Project Administration Manual - Updated · Version: 4 Last updated by: BRB Date: 08 March 2012 The Project Administration Manual (PAM) is a joint Government/ADB manual that describes

Version: 4 Last updated by: BRB Date: 08 March 2012

The Project Administration Manual (PAM) is a joint Government/ADB manual that describes how EAs/IAs will use country systems to manage project implementation assuring that ADB's fiduciary due diligence responsibilities are met. The PAM details the design and monitoring framework, outlining all implementation planning, monitoring, reporting, and evaluation processes.

The PAM is an active document, progressively updated and revised as and when necessary, particularly during reviews and following any changes in project costs, scope, or implementation arrangements.

Project Number: 42533 Grant Number: G0161 March 2012

Islamic Republic of Afghanistan: Hairatan to

Mazar-e-Sharif Railway Project

Project Administration Manual - Updated

Contents

PROJECT DESCRIPTION .......................................................................................................... 1

I. Introduction ..................................................................................................................... 1 II. Purpose ........................................................................................................................... 1 III. Key Persons Involved in the Project ................................................................................ 2 IV. Processing History........................................................................................................... 3

1. PROJECT DEFINITION ...................................................................................................... 4

I. Sponsors, Stakeholders and External Agencies .............................................................. 4 II. Impact and Outcomes ..................................................................................................... 4 III. Outputs ............................................................................................................................ 4 IV. Change in Scope ............................................................................................................. 5

2. PROJECT MANAGEMENT ................................................................................................ 6

I. Project Organization Structure ......................................................................................... 6 II. Roles and Responsibilities ............................................................................................... 7

3. PROCUREMENT PLAN ...................................................................................................... 9

I. Process Thresholds and Reviews .................................................................................... 9 II. Indicative List of Packages Required Under the Project ................................................ 10 III. Advance Action and Retroactive Financing ................................................................... 10 IV. Updated Procurement Plan ........................................................................................... 10

4. SAFEGUARDS PLAN ...................................................................................................... 14

I. Environment .................................................................................................................. 14 II. Involuntary Resettlement ............................................................................................... 14 III. Indigenous People ......................................................................................................... 14 IV. Other Safeguards .......................................................................................................... 15

5. FINANCING PLAN ............................................................................................................ 16

I. ADB Financing, Fund Flow and Disbursement Arrangements ....................................... 16 II. Allocation Table ............................................................................................................. 17 III. Government Financing and Fund Flow .......................................................................... 17

6. INVESTMENT (COST) PLAN ........................................................................................... 18

I. Detailed Cost Estimate - Original ................................................................................... 18 II. Forecast of Cost to Complete ........................................................................................ 18

7. IMPLEMENTATION PLAN ............................................................................................... 19

I. Responsibility Allocation by Activity (Typical)................................................................. 19 II. Gantt Chart (for G0161-AFG) ........................................................................................ 20

8. PERFORMANCE MONITORING AND EVALUATION ...................................................... 21

I. Performance Indicators ................................................................................................. 21 II. Monitoring and Evaluation Report .................................................................................. 21

9. MAJOR COVENANTS ...................................................................................................... 22

I. Sector Covenants .......................................................................................................... 22 II. Financial Covenants ...................................................................................................... 23 III. Environmental Covenants.............................................................................................. 23 IV. Social Covenants .......................................................................................................... 24 V. Other Covenants ........................................................................................................... 25

10. ADDITIONAL FINANCING ............................................................................................ 26

I. Additional Financing and Scope .................................................................................... 26 II. Investment Plan and Additional Financing ..................................................................... 26 III. Implementation Arrangements ....................................................................................... 26 IV. Implementation Period ................................................................................................... 27 V. Procurement .................................................................................................................. 27 VI. Allocation and Withdrawal ............................................................................................. 32

APPENDIXES ........................................................................................................................... 33

PROJECT DESCRIPTION )

I. Introduction 1. The Project has two components: (i) design and construction of railway line and associated infrastructure; and (ii) project management, independent supervision, and institutional support. The construction involves a new 75 kilometers (km) railway line between Hairatan at the border with Uzbekistan and Mazar-e-Sharif in Afghanistan. 2. The Project will engage the central and the provincial governments. At the central level, it will help the Government strengthen the sector planning and management by developing a long term railway sector strategy. 3. The construction will be carried out by an engineering, procurement and construction (EPC) contractor, on a turnkey basis with fixed price and fixed time for delivery of the railway line. Once the line is constructed, tested, and accepted, the Government will sign an operation and maintenance (O&M) contract with the same EPC contractor. The Government will establish an executive committee to oversee the construction work, with representatives from the ministries of finance, public works, commerce and industry, transport and civil aviation. The executive committee will be chaired by a minister-level official.

II. Purpose 4. The purpose of this document is to help the project management organization and the project implementation unit with the implementation arrangements. The project implementation unit will be set up in Mazar-e-Sharif. 5. The document is referred to as the Project administration manual (PAM). This is an active document. It will be updated and revised progressively as and when necessary during each review mission and following any changes in project investment costs, scope, or implementation arrangements. The contents herein are intended to assist and facilitate project management and implementation. If there is any conflict with any other legal agreement(s) related to this Project the provision(s) in the legal agreement(s) will prevail. 6. The document is organized in to sections. Each section describes a specific aspect of implementation arrangement, the framework or structure (if applicable), the required actions and the policies and guidelines that apply to that section or actions. These sections are as follows:

Project Definition

Project Management

Procurement Plan

Safeguards Plan

Financing Plan

Investment (Cost) Plan

Execution Plan

Performance Monitoring and Evaluation

Major Covenants

Appendixes

2

III. Key Persons Involved in the Project

A. ADB Staff

7. The department responsible for the implementation is the Central and West Asia Department (CWRD), Transport and Communications Division (CWTC). Transport and Communications Division (CWTC) Central and West Asia Department (CWRD)

Mr. Hong Wang Director, CWTC Tel: +63 2 632 6765 Email: [email protected] Mr. Balabhaskara Reddy Bathula Senior Transport Specialist, CWTC Tel: +63 2 632 6950 Email: [email protected] Ms. Agnes Villasenor Senior Operations Assistant, CWTC Tel: +63 2 632 6391 Email: [email protected] Mr. M. Thiruchelvam Transport Specialist, AFRM Mob: +93 791930047 Tel: +93 752103602 Email: [email protected]

Office of the General Counsel (OGC) Mr. Baurzhan Konysbayev Counsel, Office of the General Counsel Tel: +63 2 632 4907 Email: [email protected]

Controller's Department Loan Administration Division (CTLA-3)

Mr. Yoshinobu Tatewaki Financial Control Specialist, CTLA-3 Tel: +63 2 632 4647 Email: [email protected]

Central Operations Services Office Consulting Operations Services Division 1 (COS1)

Mr. Yo Ikeda Procurement Specialist, COS1 Tel: +63 2 632 6838 Email: [email protected]

Address: Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila Philippines

Facsimile (CWTC): Website Address:

+63 2 636 2428 http://www.adb.org

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B. Executing Agency Ministry of Public Works (MPW) Mr. Najibullah Ozhan

Minister Tel: +079 273132

Address: Ministry of Public Works 1st Macrorayan, 1st Block Kabul, Islamic Republic of Afghanistan

Facsimile:

IV. Processing History

(i) Approval of TA 27 March 2009

(ii) Fact-Finding Mission 9–17 August 2009

(iii) Management Review Meeting 25 August 2009

(iv) Staff Review Committee Meeting 4 September 2009

(v) Loan and Grant Negotiations 10 September 2009

(vi) Board Circulation 14 September 2009

(vii) Board Consideration and Approval 30 September 2009

(viii) Grant Agreement Signing 30 September 2009

(ix) Grant Effectiveness, including Conditions 04 November 2009

Others (i) Change in Scope 16 June 2011 (ii) Additional Financing: - Negotiations 2–3 August 2011 - Board Circulation 30 August 2011 - Board Approval 20 September 2011 - Grant Signing 19 October 2011

4

1. PROJECT DEFINITION )

I. Sponsors, Stakeholders and External Agencies

8. The project is funded by the sponsors, it is implemented by the stakeholders and during implementation it will consult the external agencies.

(i) Sponsors:

Ministry of Finance (MOF) of Afghanistan

Asian Development Bank (ADB)

(ii) Stakeholders:

Executing agency o Ministry of Public Works and Project Implementation Unit.

Local Government (Balkh Province)

Executive committee o Ministry of Public Works (MPW) o Ministry of Commerce and Industry (MOCI) o Ministry of Interior (MOI)

(iii) External agencies:

Ministry of Interior (MOI)

Ministry of Transport and Civil Aviation (MOTCA)

State Committee for Environmental Protection-National Environment Protection Agency

Association of Freight forwarders, Afghanistan

Association of Trade and Industries, Afghanistan

Association of Businesses, Mazar-e-Sharif

Resident Community in Hairatan and Mazar-e-Sharif

II. Impact and Outcomes

9. The expected impact is greater economic growth and increase in trade between Afghanistan and the region. The expected outcome is a more efficient, safe, and sustainable railway transport network, which will increase transport volumes and reduce transport costs. This will improve regional cooperation and integration in Central Asia.

III. Outputs

10. The project has three components: (i) Component 1 – Railway design and construction; (ii) Component 2 – Institutional development and (iii) Component 3 – Operation and Maintenance services. The outputs of each component are listed below:

5

(a) Railway design and construction. The Project will construct a 75 km railway line and support infrastructure and facilities. The outputs are:

Upgraded marshaling yard and railway station at Hairatan;

New single-line of 75 km;

Railway station and transshipment facilities at Mazar-e-Sharif;

Signaling and telecommunication systems; and

Safety facilities.

(b) Institutional development. This component will cover project management, construction supervision, and institutional support. An advisor will be recruited and tasked with developing a draft:

Railway sector institutional plan;

Railway legal and regulatory framework;

O&M agreement; and

Training program.

(c) Operation and Maintenance services. This component covers the operation of 75 km railway line and maintains the new railway infrastructure and facilities.

IV. Change in Scope

11. A minor change in Project scope has been approved on 16 June 2011, (i) to include Project’s railway operations and maintenance (O&M) and ancillary infrastructure, (ii) resulting reallocation of grant proceeds, and (iii) extension of the closing date for one year until 31 December 2012. Reallocation of funds is detailed in the Table below:

Reallocation of Grant Proceeds (US$)

Category Current Allocation Reallocation Revised Allocation

Consultants 6,200,000 (1,000,000) 5,200,000

Civil Works (Turn Key) 142,693,746 10,000,000 152,693,746

Project Management 5,500,000 (2,500,000) 3,000,000

Operations and Maintenance Support 4,000,000 4,000,000

Unallocated (Contingency) 10,606,254 (10,500,000) 106,254 Total Grant 165,000,000 165,000,000

6

2. PROJECT MANAGEMENT

I. Project Organization Structure

(i) Project Organization Structure

(ii) Project Implementation Unit (PIU) – Organization Chart

Executive Committee

(Ministry of Finance, Ministry of Public Works, Ministry of Commerce & Industry, Ministry of

Mines, and Ministry of Interior)

Institutional Development

Ministry of Public Works

(PIU in Mazar-e-Sharif)

Construction


and Ministry of Commerce and Industry

O&M

Ministry of Interior

Security

Executive Committee

Project Implementation Unit Project Director

Financial and MIS

EPC Contractor and Rail services Operator

Design Review & Supervision Consultant and O&M Inspector

Environmental and Social

Administration and Support

Engineering, Quality Control

Asian Development Bank (Afghanistan Resident

Mission)


7

2. PROJECT MANAGEMENT )

II. Roles and Responsibilities

12. Executive Committee’s roles and responsibilities:

Chair of the committee will be a Minister-level Official;

Convene meetings as necessary – monthly at minimum – and monitor progress and assist resolve issues that cannot be dealt at PIU level;

Accountable for putting in place the Institutional setup and capacity building.

Accountable for timely construction and delivery of the Railway line.

Provide overall direction and guidance, resolve issues brought up to committee including those that will impact the delivery time, and ensure the timely implementation of the construction and security related issues.

13. Ministry of Public Works’ (Executing agency) roles and responsibilities:

Setup Project Implementation Unit in Mazar-e-Sharif and ensure independent functioning of PIU;

Recruit a qualified and highly competent Project Director;

Procure and contract the EPC contractor;

Recruit the Design review & supervision consultant

Recruit or second highly competent resources to the PIU for (i) Engineering and Quality Control; (ii) Financial and MIS; (iii) Environmental and Social Safeguards; and (iv) Administration and Support;

Through Ministry of Interior, provide security during the implementation period to the Project and all persons (staff, contractor, and consultant); and

Coordinate with all the external agencies and provide technical and administrative back-up support to the Project Implementation Unit.

14. Project Implement Unit (PIU)’s roles and responsibilities:

Project Director will be the head of PIU;

PIU will report directly to the Executive committee and functionally to (a) Ministry of Public Works, and (b) Asian Development Bank (Afghanistan Resident Mission);

Prepare detail construction activity schedule and deliver the railway line on time.

Carry out diligently and monitor resettlement activities as specified in SLARP;

Ensure all positions in the PIU organization chart are filled with competent staff;

Supervise and coordinate the activities of (i) Design review and Supervision consultant, (ii) EPC contractor, (iii) Engineering and Quality Control, (iv) Financial & MIS (including withdrawal applications); (v) Administration and Support; (vi) Environmental and Social;

Put in place a Performance monitoring and evaluation system, and ensure reports are produced quarterly and reported to (i) Executive Committee, (ii) Ministry of Public Works, and (iii) Asian Development Bank;

Monitor the activities and mitigation measures required under social, gender and environmental impact obligations of the project; and

Prepare the project accounts, arrange for the independent annual audit of the project accounts, and submit the audited project accounts to ADB.

8

15. Security Arrangements:

The Executive Committee will coordinate the security arrangements, monitor implementation, and ensure all administrative requirements are in place for security at all levels and times.

Ministry of Interior (MOI) is responsible for providing the necessary security assessment and arrangement to the Project and all parties involved in the Project.

Ministry of Public Works, through MOI, must arrange for security assessments through International Security Assistance Force and share the information with the EPC contractor and Asian Development Bank-AFRM, Field Security office.

Ministry of Public Works, through MOI, will provide security to EPC contractor’s camps, project design teams, and construction staff.

MPW should coordinate with MOI and EPC contractor, to facilitate an agreement on the security arrangements

EC should ensure on the security arrangements agreed between the MOI/MPW and EPC contractor.

16. O and M Inspector:

Periodic inspection of rail operational services and maintenance of rolling stock with respect to the standards included in the O&M contract

Periodic inspection of maintenance services of rail infrastructure with respect to the standards included in the O&M contract

Verification of tonnage of goods carried and revenues generated and various reports submitted by the Operator, as required by the O&M contract.

Verification and certification of Operator invoices before submitting to MPW/MoF

Verification and certification of Operator invoice on gap funding to be sent to ADB through MPW/MoF

Providing appropriate advise on training and technical and contractual matters to the MPW/MoF

Other services required by the O&M contract

9

3. PROCUREMENT PLAN

)

I. Process Thresholds and Reviews

A. Thresholds

17. 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

Direct Contracting None

B. Reviews

18. 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.


Procurement Method Prior or Post Comments

Direct Contracting Prior

Recruitment of Consulting Firms

Quality-and-Cost-Based-Selection (QCBS) Prior

Other selection methods: Consultants Qualifications (CQS), Least-Cost Selection (LCS), Fixed Budget (FBS), and Single Source (SSS).

Prior

Recruitment of Individual Consultants

Individual Consultants Prior Individual Consultants may be selected on an ad-hoc basis to provide intermittent and independent service on the projects.

C. Sourcing of Materials (Rail Track Components)

19. Rail track components procured from non-member countries of ADB members are eligible for financing under the Project. The Report and Recommendation of the President in the recommendation paragraph reflects this exception.

10

3. PROCUREMENT PLAN )

II. Indicative List of Packages Required Under the Project

20. The following table provides an indicative list of all procurement (goods, works, and consulting services) over the life of the Project. Contracts financed by the Borrower and others should also be indicated, with an appropriate notation in the comments section.

III. Advance Action and Retroactive Financing

21. Advance contracting and retroactive financing is allowed for works and consulting services. Advance contracting allows Government and the executing agency (Ministry of Public Works) to commence procurement activities. 22. Retroactive financing of up to 20% of the grant amount is allowed for financing eligible expenditures incurred during the period not exceeding 12 months prior to signing the grant agreement.

IV. Updated Procurement Plan

23. Following the minor change in scope approval on 16 June 2011, to include Project’s railway operations and maintenance (O&M) and ancillary infrastructure, and resulting reallocation of grant proceeds, the procurement plan has been updated as presented below:

General Description

Estimated Value

(cumulative, million)

Estimated Number of Contracts

Procurement Method

Domestic Preference Applicable

Comments

Goods & Works Design, procure, and construct

$130 1 Direct Contracting

No To UTY

General Description

Estimated Value



Recruitment Method

Type of Proposal

Comments

Consulting Services

$4.7 2 QCBS; Individual

FTP

11

3. PROCUREMENT PLAN )

Basic Data

Project Name: Hairatan to Mazar-e-Sharif Railway Project Country: Afghanistan Executing Agency: Ministry of Public Works Grant Amount: $165 million Grant Number: Date of First Procurement Plan: 16 August 2009 Date of this Procurement Plan: 10 June 2011

A. Process Thresholds, Review and 18-Month Procurement Plan

1. Project Procurement Thresholds

1. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works.


Method Threshold

Direct Contracting None

2. ADB Prior or Post Review

2. 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. Procurement Method Prior or Post Comments


Direct Contracting Prior


Quality- and Cost-Based Selection (QCBS) Prior Other selection methods: Consultants Qualifications (CQS), Least-Cost Selection (LCS), Fixed Budget (FBS), and Single Source (SSS)

Prior


Individual Consultants Prior Individual Consultants may be selected on an ad-hoc basis to provide intermittent and independent service on the projects

3. Goods and Works Contracts Estimated to Cost More Than $1 Million

3. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

12

General Description

Contract Value

(million)

Procurement Method

Prequalification of Bidders (y/n)

Advertisement Date

(quarter/year)

Comments

Design, procure, and construct Operation & Maintenance

$152

1

$1002

Direct Contracting

Direct Contracting

No

No

3rd Quarter 2009

Direct contract to

UTY

SE Sogdiana Trans (UTY-

controlled entity)

4. Consulting Services Contracts Estimated to Cost More Than $100,000

4. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

General Description

Contract Value

(million)

Recruitment Method

Advertisement Date

(quarter/year)

International or National Assignment

Comments

Design review and Construction Supervision

$4.0 QCBS (90:10) 3rd Quarter 2009 International with domestic

TOR's included in Supplementary

Appendix A 200 person

months

Advisors

$0.7

Individual

4th Quarter 2009

International

10 person months

5. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000

5. The following table groups smaller-value goods, works and consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description

Value of Contracts

(cumulative)

Number of Contracts

Procurement / Recruitment

Method

Comments

Not applicable

1 The expected costs of O&M infrastructure facilities and ancillary works have been added to this contract. These

works will be carried out as variation order to the construction contract of UTY 2 ADB’s financing under this grant proceeds will be limited to $ 4 million. The remaining will be financed by the Government through revenue to be generated during three-year contract period.

13

B. Indicative List of Packages Required Under the Project

6. The following table provides an indicative list of all procurement (goods, works, and consulting services) over the life of the Project. Contracts financed by the Borrower and others should also be indicated, with an appropriate notation in the comments section.

7. Review of Contract Modifications. ADB will review contract modifications in accordance with the procedures set forth in the grant agreement between the Recipient and ADB.

General Description

Estimated Value



Procurement Method


Comments

Works

Design, procure, and construct

Operation & Maintenance

$152

$100

1

1

Direct Contracting

Direct Contracting

No

No

To UTY

SE Sogdiana Trans (UTY-controlled entity)

General Description

Estimated Value



Recruitment Method

Type of Proposal Comments

Consulting Services

$4.7

2

QCBS; Individual

FTP

14

4. SAFEGUARDS PLAN

I. Environment

24. The Project is classified as category B according to ADB’s Environmental Policy (2002) and Environmental Assessment Guidelines (2003). 25. Initial environmental examination (IEE), has been carried out for the Project (Supplementary Appendix F of the RRP). 26. The Project will have no major long-term adverse impact on the environment. Short-term impacts are considered insignificant and temporary and will be mitigated by the proposed mitigation measures and environmentally sound engineering and construction practices. 27. The environmental mitigation and monitoring procedures in the environmental management plan (EMP) will be followed. MPW will ensure that the EMP is incorporated in the bidding documents. 28. MPW, through the PIU, will be assisted by the supervision consultant to, (i) monitor and record the implementation of the EMP prepared for the Project, under the guidance of the State Committee for Environmental Protection-National Environment Protection Agency. (ii) supervise and monitor the implementation of mitigation measures during construction, and (iii) implement the environmental monitoring plan including reporting requirements. 29. A report on the implementation of the EMP during construction will be submitted to ADB every 6 months.

)

II. Involuntary Resettlement

30. The Project entails minor resettlement as the impact of the railway route is only on 2 vacant plots. 31. The Project has been classified B for resettlement purposes. A short land acquisition and resettlement plan (SLARP) was prepared (Supplementary Appendix D of the RRP) 32. The SLARP was reviewed and approved by ADB, and also disclosed at site 33. The resettlement will be monitored by MPW, with the help of international resettlement expert

)

III. Indigenous People

34. None of the people affected by the Project belongs to groups classified as indigenous people under ADB's Policy on Indigenous People (1998). 35. The Project has been categorized as C for impacts on indigenous peoples.

15

IV. Other Safeguards

36. Labor, gender, health, and social protection:

Ministry of Public Works, will include a specific provision in the EPC contract to ensure that civil works subcontractors (a) comply with applicable core labor standards and labor laws, and incorporate applicable workplace occupational safety norms; (b) do not differentiate payment between men and women for work of equal value; (c) do not employ child labor in construction and maintenance activities; (d) eliminate forced or compulsory labor; (e) eliminate discrimination in respect of employment; (f) allow freedom of association; and (g) to the extent possible, maximize employment of local poor and disadvantaged persons for project construction, provided that the requirements for job and efficiency are adequately met. Ministry of Public Works will ensure that appropriate entities-for example nongovernment organizations-disseminate information on the risks of sexually transmitted infections, including HIV/AIDS, to the employees of civil works contractors engaged under the Project and to members of the local communities surrounding the project railway, particularly females.

Ministry of Public Works will ensure that the Project is implemented (a) in compliance with ADB's Policy on Gender and Development (1998); (b) necessary steps are taken to encourage women living in the project area to participate in the Project related activities; (c) in consultation with local governments and communities, and nongovernment organizations, independent monitoring is carried out of the social impacts throughout implementation of the Project.

16

5. FINANCING PLAN )

I. ADB Financing, Fund Flow and Disbursement Arrangements

37. Total project financing initially was $170 million. ADB provided $165 million grant financing from its Special Fund resources for the project. The Government provided the balance $5 million. Source Amount

($ million) Share (%)

ADB - Asian Development Fund Grant

165

97

Government of Afghanistan

5

3

Total 170 100

38. The Funds flow diagram is shown below: 39. The disbursement arrangements specified below are those in the Report and Recommendation to the President. Deviations, if any, must be notified and approved in advance by ADB’s Controller’s department:

All grant disbursement must be in accordance with ADB’s Loan Disbursement Handbook;

Asian Development Bank Ministry of Finance

Project Implementation Unit/O&M Inspector, MPW

EPC Contractor and Consultant/ Operator

Funds Flow

Withdrawal Application

Direct Payment

Imprest Fund ($)

Imprest

Fund (Local)

17

Direct payment procedures will be used for large civil works contracts and consulting services;

Ministry of Finance will establish an imprest account for PIU at a commercial bank acceptable to ADB;

Initial advance to the imprest account will be the lower of (i) estimated eligible project expenditures for the next 6 months which are to be paid through the imprest account or (ii) 10% of the grant amount; and,

Statement-of-expenditure (SOE) procedure will be used to reimburse eligible expenditure and to liquidate and replenish the imprest account for individual payments of $100,000 and below.

The withdrawal for O&M from ADB will only be made for gap funding (if the annual revenue is less than the operator fee), with appropriate certification from the Inspector appointed under O&M contract.

)

II. Allocation Table

40. Reallocation based on change in scope approved on 16 June 2011.

REALLOCATION AND WITHDRAWAL OF GRANT PROCEEDS

CATEGORY PERCENTAGE OF BANK FINANCING

Number Item Amount Allocated

$ Percentage

Basis for Withdrawal from the Grant Account

1 Turnkey contract 152,693,746 100 of total expenditure claimed*

2 Consulting Services 5,200,000 100 of total expenditure claimed*

3 Operation & Maintenance support

4,000,000 100 of total expenditure claimed*

4 Project management support


5 Unallocated 106,254

TOTAL 165,000

* Excluding taxes and duties imposed within the territory of the Recipient

III. Government Financing and Fund Flow

41. The Government will provide $5 million to cover costs of land acquisition, resettlement, taxes and duties.

18

6. INVESTMENT (COST) PLAN )

I. Detailed Cost Estimate - Original

Item Amounta

A. Base Cost

1. Railway Construction

a. Land acquisition and resettlement 0.5

b. Civil and railway works 130.0

c. Design review and supervision 4.0

2. Institutional Development 0.7 3. Taxes and duties 4.5 Subtotal (A) 139.7

B. Recurrent Costs 1. Project management 0.5

Subtotal (B) 0.5 Total (A+B) 140.2

C. Contingenciesb

29.8

Total Project Costs (A+B+C) 170.0 a In mid-2009 prices.

b Contingencies include provisional budget for environmental monitoring and security

arrangement.

II. Forecast of Cost to Complete

Total

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Q4

2010

FY

2011

FY

2012

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Q4

2010

FY

2011

FY

2012

Base Costs:

Land Acquisition & Resettlement

Turnkey Contract

Consulting Services

Recurrent Costs:

Project Management Support

Contingencies:

Total

Contract Awards Disbursements

19

7. IMPLEMENTATION PLAN )

I. Responsibility Allocation by Activity (Typical)

Level 1 Level 2 Ref. EC MPW MOI MOCI PIU Cons. Cont.

1. Project Startup

1.1 Set up Executive Committee

1.2 Set up Project Implementation Unit

1.3

2.

2.1

2.2

2.3

2.4

3. Railway Line Construction

3.1

3.2

3.3

4. Railway Sector and Institutional Development

4.1

4.2

4.3

4.4

5.

5.1

5.2

5.3

20

7. IMPLEMENTATION PLAN )

II. Gantt Chart (for G0161-AFG)

Q 1 Q 2

Q 3 Q 4

Q 1 Q 2

Q 3 Q 4

Q 1 Q 2

Q 3 Q 4

Advance Action

Procurement of Civil and Railway Works - Design and Build

Procurement of Design Review and Supervision Consultants

ADB No Objection

Railway Line Construction

Detailed Design, Engineering , and documentation

Land Acquisition and Resettlement

Civil Works Construction

Track Laying

Telecommunications and S ignaling

Trial Operations - Testing and Commissioning

Railway S ector and Institutional Development

Procurement of Railway Advisor (Sector and O and M)

Procurement of Railway Advisor (Legal)

Item

2009 2010

2011

21

8. PERFORMANCE MONITORING AND EVALUATION

)

I. Performance Indicators

42. The project outputs and deliverable are as follows:

(i) About 75 km of a new railway line and stations between Hairatan and Mazar-e-Sharif constructed and operated: (a) Railway line meeting the specifications of gauge (1520 mm) (b) Marshalling yard at Hairatan Station upgraded to handle 20,000 ton per

day from 5,000 ton per day (2008) (c) Railway signaling and telecommunication system installed

(ii) Railway sector plan endorsed by the Government, railway institution established

and capacity building: (a) Long term railway development plan developed and reviewed by the

Government (b) Railway legal framework and regulations drafted and reviewed by the

Government (c) O&M agreement signed between UTY and the Government (d) 30 staff trained on railway operation and maintenance

II. Monitoring and Evaluation Report

43. MPW through PIU, assisted by the design review and construction supervision consultant, will develop a project performance monitoring system within 3 months from Project commencement, which will contain baseline values of indicators, targets, and milestones corresponding to the expected impacts, outcome, outputs, and activities identified in the design and monitoring framework, and other relevant measures agreed between ADB and MPW. 44. The design review and supervision consultants will help PIU compile periodic data on key indicators on physical components of the Project. Data will be analyzed and results of the analyses and corrective measures (if any) taken will be reported in PIU's quarterly progress report. The quarterly progress reports will also include physical progress, disbursements, problems (if any) encountered, actions taken, and activities planned for the following quarter. MPW through PIU will also perform a complete analysis of related primary and secondary data on impacts and outcomes within 1 month of completion of the Project. The results of that analysis will be contained in the Government's project completion report to ADB, which will be submitted within 3 months of completion of the Project.

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9. MAJOR COVENANTS )

I. Sector Covenants

45. The major legal covenants are as follows – refer Grant agreement for the complete list: 1. Project Executing Agency and Project Implementing Agency

The Recipient shall designate MPW as the Project Executing Agency with responsibility for the overall Project coordination and implementation, and liaison with ADB and government agencies concerned. MPW shall be directly responsible for the construction of railway line under the Project. An Executive Committee, chaired by a Minister-level public official and comprising representatives from the MOF, MPW, MOF, Ministry of Interior, Ministry of Commerce and industry, and other relevant government ministries and agencies, shall be formed by Grant effectiveness to provide policy guidance on the implementation of the Project activities, to monitor its impacts, and to ensure close inter-ministerial coordination (Schedule 4, para. 1 of the GA)

2. Project Implementation Unit The Recipient shall ensure that, the Project Implementation Unit (PIU) is established at Mazar-e-Sharif to undertake day-to-day Project management and implementation functions including: (i) monitoring the progress of Project implementation, including policy and monitoring activities; (ii) preparing Grant withdrawal applications and Project progress reports to MPW and ADB; (iii) maintaining Project accounts and completing Grant financing records for auditing the Project; (iv) carrying out the due diligence and procurement of consulting services, training, and equipment for the Project activities; and (v) developing the Project Performance Management System and Gender Action Plan and monitoring their implementation.

The Recipient shall ensure that at all times throughout Project implementation, PIU is adequately staffed with professional and clerical personnel with the necessary experience and expertise in finance, accounting, treasury, information technology (IT) systems, procurement and contract administration. (Schedule 4, para. 2 & 3 of the GA)

3. Construction quality The Recipient shall ensure or cause MPW to ensure that (i) the Project railway is rehabilitated or constructed in accordance with the design and technical specifications; and (ii) construction supervision, quality control and contract management are performed in accordance with applicable standards and best international practices. (Schedule 4, para. 5 of the GA)

4. Performance targets The Recipient shall ensure that the works contract incorporates specific implementation milestones and targets with appropriate reward and penalty provisions to provide reasonable economic stimuli for timely and qualitative Project completion. (Schedule 4, para. 6 of the GA)

5. Railway operation and maintenance The Recipient shall use its best efforts to enter into a performance-based time-bound operation and maintenance contract for the railway section between Hairatan and Mazar-e-Sharif by 31 October 2010. (Schedule 4, para. 7 of the GA)

6. Railway safety The Recipient shall ensure that works contracts will include the contractor’s obligation to comply with safety measures during construction and operation. The Recipient shall ensure that the accident rate after commencement of operation of the Project railway is monitored and reported to ADB. (Schedule 4, para. 8 of the GA)

7. Institutional Reform The Recipient shall ensure that a railway subsector restructuring plan contemplating gradual and phased

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disassociation from the Government to attain the railway system's financial and operational independence is developed by Project's completion. (Schedule 4, para. 10 of the GA)

II. Financial Covenants

46. The major financial related covenants are as follows – refer Grant agreement for the complete list: 8. Funding and O & M

The Recipient shall ensure that: (a) additional funding will be provided for successful Project completion; and (b) in each fiscal year adequate funds are allocated and/or generated for operation and maintenance (O&M) of the Project facilities in accordance with international best engineering and O&M practices. (Schedule 4, para. 4 of the GA)

9. Financial management The Recipient shall cause MPW to establish and maintain a sound financial management system, including establishing separate bank accounts and maintenance of minimum balances to ensure smooth cash flow and the timely settlement of potential project construction liabilities. The financial management system shall comprise (a) financial planning, budgeting and budgetary control; (b) accounting consistent with internationally applicable standards; (c) internal control; (d) data processing; and (e) financial reports. (Schedule 4, para. 9 of the GA)

III. Environmental Covenants

47. The major environmental safeguards related covenant is as follows: 10.

The Recipient shall ensure that potential adverse environmental impacts arising from the Project are minimized by implementing all the mitigation measures presented in the IEE and environmental management plan (EMP). The Recipient shall also ensure that the design, construction, and operation of the Project are in accordance with ADB’s Environment Policy (2002) and applicable environmental laws and regulations. Specifically, the Recipient shall ensure and shall cause the EA to ensure that:

(a) The contractor has primary responsibility for implementing the mitigation measures and EMP. The PIU head has access to sufficient resources to draft suitable conditions of contract to ensure that all environmental management provisions are included in the tender and design-build documents.

(b) The PIU monitors and records the implementation of the EMP prepared for the purposes of the Project, under the guidance of the State Committee for Environmental Protection – National Environment Protection Agency (NEPA).

(c) The PIU with the assistance of the project management and supervision consultant prepares semiannual environmental reports and submits to ADB, within 3 months of the close of each half of the calendar year, from the start of project implementation and until completion of the Project. The report will include, among other things, a review of progress made on environmental measures detailed in the IEE, EMP, and monitoring thereof; and problems encountered and remedial measures taken.

(d) Detailed engineering designs, civil works, and other contracts for the project facilities incorporate applicable environmental measures identified in the IEE, summary IEE, and EMP.

(e) Works contractors are supervised to ensure compliance with the requirements of the IEE and EMP.

(Schedule 4, para. 15 of the GA)

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IV. Social Covenants

48. The major social safeguards related covenant is as follows: 11. Involuntary Resettlement

The Recipient shall ensure and shall cause MPW to ensure that (i) the Project will implement LARP and follow ADB’s Involuntary Resettlement Policy (1995), (ii) subsequent to awarding civil works contract under the

Project, no notice to proceed is issued to contractors for respective sections or parts of the Project until the applicable provisions of the LARP (including in particular the timely delivery of compensation to affected families) and EMP have been implemented in accordance with their terms. The Recipient shall ensure that the Project is carried out in accordance with the Government's applicable laws and regulations, ADB's Involuntary Resettlement Policy including the following provisions:

(a) LARP shall be prepared in consultation with, and disclosed to, the affected persons. (b) All land and rights of way required by the Project shall be acquired and made available in a timely manner. (c) All compensation and resettlement assistance shall be provided to affected persons prior to their displacement and dispossession. (d) Efficient grievance redressal mechanism shall be in place in accordance with the LARP to assist affected persons in resolving queries and complaints if any, in a timely manner. (e) Adequate staff and resources shall be made available for supervising and monitoring implementation

of the LARP. An independent monitor acceptable to ADB shall be engaged to carry out external monitoring and evaluation of the LARP and report the outcomes to ADB semiannually. Semiannual reports shall be submitted to ADB within 3 months of the end of each period covered. The internal monitoring shall be carried out by MPW.

(f) If during implementation of the LARP, any changes to the location, railway alignment, or additional environmental and/or resettlement impacts are identified, the LARP shall be updated and prior approval by ADB and the relevant government agency shall be obtained before further implementation of the LARP.

Any changes to the location, land alignment of railway, or environmental impacts on account of detailed designs of related projects will be subject to prior approval by ADB and the relevant government agency. (Schedule 4, para. 19 of the GA)

12. Labor and Gender The Recipient, through MPW, shall ensure that works contractors (a) comply with applicable core labor standards and labor laws, and incorporate applicable workplace occupational safety norms; (b) do not differentiate payment between men and women for work of equal value; (c) do not employ child labor in construction and maintenance activities; (d) eliminate forced or compulsory labor; (e) eliminate discrimination in respect of employment; (f) allow freedom of association; and (g) to the extent possible, maximize employment of local poor and disadvantaged persons for project construction, provided that the requirements for job skills and efficiency are adequately met. The Recipient shall ensure that appropriate entities-for example nongovernment organizations-disseminate information on the risks of sexually transmitted infections, including HIV/AIDS, to the employees engaged under the Project and to members of the local communities in the Project area. Relevant works contracts financed under the Project must include specific clauses on these undertakings, and compliance will be strictly monitored during implementation..

The Recipient, through MPW, shall ensure that (i) Project is implemented in compliance with ADB's Policy on Gender and Development (1998); (ii) necessary steps are taken to encourage women living in the project area to participate in the Project related activities; and (iii) in consultation with local governments and communities, and nongovernment organizations, independent monitoring is carried out of the social impacts throughout implementation of the Project. The Recipient shall ensure that relevant government agencies provide strict border controls and road patrols to prevent trafficking of humans, wildlife, endangered species, and illegal substances on roads, where construction, rehabilitation or improvement is financed by the Project. (Schedule 4, para. 16, 17 and 18 of the GA)

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V. Other Covenants

49. The other related covenant is as follows: 13. Auditing

The Recipient, through MPW, shall ensure that the financial statements of the Project accounts will be audited annually according to the international standards and ADB requirements. A separate auditor’s opinion on the use of imprest account and statement of expenditure will be incorporated in the audit reports.

14. Change in Ownership and Operation If any of the following is anticipated: (i) any change in ownership of the railway, road facility, or structure financed under the Project; (ii) any sale, transfer, or assignment of interest or control in the railway, road facility, or structure financed under the Project; or (iii) any lease or other contract or modification of the functions and authority of the MPW over operation and maintenance of any railway, road facility, or structure financed under the Project; then the Recipient shall ensure that ADB’s consent is obtained at least six (6) months prior to the implementation of such a plan. The Recipient shall ensure that any such changes will be carried out in a legal and transparent manner. (Schedule 4, para. 11 of the GA)

15. Anticorruption The Recipient shall comply with ADB’s Anticorruption Policy (1998, as amended to date) for the purposes of the Project. The Recipient, consistent with its commitment to good governance, accountability and transparency, agrees (a) that ADB reserves the right to investigate, directly or through its agents, any alleged corrupt, fraudulent, collusive or coercive practices relating to the Project and (b) to cooperate fully with any such investigation and to extend all necessary assistance. The Recipient shall ensure or caused to be ensured that all contracts financed by ADB under the Project include provisions specifying the right of ADB to audit and examine the records and accounts of the MPW and all contractors, suppliers, consultants, and other service providers as such records and accounts relate to the Project. (Schedule 4, para. 12 of the GA)

16. Project monitoring, review, and reporting The Recipient, through MPW, shall monitor and evaluate the Project's benefits and impacts and their distribution in accordance with the design and monitoring framework agreed between the Recipient and ADB. (Schedule 4, para. 13 of the GA)

17. Security The Recipient shall undertake its best efforts to provide adequate security and de-mining measures for the smooth and uninterrupted implementation of the Project. In addition, the Recipient shall ensure that the Works contracts require an action plan for adequate security and smooth and uninterrupted implementation of the Project, that the cost of implementing such a plan is included in the budget for such works, and that such a plan is fully implemented. (Schedule 4, para. 14 of the GA)

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10. ADDITIONAL FINANCING )

I. Additional Financing and Scope 50. The Government has requested additional ADB funds for O&M support activities including operator fees to cover revenue gaps, and additional civil/track works including equipment required to support O&M of new railway line. Accordingly, it is proposed to construct freight yard where-house, rolling stock maintenance depot and ancillary works along the new railway line and provide goods handling equipment, including related design, construction supervision and inspector consulting services and civil works. ADB’s additional financing will be used towards payment to the Operator as revenue gap if the revenue from tariff’s is below the annual operator fees, additional works and handling equipment. Additional civil works and equipment required will be carried out under a variation to the construction contract.

II. Investment Plan and Additional Financing

51. The additional investment cost is estimated at $129.5 million equivalent. The government has requested an additional financing of $33 million in the form of a grant to finance the additional scope. The government will provide $95 million to cover the O&M fees, taxes and duties, and security support cost of the project. The total amount of additional financing requested for the Railway Project is $33 million as outlined in the Table below.

Additional Financing ($ millions)

Item Cost Components Amount

A. Base Cost 1. Operation and Maintenance Services

a 13.0

2. Operation and Maintenance Equipmentb 5.0

3. Railway Civil Worksb 10.0

4. Inspection Consultants / Inspectorsb 2.0

B. Contingenciesb 3.0

Total (A+B) 33.0

Source: Asian Development Bank estimates

III. Implementation Arrangements

52. The current Railway Project implementation arrangements will continue. The Ministry of Public Works (MPW) will continue to be the Executing Agency (EA) responsible for overall project implementation. The program management office (PMO) in MPW will coordinate the project management office (PMO) and be responsible for procurement, withdrawals, and reporting to ADB. To expedite project implementation, advance contracting and retroactive financing for eligible civil works, equipment and consulting services is proposed.

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IV. Implementation Period

53. The project will be implemented over a period of three years and be completed by December 2014. The O&M activities are expected to start in September 2011. The grant account will be closed by 30 June 2015.

V. Procurement

54. It is proposed that the O&M services included in the change in scope would be provided under the existing O&M contract between the government and the UTY operator – SE Sogdiana Trans (SEST). Given UTY’s role as EPC contractor for all design and civil works to date under the Railway Project, it is proposed to undertake the additional civil and track works under a variation to the existing contract no. MPW/ADB/0161/001. Railway O&M equipment will be procured under ICB in accordance with ADB’s Procurement Guidelines (2010, as amended from time to time). A consulting firm, to provide railway inspection services will be recruited under QCBS in accordance with Guidelines on The Use of Consultants by Asian Development Bank and Its Borrowers (2010, as amended from time to time). Detailed procurement plan is given below.

Procurement Plan3 for Additional Financing

Basic Data Project Name: Hairatan to Mazar-e-Sharif Railway Project Country: Afghanistan Executing Agency: Ministry of Public Works Grant Amounts: $33 million Grant Number: G0161-AFG Date of First Procurement Plan: 10 Sept 2009 Date of this Procurement Plan: 3 August 2011

A. Process Thresholds, Review and 18-Month Procurement Plan

1. Project Procurement 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 Above $1,000,000 International Competitive Bidding for Goods Above $500,000 National Competitive Bidding (NCB) for Works Below that stated for ICB, Works National Competitive Bidding for Goods Below that stated for ICB, Goods Shopping for Works Below $100,000 Shopping for Goods Below $100,000 Direct Contracting None

2. ADB Prior or Post Review

Except as ADB may otherwise agree, the following prior or post review requirements apply to the procurement and consultant recruitment methods used for the project. Civil works contracts will be procured through ICB using post qualification. ADB’s prior review procedures will be followed.

3 Procurement plan will be revised annually.

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Procurement Method Prior or Post Comments


ICB Works Prior ICB Goods Prior NCB Works Post Prior review of first procurement NCB Goods Post Prior review of first procurement Shopping for Works Post Shopping for Goods Post


Quality- and Cost-Based Selection (QCBS) Prior Quality Based Selection (QBS) Prior Upon the necessity


Individual Consultants Prior Individual Consultants may be selected on an ad-hoc basis to provide intermittent and independent service on the projects

ADB = Asian Development Bank, ICB = international competitive bidding, NCB = national competitive bidding, QBS = quality-based selection, QCBS = quality- and cost-based selection.

3. O&M Services, Goods, and Works Contracts Estimated to Cost More Than $1 Million

The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. The detailed procurement schedule is shown in Attachment 1.

General Description Contract

Value

($ million)

Procurement Method

Prequalification of Bidders

(y/n)

Advertisement Date

(quarter/year)

Comments

1. O&M Services

Railway Operation and Maintenance (O&M) for 3 years

100a Directb

N Q2/2011 UTY group operator – `SE

Sogdiana Trans’

2. Civil Works

Ancillary Railway Civil Works

10.0 Direct N Q4/2011 UTY group

3. Goods

Rail O&M handling equipment/machines

5.0 ICB N Q3/2011

ADB = Asian Development Bank, ICB = international competitive bidding, km = kilometers; N = no, y/n=yes/no, q=quarter. a ADB’s financing for O&M gap funding will be limited to $17 million. The remaining amount will be generated by the

operator through tariffs for service over a three year contract period b

ADB. 2009. Report and Recommendation of the President to the Board of Directors on the proposed Asian Development Fund Grant to the Islamic Republic of Afghanistan for the Hairatan to Mazar-e-Sharif Railway Project. Manila.

4. Consulting Services Contracts Estimated to Cost More Than $100,000

The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

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General Description Contract Value

($ million)

Recruitment Method

Advertisement Date

(quarter/year)

International or National Assignment

Comments

Railway O&M inspector services

2.0 QCBS

Q3/2011 International and regional

90:10

FTP = Full Technical Proposal, O&M = operation and maintenance; QCBS = quality- and cost-based selection,

q=quarter.

5. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000

The following table groups smaller-value goods, works and consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

General Description

Value of Contracts (cumulative)

Number of Contracts Procurement / Recruitment

Method1

Comments

Not applicable

B. Indicative List of Packages Required Under the Project

The following table provides an indicative list of all procurement (goods, works, and consulting services) over the life of the project. Contracts financed by the Recipient and others should also be indicated, with an appropriate notation in the comments section.

General Description

Estimated Value

(cumulative)


Procurement Method


Comments

O&M Services

Railway Operation and maintenance (O&M) for three years

100a 1 Direct Contract

signed with SE

Sogdiana Trans

Works

Ancillary Railway Civil Works

10.0 1 Direct UTY group

Goods

Railway O&M handling equipment/ machines

5.0 1 ICB

General Description

Estimated Value

(cumulative)


Recruitment Method Type of Proposal Comments

Consulting Services

Railway O&M inspector services

2.0 1 International QCBS

FTP

ADB = Asian Development Bank, FTP = Full Technical Proposal, ICB = international competitive bidding, O&M = operation and maintenance, QCBS = quality- and cost-based selection. a

ADB’s financing will be limited to $17 million, towards O&M funding gap. The civil works required will be carried out through variation by UTY who was the contractor for construction of railway line, under Grant 0161-AFG. The remaining amount will be generated by the operator through tariffs for service over a three year contract period.

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C. National Competitive Bidding

General. National competitive bidding for the procurement of goods and related services shall conform to the provisions for Open Tender without prequalification as prescribed in the Procurement Law of October 2005 and elaborated in the Rules of Procedure for Public Procurement issued by the Ministry of Finance in April 2007, with the clarifications and modifications described in the following paragraphs required for compliance with the provisions of the ADB Procurement Guidelines.

Registration and Other Pre-Bid Requirements.

(i) Bidding shall not be restricted to Shortlists or Standing Lists. (ii) No bid shall be declared as ineligible of the grounds of debarment without ADB’s

prior concurrence. (iii) No bid shall be declared ineligible on the grounds of government regulations that

restrict sources without ADB’s prior concurrence. (iv) Foreign suppliers and contractors from ADB member countries shall be allowed to

bid, without registration, licensing, and other government authorizations. However, in case these foreign suppliers and contractors are declared winning bidders, the requirements may be completed after award and before signing of contract, without unreasonable costs or additional requirements.

Prequalification. Post qualification shall be used unless prequalification is explicitly provided for in the loan agreement/procurement plan. Irrespective of the procedure applied (whether prequalification or post qualification), no domestic or foreign contractor shall be precluded from participation. If prequalification is undertaken, the prequalification criteria should include "Eligibility Requirements", "Financial Situation", "Pending Litigation", and "Experience". Technical Capacity (personnel and equipment) should not be part of the prequalification criteria. Interested bidders shall be given a minimum period of 28 days for the preparation and submission of prequalification applications.

Advertising. Bidding of NCB contracts estimated at $500,000 or more for goods and related services and NCB contracts estimated at $1,000,000 or more for works shall be advertised on ADB’s website via the posting of the Procurement Plan.

Bidding Documents. Procuring entities shall use standard bidding documents acceptable to ADB, based ideally on the standard bidding documents issued by ADB.

Bidding Period. Procuring entities shall allow for a minimum of four weeks for submission of bids.

Bid Security. Where required, bid security shall be in the form of a bank guarantee or check from a reputable bank and should not be more than two percent of the estimated value of contract to be procured.

Preferences. No preference of any kind shall be given shall be given to domestic bidders or for domestically manufactured goods.

Evaluation. No bid shall be rejected on the grounds of price, or for any other reason(s) not related to the evaluation and qualification criteria, without ADB’s prior concurrence. Prompt payment discounts offered by bidders shall not be considered in bid evaluation.

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Price Negotiations. Price negotiation shall be allowed only after receiving ADB’s prior concurrence.

Advance Payments. No advance payment shall be made without an advance payment security in the form of a bank guarantee or check from a reputable bank.

Government-Owned Enterprises. Government-owned enterprises in Afghanistan shall be eligible to participate only if they can establish that they are legally and financially autonomous, operate under commercial law, and are not a dependent agency of the procuring entity, or the Project Executing Agency, or the Implementing Agency.

Right to Inspect/Audit. A provision shall be included in all NCB works and goods contracts financed by the Bank (ADB) requiring suppliers and contractors to permit ADB to inspect their accounts and records and other documents relating to the bid submission and the performance of the contract, and to have them audited by auditors appointed by ADB.

Anti-Corruption Policy. (i) The Borrower shall reject a proposal for award if it determines that the bidder recommended for award has, directly or through an agent, engaged in corrupt, fraudulent, collusive, or coercive practices in competing for the contract in question. (ii) ADB will declare a firm or individual ineligible, either indefinitely or for a stated period, to be awarded a contract financed by ADB, if it at any time determines that the firm or individual has, directly or through an agent, engaged in corrupt, fraudulent, collusive, or coercive practices in competing for, or in executing, ADB-financed contract, as indicated in paragraph 1.14 of ADB's Procurement Guidelines.

Disclosure of Decision on Contract Awards. At the same time that notification of award of Contract is given to the successful bidder, the results of bid evaluation shall be published in a local newspaper, or well-known freely accessible website identifying the bid and lot numbers and providing information on (i) name of each bidder who submitted a Bid, (ii) bid prices as read out at bid opening, (iii) name of bidders whose bids were rejected and the reasons for their rejection, and (iv) name of the winning bidder, and the price it offered, as well as duration and summary scope of the contract awarded. The executing agency/implementing agency/contracting authority shall respond in writing to unsuccessful bidders who seek explanations on the grounds on which their bids are not selected.

Member Country Restriction. Bidders must be nationals of member countries of ADB, and offered goods, works and related services must be produced in and supplied from member countries of ADB.

D. Review of Contract Modifications

ADB will review contract modifications in accordance with the procedures set forth in the relevant grant agreement between the Recipient and ADB.

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VI. Allocation and Withdrawal

55. Allocation. Allocation of funds based on additional financing is,

ALLOCATION AND WITHDRAWAL OF GRANT PROCEEDS

CATEGORY PERCENTAGE OF BANK FINANCING

Number Item Amount Allocated

$ Percentage

Basis for Withdrawal from the Grant Account

1 Operation and Maintenance support


2 Works 10,000,000 100 of total expenditure claimed*

3 Goods 5,000,000 100 of total expenditure claimed*

4 Consulting Services 2,000,000 100 of total expenditure claimed*

5 Miscellaneous 1,000,000** 100 of amount due

6 Unallocated 2,000,000

TOTAL 33,000,000

* Exclusive of taxes and duties including without limitation Business Receipt tax, Sukook tax and other value-added

tax (VAT) or Gross sales tax (GST) type taxes or duties imposed within the territory of the Recipient ** To be utilized for the purposes of administration charges payable to, or disbursements incurred by, ADB for administration of the Grant

56. Withdrawals. No withdrawals will be made from time to time for Category 1 (Operation and Maintenance support) until the O&M inspector duly appointed and authorized as per the O&M contract has verified and confirmed in writing that the amount of withdrawal is required to cover a difference between: (a) the fees and payments exclusive of taxes and duties, due to the Operator under the O&M contract; and (b) the Revenue as defined in the O&M contract, in each case for the relevant period. On receipt of such withdrawal application, the ADB’s user division will verify and check with the Inspector and relevant reports before processing the payment.

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APPENDIXES )

Appendix 1: Environmental Management Plan Appendix 2: Summary Land Acquisition and Resettlement Plan Appendix 3: Quarterly Progress Report Format Appendix 4: Record of PAM Changes