Project”. This study

comprises the basis for the development of the Feasibility Study TORs.

A 1.2. The Government Policy of Mongolia

Constructing a medium capacity hydropower plant with a dam on western area rivers has

been implemented successfullyin recent years.A hydropower plant with RollerCompacted

Concrete (RCC)dam(Taishir hydro power plant) was built over the Zavkhan River and a

Concrete Faced Rockfill(CFRD) dam (Durgun hydro power plant) was constructed on the

ChonoKharaikh River. These hydropower plants created a stable energy supply and

sustainable livelihood in western area of the country. In the northern part, large scale

hydropower plants would supply electricity demanded by the mining sector and fill

electricity shortfall faced by the country, and bring multipurpose benefitstothe

SelengeRiverregion.

The State Great Khural (Parliament) and the Government of Mongolia are highly

attentive of these concepts and have mentioned them in the laws and policieslisted below:

1. Mongolia’s Strategy for Sustainable Development of the Energy Sector 2002-

2010has been approved by the cabinet in July 2002 and revised in 2004. The aims

of theStrategy include: sustainable development of the energy sector, reduced

povertyand increased involvement of the private sector, and public interest in the

sectorthrough a more secure energy supply.

2. Mongolia’s energy sector has overcome a transition from a centralised,

commandbasedsystem to a market-oriented one. Currently, within the Central

Energy System(CES), electricity is traded through the main market – the “single

buyer model”(SBM) – and two other accompanying markets: spot and competitive.

3. In June 2005, the Mongolian Parliament approved the National Renewable Energy

Program which sets ambitious goals for broad-based renewable energy

development increasing the share of renewable energy in total energy supply from

0.9% in 2005 to 3-5% by 2010 and to 20-25% by 2020.

4. Item 3.8. National Renewable Energy Program; Take measures to perform

technical economic feasibility studies of large hydropower stations namely Eg river

220 megawatts station, Artsat 118 megawatts station on Selenge River and Orkhon

river 110 megawatts station on rivers with significant hydropower resources such as

Selenge, Eg and Orkhon rivers, and to implement these studies.

5. The Renewable Energy Law of Mongolia came into force on 11 January 2007 and

regulates the generation and supply of energy from renewable energy sources. The

Government is seeking active engagements of donors and local and foreign private

investors for the development of Mongolia’s large renewable potential for utilizing

solar, wind, hydro and geothermal energy resources.

6. Item 9.2.3, Renewable energy law of Mongolia; Studies on soil, flora, geological

and hydro-geological conditions, geographical location, land surface, air pressure,

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weather, wind regime, and water study for cases of constructing facilities which

will use hydro sources.

7. Item 9.2.4, Renewable energy law of Mongolia; A statement issued by an authority

with regard to compliance of equipment, technology and facilities of a renewable

energy power source with national and international standards.

8. Item 3.5.1.7 of Mongolian National Security Concept approved by Resolution

No.48 by the Parliament of Mongolia, dated 15 July, 2010 - “Regulate flow of

large rivers and construct a reservoir in order to improve usage of surface water in

Mongolia”

9. Item 1.7. Some of action plan of Renewable energy source studies No. 16

Parliament of Mongolia dated 08 June 2010 – “ Intensify for Large scale hydro,

solar and wind power plant source studies, promote for NGO and private sector

and cooperate”

10. Item 8.17.Base line of develop for Economic and society of Mongolia in 2013.No.

37 Parliament of Mongolia dated 18 May 2012 -Initiate large scale hydropower

plant construction work (300-350MW) on Selenge River basin.

11. Item 63-3. Implementation plan of action program of Government of Mongolia

No. 120 Parliament of Mongolia dated 03 November 2012 - Startup Pre-

feasibility study of large scale hydropower plant on Selenge River basin.

12. Item 3.3.2.Water National Program approved by Resolution No. 24 by the

Parliament of Mongolia dated 20 May 2010 - “Regulate flow of Archon, Selenge,

Tuul and Khovd rivers, some of rivers and construct a reservoir, transmit water in

order to Improve usage of surface water in Mongolia”

13. Item 3.3.19. Water National Program approved by Resolution No. 24 by the

Parliament of Mongolia dated 20 May 2010 – Improve again Mongolian rivers

hydro energy potential, Renewable energy development plan, Energy

consumption and demand, sector policy and planning connect with operational

experience and maintenance difficulties of Taishir and Durgun HPP.

14. Item 3.3.32. Water National Program approved by Resolution No. 24 by the

Parliament of Mongolia dated 20 May 2010 – Carry out Feasibility study of HPP

on Selenge River with 300MW, Egiin HPP with 220MW and Orkhon HPP with

100MW, studied and resolved to startup the construction work.

A 1.3 Project Region

Selenge River is the biggest river of Mongolia. It belongs to the ArcticOcean Basin and it

flows from Mongolia across the border to theRussianFederation supplying 50percent of

the flows to the Baikal Lake.

The planned HPP site is located at 3 km from the tributary of Shuren River joining the

Selenge River, which is at Orgikh bag, Tsagaannuursoum, Selenge province. The

reservoir area would cover the territory of Selenge and Khangalsoum of Bulgan province

as well as Baruunburen, Khushaat, Tsagaannuursoums of Selenge province. Thus, it is

required to conduct studies of the detailed environmental, ecological and socio-economic

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impact of the project. Both positive and negative aspects to the project areashould be

studied in the feasibility stage.

To meet the growing energy consumption of central region, ensuring reliable and

sustainable energy forthe mining industry in the Gobi area, it is required to have a new

energy resource that can enable a stable energy system in Central Energy System, and

which is capable to deliver power for peak load and reserve energy. This energy source

can be supplied by HPP on the Selenge River, which could provide maximum daily load

and allow the system to control the frequency.

A 1.4. Project initial screening

In the Phase 2 of the MINIS project a pre-feasibility study was conducted includingan

option assessment and initialscreeningof theenvironment, social, finance and economics

of a hydropower plant on theSelenge River. Its results werediscussed and agreed with the

Working Group of the Ministry of Energy. The pre-feasibility study is available for

interested bidders and can be obtained by the MINIS Project Management Unit.

The result of the pre-feasibility study for the HPP Shuren is that the investigated area at

the SelengeRiver between Khyalganat and Zuunburen is suited for the proposed

construction of a HPP. Within this area, six possible dam sites have been identified. They

have been selected by new investigations and based on the Russian feasibility study from

1973.

Site no. 1 49°48'24.45"N, 105°09'51.70"E

Site no. 2 49°44'43.07"N, 105°02'58.63"E

Site no. 3 49°43'59.27"N, 104°57'15.60"E

Site no. 4 49°42'29.70"N, 104°56'25.72"E

Site no. 5 49°41'06.73"N, 104°47'54.18"E

Site no. 6 49°40'31.20"N, 104°45'52.26"E

Two locations, Sites no. 4 and 6, were identified as best suited for the construction of a

HPP and have to be further investigated in the feasibility study. The selection of the final

location has to be done by a comparison of sites taking into account the power generation

need for the Central Energy System (CES), technical and economic feasibility, and

environmental and social impacts.

The initial screening of potential sites for the Shuren HPP was followed by preliminary

investigations for the Site No. 4 in the pre-feasibility study, which indicated that Shuren

HPP is an important and feasible project for the future generation of power for theCES.

The feasibility study shall, review all previously studied sites, confirm the preliminary

investigations of Site no. 4and conduct similar investigations of Site no.6to make an

informed choice of the best alternative. The best alternative will then be further

developed and analyzed to a feasibility level design.

A 2. OverallScope of the Study

A 2.1. The Purpose of Feasibility Study

The purpose of Feasibility Study is to analyze the possibility of implementing proposed

Shuren HPP project in terms of technical, financial and economic factors. The Feasibility

Study shall satisfy the following requirements:

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Perform an analysis of all relevant technical, economic, financialissues to high

professional standards;

Prepare engineering designs at the Feasibility Study Level and develop a Draft

Implementation Plan;

Calculate required capital investment for each project stages and identify the basis

of the Project in compliance with the Technical, Economic, Environmental and

Social Impact Assessment;

Suggest an appropriate solution on capital investment and identify project

implementation phases;

The Feasibility Study must be carried out in compliance with Mongolian laws,

construction norms and regulations of Construction Normative and Rule (CNaR), and

international standards, and consider that the outcome of the Feasibility Study process

will be subject to an Environmental and Social Impact Assessment, in compliance with

the World Bank’s Operations Safeguard Policy and that detail and quality of the

Feasibility Study will be sufficiently high to support approvals and financing decisions at

an international level.

The Feasibility Study report must be developed and submitted for the review in

accordance with the World Bank and Mongolian government rules and procedures and

the consulting service can only be considered to be completed after receipt of the

customer's approval on such report.

A 2.2. Integration with the ESIA

The feasibility study and the detailed ESIA of the ShurenHPPwillbe conducted by

different consultants to full World Bank requirements and relevant Mongolian and

international standard, rules and procedures, but these two studies must be highly

interrelated.

The Feasibility Study consultant shall regularly coordinate its activities with the ESIA

consultant and actively inform itself of the results of the ESIA. Results of the technical

feasibility study and the parallel ESIA shall be integrated to make the final choice of the

best site and size for the Shuren HPP. The preliminary design of the chosen site shall take

into account environmental and social impacts, and the cost estimate and proposed

implementation plan shall take into account the Environmental Management Plans,

Resettlement Action Plan and Livelihood Improvement Programs.

A 2.3. Advisory Committee

The Consultant’s work and output will be reviewed by an Advisory Committee assigned

by the Client. The committeewill include international renowned hydropower experts in

the technical, environmental and social fields, and will review the results of both the

feasibility study and the ESIA. The committeewill review main outputs, such as the draft

inception report, site selection report and feasibility report. The Consultant shall respond

to the committee’scomments and recommendation, incorporate these in the final reports,

or clearly motivate if not following the recommendations.

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B. UPDATE OF PROJECT CHARACTERISTICS

B 1. Review of Previous Studies and Site Visits

The proposed Shuren project location at the Selenge River was investigated in the pre-

feasibility study. As a result two possible dam sites were selected for further investigation

in the feasibility study:

Site no. 4 49°42'29.70"N, 104°56'25.72"E Dam height; 65 meter

Site no. 6 49°40'31.20"N, 104°45'52.26"E Dam height: 43 meter

For the construction design given in the pre-feasibility study, site no. 4 was selected as

the site for further investigations in the pre-a stage since it provides more head than site

no. 6 and the available documents of the Russian feasibility study from 1973 refer to that

site. This preliminary determination of one site enabled a more detailed construction

assessment, providing the motivation for further studies of the Shuren Hydropower

Project.

Nevertheless, all previously studied sites must be reviewed, and both sites no. 6 and no. 4

have to be studied further in the feasibility study stage. The final selection of the dam site

and dam design shall go hand-in-hand and must include the investigationsof both sites, a

study of various dam types, reservoir capacities, mode of operation with respect to base

load and peaking, reservoir and flow management and required environmental and social

impact mitigation.

It is necessary to collect, summarize and evaluate available reports, studies, calculations

and further inventory data related to the construction of the Shuren project. In particular a

repeated search for the Russian feasibility study from 1973 has to be done. Cooperation

and consultation with Mongolian and Russian authorities, organizations and companies is

essential.

The Consultant shall therefore as a first task compile all relevant previous studies and

information for the alternative sites identified for the proposed Shuren Hydropower

Project. Key documents are the feasibility studies from 1973, the pre-feasibility study

conducted under MINIS and the new Energy Master Plan. All documents shall be

carefully reviewed to inform the Feasibility Study.

The Consultant shall conduct an initial site visit to the Selenge River, and shall meet the

Client and key stakeholders, such as the Ministry of Energy, Ministry of Environment

and the Working Group for the Shuren Hydropower Project development.

As a result of the review of all previous documents and available information, the

Consultant shall prepare an Inception Report, highlighting any changes to the

methodology that was made in the Technical Proposal, and update the activities

andworkschedule if needed.

B 2. Power Demand and Sector Review

The Consultant shall, based on the information collected in Phase 1 and 2 and the new

Energy Master Plan, and any other available information, review and update the

electricity demand forecast for Mongolia, and especially the future demands and load

factors for the Central Energy System (CES)

The Consultant shall conduct a thorough review of the Mongolian energy sector and

policies, and establish likely expansion alternatives for the future CES in regard to

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generation, inter-connections and transmission. The consultant shall especially establish

an understanding of the future role for hydropower as a generation source for the CES.In

additions the Consultant shall review and evaluate any need for ancillary functions of

hydropower, such as frequency control and spinning reserve for the CES.

B 3. Updated Surveys and Investigations

B 3.1. Engineering TopographicSurvey

The Consultant shall collect, summarize and evaluate available reports, previous surveys,

aerial mappings and further inventory data related to the topography of the Shuren

project. Cooperation and consultation with Mongolian authorities, organizations and

licensed companies is required.

Detailed survey of site no. 4 is available and presented in the pre-feasibility study, if

found necessary the Consultant shall expand mapping area scaled by 1:5000 and 1:1000.

The Consultant shall conduct site survey of site no. 6 to a relevant level to enable

conceptual design for comparison of the two sites. Any geodesy mapping of the dam sites

and the reservoir shall include the marking of villages, landmarks, fields and meadows,

transmission lines etc.

The Consultant shall survey all possible existing movable or immovable objects, sites,

structures, groups and natural features and landscapes that have archaeological,

paleontological, historical, architectural, religious, aesthetic, or other cultural significance

in site 4 and 6.Geodesy mapping shall be performed with suitable scale and accuracy,

using GIS and AutoCAD software. Aerial and satellite mapping shall be used in

combination with topographic survey.

In addition to the site surveys, the Consultant shall develop topographic maps in the scale

of 1:100000 for the whole impact area (including grid connection to Erdenet) with

elevation accuracy not less than 10 meters. For the reservoir areas the Consultant

shalldeveloptopographic maps in the scale of 1:50000 with accuracy not less than 10

meters.

B 3.2. Geological and Geotechnical Investigations

The Consultant shall collect, summarize and evaluate available information from

previously conducted geological, hydro-geological, seismological studies and inventory

data related to the Shuren project. List all the information by name, type, age, scope of

work, duration for execution, methodology and results. Cooperation and consultation

with Mongolian authorities, organizations and companies is required.

The Consultant shall conduct geological and geotechnical investigations to a level that

will allow conceptual design for comparison of the two sites (no.4 and no.6)

The Consultant shall investigate the geological condition and phenomenon of the whole

project area, including dam sites, reservoirs and grid connections. Make geological

assessment of existing data, maps and aerial maps categorized by zones. Prepare

geological maps and geological cross sections and seismic-tectonic drawings categorized

by zones. This part of geological works for feasibility study shall include activities to;

Identify boundaries and intensity of geological processes.

Visit the project area and establish a survey and investigation program.

Develop parameters to describe the geological condition of the area and develop a

methodology for the geological, hydro-geological and geophysical studies.

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Identify soil and rock types, fractures and boundary of rock-soil cracks, locations

and replenishment accumulation zones. Identify depth and thickness of soil, river

alluvium and rock.

Identify depth and thickness of permafrost soil.

Identify the permeability of river alluvium, rock and soil.

Identify frost resistance of rock.

Identify the level of ground water, flow direction and chemical composition of

each layer of ground water.

Hydro-geological survey and investigation shall cover the proposeddam sites and

reservoirs area. Under this study, the consultant shall establish hydro-geological

monitoring boreholes to identify underground water regime. Give recommendations on

soil water regime changes, methods of observation for the regime and methods for

measurements during operation period.

Within the geophysical survey, which should cover the proposed dam site area,

theConsultant shall identify depth of rock, soil and permafrost boundaries, thickness and

fracture, crack boundaries, and establish the level of soil water and deep water in the river

valley and flow direction. Also, Consultant shall conduct a geophysical study for

seismology and earthquake zoning. The Consultant shall select method and methodology

suitable for the geophysical study and conduct a drilling survey to verify results.

The Consultant shall identify engineering geological conditions at the selected dam site

areas, areas for power house and dam facilities (water collecting reservoir, dam, hydro

power station, water outlet structure, and spillway and fish passage). Develop geological

mapping and reports for the dam site and areas for power house and other facilities.

Survey and investigate geology, geophysics and engineering geology connected to the

topographic mapping. Conduct geotechnical investigation following the selected line and

profile.

Geotechnical investigations shall include soil and rock soil drilling, kern sampling,

digging channel, cast in place test and gallery at the embankment area, site test,

laboratory tests and their reports and determine soil and rock strata. Engineering

geological assessment shall be conducted for the following components:

Water accumulating reservoir (water proofing of the reservoir, any water loss and

slope stabilization)

Embankment

Other hydro-technical buildings and facilities.

Sub stations

Construction material quarry and borrow pit site

Infrastructure at the dam embankment

Conduct a drilling survey program to verify the geological, hydro-geological and

geophysical studies. This program includes the drillings, diggings, kern sampling, site

and laboratory tests.

The Consultant shall:

Drill at least 10 boreholes at each dam site (no. 4& no. 6) along the planned weir

axis also drill at least 2 boreholes in the river. Depth of the boreholes needs to

penetrate the base rock below the river alluvium and to penetrate up to minimum

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10 meters in the base rock. Determine base rock cracks, their length, width,

location and direction.

Drill 0-2 boreholes within 1 km² in the reservoir area. Depth of boreholes needs to

penetrate the base rock. Select the location of the boreholes depending on the

geological conditions. Identify soil characteristics in regard of slope stabilities in

the reservoir area to evaluate the risk of landslides.

Drill one borehole at the proposed location of the substation. Depth of borehole

needs to penetrate the base rock.

Drill boreholes of 5-6 m depth at each 3 km along the proposed transmission line

and access road.

Sample not less than 30 % of the drillings and diggings and test them at a

laboratory to determine soil and rock characteristics. Store the sorted kerns and

samples in a safe location. Based on the findings, develop geological maps, cross

sections, seismic-tectonic drawings and reports, connected to the topographic

survey and categorized by zones. Assess the suitability of the rock and soil for

foundations or use of construction material.

B 3.3. Seismic Studies

The Consultant shall summarize quality and quantity data used in the previously

conducted seismic study analyzing by name and type of works, coverage, executed

timeframe, methodology and result and provide a conclusion.

The Consultant shall conduct a detailed seismic study at thesites of the proposed dams at

the Selenge River and site surveys and investigations for determining cracks in the base

rock, length of cracks, vertical and longitudinal transferring and types of damage. Based

on the geological, and geophysical studies and laboratory tests, identify physic and

mechanic characteristics of the rock. Assess seismic impacts, risks and describe

seismicity for the project area.

The Consultant shall determine seismic impact zones, seismic sources, and the estimated

maximum earthquake, the design maximum earthquake during project operation, the

earthquake speed, ground acceleration, and earthquake grades as basis for design

parameters.

The Consultant shall develop seismicity zones maps for the project area. In addition the

Consultant shall review the current seismic network in the region, project area and make

suggestions for improving monitoring seismic activity in the project region and area.

B 3.4. Construction Material Studies

The Consultant shall identify location, quantity and characteristics of sand, gravel, stones,

boulders and rock suitable for use as construction material and for concrete production.

Identification shall be done my sampling and field and laboratory tests. Pay special

attention to test the mineral aggregates for danger of alkali-silica-reaction (ASR).

In addition, the Consultant shall identify resources of cement, steel, wood both of local or

distant material procurement sources, and assess available quantity and quality of water

to be used for construction. Investigations must follow norms, standards and regulation

requirements of the Mineral Resources Authority in Mongolia based on regulation to

protect nature and environment and usage of natural resources.

The Consultant shall provide investigation results and maps of the resource locations,

sampling locations and transport routes.

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B 3.5. Geotechnical Baseline Report

The Consultant shall summarize all findings of the geological and geotechnical

investigations into a Geotechnical Baseline Report following international standards.

B 4. Updated Hydrology and Climate Change Assessment

Within the framework of the Feasibility Study a complete hydrological investigation shall

be conducted to expand observation data along Selenge River and collect data until

Baikal Lake. The Consultant shall collect, summarize and evaluate available studies and

inventory data related to the hydrology of the Selenge River. Cooperation and

consultation with Mongolian authorities is required.

B 4.1. Meteorological and Hydrological Studies

The Consultant shall review previous hydrological assessment of the Selenge River and

compile and evaluate the existing discharge data of the Selenge River from the gauging

stations Ikh-Uul, Khutag-Undur, Khyalganat, Zuunburen and Sukhbataar, as well as

meteorological data for the project area and Selenge River basin and Baikal Lake. The

Consultant shall conduct an exhaustive quality check of the available river runoff data

(homogeneity of discharge values, size of catchment areas, station ratings, etc.) from

these gauging stations and search for additional data from these five and other gauging

stations. The Consultant shall also search for additional gauging stations at the Selenge

River in Russian part and vicinity of the project.

Based on the available data, a hydrological assessment shall be conducted including the

following components:

Confirm the size of the catchment area of the sites no. 4 and no. 6.

Estimate long-term inflow characteristics of the proposed dam sites

Perform a study for the sediment transportation in the Selenge River.

Analyze the interrelation between groundwater and surface water at dam sites

Investigate dam evaporation.

Identify ice cover and temperature curves of the Selenge River. Identify the design

flood discharges for the dam sites.

If found needed, establish a temporary remote control gauging station near the

dam site for measuring discharges and sediments

B 4.2. Water Consumptions

The Consultant shall identify existing water consumption from towns (like the pumping

station for Erdenet city), rural settlements, mining, industry, agriculture (like the

TiirgiinHundii and BongiinTokhoi irrigation systems) and the environment.

The Consultant shall evaluate the volumes of the current water consumptions and

estimate future development of the water consumptions, and establish inflow series to the

two dam sites that will be representative for the future economic life span of the proposed

HPP.

The Consultant shall liaise with the ESIA consultants to estimate the necessary ecological

flow in the river bed to be released under filling of the dam and operation of the project.

15



The ecological flows shall take into account the need of dynamic water flows for

downstream water consumptions and environmental needs.

B 4.3. Climate Change Assessment

The Consultant shall, based on global and regional studies, and climate change

projections, estimate the likely range of climate futures for the period of the economic life

span of the Shuren HPP. These climate change scenarios shall be expressed as percentage

of change in future temperature, precipitation and runoff compared to historical records.

The Consultant shall take this information into account in the conceptual design of the

two site alternatives for Shuren HPP and use them as input to sensitivity analysis for cost

(due to possible necessary adaptive design) and benefits (due to possible changed inflow)

of the project.

B 5. Assessment of power evacuation alternatives and integration to CES

B.5.1 Integration to CES

The Consultant shall, based on the conducted detailed assessment of the future power

demand and likely expansion of the CES, and in coordination with the reservoir operation

modeling and conceptual design of the two alternative sites, determine how the Shuren

HPP is best integrated as a generation source to the future CES.

A key characteristic to be determined is the appropriate plant factors for of the two

alternative sites. The Consultant shall also determine the best configurations of the

generation units, taking into account any need for ancillary services, such as spinning

reserve.

If necessary, the Consultant shall conduct simplified power systemmodelingof the CES to

determine the best future role for the two alternative Shuren HPP plants that can be

constructed at the two identified sites (No. 4 and 6).

B 5.2. Transmission and Grid Connection

The Consultant shall identify the most feasible alignment of the transmission line from

the HPP Shuren to Erdenet to connect to the Central Energy System (CES). This will

include conducting a calculation the energy losses in the transmission line and selecting

an appropriate design of the grid connection based on this calculation, and in accordance

to the Mongolian regulations and standards.

The Consultant shall identify the necessary properties of the substation to transform the

voltage coming from the generators in the power house to the high voltage required for

the transmission line.

In addition to the conceptual design the Consultant shall conduct preliminary expense

budget and implementation schedule for the transmission lines and sub-stations.

B 6. Reservoir Modeling and Power Simulations

B 6.1. Reservoir Operation

The Consultant shall conduct reservoir modeling to estimate the potential power

production of the two alternative sites No. 4 and 6. The modeling shall be done to find the

optimized scheme layout and operation in coordination with the conceptual design of the

dam and power plants, and the assessment of integration of the Shuren plant into the

CES.

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The Consultant shall determine the total gross storage and surface water area for the dam

alternatives based on the topographical surveys. The available live storage shall be

determined based on the estimated sediment transport in Selenge River and potential

mitigations measures for reservoir siltation. The Consultant shall establish storage

volume curves versus reservoir elevation and how they evolve over time due to project

siltation.

The Consultant shall, based on the hydro-geological assessment and investigations,

estimate potential water losses through seepage.

The Consultant shall model reservoir operations and power production for different dam

and power plant configurations, using the hydrological data (inflow, dam evaporation,

and ecological flow releases) as input. It is anticipated that a series of at least 30 years

will be used to capture the variability in inflow to estimate accurate firm power

production. The reservoir modeling shall also determine the resulting reservoir and

tailrace water levels.

The reservoir model shall be used, together with dam safety aspects, to analyze different

scenarios of filling of the dam alternatives. The results shall describe the anticipated

duration of the filling and the estimated effect on downstream flows.

B 6.2. Flood Routing

The Consultant shall conduct flood routing of the appropriate design flood discharges

through the reservoir, and establish the required discharge capacity of the flood spillway

and operating rules for the reservoir. The flood routing shall be used to identify back

water effects of reservoir and tailrace water levels during extreme floods. The Consultant

shall provide model, methodology, criteria and calibration used in the flood routing, and

present the reservoir operation and simulation studies in a report along with the model,

methodology, criteria, data and results used.

B 7. Conceptual Scheme Layout

B 7.1 Basic Data Defining the Project Design

The Consultants shall define the project design for both alternative sites no. 4 and no. 6

based on existing basic data conditions.

The Consultant shall identify the river bed conditions (elevation, material) along the

proposed dam axis and also bank conditions (elevation, vegetation, rock / soil conditions)

on both sides of the river along the proposed dam axis.

The Consultant shall identify the elevation of the base rock below the river alluvium and

the soil on both river banks, soil and rock characteristics based on field and laboratory

tests. Establish characteristic design values to be used later on in the stability analysis of

the construction.

The Consultant shall identify the permafrost level and permafrost depth at the dam sites.

Develop a cross section of the river valley along the proposed dam axis for both

alternative locations. The cross sections shall show all the available information of the

ground. Flag these cross sections in the topographic maps.

The Consultant shall identify existing features upstream of the dam site that could limit

the reservoir size or require special measures to be protected or removed and replaced

with regard of the reservoir. Those features could be, but not limited to: settlements,

buildings, agriculture or industry facilities, historical landmarks, protected areas, etc.One

such important feature to assess is the existing water supply scheme for Erdenet, which

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may be affected by the proposed dam alternatives. The consultant shall flag these sites in

the topographic maps together with information about the kind of feature, elevation, size,

importance, and make sure that any mitigation measure to protect, remove or replace

these features is included in the total cost estimate of the project.

The Consultant shall identify the seismic activity in the project area. Based on the given

data, establish characteristic design values like peak ground acceleration to be used in the

stability and structural analysis later on. The Consultant shallconsult Mongolian

authorities to confirm these characteristic design values to be used for stability and

structural analysis and to be in compliance with the national and international standards.

The Consultant shall identify the main hydrology design parameters for the Selenge River

at the proposed dam sites. For the stability analysis of the dams, different design flood

events have to be established. The Consultant shall liaise with Mongolian authorities to

confirm these design flood events to be used for stability analysis of the dam and to be in

compliance with the national and international standards.

The Consultant shall identify the climate conditions at the project location (temperature,

humidity).The Consultant shall identify the icing of the river water, when the icing starts,

maximum and average ice thickness and when the melting of the ice on the river starts.

Pay special attention to the local condition, that in the spring season when the highest

river discharges appear, the river is mostly still covered with ice or has floating ice sheets,

so flood events occur in connection with drifting ice.

B 7.2. Dam Design

Based on the defined basic data for both alternative sites no. 4 and no. 6, the Consultant

shall develop the project designs:

Identify the maximum, minimum and the normal reservoir water level for the dam

site.

Identify the required foundation level of the dam, based on a rough stability

analysis and with attention to seepage.

Identify the top level of the dam, based on the established water levels, the

required spillway freeboard and with attention to the international standards and

regulations.

Identify the resulting height of the dam.

Identify the width of the dam, based on the cross section of the river valley at the

proposed dam site.

Identify the resulting size (length and width) and volume of the reservoir for both

sites.

The Consultant shall provide a longitudinal section and a cross section for both

alternative dam sites no. 4 and no. 6, showing the selected height of the dam and the

selected water levels. The Consultant shall investigate the possibility to build a

A Roller Compacted Concrete dam (RCC dam), or

B Concrete Faced Rock fill dam (CFRD)

or any other dam type the Consultant may suggest. At the proposed sites; conduct a

detailed study of alternatives for both construction types, providing the advantages and

disadvantages of both construction types. This study shall contain, but not limited to:

18



construction time, excavation volume, dam stability, overtopping, geometry, apertures

and passages and provide draft drawings for both dam types.

The Consultant shall identify the required dimensions of the flood spillway, based on the

established design flood events. Identify the arrangement of the flood spillway in or

beside the dam (crest spillway or flood bypass). Pay special attention to the situation that

the spillway must be able to safely release the flood discharge at all times, especially at

the end of the wintertime when freezing, flood water and drifting ice occur

simultaneously. A spillway without moveable parts is generally preferred.

The Consultant shall identify the required dimensions of the plunge pool to prevent the

flood water release from eroding the downstream riverbed. The Consultant shall identify

the required number and location of the bottom outlets. It is preferred to have at least two

bottom outlets, providing the possibility of a backup in case of malfunction or blocking of

one bottom outlet. Assess the design of the required armored protection of the bottom

outlets against abrasion to guarantee the durability of these structures.

The Consultant shall, based on the defined active storage volume and the river hydrology,

define the maximum discharge capacity of the hydro power plant. Based on this selection,

the Consultant shall define the number and sizes of turbines. Based on the selected

number of turbines and the resulting maximum discharge per turbine, select the required

dimension of the penstocks and assess the resulting hydraulic losses. Establish an

economic optimization for the selection of the most feasible penstock diameter versus the

hydraulic losses.

The Consultant shall identify the type of penstock pipes (GRP, steel, etc.). Assess the

availability, the costs, the transport facilities and the durability of the possible types of

penstock. Select a final type of penstock and identify the final alignment of the penstock

with regard to the minimum water level and the maximum dead storage level.

The Consultant shall determine following dimensions in power house;

Identify the dimensions of the required intake protection of the penstock. Take the

required protection for aquatic species in the reservoir into account.

Identify the location and dimension of the power house, required for the housing

of the complete turbine equipment.

Identify the required tailrace dimensions (length, width and depth) to safely

release the turbine discharge.

Identify the construction material for the power house.

The Consultant shall establish a rough stability and structural analysis in order to define

the dimensions of bearing structures, walls, floors and ceilings. Include seismic loads into

the static calculations.

B7.3. Stability and Structural Analysis

The stability and structural analysis is intended to determine the integrity of the dam and

connected structures under defined loadings. The Consultant has to agree with the client

and the Mongolian authorities, which national and / or international codes and regulations

apply for the proposed Shuren HPP and which loadings and combination of loadings have

to consider. The Consultant must present a written definition of the agreed codes and

regulations, approved by the concerned Mongolian Authorities.

For the type and location of dam selected, the corresponding structural and stability

analysis shall be performed by the Consultant.

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B7.4. Dewatering and Water Diversion

The Consultant shall plan the water diversion of the Selenge River during the

construction time in order to enable a secure construction progress a simultaneously

securing the continuing river discharge of the Selenge River.

The Consultant shall set up design discharge values for the Selenge River, the water

diversion has to withstand without putting the construction sites in danger. Prepare

hydraulic calculations based on the available hydrology.

The Consultant shall estimate the volume of the necessary dewatering of the construction

sites, based on calculated seepage values for the ground. Consider sheet piling and similar

measures to minimize seepage. Estimate the required numbers and size of pumps and the

resulting consumption of electricity.

The Consultant shall establish measures to prevent polluted water being pumped out of

the construction site into the Selenge River. Present evacuation procedures and alarm

levels for the construction site regarding possible flood events.

B 7.5. Design of Hydro-Mechanical and Electro-Mechanical Equipment

The Consultant shall define the type, number and capacity of turbines to be installed in

the HPP. Selection based on costs, efficiency, reliability, availability and transport

facilities of the turbines. The arrangement of the turbines must consider sufficient water

coverage at the tailrace, prevent cavitations, offer sufficient protection against icing and

provide sufficient access space for maintenance purposes.

The Consultant shall define the required generators, based on the selected number and

capacity of the turbines. Consider the required capability for connection to the national

grid system and the requested capability of the generators to function as a spinning

reserve.

The Consultant shall define the connection between turbines and generators. The

selection of the generators shall be priory based on choosing the same provider of turbine

and generator equipment.

The Consultant shall identify the required stop and regulating valves, belonging to the

penstock and the turbine equipment. Identify the required closing times of the main valve

in the penstock in order to protect the electro-mechanical equipment, and calculate the

resulting water hammer in the penstock.

The Consultant shall identify the required stop logs and gates at the penstock intakes, the

bottom outlets and the tailrace channels. Conduct a rough structural analysis to identify

the required dimensions and numbers. The Consultant shall identify the required number

and type of cranes to lift the stop logs.

B 7.6. Infrastructure and Access Roads

The Consultant shall identify the required access to permanent installations at the dam

site like the top of the dam, the power house, the stilling basins, the tailrace channel,

workshops, housing facilities, substation, grid connection, fish bypass, etc.The Consultant

shall plan the necessary access roads and infrastructure in accordance with the Mongolian

construction norms and regulations, standards and appropriate environment regulations.

The Consultant shall identify the required access to temporary installations during the

construction time like construction camps, contractor´s plants, supply areas, etc.

The Consultant shall develop requirements for the access roads, based on the size and the

weight of the transported materials and equipment. Develop a plan for transport of

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oversize and overweight equipment to the project site. Identify the most feasible route

from Erdenet to the project site or from Darkhan-Zuunburen to the project site for

temporary and permanent access, paying attention to existing and required bridges,

culverts and flood protection and possible alignment of the transmission line along the

access road.

B 8. Site Selection

B. 8.1 Costs and Benefits of Alternatives

The Consultant shall summarize all costs and benefits of the two alternative sites and

alternative dam configurations. The investment and operational costs of the alternatives

shall be quantified based on the conceptual scheme layouts. Benefits and the form of

power production and ancillary services shall be estimated. Externalities, such as

environmental and social impacts, including cumulative impacts, shall be summarized.

The Consultant shall coordinate and receive such information on environmental and

social externalities from the parallel ESIA study.

The Consultant shall put the different alternatives into the perspective of planned

construction of other hydropower projects (such as the Eg HPP) and the development of

the CES in general. The pro and cons of how the suggested alternatives would fit into a

phased future development of new generation sources to secure affordable power security

for central Mongolia should be considered and included in the basis for the final

selection.

B 8.2. Multi-criteria Analysis for Site Selection

The Consultant shall use the summarized costs, benefits and externalities as input to a

multi-criteria analysis to evaluate the different sites (no. 4 and 6) and dam configurations.

The multi-criteria analysis shall be a transparent tool that describes which factors have

been included and which weights they have been given.

Based on the multi-criteria analysis the Consultant shall select and motivate the best

option for development of the Shuren HPP.

B 8.3. Site Selection Report and Workshop

All analyses and results that led to the site selection, and the multi-criteria analysis and

final choice of best option for Shuren HPP shall be described in a Site Selection Report.

This report shall be structured with a main report, which summarizes the salient findings

and results, and a number of annexes that describes the results in detail.

The Site Selection Report shall be submitted for review of the Client, Panel of Experts

and the World Bank team. After giving time for review the results shall be presented by

the Consultant in a workshop in Ulan Bataar, to allow discussion and clarification of the

method and results, and feedback to the Consultant. This workshop shall be coordinated

to be held jointly with the presentation of results for the parallel ESIA.

B 9. Feasibility Level Design

B. 9.1 Complementary Surveys and Investigations

The Consultant shall plan and execute any necessary additional assessments, surveys and

investigations required to develop the selected Shuren HPP site to a feasibility design

level, including drawings and draft bill of quantities.

If not conducted previously, the Consultant shall make additional surveys for the chosen

site to develop topographic maps in the scale of 1:25000 for the grid connection, access

21



roads and reservoir with elevation accuracy not less than 5 meters, and develop

topographic maps in the scale of 1:5000 and 1:1000 for selective building structures

(dam, power house, substation, etc.) with elevation accuracy not less than 1 meter.

The Consultant shall update and finalize the Geotechnical Baseline Report. Additional

surveys, investigations and laboratory tests for doing so should be conducted. The

seismic assessment shall be updated if needed.

The hydrology, reservoir modeling and power simulations shall be updated if needed.

The design floods shall be confirmed and design of river diversion works and spillway

updated if needed.

B. 9.2 Design, Drawings and Bill of Quantities

The Consultant shall for the feasibility design work in close collaboration with the ESIA

consultant to optimize the engineering design to minimize as much as possible adverse

environmental and social impacts. The feasibility design shall adhere to the most modern

international best practices.

The Consultant shall confirm and finalize the conceptual scheme layout for the selected

sites, conduct design at feasibility level and prepare drawings and technical

specifications. The design and the drawings shall cover all construction parts (access

roads, quarries and camps, diversion works, dam, powerhouse) and the complete electro-

mechanical and hydro-mechanical equipment (turbines, generators, transformers,

substation, and grid connection).

Besides the main components preliminary designed in the site selection stage and

confirmed in this feasibility stage, the Consultant shall develop and design the

communication, data and telemetry control for the selected HPP.The communication

system shall include all sensors, meters and telemetry components required for a

permanent and safe control of the project appropriate to Mongolian and international

conditions and standards.

The Consultant shall establish draft bill of quantity for civil works and equipment for the

various components of the project. Prepare the bill of quantity in a way that it can be used

for future planning and bidding documents.

Set up an implementation schedule for the construction steps and present drawings of the

planned water diversion structures, giving the dimensions of the diversion structures and

of the agreed design discharge values.

B 10. Implementation Plans

B 10.1. Contract and Procurement Planning

The Consultant shall propose the contract lots for civil works and for the electrical and

mechanical equipment, and prepare a procurement strategy.Pre-qualification shall be

taken into account for major contracts for civil works and electrical and mechanical

equipment.

B 10.2. Implementation Schedule

The Consultant shall prepare an implementation schedule of the project, including:

Detailed Design and Financial Close - Detailed design

- Preparations of tender documents

- Negotiations and financial close

- Procurement

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Preconstruction activities - Preparing access and transportation routes

- Preparing construction site

Construction activities - construction of dam and associated infrastructure

- Installation of equipment

- Implementation of EMP and RAP

Startup activities - Filling of reservoir

- Initial operation

The Consultant shall prepare the implementation schedule is a way that a cash flow

projection calculation can be developed on that basis.

B 10.3. Project Operation Organization

The Consultant shall estimate the required management structure and number of

employees for a proper operation of the HPP.Identify work places for the operating

organization of the HPP that meet functional requirements and including necessary

equipment, instruments and vehicles.

The Consultant shall propose measures to cooperate with the local public communities

during construction of the facilities and make an introduction to the local administrations

and communities.

The Consultant shall plan buildings and facilities for the operation personnel, employee

accommodations and security facilities for the secure operation of the dam and the

reservoir. Include a visitor facility near the dam site for receiving visitors and providing

public information.

B 11. Dam Safety Measures

The rules and regulations for dam structures, set out by the ICOLD shall be observed. In

addition the World Bank Operational Policy OP 4.37 shall be observed, required

documents prepared and procedures undertaken. This would include prepare an

Instrumentation Plan, an Operation and Maintenance Plan and an Emergency

Preparedness Plan.

The Consultant shall prepare a list of Mongolian and accepted international regulations

regarding the construction supervision and quality assurance, operation and maintenance

procedures and emergency procedures to be followed by the developer and the operator

of the HPP.

B 12. Legal Analyses

B 12.1. Laws, Regulations and Electricity Tariff

The Consultant shall review all effective international conventions, treaties, and bilateral

agreements which Mongolia is a party to and domestic laws, policy documents, national

programs essential for the implementation of the project.

Legal review helps to reveal the external and the internal legal factors that may affect the

project implementation, and its cause or justification, to provide an answer to some public

misunderstanding about the project from legal point of view, to correctly evaluate

potential external and internal risks and its factors for the implementation of the project,

to envisage decisive countermeasures against such risks, and to ensure in establishing

legal preconditions for successful implementation of the project.

23



Electricity selling tariff shall be calculated in accordance with the Energy Regulation

Commission adopted in 2005; and Resolution #74,concerning Tariff Rules for

Controlling. In financial and economic calculations, all effective laws and regulations,

taxes and tariffs of Mongolia shall be complied.

The Consultant shall assess the project from perspective of whether the project is eligible

for an international recognition within framework of international programs, such as Man

and the Biosphere sponsored by UNESCO, and the World Heritage Convention due to its

significance and extents; and if it is determined as eligible, then to recommend how to

accomplish such recognition in the international level and its implication in

environmental and social impacts of the project, to determine possible impacts for the

project’s international significance and configuration and financing for the project.

B 12.2 Management and Financing Alternatives

The Consultant shall study the current or newly emerging experiences in the world with

respect of ownership rights for assets created by a project, and/or joint ownership by

several parties or countries and issue a recommendation for the Shuren HPP in that

respect. Recommendations must be made for the involvement of the stakeholders

especially the government.

The Consultant shall make a proposal for the ownership, implementation and operation of

the ShurenHPP,pursuant to the Concession Law of Mongolia, by consortium comprising

of foreign and local entities, and with possible involvement or financing of international

organizations or international private investors. The Consultant shall propose the terms to

operate and maintain the Shuren HPP, taking into account relationship with other water

users.

Since the project is in the concession list adopted by the Government of Mongolia

(Resolution #198 of 2010) pursuant to the Concession Law, the Consultant shall propose

possibilities to attract international financial institutions and donor countries, or

international private capitals, including domestic investments into the project, possible

types of cooperation, or project financing, special project vehicle, its right and duties,

relationship with others, specific issues and scope thereof.

B 13. Financial and Economic Analyses

B13.1. Capital and Investment Costs

All costs related to the construction and implementation of the Shuren HPP shall be

updated based on the feasibility design, draft BoQ and implementation plan. Costs for the

implementation of the EMP, RAP and possible benefit sharing programs shall be

retrieved from the ESIA and included in the total capital cost.

Sources of Project financing for the selected alternative along with targeted weights for

each shall be identified and ranked in the context of current conditions in the global

financial market for Mongolia-related capital.Market-based, realistic Weighted Average

Cost of Capital (WACC) estimates for alternate financing scenarios and alternate project

structures will be analysed.

B 13.2.Operating Expenses

The Consultant shall estimate operating expenses including:

OPEX

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Depreciation

Interest Expense

Labor Costs

Worker’s Compensation

Other Taxes

Fee on Use of Water Resources

Land Utilization

Insurance Cost

Environmental and Social Costs

Other operational costs

B13.3. Direct and Indirect Benefits

The Consultant shall estimate the direct benefits from the power supply generation and

benefitsthe following potential multi-purpose sectors upon implementation of the project:

Animal husbandry and agriculture;

Tourism;

Fish farming.

In addition the economic indirect benefits of the Project shall be analyzed, such as

National energy security, GDP growth rate, reduction of CO2 emissions, job creation, and

production by small and medium enterprises.

B 13.4 Financial and Economic Analyses

The Consultant shall carry out an economic analysis for the proposed Shuren HPP taking

into accounts the above costs and benefits. Indicators such as Net Present Value (NPV),

Benefit Cost (B/C) Ratio, and Economic Internal Rate of Return (EIRR), ratio verify, and

unit cost of firm energy shall be calculated. Sensitivity analysis shall be applied on

important parameters in order to assess their impact on the viability of the project.

The economic analysis shall assess the Shuren HPP project compared to plausible

alternatives that would deliver the same services, and prove that it is economically the

preferred option for Mongolia. The choice of plausible alternatives should be motivated

based on the power demand and sector review conducted as part of the feasibility study.

The Consultant shall also carry out the financial analysis of proposed Shuren HPP taking

into account the national demand and the costs/benefits identified. In general, the

financial analysis should evaluate the commercial merits of the project under alternative

power market including ownership models, financial packages and fiscal regime. The

Consultant shall, as part of the financial analysis, prepare the cash flow estimate.

B 14. Risk Register

Development of hydropower projects involves various sorts of risks at different stages

viz., planning, design and construction stage. Risk management shall be carried out by

the Consultant through the use of Risk Assessments and Risk Registers. The primary task

is to define various risks, to identify measures to be taken in case the risk materializes and

to allocate the risk to Employer and Employee.

While carrying out the formal Risk Assessments in different stages of the project, various

possible hazards are identified and an evaluation is carried out regarding their potential

25



impact and probability of occurrence together with the response or strategies as

appropriate for preventive and contingent actions and responsibilities etc. Risk

Assessments required at each stage of the project are summarized in a Risk Register.

B 15. Final Recommendation

The Shuren Hydropower Project is a large multi-purpose project with direct and indirect

benefits, as well as direct and indirect impacts. It will become a one-sided view if cost-

recovery, revenue and benefits of the Project are analyzed from only economic point of

view. Therefore, the final recommendation for the Shuren HPP development must be

made on a combination of economic, environmental, social grounds to ensure national

electricity security, indirect benefits and sustainable development.

The Consultant shall, based on the results of the financial and economic analyses, the

identified indirect benefits and impacts, and the identified risks in this Feasibility Study,

and with inputs from the parallel ESIA, make and motivate a final recommendation for

the development of the Shuren HPP.

B 16. Feasibility Report and Workshop

All analyses and results that led to the final recommendation for the development of the

Shuren HPP shall be described in a Feasibility Study Report. This report shall be

structured with a main report, which summarizes the salient findings and results, and a

number of annexes that describes the results in detail.

The Feasibility Study Report shall be submitted for review of the Client, Panel of Experts

and the World Bank team. After giving time for review the results shall be presented by

the Consultant in a workshop in Ulan Bataar, to allow discussion and clarification of the

method and results, and feedback to the Consultant. This workshop shall be coordinated

to be held jointly with the presentation of results for the parallel ESIA.

C. REPORTING REQUIREMENTS AND DELIVERABLES

C1. Deliverables and Reporting

The Feasibility Study and Detailed Environmental and Social Assessment shall be

performed simultaneously under individual agreement with separate Consultants. The

Feasibility Study shall include engineering, technical, financial, economic, legal and

institutional studies used for developing the project concept and justifications for its

implementation. The Environmental and Social Assessment will include information

collected during public consultations. Results from these two works will establish the

basis for decisions on implementation of the project. Deliverables produced as a result of

this TOR will packaged as described in this section.

C1.1. Progress Reporting

All reports listed below should be submitted in English and Mongolian. Unless

otherwise stated, reports are submitted to the World Bank through the MINIS PMU

according to the schedule given below.

Inception Report: The inception report should be submitted in English to the PMU 30

days after Date of Letter Award

Proposed Work Program: The proposed work program should be submitted in English

to the Technical Steering Committee 30 days after Date of Letter Award.

26



Progress Reports: Progress reports should be submitted in English to the PMU monthly,

following contract signature. The progress report should present a very brief overview of

progress in completing the tasks, difficulties in achieving the work as described in the

contract, proposed alternate means to achieve the Project objectives, status of budget and

major scheduled milestones. It is anticipated that progress reports would be 1-3 pages

maximum in length.

C1.2. Main Reports

Site Selection Report: This report shall present all data, information, methods, and

results leading to the final site selection of the Shuren HPP.

Feasibility Study Report: This report shall present all data, information, methods,

and results leading to the final recommendation of the Shuren HPP. The Feasibility Study

report shall include the Feasibility Design, including drawings, technical specifications

and draft Bill of Quantities.

The main reports shall be submitted, discussed and approved by the “Shuren

hydropower plant project working group” under the Ministry of Energy in accordance

with the current Mongolian Law on “Construction” and Regulation on “Design for

construction and its expertise approval, supervision of construction works and

commissioning” which was approved by the Resolution No.185 in 2010.

The PMUwill organize review meetings. Major comments should be incorporated in the

final reports and submitted to the PMU. Main sections of reports that require extensive

re-writing and editing should be re-submitted for verification to the PMU.

C 2. Management of the Feasibility Study

C 2.1 Roles and Responsibilities

Roles and Responsibilities of PMU: The Project ManagementUnit (PMU) is

responsible for providing managerial guidance and monitoring progress of the Feasibility

Study. The PMU shall monitor the fulfillments of the Consultant and shall receive the

reports on the Project from the Consultant for review and approval by related

organizations. The PMU shall monitor the activities of the Consultant all times and shall

report to the Client.

Roles and Responsibilities of the Client: The Client for the Project is the Ministry of

Energy of Mongolia. The Working Group headed by the Vice Minister of the Ministry of

Energy shall perform the monitoring with assistance of PMU during the Feasibility Study

Phase. The Working Group shall review and discuss the reports on Project phases and

shall grant necessary approvals when required.

Roles and Responsibilities of the Consultant: To ensure fulfillment of Feasibility

Study within a timeframe, the Consultant will be fully responsible for regulating their

activities under transparent and united management. The Consultant shall be responsible

for ensuring work interrelations, exchanging official information and organizing meetings

with Consultant’s management and other key and non-key experts—as required--and in a

timely manner. In addition, the Consultant will submit work fulfillments and will hand

over reports to the PMU and the Client in compliance with Work Schedule for discussion

and approval after including their recommendations.

27



C 2.2 Time Schedule

The work of the Consultant will be supervised by the PMU, which will be the focal point

for coordination with all other ministries, agencies and any other international

institutions. It will also provide liaison and contacts with the academic and applied

research institutions, Civil Society Organizations and Nongovernmental Organizations.

The following table and chart present the timing of major milestone events for the

production of the reports described above. The Consultants Team should begin work

upon contract signature. The Consultants Team should submit a detailed work plan and

schedule with critical milestones with allowance for PMU and external reviews.

The Consultant must provide monthly progress reports in writing during the

implementation of the Project to avoid unexpected problems and to resolve problems in a

timely manner. The inception reports, monthly progress reports and any other reports

must be prepared in English and Mongolian. The Inception Report shall include the work

plan and schedule and be clearly written.

The special and general drafts and final reports will be prepared in both English and

Mongolian. The Draft Final Reports must be printed in Mongolian and be submitted to

the Client, the Ministry of Energy and to the Public Representatives for comments.

N

o Objective Month

1 Submit Inception report 1

2 Participate in Study Launch Workshop 2

3 Submit Draft Site Selection Report 11

4 Participate in Site Selection Workshop 12

5 Submit Final Site Selection Report 12

6 Submit Draft Feasibility Study Report 21

7 Participate in Final Study Workshop 22

8 Submit Final Feasibility Study Report 24

C 2.3. Ownership and Control of Information, Data and Documents

All information and data, all intellectual property rights, ownership, licensing provided to

the Consultant Team shall be used only for this Study and assessment.

Documents and information/data provided to and/or generated by the Consultant Team

shall not be disclosed without the expressed written consent of the PMU.

28

Overview of proposed time schedule and integration of feasibility study and ESIA for the Shuren HPP

Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Feasibility study

Inception, Review of previous studies

methodology

Updated energy demand and sector analysis

Update project area characteristic

*-Updated hydrology and climate change

assessment

*-Updated surveys and geotechnical

investigations

Assessment of power evacuation alternatives

and integration to CES

Reservoir and Power modelling of alternatives

sites

Conceptual Desings of alternative sites

Cost and benefits of alternative sites

Site selection

Complementary assessment, surveys and

geotechnical investigations for selected sites

Feasibility level design of HPP and transmission

lines for selected sites

Formulation of Implementation Plans

Formulation of Dam safety and emergency

preparedness plans

Final cost estimation

Financial and economic analysis

Reporting and finalization of study

ESIA

Inception and Review of Previous studies

Update of project area characteristics

Environmental Impact Assessment of

Alternative Sites

Regional Environmental Assessment

Environmental baseline survey

Socio-economic baseline survey

Cultural heritage survey

Impact assessment of selected project

Cumulative Impacts Assessment

Design Mitigation Measures

Environmental Management Plan

Stakeholder consultation

Reporting and Finalization of Study

Review by international advisory committee

Workshops for presentation of results

29

D. REQUIRMENT FOR THE CONSULTANT TEAM

D1. Consultants Required

The firm or the leading firm/main consultant in case of associations should have international

experience of similar projects in similar climatic conditions in the last 5 years.Consultants

may associate with other firms in the form of a joint venture or a sub consultancy to enhance

their qualifications.

Consultant Team will determine the identity and biography of specialists to be involved in

specific positions within the Consultant Team. Furthermore, the Consultant Team will qualify

main members of the Consultant Team and all essential specialists immediately. Consultant

Team must confirm that all specialists are available to work during the Project

implementation period.

The estimated total input of staff months, shared between international and national experts,

for the Feasibility Study is 115.

D 2.Key Professional Qualifications and Competence for the Assignment

Minimum qualification requirements of Consultant Team specialists for Feasibility study are

presented below:

Team Leader

Education: Advanced University (Masters or higher) Degree in hydropower plant

sector;

Experience: Minimum 20 years professional experience in his field of expertise and at

least 15 years experience in hydro engineering, nature resource management,

strategically, resources management, planning and environmental assessment. The

team leader must have project management experience, as a team leader, regarding

feasibility study for various studies, preferably dealing with large hydropower plant,

and providing guidance and direction to consultants’ activities;

Demonstrated expertise working on similar projects;

Demonstrated experience working with multilateral banks and the application of

World Bank guidelines.

Analytical ability, practical problem-solving skills and resourcefulness in performing

varied tasks in the area;

Demonstrated skills in retrieving, gathering and obtaining information from various

sources;

Sound organizational skills and ability to prioritize and deliver assignments in a

timely manner often under severe time pressures;

Demonstrated initiative in developing practical approaches that improve efficiency

and effectiveness of the project;

Strong inter-personnel skills and commitment to work in a team-oriented, multi-

cultural environment;

Ability to provide guidance to the Working Group;

Language skills: Fluent oral and written skills in English;

30

Computer literacy: Proficient in PC based applications such as Word, Excel and

Power Point etc.

Dam/Civil Engineer


sector;

Experience: Minimum 10 years professional experience in larger dam projects and

water infrastructure project.

Demonstrated expertise working on cold region countries;

Possess a wide array of experience assessing negative influences of hydrology, river,

water resource management, water infrastructure, climate change and its processes;




sources;










Power Point etc.

Power Engineer


sector;

Experience: Minimum 10 years professional experience in the electrical aspects of

hydropower development, power transmission and power systems.





sources;





31






Power Point etc.

Mechanical Engineer


sector;

Experience: Minimum 10 years professional experience in the mechanical aspects of

hydropower development.





sources;










Power Point etc.

Geotechnical Engineer

Education: Advanced University (Masters or higher) Degree in a relevant discipline;

Experience: Minimum 10 years professional experience in the geotechnical

investigations.





sources;



32








Power Points etc.

Engineering Geologist

Education: Advanced University (Masters or higher) Degree in geology or relevant

discipline;

Experience: Minimum 10 years professional experience in geological investigations

of potential dam sites or similar structures.





sources;










Power Point etc.

Geodesy Engineer

Education: Advanced University (Masters or higher) Degree in Geodesy or relevant

discipline;

Experience: Minimum 10 years professional experience in geodetic engineering;





sources;

33










Power Point etc.

Hydrologist

Education: Advanced university (Masters or higher) degree in hydrologic sciences or

relevant discipline;

Experience: Minimum 10 years professional experience in hydrological survey,

monitoring groundwater levels, using computer technologies to calculate flow

statistics, and reservoir modeling.





sources;










Power Point etc.

Financial and Economic specialist

Education: Advanced University (Masters or higher) finance and economics;

Experience: Minimum 10 years professional experience in project related fields in

developing countries.

Ability to estimate, assess and prepare financial analysis of investment in natural

resource and infrastructure development project.


34




sources;










Power Point etc.

Legal specialist

Education: Advanced University (Masters or higher) law;

Experience: Minimum 10 years professional work experience his profession;

Legal specialist should have experience related to instructions and requirements of the

project and experienced with international development organizations, natural

resource management policy and law in developing countries;



Demonstrated skills in managing situations typical of developing countries have wide

range interest;





Power Point etc.

E. PAYMENT SCHEDULE

Ten percent (10%) as an advance payment against the submission of a bank guarantee for

the amount.

Ten percent (10%) upon acceptance of the Inception Report / Work Program and the

Consultation and Communications Program.

Forty (40%) upon acceptance of the Final Site Selection Report.

Twenty percent (20%) upon submission of Draft Feasibility Study Reports.

Twenty percent (20%) upon acceptance of the Final Feasibility Study Reports.

35

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