Project Number: 46499-002 May 2016

Solomon Islands: Sustainable Transport Infrastructure Improvement Program

Program Implementation Document

CONTENTS Page

I. Program Description 1

II. Results and Disbursement 2

A. The RBL Program’s Overall Results 2

B. Disbursement-Linked Indicators 5

C. Disbursement Linked Indicator Verification Protocols 6

D. Disbursement Allocation 9

III. Expenditure Framework and Financing 12

A. Expenditure Framework 12

B. Program Financing 13

IV. Program systems and implementation arrangements 13

A. Monitoring and Evaluation System 13

B. Fiduciary Systems 14

C. Satisfying Procurement Member Country Eligibility Restrictions 21

D. Safeguard Systems 22

E. Gender and Social Dimensions 24

F. Communication and Information Disclosure Arrangements 25

G. Development Coordination 25

V. Integrated Risks and Mitigating Measures 26

A. Key Risks and Mitigating Measures 26

VI. Program Action Plan 28

A. Status of Program Action Plan 28

VII. Technical Assistance 32 A. Summary 32

B. Cost and Financing 34 C. Implementation Arrangements 34

D. Consulting Service Requirement 35

E. Outline Terms Of Referemce for Consultants 35

VIII. Monitoring of Key Program Covenants 43

A. Summary of Key outstanding issues 43

B. Accountability Mechanism 43

C. Changes in Program Scope and Implementation Arrangements 43

D. Organizational Structure 43 E. Program Officers and Focal Persons 45

PURPOSE OF THE PROGRAM IMPLEMENTATION DOCUMENT

The Solomon Islands Government (the government) is wholly responsible for implementing the program supported by results-based lending (RBL). The Asian Development Bank (ADB) staff support the results based lending program design and implementation.

The program implementation document (PID) consolidates the essential program implementation and administrative arrangements. The PID is a management tool to effectively and flexibly support program implementation, monitoring, and reporting. At loan negotiations, the borrower and ADB will review the PID and reflect the discussion in the minutes of loan negotiations. The PID is a living document. It is developed throughout the program processing, and refined and updated during program implementation in close consultation with the government and cofinanciers. The PID should be discussed at loan negotiations, and kept up to date during the implementation period of the program.

Abbreviations

3-YAP = 3-year action plan ADB = Asian Development Bank

AMU = Asset Management Unit AWP = annual work plan BERs = Bid evaluation reports

CBSI = Central Bank of Solomon Islands

CPIU = Central Project Implementation Unit CSS = Country safeguards system

CTB = Central Tender Board

DLIs = disbursement-linked indicators

ECD = Environment and conservation division

EMS = environmental management system

GOA = Government of Australia

IAD = Internal audit division

LAR = Land acquisition and resettlement

LBES = Labor-based equipment support

M&E = monitoring and evaluation

MBMC = machine based maintenance contracts

MDPAC = Ministry of Development Planning and Aid Coordination

MID = Ministry of Infrastructure Development

MLHS = Ministry of Lands, Housing and Survey

MOFT = Ministry of Finance and Treasury NTF = National Transport Fund

NTP = National Transport Plan PAP = program action plan

PER = public environment report

PFMA = Public Financial Management Act

PID = program implementation document

PSSA = program safeguard systems assessment

RBL = results-based lending

RRP = report and recommendation of the president

SBD = standard bidding document SPM = safeguards procedures manual

SPS = safeguards policy statement

STIIP = Sustainable Transport Infrastructure Improvement Program

TSDP = Transport Sector Development Project

I. PROGRAM DESCRIPTION 1. The Solomon Islands National Transport Plan (NTP) 2011-2030 sets out a strategic and policy framework to maintain and develop physical infrastructure, develop transport services, and improve the capacities of government agencies and the private sector for the delivery the services in the transport sector.1 The National Transport Fund (NTF) serves as a sustainable mechanism to fund the transport sector.

2. The Sustainable Transport Infrastructure Improvement Program (the program) is proposed to improve transport infrastructure financed by the NTF that pools government and development partner resources and uses improved country systems and government agencies to deliver transport infrastructure and services. Transport infrastructure to be covered under the program will include land, maritime and aviation infrastructure, with emphasis mainly on land and maritime transport.

3. The $79 million program will finance the NTP priorities identified through the 3-Year Action Plan (3-YAP) financed by the NTF and will exclude activities2 that would (i) be classified as category A under ADB’s Safeguard Policy Statement (2009) or (ii) involve procurement of goods and services under contract with estimated values that exceed specified monetary amounts (high value contracts).3 The program will support the NTP by covering the NTF work plan activities from 2016 to 2020. The scope of the NTP and the results-based lending (RBL) program is summarized in Table 1.

Table 1: Program Scope As of March 2016

Item National Transport Plan Proposed RBL Program Outcome Effective transport infrastructure

and services established. Multimodal transport system efficiency and sustainability improved

Key outputs (i) Transport sector physical infrastructure developed and maintained.

(ii) Competency and capacity of

government agencies improved.

(i) Transport infrastructure rehabilitated and maintained for all users, with safe, gender-responsive, and climate- and disaster-resilience improved.

(ii) Country systems to finance and implement the NTP strengthened.

(iii) MID’s management and monitoring capacity improved.

Activity types Develop, rehabilitate, and maintain roads, bridges, wharves, and airfields

Rehabilitate and maintain roads, bridges, and wharves.

Expenditure size $151 million (2011–2030)a $79 million

Main financiers Government, ADB and Government of Australia

Government, ADB and Government of Australia

Geographic coverage Nationwide Nationwide Implementing agency MID MID Implementation period

2011–2030, 2015–2020

2016–2020 ADB = Asian Development Bank, GoA = Government of Australia, MID = Ministry of Infrastructure and Development, NTP = National Transport Plan. Sources: Asian Development Bank, Australian Department of Foreign Affairs and Trade and Solomon Islands Government.

1 Government of Solomon Islands. 2010. National Transport Plan 2011-2030. Honiara.

2 ADB 2013. Piloting Results-Based Lending for Programs. Manila.

3 The specified monetary amounts are harmonized with the amount applied to the World Bank’s Program-for-Results

financing to increase development coordination and support program implementation.

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II. RESULTS AND DISBURSEMENT A. The Program’s Overall Results 4. Government of Solomon Islands uses the NTP indicators at country, agency and program levels to deliver its transport infrastructure priorities. The Ministry of Infrastructure Development (MID) through its 3YAP and annual work plan (AWP) implements the priorities in the NTP. The program will support NTP priorities from 2016-2020. The impact of the program will be sustainably improved access to socioeconomic opportunities and inclusive growth. The outcome will be multimodal transport system efficiency and sustainability improved. The outputs of the program are selected from the NTP’s key performance indicators. Certain outputs are further developed into annual disbursement-linked indicators (DLIs), achievement of which will set the progressive steps towards the NTP outcome achievement. Some output targets, which are also important for outcome achievement but difficult to link to disbursement, are included in the program action plan (PAP) and design and monitoring framework. The proportion of transport infrastructure under regular maintenance is included to measure the program outcome.

1. Program Results Framework

Table 2: RBL Program Results Framework (As of March 2016)

Results Indicators

DLI

(Yes/No)

Base Value

Base Year

Target Values of Result Indicators

2016

2017

2018

2019

2020

Outcome

Multimodal transport system performance, including safety, improved

Travel time, for men and women, to markets and health care facilities decreased by 20% in 2020

No tbd 2016 tbd tbd tbd tbd tbd

Outputs

Output 1: Transport infrastructure rehabilitated and maintained with access for all users, with safety, gender-responsiveness, and climate- and disaster-resilience improved a. Length of unsealed roads, including (major unsealed) roads maintained annually for safe access by men and women pedestrians, public and private motor vehicles (km)

Yes, DL1 296, (250)

2014 400, (270)

400, (290)

450, (310)

545, (330)

545, (330)

Length of sealed roads maintained annually for safe access by men and women pedestrians, public and private motor vehicles (km)

Yes, DLI 114 2014 120 130 140 154 154

Number of bridges maintained for safe access

No 30 2014 50 70 90 130 130

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by all users, including men and women Number of wharves maintained

No 3 2014 9 15 21 33 33

b. Length of unsealed roads rehabilitated or upgraded to sealed (km)

No NA 2014 0 0 0 0 10

c. Number of wharves reconstructed

No NA 2014 0 0 2 2 0

d. Number of gender responsive design features built

Yes, DL2 NA 2014 1 2 2 1

e. Number of locations where traffic-calming measures and/or signage implemented in community areas increased

No 0 2014 0 0 5 5

Output 2: Country systems strengthened to finance and implement the NTP a. Annual government contribution to NTF to finance all maintenance costs increased over time (SI$)

Yes, DLI3 31 2014 40 50 60 65 65

b. NTP 3-Year Action Plan updated annually and Safeguards Procedures Manual adopted and implemented

Yes, DLI4 No No

2014 2014

Yes Yes

Yes Yes

Yes Yes

Yes Yes

Yes Yes

d. Road classification finalized, approved and used

No Partial 2014 No No Yes Yes Yes

e. Percentage of projects screened for climate change-resilient infrastructure design under the NTF rehabilitation/emergency works program increased

No No 2014 20 40 60 70

f. System to analyze, track, and control unit rates of bid price to achieve cost effectiveness in place

No No 2014 No Yes Yes Yes Yes

g. Annual fiduciary review of MID transactions conducted

No

No 2014 Yes Yes Yes Yes Yes

h. Length of sealed roads subject to safety audit by a third party and recommendations implemented increased (km)

No No 2014 0 0 70 80 0

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Output 3: MID’s management and monitoring capacity strengthened a. Percentage of MID staff, men and women, whose performance has been reviewed and issues addressed promptly by MID management using the 4-stage Public Service Performance Management Process (which includes attendance), increased

No 0 2014 0 25 60 95 95

b. Number of MID staff, men and women, in key core areas, where need has been assessed, increased to 2 procurement officers, 1 classified at levels10–11, 3 safeguards officers 1 classified at levels 10–11, and 1 monitoring and evaluation officer, all appointed by 2020

Yes, DLI 7

Y 2014 P (1); S (1)

P (1) 0 0 0

c. Total length of road upgrading contracts over the 5-year work program increased to 9 km by 2020, using LBES maintenance and coverage reviewed

No 5 2014 0 0 0 0 1

d. Road network and wharves inventoried and condition surveyed

DLI 5 Partial 2014 Yes Yes Yes Yes Yes

e. Number of annual contracts under implementation reduced to increase efficiency and cost-effectiveness by 2020 using LBES maintenance arrangements and coverage reviewed

No Y 2014 70 70 50 30 30

f. Annual disbursement rate of the NTF work program increased (%)

Yes, DLI 6

SI$88 2014 SI$90 million

SI$94 million

SI$100 million

SI$ 115

million

SI$ 115

million

g. Regular sampling of verified sex-disaggregated data collected

No Y 2014 No Yes Yes Yes Yes

DLI = Disbursement Linked Indicator, MID = Ministry of Infrastructure Development, NTF = National Transport Fund, NTP= National Transport Plan, YAP= Year Action Plan. Source: Asian Development Bank.

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B. Disbursement-Linked Indicators

1. Description of Disbursement-Linked Indicators 5. Selected NTP indicators have been developed into program disbursement-linked indicators which are broken out into sequence of annual time-bound target values. The program DLIs are in Table 3.

Table 3: Disbursement-Linked Indicators (As of March 2016)

Disbursement Linked Indicators

Baseline Year and

Value

Target Values Prior

Results 2016 2017 2018 2019

Output 1: Transport infrastructure rehabilitated and maintained for all users, with safety, gender-responsiveness, and climate- and disaster-resilience improved DLI 1: Length of sealed and major unsealed roads effectively maintained annually

Sealed: 114 km

Unsealed: 250 km (2014)

Sealed: 120

km; Unsealed 270 km

Sealed: 130 km;

Unsealed 290 km

Sealed: 140 km;

Unsealed 310 km

Sealed: 154 km;

Unsealed 330 km

DLI 2: Gender responsive design features built

N.A.

1 Feature built

a

2 Features built

a

2 Features built

a

1 Feature built

a

Output 2: Country systems strengthened to finance and implement the NTP DLI 3: Government counterpart contribution to the program funded adequately and timely

N.A.

≥ SI$ 40b

million

≥ SI$ 40 million

b

≥ SI$ 40 million

b

≥ SI$ 40 million

b

DLI 4: Safeguards Procedures Manual adopted and implemented annually and NTP 3YAP updated annually

No (2014) SPM

adopted Yes Yes Yes Yes

Output 3: MID’s management and supervision capacity strengthened DLI 5: Road network inventoried and condition surveyed

1,063 km (2014)

1,502 km condition surveyed

c

DLI 6: Increased annual financial rate of execution of the NTF work program

SI$88 million (2014)

SI$90 million

SI$94 million

SI$94 million

SI$94 million

DLI 7: MID staff increased in key functions

0 procurement

and 2 safeguards

officers

1 procurement

and 1 safeguards

officer

1 procurement

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a Appendix 3, Table A3.2, Report and Recommendation to the President, includes details about the features.

b GoA will disburse against DLI 3, a base contribution of A$5 million per year over the 5 years and an addition A$8

million over five years as outlined in para 20 of the RRP and the Program Results Framework (accessible from the list of linked documents in Appendix 2). 3-YAP = 3-Year Action Plan, DLI = disbursement-linked indicator, km = kilometer, MID = Ministry of Infrastructure Development, N.A. = not applicable, NTF = National Transport Fund, NTP = National Transport Plan, SPM = Safeguards Procedures Manual. Source: Asian Development Bank

Table 4: Status of Disbursement-Linked Indicators ($million)

(As of March 2016)

Disbursement Linked Indicators Baseline

Value Baseline

Year

Target Value (2016)

Actual Achievement

(2016)

Outputs Output 1: Transport infrastructure rehabilitated and maintained for all users, with safety, gender-responsiveness, and climate- and disaster-resilience improved DLI1: Length of sealed and major unsealed roads effectively maintained 3.6 2015

DLI 2: Gender responsive design features built 1.5 2015 Output 2: Country systems strengthened, to finance and implement the NTP

DLI 3: Government counterpart contribution to the program funded adequately and timely 4.2 2015 DLI 4: NTP 3-Year Action Plan updated annually and Safeguards Procedures Manual adopted and implemented 3.6 2015

Output 3: MID’s management and supervision capacity strengthened DLI 5: Road network inventoried and condition surveyed 3.0 2015 DLI 6: Increased annual financial rate of execution of the NTF work program 3.6 2015 DLI 7: MID staff increased in key functions 1.5 2015

Total 21.0 3YAP = 3-Year Action Plan, DLI = disbursement-linked indicator, MID =Ministry of infrastructure development, NTF = National Transport Fund, NTP= National Transport Plan, Source: Asian Development Bank.

C. Disbursement Linked Indicator Verification Protocols

1. Description of the Verification Protocols 6. The MOFT may submit withdrawal applications periodically, along with evidence verifying achievement of the DLIs. Disbursements are allowed for early or timely achievement of the relevant DLIs. The DLIs will be verified based on monthly supervision report of rehabilitation and maintenance contracts, the NTF financial statements, comparative analysis of past 3YAPs, the NTF work program, this program and the proposed update, physical verification of the query functionality of the database, random review of the survey reports, contract supervision reports, field inspections and technical audit reports. The disbursement amount allocated to each DLI depends on the importance of the DLI. Most of disbursements for the DLIs have been carefully considered and one DLI has been linked to prior results. This DLI front-loaded to support MID’s cash flow and support the implementation of the 2016 NTF work program.

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a. General Procedures

(i) The MID Central Project Implementation Unit (CPIU) will collect all the reports and information necessary to verify accomplishment of the DLIs and prepare a draft DLI Achievement Report. Achievement reports refer to the month and year of the DLI achievement indicated in the DLI table.

(ii) The Permanent Secretary, MID or designee will assess the achievement of the DLIs and authorize the DLI Achievement Report to be shared with the Ministry of Finance and Treasury (MOFT), Asian Development Bank (ADB), and Government of Australia (GoA), and by 15 January the year following the targets are to be achieved.

(iii) The DLI Achievement Report will be discussed and confirmed with ADB and GoA. In case ADB identifies issues with the DLI, achievement, it will relay its concerns to the Permanent Secretary, MID within 1 month of its receipt of the Achievement Report.

(iv) Once ADB has confirmed the achievement of a DLI, the MID submits the Withdrawal Application to ADB accompanied by the evidence of the particular DLI achievement.

(v) The withdrawal application can be submitted in the same year the DLI is achieved or any subsequent year depending upon the government’s cash flow.

b. Verification Protocols

7. To avoid any confusion about whether a particular DLI has been met, verification protocols have been agreed with government and are presented in Table 5.

Table 5: Disbursement-Linked Indicator Verification Protocols (As of March 2016)

Disbursement- Linked

Indicators

Definition and Description of Achievement and Verification

Timeframe

Information Source and Frequency

Verification Agency and Procedure

Output 1: Transport infrastructure rehabilitated and maintained for all users, with safety, gender-responsiveness, and climate- and disaster-resilience improved DLI 1: Length of sealed and major unsealed roads maintained

Mileage of routine maintenance works, including repairs, are fully executed and effectively supervised on both maintainable sealed roads and major unsealed roads each calendar year. The list of maintainable unsealed roads has been identified by the Asset Management Unit.

On site verification of randomly selected sections at different times of the year.

ADB, GoA, and third party (short-term individual expert). The results of the verification for a period of 1 year will be compiled in October of every year to form the annual result.

DLI 2: Gender responsive design features built

All of the following six features have been built in appropriate locations, following a design commonly agreed, and the toilets are privately operated for a fee: (i) two-shaded resting areas equipped with separate male and female toilets located at a market point and a wharf, (ii) two laundry facilities on streams near water crossings and roads,

Field visits, testimonies, pictures

ADB and GoA. During field supervisions.

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Disbursement- Linked

Indicators

Definition and Description of Achievement and Verification

Timeframe

Information Source and Frequency

Verification Agency and Procedure

(iii) one improved access to river or stream for water and laundry, and (iv) one small boat access at a major wharf using pontoons and ramps.

Output 2: Country systems strengthened to finance and implement the NTP DLI 3: Government counterpart contribution to the program funded adequately

Government counterpart funds for the program must be transferred to the NTF in an amount not less than SI$40 million every calendar year. This amount is not earmarked for any purpose other than the NTF work program which is approved for the corresponding year.

NTF monthly financial statements.

ADB. Verification of financial statements.

DLI 4: NTP 3YAP updated annually and Safeguards Procedures Manual (SPM) adopted and implemented

The SPM has been adopted in 2015 and counts as a prior result. NTP’s 3-YAP is developed and updated annually based on multiple criteria, including inclusiveness and accessibility to basic services. The NTF work program is built in accordance with the priorities of the 3-YAP.

NTF Board and Secretariat every year by October 15

ADB and GoA. Comparative analyses of the NTP, past 3YAP and NTF work program, and the proposed update.

Output 3: MID’s management and supervision capacity strengthened DLI 5: Road network and wharves inventoried and condition surveyed

The entire length of the road network and all the wharves have been surveyed in terms of characteristics and condition. All information have been archived in a computerized system and can be retrieved by simple query. The above was completed in 2015l and counts as a prior result.

CPIU, Asset Management Unit progress reports

ADB and GoA. Physical verification of the query functionality of the database. Random review of the reports submitted by consultants who performed the surveys.

DLI 6: Increased annual financial rate of execution of the NTF work program

Total amount of expenditures paid and/or approved for payment (approved monthly payment certificates of contracts and other eligible expenditures) against activities of the NTF work program divided by the total amount planned for disbursement by 31 December every year.

CPIU monthly, quarterly and annual progress reports with separate records for NTF and “ring fenced” programs

ADB and GoA. Review of the reports, random review of contract supervision reports, and field inspection(s).

DLI 7: MID staff increased in key functions

MID staff in the CPIU increased in key core areas where need has been assessed: Two procurement officers one of which is classified at levels 10–11, and 1 safeguards officer

Effective appointment of CPIU staff

ADB and GoA. Contract documents of each officer. Staff could be funded by the program, for the first year of implementation and come under MID payroll thereafter.

3YAP = 3-Year Action Plan, ADB = Asian development Bank, CPIU = Central Project Implementation Unit, DLI = disbursement linked indicator, GoA= Government of Australia, MID =Ministry of infrastructure development, NTF = National Transport Fund, NTP= National Transport Plan, SPM = Safeguards Procedures Manual. Source: Asian Development Bank.

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Table 6: Progress in Disbursement-Linked Indicator Verification (As of March 2016)

Disbursement Linked Indicator Progress in Verification Issues and Changes

Outcome Nationwide access to social services and inclusive economic growth

Output Output 1: Transport infrastructure rehabilitated and maintained for all users, with safety, gender-responsiveness, and climate- and disaster-resilience improved

DLI 1: Length of sealed and major unsealed roads effectively maintained.

DLI 2: Gender responsive design features built Output 2: Country systems strengthened, and the competency and capacity of government agencies improved to finance and implement the NTP DLI 3: Government counterpart contribution to the program funded adequately and timely DLI 4: NTP 3-Year Action Plan updated annually and Safeguards Procedures Manual (SPM) adopted and implemented

Output 3: MID’s management and supervision capacity strengthened

DLI 5: Road network and wharf inventoried and condition surveyed

DLI 6: Increased annual financial rate of execution of the NTF work program

DLI 7: MID staff increased in key functions

Other Results 3YAP = 3-Year Action Plan, DLI = disbursement-linked indicator MID = Ministry of infrastructure Development, NTF = National Transport Fund, NTP= National Transport Plan. Source: Asian Development Bank.

D. Disbursement Allocation 8. The loan proceeds will be disbursed to the NTF account established at the Central Bank of Solomon Islands by the MOFT. The disbursement will be made in United States dollar ($). MOFT will open the NTF account in $ for the deposit of the funds. The following disbursement principles will apply for the disbursement of the loan proceeds:

(i) Advance financing. ADB can provide up to $2.4 million as advance financing. Advances can be considered for initial and subsequent DLIs during the implementation period. The amount of advances will be recovered from subsequent disbursements when DLIs are achieved. Additional advances can be made once an earlier advance has been recovered or partially recovered. The recovered advance is then available, as needed, for additional advances (“revolving advances”, but the outstanding advance should not at any time exceed the ceiling of 11.4% ADB financing. The government will refund any advances (or portions of advances) if the DLIs have not been met or fully met by program completion no later than 6 months after program completion.

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(ii) Financing prior results. Some results may need to be achieved before a RBL loan is approved. In such cases, ADB will be able to finance and disburse based on the DLIs achieved before the effectiveness of the RBL loan. The total amount of such financing will not exceed $3.9 million, 18.6% of the ADB financing. Funding for prior results achieved before loan effectiveness, no earlier than 12 months before loan signing will be allowed in order to support government to initiate actions required to achieve Year 1 DLIs. Prior results have been agreed with the government, and DLIs against which the amount of prior results financing will be made have been identified during program preparation. The program team is now of the view that such results are within the scope of the program supported by RBL and are subject to the agreed verification protocol. (iii) Ceilings for advance financing and financing for prior results. The program will finance $3.9 million (18.6%) for prior results and $2.4 million (11.4%) as an advance. The combined ceiling for both is $6.3 million (30%). The advance may only be disbursed once the loan is effective.

. 9. Before the submission of the first withdrawal application, government will submit to ADB the evidence of achievement for such disbursement based on the verification protocols, and evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the government, together with the authenticated specimen signatures of each authorized person.

1. Expected Disbursement Allocation and Schedule

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Table 7: Expected Disbursement Schedule

(As March 2016)

Disbursement- Linked Indicators

Total ADB Financing Allocation ($ million)

Share of Total ADB Financing

(%)

Financing for Prior Results

2016 ($ million)

Advance Financing ($ million)

2016 ($ million)

2017 ($ million)

2017 ($ million)

2019 ($ million)

Output 1: Transport infrastructure rehabilitated and maintained for all users, with safety, gender-responsiveness, and climate- and disaster-resilience improved DLI 1: Length of major unsealed roads maintained annually

3.6 17.1% 1.2 1.2 0.6 0.6

DLI 2: Gender responsive design features built 1.5 7.1% 0.25 0.5 0.50 0.25

Output 2: Country systems strengthened to finance and implement the NTP DLI 3: Government counterpart contribution to STIIP funded adequately

a

4.2 20.0% 1.05a 1.05

a 1.05

a 1.05

a

DLI 4: Safeguards Procedures Manual (SPM) adopted and implemented and NTP 3YAP updated annually

3.6 17.1% 0.9 0.9 0.9 0.9

Output 3: MID’s management and supervision capacity strengthened DLI 5: Road network inventoried and condition surveyed

3.0 14.3% 3.0 - - - -

DLI 6: Increased annual financial rate of execution of the NTF work program

3.6 17.1% 1.2 1.2 1.2 -

DLI 7: MID staff increased in key functions

1.5 7.2%

0.75 0.75 - -

Total 21.0 100% 3.9 5.35 5.60 4.25 1.9 Advance/Reimbursement 2.4 0.75 1.20 0.45 Net 3.9 2.4 4.60 4.4 3.80 1.9 3YAP=3-Year annual program, MID =Ministry of infrastructure development, NTF = National Transport Fund, NTP= National Transport Plan, STIIP = Sustainable Transport Infrastructure Improvement Program. a

GoA will disburse against DLI 3, a base contribution of A$5 million per year over the 5 years and an addition A$8 million over five years as outlined in para 20 of the RRP and the Program Results Framework (accessible from the list of linked documents in Appendix 2). Source: Asian Development Bank

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2. Disbursement Status

Table 8: Disbursement Status (As of March 2016)

Disbursement-Linked Indicators (DLI)

ADB Financing Allocation ($million)

Share of Total ADB

Financing (%)

Expected Disbursement

by (December,

2016)

Actual Disbursement

by (December,

2016)

Share of Total ADB Financing Disbursed

(%) DLI 1: Length of major unsealed roads maintained 3.6 17.1% 0 0

DLI 2: Gender responsive design features built 1.5 7.1% 0 0 DLI 3: Government counterpart contribution to funded adequately 4.2 20.0% 0 0 DLI 4: NTP 3-Year Action Plan updated annually and Safeguards Procedures Manual (SPM) adopted and implemented 3.6 17.1% 0.9 0 DLI 5: Road network inventoried and condition surveyed 3.0 14.3% 3.0 0 DLI 6: Increased annual financial rate of execution of the NTF work program 3.6 17.1% 0 0 DLI 7: MID staff increased in key functions 1.5 7.2% 0 0

Total 21.0 100.0% 6.3 0

Advance 2.4 0

Nett 3.9 0 ADB = Asian Development Bank, MID =Ministry of infrastructure development, NTF = National Transport Fund, NTP= National Transport Plan, STIIP = Sustainable Transport Infrastructure Improvement Program. Sources: Asian Development Bank and Solomon Islands Government.

III. EXPENDITURE FRAMEWORK AND FINANCING

A. Expenditure Framework

10. Program expenditures. The projected expenditure during 2016 to 2020 for the government’s overall program is $78.8 million (Table 9).

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Table 9: Summary of Program Expenditure Framework, 2016-2020

Item Amount ($million) Share of Total (%)

1. Investmenta 35.8 45.5%

2. Maintenanceb 42.0 53.2%

3. Capacity Building & Monitoringb 1.0 1.3%

Total 78.8 100.0% a

Includes only civil works from ADB but implementation support for feasibility studies, design and supervision will be from Australian Department of Foreign Affairs and Trade grant funds. b

Includes funds from Australian Department of Foreign Affairs and Trade grant and Solomon Islands Government. Sources: Asian Development Bank

B. Program Financing

1. Expected Financing Plan 11. The government will finance $35.8 million (43.7% of the total program cost) of the $78.8 million cost of implementing the program during 2016-2020 period. The government has requested a loan of $21.0 million (26.7% of the total program cost) from ADB’s Asian Development Fund and a collaborative grant of $23.3 million (29.6% of the total program cost) from the GOA to help finance the RBL program. The financing plan is in Table 10.

Table 10: Program Financing Plan (As of February 2016)

Source Amount

($million) Share of Total

(%)

Government 34.4 43.7%

Development Partners

Asian Development Bank

Asian Development Fund (loan) 21.0 26.7%

Government of Australia (grant) a 23.3 29.6%

Total 78.8 100.0% a

The contribution from the Government of Australia up to A$33 million, as collaborative parallel cofinancing, is subject to its approval processes. It includes a base contribution up to A$25 million, with an additional up to A$8 million linked to an increase in the Government of Solomon Islands’ contribution, as outlined in the program’s design and monitoring framework; currency conversions based on 12 February 2016 rates: $1.0 = A$1.41 and $1.0 = SI$8.13.

Sources: Asian Development Bank.

IV. PROGRAM SYSTEMS AND IMPLEMENTATION ARRANGEMENTS

12. Throughout the implementation period, the program will use government systems and processes undertaking key management and implementation functions. The assessment of the government’s systems has been found adequate to implement the program. However, there are some areas documented in the PAP which require strengthening. Key actions to strengthen these systems are summarized in the PAP.

A. Monitoring and Evaluation System

1. Summary of Monitoring and Evaluation System and Actions

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13. Reports. The program monitoring, evaluation and reporting activities will include preparation and sharing of key program implementation status reports including: (i) reports on progress and achievement of DLIs as defined in the DLI verification protocols; (ii) semi-annual and annual progress reports on the progress of and status of the PAP actions; (iii) financial reports as described in the loan agreement; (iv) annual updates on compliance with any loan covenants and social, and environmental safeguards; (v) semi-annual environmental safeguards monitoring reports; (vi) gender and communication plans; and (vii) any other reports as agreed by ADB, GoA and the MID or requested by the program steering committee. ADB will undertake biannual review of program. After two years of implementation, ADB will undertake a midterm review of the program. The GOA will be invited to participate in the biannual and midterm review of the program. 14. Within 12 months of loan closing of the program, the MID will produce a program completion report which will be shared with ADB and GoA. Two years after program completion, ADB will produce a program completion report in consultation with government and GoA.

2. Monitoring and Evaluation System Related Program Actions Status 15. The Ministry of Development Planning and Aid Coordination (MDPAC) has been tasked with the responsibility for coordination of monitoring and evaluation (M&E) system government-wide, and this is likely to require each ministry to adopt a more rigorous approach to measurement, monitoring, reporting and acting on achievement progress on key national and Ministry-specific strategies, goals and indicators. These are positive signs for introducing a more evidence-based management mode but it should not be assumed that there is sufficient capacity to appoint needed staff and to implement these reforms in the short term. The CPIU’s core management team will continue to require the assistance of the consultants of the program’s core technical team to ensure that its M&E system is set up and mechanisms are established for data collection, analysis and reporting. The MID will appoint a M&E officer within the CPIU. Capacity will be developed for the M&E Officer in monitoring the program’s performance and in preparing the M&E report on the program. This will be done with inputs from the core technical and management team. The program’s M&E report will be reviewed by the Program Lead and will be disclosed to the program steering committee, NTF Board, MDPAC, ADB and GoA. B. Fiduciary Systems

1. Financial Management System

a. Summary of the Financial Management System and Actions 16. The program will be implemented using the RBL modality and will use the government’s financial management systems and processes for implementation. The RBL arrangement will be fully aligned with the government’s systems and procedures for fund management. The government budget allocated to MID will serve as the program’s budget which will be pooled with GoA and ADB contributions to in the NTF. The management of funds in the NTF will follow the government’s system for budget formulation, execution, accounting, internal control/audit and external audit. The implementation of the program will be entirely funded from the NTF with no requirement for MOFT/MID to identify which transaction or payment is funded from which source. MID will not be required to ring-fence the implementation of either ADB or GoA or government funded program from the NTF or specific accounting and reporting of ADB, GoA and government financing. However, additional support will be provided for sector management

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for the program implementation. Based on the financial management assessment, it was agreed to engage an external financial audit or and a fiduciary auditor including a firm or expert to review the financial management manual currently under preparation for completion by 30 June 2016. These are included in the PAP. 17. Budgeting. The MID’s management staff are responsible for preparing the annual budget estimates in support of MID’s operations, annual work plans and programs to achieve its goals of providing citizenry better and safe access to transport services. The process also involves the review, evaluation and consolidation of proposals for each department within MID in coordination with the MID’s Corporate Services Department. The budget is then submitted to MOFT’s Budget Committee. Meetings are held between the MID management and the Budget Committee to discuss and agree on the budget estimates for consolidation and approval by Parliament. Financing for activities associated with the PAP or with achieving results in the DLIs will be included the MID’s general budgeting processes.

18. Fund flow. All payments are made by the MOFT. Other line ministries prepare payment vouchers and MOFT reviews them against the contracts and pays out to contractors, consultants and suppliers. For the program, the proposed funding arrangement will generally follow the existing procedure for the NTF. The GoA will continue to deposit its contribution to the NTF through the Central Bank of Solomon Islands (CBSI) AUD account that was opened as part of the Direct Funding Agreement between GoA and government. The GoA contribution in AUD1 will then be converted to local currency2 and deposited to the NTF SBD account prior to transfer to the ANZ NTF operating account. All approved NTF payments for goods, works and services will be paid by check out of the ANZ NTF operating account3. MOFT on the other hand will open a separate USD account with the CBSI to channel all proceeds from the ADB loan. The separate account is necessary to distinguish the GOA from ADB funds. However, ADB loan funds will only be disbursed upon verification that the DLIs have been achieved. No loan funds will be released until triggered by compliance with a DLI except for the financing of prior results in 2016 of $3.9 million and advance payment of $2.4 million combined equivalent to 30% of the loan amount of $6.3 million that will be made available by ADB to the NTF4. 19. The US Dollar denominated ADB loan funds that are disbursed will be deposited in US Dollar account in CBSI. It will be converted to SBD as and when required and deposited to the CBSI NTF SBD account that will also be opened by MOFT. The SBD denominated loan funds will then be transferred to the ANZ NTF operating account. For government’s counterpart contribution to the NTF, the funds will be appropriated in the annual budget and the funds will first be deposited into the govnerment’s consolidated fund5 then deposited to the ANZ NTF operating account and pooled with ADB and other development partner funds. Currently, there is no set timeframe to transfer government funds from the government consolidated account. It

1 Australian Dollar

2 Solomon Island Dollar

3 In the Joint Review report, it was noted that NTF payments were made from the ANZ government creditors SBD

account thereby subjecting NTF funds to government cash flow limitations causing delays in payments. 4 The advance may go up to 30 percent if there is retroactive financing. The advance will be recovered from

subsequent disbursements when DLIs are achieved. 5 Clause 22, Part 5 of the PFMA, Management of Consolidate Fund and other funds states that, “ all public monies

raised or received for the purpose of Government, including borrowed monies shall be paid into the Consolidated Fund”. Under clause 27-31 of Part 5, the Act allows for targeted balances. Targeted balances means “budget support financing allocated from the Consolidated Fund to a Government agency, intended to finance targeted services, programs and projects or pre-conditioned on certain policies and actions of Government, when the recipient accountable officer does not have the discretionary power on how to spend those funds”.

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is proposed that during the program’s implementation, the transfer of government counterpart contribution to NTF will coincide with the release of GoA funds to the ANZ NTF operating account. This will ensure (i) the timely availability of government funds, (ii) place government contributions in equal footing with those from ADB and DPs and do away with the past experience that DP funds are first used and only replenished later by government, and (iii) show government’s determination to make NTF as the sole funding source improve the transport sector. The proposed program flow of funds to the NTF is illustrated in Figure 1. 20. Accounting. Government has a centralized accounting and financial reporting system and the MOFT is tasked with the responsibility of preparing all financial reports for all government line ministries and state enterprises. Since financial reports are centrally produced by MOFT, there is no requirement for line ministries to have separate financial management systems. Solomon Islands financial statements are prepared using a cash basis of accounting. However, the joint NTF review commissioned by ADB and GoA in September 2013 highlighted that “control weaknesses in the government accounting system prevent preparation of financial statements compliant with international standards and which do not satisfy ADB or other donors minimum accountability standards”.

21. The joint NTF review also highlighted that in 2011 due to the structural limitations of the government’s chart of accounts MOFT financial reporting for NTF was restricted to a summary statement of receipts and payments only. This form of reporting lacked sufficient detail and could not meet NTFB’s need for financial reporting. Subsequently, the MID CPIU was appointed as the NTF Secretariat in February 2012 and which has taken a number of practical steps to find solutions to address these weaknesses leading to unqualified audit reports on the NTF financial statements for 2011 and 2012. However, going forward financial reporting responsibilities are expected to be discharged by the MID Accounting Division. The program’s accounting and financial reporting will use the NTF financial statements since ADB loan funds will be contributed to the NTF. The preparation of the financial statements is complex and involves the MID and the MOFT. For better project management and control, the NTF will use the SAGE 506 software which is based on accrual accounting. Although the AX system follows the cash basis of accounting and the SAGE 50 uses the accrual basis, the two software can interface using Microsoft Excel program. Since commercially available accounting software use accrual basis of accounting, the preparation of NTF financial statements under the program will continue to be based on the accrual method. The new Public Financial Management Act (PFMA) also recognizes accrual based accounting but the PS MOFT has yet to establish the applicability of using accrual based accounting for government. Subsidiary ledgers are adequate for the reconciliation of accounts with the general ledger. All reports and supporting documents on all transactions are stored and retained by the accounting officer, and are available. MID has implemented clear segregation of duties. All supporting documents will be subjected to a pre-audit by the GoA financial management adviser. If the compliance review determines that the payment requests are for valid NTF projects this will forwarded to MOFT payment section where it will again undergo another compliance check by a GoA adviser in the MOFT. MOFT manages all the bank accounts and also undertakes its own monthly bank reconciliations. Discrepancies in bank reconciliation statements between the MID and the MOFT have been noted in the external audit reports conducted in the past years.

6 Formerly Peachtree accounting in the US and Simply Accounting in Canada

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Sends Invoice SIG

Consolidated Fund

ANZ NTF Operating Account SBD

CBSI NTF USD Account

CBSI NTF

NTF Requisition

Form

NTF SIG Budget

MID/ MoFT Issues

Payment Voucher

ADB Loan

CBSI NTF SBD Account

CBSI NTF SBD Account

MID Finance with NTF

Compliance Officer

MOFT Payment

Section with NTF

Compliance

MOFT Acct General

GoA Grant

Figure 1: Proposed NTF Flow of

Contractor/ Supplier

A

A

DLI

Yes

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22. Internal control. There is no internal audit function within the MID. The GoA funded financial management adviser overseeing and reviewing to ensure that requests for payments are done properly and accurately. Weak internal controls have been highlighted in the joint NTF review report as well as prior year management letters. The MOFT has recently established its internal audit department. To address the weaknesses, the MID is preparing a financial management manual that will be completed before loan disbursement. Specific actions are included in the PAP. 23. Internal audit. The MOFT has an internal audit division (IAD) created under the new PFMA1. The newly created MOFT IAD is responsible for advising accounts officers of all government ministries on internal controls and provides internal audit services to MOFT and other line ministries. The MOFT IAD will also conduct audits of the NTF. The Director IAD has the right, under section 20 of the PFMA to enter any government premises, have access to relevant books and records and ask for the information and explanation necessary for IAD’s examination. The active involvement of internal audit will help strengthen internal controls and further improve anti-corruption initiatives. The MOFT and the MID will strengthen its system for internal auditing to address the program needs. Specific actions are included in the PAP. 24. External auditing and public disclosure. The MID will engage external auditors acceptable to ADB and GoA and the Office of the Auditor General of Solomon Islands to audit the financial statements of the NTF, which will include the contributions of ADB, GoA and government, and prepare an annual audit report (including the audit opinion), the audited financial statements (including statement of management responsibility, consolidated statement of cash flows, and the notes to the financial statements, observations and recommendations [the audit management letter], and the status of implementation of prior year’s audit recommendations). The MID will furnish to ADB and government, no later than six months after close of fiscal year 2016 to 2020, a copy of the annual audit report, in English, and such other information concerning these documents and the audit thereof as ADB and government shall from time to time request. ADB shall disclose the annual audit report on the ADB’s website in accordance with ADB’s Public Communications Policy (2011).2 ADB reserves the right to require a change in the auditor (in a manner consistent with the laws and regulation of the Solomon Islands), or require additional support to be provided to the auditor, if the audits required are not conducted in a manner satisfactory to ADB, or if the audits are substantially delayed.

b. Financial Management System Related Program Actions Status 25. Solomon Islands have a shortage of skills in financial management, financial and economic analysis, and procurement. Few accounting staff possesses skills beyond basic bookkeeping. There is an urgent need for continuous training on financial management and accounting practices to improve the capacity of the finance/accounting staff across all government ministries3. However due to the stiff competition with the private sector for highly qualified and trained individuals, government’s chances of hiring more qualified persons will be challenging. 26. Financial management policies and procedures are inadequate for the implementation of

1 Clause 19-21, Part 4, Public Finance and Management Act

2 ADB. 2011. Public Communications Policy. Manila.

3 The PFM Reform Roadmap, June 2014 recognizes the major issues that involve human resources such as building

capacity at all levels, getting the right skills and incentivizing performance is a priority and one of the guiding principles in the preparation of the PFM Reform Roadmap

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the program. The development of the development of a financial management/ accounting manual to is underway and may require further review by an internationally recognized accounting firm to guide in the preparation of the NTF financial statements. There will be a need for rigorous training on financial management and accounting procedures to upgrade staff capacity. Furthermore, there are shortages of accounting staff in the MID. To overcome this, the GoA financial management adviser will continue with training of MID staff on the preparation of the NTF financial statement. Continued training of MID accounting staff on the use of Sage50 accounting software will ensure that NTF financial reports are available on time for audit by MOFT IAD and external auditors. Information systems are weak due lack of a proper record keeping/ filing system at the MOFT that causes lack of an audit trail for financial transactions. This will be overcome by (i) rigorous training on financial management and accounting procedures to upgrade staff capacity in the MOFT and the MID; (ii) rigorous monitoring and resolution by the MID and the MOFT of any current external audit observations; and (iii) regular backups of all accounting systems and appropriate security measures over backed-up data should be put in place.

2. Procurement System

a. Summary of the Procurement System and Actions 27. Since the program will be implemented using RBL modality, it will use the government’s procurement system and processes for implementation. All procurement actions are aligned with the PFMA. The PFMA provides the framework for the public procurement regulations and a Procurement and Contract Administration Manual 2013 and the associated standard bidding documents (SBDs) for the procurement of Works, Goods and Services and sample bid evaluation reports (BERs) constitute the documentation. The SI Procurement system adheres to the principles of (i) competition (less than 10% sole source contracting), (ii) transparency (bidding processes are open and transparent), (iii) fairness and equal opportunity, and (iv) economy and efficiency although there is room for improvement under this fourth principles as the cost of works is high by international standards and there have been cases where the engineer’s estimate has been exceeded by a large factor. All the contracts envisaged under the program will remain significantly below the so-called high-value contracts. The procurement rules are accessible to the public via the MOFT website. The program will rely on the NTF Secretariat and Board including MOFT Procurement Unit, which have a satisfactory track record under the ongoing TSDP, for procurement planning and budgeting arrangements. So far this mechanism has proved to be substantially realistic, timely and reliable. The tight relation of the work program with the National Transport Plan ensures that it is also linked to the needs of the program beneficiaries. Overall the PFMA instructions and associated procurement documentation have been found adequate to conduct the procurement of works, goods and services successfully in MID. 28. Annual Procurement Plan. The CPIU will prepare an annual works plan from the updated 3YAP on priority subprojects and simultaneously prepare an annual procurement plan from the annual work plan both to be approved by NTF Board. The annual procurement plan will initiate the procurement process. The CPIU will need to follow all the government procurement processes including:

(i) Drafting bid documents; (ii) Advertising invitation for bid and apply eligibility and to bid; (iii) Posting of the project on the MOFT’s website; (iv) Hold pre-bid meetings;

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(v) Opening and evaluation of bids; (vi) Preparation of notice to award either through Ministerial or Central Tender Boards; (vii) Arrange ning of contract by Issuing Letter of Acceptance; (viii) Publish for public discloser on the MOFT’s website. and (ix) Monitoring of contract and contractor performances.

29. The government processes and systems require the CPIU to obtain reviews and approvals from the MOFT’s procurement unit and counter signing of the contract. Based on the expenditure and procurement profile of the program, the member country procurement eligibility requirement will be satisfied for the program during implementation.

b. Procurement System Related Program Actions Status 30. Key actions to improve the system. There are three areas for improvement: (i) the preparation of bidding documents, including the technical specifications and terms of reference; (ii) the management of contracts, and (iii) preparation of an anti-corruption action plan. Arrangements have been planned under the program to reinforce the capacity of the CPIU to address the concerns and have been identified and included in the Program Action Plan as appropriate. The other areas of improvement that will be initiated are on the Composition of MTB and CTB. Each Board is composed of agents from the relevant ministry (MTB’s) or MOFT (CTB) and therefore lack independency and possibly transparency. As part of the Public Financial Management Reform Road Map July 2014 – June 2017, the MOFT plans to start appointing independent members in the MTB’s and the CTB in mid-2016.4

3. Anticorruption System

a. Summary of Anticorruption System and Actions 31. The government has a centralized procurement unit within the MOFT and each line ministry carries out its procurement, which is subject to review and approval by the MOFT’s procurement unit. The government procurement guidelines provide the ethical standards and general prohibitions on corrupt activities, conflicts of interest including acceptance of gifts5. The Manual, however, does not provide for the total blacklisting of contractors6. All tender evaluation documents have to be submitted to the procurement unit for compliance to approved procurement procedures. All those evaluated to be not compliant will be sent back to the tendering agency for them to follow the process that could result in a different winning bidder. The MOFT also publishes on its website the requests for expression of interest, applications for pre-qualification, advertisements for tendering and contracts awards as part of government’s transparency reforms. Prior to the PFMA, issuance of bid waivers was rampant. The bid waivers expedite the procurement process, but also opens the door to corruption as contracts are awarded on a sole source basis to favored contractors. Since the implementation of the PFMA, compliance has been low as ministries still insist on obtaining bid waivers. Sustained training and capacity building will be required in all the line ministries. Complaint and dispute resolution mechanisms do exist but they are not independent and escalate up to the CTB assisted by the Procurement Advisor for the MOFT. The upcoming Procurement Regulation improvement is expected to address this issue. However, experience in other countries has shown that it takes

4 Art. 14.3.1. of PFM Management Reform Road Map July 2014 – June 2017, MOFT June 2014 5 Solomon Islands Procurement and Contract Administration Manual, April 2010 and Finance Circular 03/2013 dated

April 26,2013. 6 The new financial management system AX allows for selective blacklisting of contractors. Contractors that are

blacklisted in one Ministry may still obtain contracts with other Ministry where it is not blacklisted.

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a long time to address this specific aspect of procurement and it is unlikely to be resolved during the program time frame. government’s commitment to the obligations set out in the ADB’s RBL Anticorruption Guidelines (Appendix 1 to be downloaded from Website) has been explained to the MOFT and the MID, in particular (i) government’s reporting of allegation of fraud and corruption to ADB; (ii) the government’s commitment not to award contract to firms debarred or suspended by ADB; and (iii) ADB’s right to investigate allegations. 32. ADB has a fiduciary responsibility to ensure that its loans and other forms of financing are only used for the purposes for which they may be granted, in accordance with the Agreement Establishing the Asian Development Bank. To uphold that obligation, ADB developed guidelines to prevent of mitigate fraud, corruption and other prohibited activities in RBL operations financed in the whole or in part by ADB (Appendix 1), which has been discussed with the government.

b. Anticorruption System Related Program Actions Status 33. The key action to strengthen the existing anti-corruption system is included in the PAP. These include engaging fiduciary auditor, external auditor, technical auditor, strengthening the MID’s Procurement and Contract Management Administration Manual. Ensure full compliance with required procurement and contract management systems, with checking of tender documents and tender evaluation committee processes and outputs monitored and reported. C. Satisfying Procurement Member Country Eligibility Restrictions 34. ADB member country procurement eligibility restrictions have been discussed with the government. The RBL policy includes provision to satisfy the ADB’s member country restrictions (RBL policy paras, 130-132, copied below).

130. Use of proceeds and procurement. Proceeds from RBL will be used to finance program expenditures aimed at achieving program results, improving program institutions, and providing needed support for achieving program objectives. ADB financing under RBL is not linked to specific transactions, but is an integral part of program financing as a whole, which may include financing from the DMC‘s own resources and cofinanciers. 131. To satisfy the Agreement Establishing the Asian Development Bank (the Charter), RBL for programs will require the adoption and implementation of mechanisms and procedures relating to the mandated country procurement eligibility requirement. Such mechanisms and procedures will provide reasonable assurance that the aggregate amount of ADB disbursement proceeds does not exceed the amount of the total program expenditures on goods, works, and services from ADB member countries, including from the borrowing country. Conversely, the total program expenditures excluding the procurement from non-member countries should be at least equal to, or exceed, the amount of ADB financing. 132. At the processing stage, as part of the procurement and financial management system assessments, ADB will take measures to ensure that those systems will provide for competitive and transparent procurement with due consideration for economy and efficiency, and can adequately track and record awards to foreign bidders, particularly those from non-member countries. During

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implementation, ADB will require the DMC to reflect the aggregate procurement value from ADB‘s non-member countries in the program‘s audited financial statements. This data will need to confirm that the amount of total program expenditures on goods, works, and services from ADB member countries (including the borrowing country) is at least equal to, or exceeds, the amount of the ADB RBL disbursements during the relevant reporting period. 53 ADB will reserve the right to audit compliance with this requirement. In certain cases, ADB may, where necessary, also support the DMC in establishing an adequate procurement bidder award recording and reporting system.

35. Given the expenditure and procurement profile of the program, it is unlikely that these restrictions will be breached. However, the process outlined above will be undertaken to satisfy the requirement. D. Safeguard Systems

1. Summary of Safeguard System and Actions 36. Safeguards. A program safeguard systems assessment (PSSA) was completed. The outcome of the program is multimodal transport system efficiency and safety improved. The outputs are: (i) transport infrastructure rehabilitated and maintained for all users, with safety and gender responsiveness and climate-and-disaster-resilience improved; (ii) country systems strengthened; and (iii) MID’s management and supervision capacity strengthened. Activities in output (i) may have environmental, involuntary settlement and indigenous peoples impacts. While the MID does not intend to build new transport infrastructure on the land it does not own, a common issue across all three safeguard areas will be that the locations of any investment subprojects are yet to be determined. Good practices include (i) the inclusion of environmental, involuntary settlement and indigenous peoples issues in the MID’s Safeguards Procedures Manual (SPM) adopted in 2015; (ii) the screening processes of all the subprojects identify those which are sensitive − often major rehabilitation and new subprojects. These latter types of subprojects come within the formal assessment system of Solomon Islands and do potentially trigger two of three ADB Safeguards Policy Statement (SPS) 2009 − Environment and Involuntary Resettlement. Under the internal MID Environmental Management System (EMS) − a three-tier EMS has been developed under TSDP as follows:

Tier 1 – labour-based equipment support (LBES) or community-based routine (i) maintenance contracts, mainly for roads, including clearing drains/culverts/outlets, patching potholes, cutting grass, etc.

Tier 2 – machine based maintenance contracts (MBMC), mainly for maintenance (ii) of roads, includes repairing damage, refilling and/or compacting base materials, sealing, etc.

Tier 3 – includes rehabilitation or reconstruction (roads and wharves) which have (iii) been badly neglected and have fallen into dis-repair and/or damaged by extreme weather events or other natural disasters. The works will include resurfacing or re-sheeting roads, repairing jetty/wharf slabs or piles, rebuilding/repairing/replacing damaged bridges and large culverts, building new water crossings or rehabilitation of roads. In some cases wharves or jetties will be constructed at new locations.

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37. Tier 2 and 3 require the preparation of a Public Environment Report (PER) which is equivalent to an Initial Environmental Evaluation document required for a subproject screened as Category B within the SPS. They are subject to a formal independent evaluation by the Environment and Conservation Division (ECD) of the Ministry of Environment, Climatology, Climate Change and Disaster Management. Even though their performance has been slow in past projects due to low staff numbers, all subprojects from the TSDP and from the various funding sources have been reviewed and formal development consent under the provisions of the national environmental regulations has been granted. 38. ADB TA Project TA-8217 SOL Strengthening Country Safeguards Systems (CSS) in the Transport Sector has carried out an Institutional Review and Gap Analysis which compared the government country system with the SPS. The conclusion on the environmental side was that the two systems could be effectively blended by strengthening a number of specific components of the country systems. For environment, changes have been proposed to initial screening procedures using guidelines to improve accountability and transparency in decision-making. Public review and provision of written reactions from other government agencies, the general public and civil society groups to the draft Environmental Impact Assessment have also been strengthened. On the social safeguards side, the main focus has been the land acquisition procedures of the Ministry of Lands, Housing and Survey (MLHS). To escape the current protracted process for the purchase of customary land, the MID resorts to the expedient negotiating of land use agreements with the communities. In an attempt to address the limitations and uncertainty of such agreements the CSS has proposed a modified system of land acquisition through negotiated settlement. 39. Program safeguard actions. Since the proper organization of the CPIU Safeguards Team, there has been a gradual improvement in the consistency and quality of safeguards implementation. The MID/CPIU has developed a number of good practices which have been applied to projects and gradually evolved into the EMS and LAR procedures of the CPIU. The program has an opportunity to build on this positive experience not only to ensure that program activities are successfully implemented in compliance with both the CSS and the SPS, but also to promote good safeguard practices for all projects under the MID. 40. The PSSA has identified some gaps and measures to fill such gaps. To comply fully with relevant SPS principles, the program needs to implement the following key actions:

(i) The MID’s adoption of SPM as part of the NTP. The SPM to bring together all PSSA requirements including EMS, land acquisition and resettlement (LAR) process, guidelines for implementation of Tier 1-3 activities, Climate Change Manual, Community Advisory Committee guidelines, and the Sourcing Road Construction Materials Guidelines. The SPM is to also specify measures to remedy gaps in current the EMS and LAR processes identified in the diagnostic above.

(ii) All civil works contracts to require contractors to comply with relevant provisions of the SPM.

(iii) The MID/CPIU to strengthen enforcement of compliance during implementation and to prepare periodic safeguards monitoring reports (at least, six-monthly for Tier 3 activities and annually for Tier 1 and 2 activities).

(iv) Provision of a strengthened full time MID/CPIU Safeguards Team, comprising specialists on environment, social/land acquisition resettlement safeguards, community facilitation and gender. Intermittent inputs of international safeguard

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specialists over the life of the program to support the MID/CPIU Safeguards Team;

(v) Implementation of Consultation and Communication Plan during planning and implementation of projects.

(vi) Training to all MID engineers, job managers and safeguards personnel involved in program planning on the scope and procedures set out in the SPM;

(vii) Training to contractors focusing on their key safeguards responsibilities and commitments to the PSS;

(viii) Training and capacity building of community advisory committee (CACs) about their role particularly in relation to supervision of contractor agreements with groups and individuals and providing feedback on contractor performance;

(ix) Coordination with the CSS which will be working with the MID, ECD and MLHS to implement recommendations of TA 8217.

E. Gender and Social Dimensions 41. Gender aspects. Under the ongoing TSDP, the gender action plan (GAP) establishes measures to ensure women's participation in project activities and capacity building opportunities, to ensure that any negative impacts on women are mitigated, and adequate gender disaggregated data is collected and analyzed for project monitoring purposes. A GAP implementation strategy has been prepared to show how the GAP measures translate through to different aspects and activities under the project. In the preparation of the program it was noted that the key element of the GAP is being complied with as many data are already being collected from contractors (LBES or MBMC or other) on number of men and women participating in works (by activity), number of days of participation, and wages earned (all dis-aggregated). The TSDP uses simple forms were produced to enable contractors to collect this data and submit it on a regular basis which are fed in project performance monitoring system. Contractor supervisors have been made aware of this requirement and ensure contractors collect and submit the required data. In addition to monitoring of GAP implementation this data is used for design and monitoring framework (DMF) verification and M&E. The quarterly progress reports have better tracked implementation of GAP activities. The same process will be applied under the program. 42. However, the program further includes construction of gender features in all machine based contracts such as machine based maintenance contracts, rehabilitation and/or new construction subprojects include gender responsive design features (waiting/resting areas at major truck pick up/market points and major wharves equipped with separate male and female toilets; shaded waiting areas for people and rain protection for produce at major wharves; and laundry facilities established and access to water improved. There are further gender targeted activities in the GAP prepared for the program. The proportion of subprojects requiring large and non-local construction workforces is low; less than 10% of the program, therefore risk of spread of communicable diseases such as STIs or HIV is low. Depending on the nature of the works, some MBMC, and all rehabilitation contracts, require the contractor to engage an approved service provider to facilitate awareness and prevention training. This item is identified in the environmental management plans and included in the bill of quantities of relevant contracts and is captured in the monitoring. The program is categorized as effective gender mainstreaming.

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43. Social aspects. The program will support the government in improving both the reach and safety of the multimodal nationwide transport system. During program preparation, community members reported that improving accessibility and reliability of transport infrastructure through routine maintenance and road rehabilitation was essential for facilitating their access to markets and hence increasing household cash income and reducing hardship. Poor road conditions were also found to affect access to schools and health centers. Respondents perceived poor road surface conditions impacting frequent travel as worse than being cut-off for short periods at river crossings; that is, a well maintained road surface, improving comfort and frequency of trips, was considered more important than connectivity. A large portion of the program will be LBES maintenance sub-projects in rural areas. Hence, primary beneficiaries are people living in rural areas, including (i) road users benefiting from lower travel costs and shorter travel times, more reliable transport, and better travel conditions; (ii) roadside communities receiving benefits from better access to basic services and markets; and (iii) coastal communities and those on smaller islands benefiting from safer conditions and better maritime infrastructure such as safer and more user-friendly accessible wharves; and (iv) the community groups engaged to implement the LBES contracts. Specifically, beneficiaries will include farmers who produce cash crops, LBES contractors, traders, fishers, and school students.

F. Communication and Information Disclosure Arrangements 44. Under the TSDP, the MID/CPIU has prepared a consultation plan which sets out requirements and mechanisms to undertake regular public consultations in the project areas and communicate project information to stakeholders (including publicity through media releases and the like), and properly document the process and outcome of these consultation activities in progress and monitoring reports. The same process will be followed for the program. Under the TSDP, the MID’s disclosure strategy has been to disseminate financial, procurement and safeguard information electronically or by media publications or through the MOFT’s website. The same processes will apply during the implementation of the program and intensify from June 2016. The proposed consultation and communication plan of the program will also cover public awareness and disclosures on various stages of subprojects including scope of works, tendering, bid evaluations, contract awards, names of bidders and bid prices, including the name and bid price of the winning bidder, engagement with private sector, NGOs and civil societies, awareness on indigenous peoples and resettlement plans, and gender-sensitization issues. The plan will also include the establishment and training of a community advisory committee for each subproject during implementation. This is currently practiced under ongoing the TSDP. Given that the MID has been involved in implementing large scale transport projects, it will be encouraged to establish its own website to facilitate quick public disclosure of information. ADB’s disclosure requirements have been discussed with the government. G. Development Coordination 45. Many development partners have been supporting the government strategy to develop a sound transport sector and provide improved access to health care, education, and socioeconomic opportunities to Solomon Islanders, 85% of whom live on far apart islands. Most development partners are mindful of the need to develop all transport modes in a multimodal framework to increase the mobility of people, goods, and services across and within the country’s islands. In so doing, they have supported in a variety of ways the sector-based approach and the NTP adopted by the government and the priority of the maintenance and rehabilitation of existing transport infrastructure assets over new construction. Funds have been allocated for capacity building in the MID and the construction industry, and for maintaining and

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upgrading roads, wharves, and airport infrastructure. 46. Since 2007 ADB, governments of Australia, New Zealand and, European Union and Japan International Cooperation Agency have been active in the transport sector funding various projects. More recently, the World Bank has been exploring ways to support the development of the air transport sector through its regional Pacific Aviation Investment Program, with a view to improving safety, security, overall management, and cost recovery of operation and maintenance, and promoting private sector participation in operations and capital expenditures. 47. Coordination between development partners will continue through the program steering committee and other project steering committees attached to operations which are funded by development partners. All development partners mentioned are supporting the transport sector. However, so far only GoA and ADB are transferring their funds directly to the NTF, a pillar of the sector-based approach adopted by the government. The NTF does not fund air transport infrastructure; these are managed and funded by the Ministry of Civil Aviation and the Aviation Special Fund. The World Bank may extend its financial support to the air transport subsector through the NTF, if requested by the Ministry of Civil Aviation, after common agreement on a reform package and a partial transfer of proceeds of the Aviation Special Fund to the NTF.

V. INTEGRATED RISKS AND MITIGATING MEASURES A. Key Risks and Mitigating Measures 48. The integrated risk assessments and mitigating measures are reflected in Table 14. The overall assessment of the RBL program is rated as substantial with mitigating measures for implementation to reduce the risks during implementation.

Table 12: Summary of Integrated Risk Assessment and Mitigating Measures

Risks Rating

Key Mitigating Measures

Results Insufficient operational capacity: MID staffing, expertise, and competency may not increase to improve operational efficiency Consulting services may not be funded and utilized as required because of increasing demand for investment.

H

Ten additional positions have been approved in MID, and seven already filled. DLI 7 ensures that key positions in procurement and safeguards are filled. The design of ADB’s Sustainable Transport Improvement Investment Program addresses capacity development needs of MID and provides consultancy services to fill gaps; the core team is engaged and managed under an attached TA. The program includes an adequate budget to fund consulting services and fill the assessed gaps.

Expenditure and Financing Risks Insufficient financing: Insufficient government financing may derail the implementation of

M

The annual government contribution of SI$40 million is based on current trend and the additional

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the program. Cash flow shortage: The program may experience cash flow shortages if ADB financing conditions are not met and government contributions are not transferred as planned.

S

contribution expected is only SI$80 million over 5 years. ADB’s DLI 3 and GoA DLI/performance benchmarks incentivize the government contribution. DLIs are attainable and concentrated in the first 3 years of the program. Prior result DLIs, an advance payment, the carryover from the ongoing Transport Sector Development Project, and the baseline funding from GoA are expected to cover any cash flow shortage during program implementation, as long as government base contributions are met.

Fiduciary Risks Internal control: The program relies on the National Transport Fund financial statements as qualified by external auditors. Weak internal audit function in MID

S

Conduct annual internal audits of the National Transport Fund by the MOFT Internal Audit Division. Develop a financial management manual. Conduct annual fiduciary reviews. Resolve all outstanding external audit observations. Train relevant MID staff on financial management and accounting procedures. Continue the compliance review of financial transactions by the GoA-funded financial management adviser.

Procurement Risk There are no MID procurement staff. Weaknesses in procurement documentation, grievance mechanisms, and anticorruption system have been identified during assessments. Safeguards Risks Safeguards screening, planning, and supervision of activities are inadequate to comply with safeguards requirements Climate change adaptation: Currently, transport infrastructure is not designed to be climate change-resilient.

H

M

S

DLI 7 ensures that MID appoints two procurement officers, and the attached TA provides a procurement and contract management specialist to fill the operational gaps and develop capacity and skills. MOFT is planning a significant improvement of the procurement documentation in 2016. For contracts above $70,000, MOFT’s Procurement Unit will review all bidding documents and bid evaluation reports. Application of the Safeguards Procedures Manual. DLI 7 ensures that MID appoints a third safeguards officer. The attached TA provides for an international safeguards expert and the program includes an adequate budget to fund safeguards consulting services. The program works contracts include safeguards provisions that are enforced and monitored through works supervision. The program does not contain category A subprojects. The program supports the use of MID’s Climate Change Manual for Design and Implementation as applicable.

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Land not available on time for civil works, thus requiring extension of the current footprint

M

Use the Safeguards Procedures Manual, Memorandum of Agreement process, and modified land acquisition process.

Operating Environment Risks Escalation of construction costs Limited capacity of national contractors and consulting firms The private sector is in growth mode, so new entrants may gain contracts through undue influence despite their lack of the necessary capacity to perform. Natural disasters: Floods, earthquakes, and tsunamis

S

S

M

The attached TA provides support on contract management and administration, and the setting up of a system to analyze, track, and control unit rates. The program includes a private sector training to build the capacity of national contractors and consultants, and the procurement system includes the verification of bidder’s qualification and past performance records. Provision for emergency works in the program expenditure framework

Overall results-based lending program risk

S

ADB = Asian Development Bank, DLI = disbursement-linked indicator, GoA = Government of Australia, H = high, M = moderate, MID = Ministry of Infrastructure Development, MOFT = Ministry of Finance and Treasury, S = substantial, TA = technical assistance. Source: Asian Development Bank.

VI. PROGRAM ACTION PLAN

A. Status of Program Action Plan 49. Table 15 below consolidates the program actions discussed in other relevant sections of the PID.

Table 13: Status of Program Action Plan (As of March 2016)

Actions

Responsible Agency

Time Frame for Implementation

Area 1: Program Technical Aspects 1.1 Identify target areas and establish baselines for impact

and outcome of ADB’s Sustainable Transport Improvement Investment Program.

MID Commence Q2 2016

1.2 Commission a safety audit of the sealed roads, and implement key recommendations into investment works.

MID Commence Q3 2016

1.3 Organize third party technical review of efficiency and cost-effectiveness of maintenance of sealed and major unsealed roads; and develop corrective actions, including bundling of contracts and balancing the level of repair against expected maintenance coverage and budget availability (DLI1).

MID Commence Q3 2016

1.4 Finalize design of gender-responsive features, identify MID Commence Q3

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locations, explore and finalize operation and maintenance arrangements of toilets, and procure and supervise works (DLI2/GAP).

2016

1.5 Review labor-based maintenance works arrangements, including the relevance of all road sections targeted for labor-based maintenance. Reduce the number of contracts to increase efficiency and cost-effectiveness (GAP).

MID By Q3 2016

1.6 Set up a system to analyze, track, and control unit rates of civil works to achieve cost-effectiveness.

MID Permanent

1.7 Scope, design, and procure routine and periodic maintenance, repair, rehabilitation, upgrading, reconstruction, and new construction of roads and wharves. Bundle investment works planned over the 5-year program implementation period into few contracts. Integrate gender-responsive, safety, and climate-resilient features in the design of investment works (GAP).

MID Commence Q3 2016

1.8 Scope, package, and procure consulting services for the supervision of maintenance and investment works.

MID Commence Q3 2016

1.9 Organize effective supervision of maintenance works as well as its oversight by the CPIU regional managers, and the timely and informative reporting to the CPIU director and core management team.

MID Commence Q3 2016

1.10 Finalize the roads classification and have it approved. MID Follow up on TSDP action and complete by Q2 2017

1.11 Revisit the roads condition ranking system and the “maintainable” status.

MID Commence Q3 2016

1.12 Set up the monitoring and evaluation system. MID Commence Q3 2016

Area 2: MID and NTF Staffing, Capacity Development, and Technical Assistance 2.1 Recruit the core management team and international

safeguards specialist under advance action. ADB Commence after

loan negotiations

2.2 Implement the performance management process for MID staff, starting with the CPIU director, deputy directors, and managers in 2016.

MID Every year

2.3 Engage international and national technical experts as required (embedded or outsourced).

MID Commence Q3 2016

2.4 Fill vacant positions of Secretariat for NTF Board. MID, GoA By Q2 2016 2.5 From approved establishment, appoint two procurement

officers, one safeguards officer, and one monitoring and evaluation officer (DLI 7/DMF 3).

MID By Q4 2016

2.6 Engage international specialist to complete the financial management manual.

MID Prior to Loan disbursement

2.7 Develop a training plan for 2017, which includes training on financial management and accounting procedures.

MID By Q3 2016

Area 3: Fiduciary and Procurement

3.1 Develop an MID procurement instruction manual based on the MOFT Procurement and Contract Administration Manual.

MID Commence Q3 2016

3.2 Develop and manage procurement plan to renew/revise relevant maintenance contracts in time.

MID Commence Q3 2016

3.3 Leverage the oversight provided by GoA financial GoA, MID Already extant

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management adviser to ensure that requests for payments are done properly and accurately.

3.4 Engage fiduciary expert, and conduct annual fiduciary and internal control review.

MID Commence Q3 2016

3.5 Conduct audit of NTF by MOFT IAD MOFT 2016–2020 3.6 Engage external financial auditor and conduct annual

independent external audit. MID Commence Q2

2016 3.7 Prepare an NTF annual plan with requisite financial data in

accordance with NTF Fund Management Regulations 2010.

NTF Board, MID

By Q2 2016

3.8 Ensure the submission, to the auditor general, of the NTF annual statement of accounts required by the NTF Act within 6 months of the financial year.

NTF Board, MID

By 30 June 2016 and every year thereafter

3.9 Resolve (by MOFT and MID) all external audit observations, including important issues pertaining to bank reconciliations and unidentified debits prior to disbursement in accordance with the auditor’s recommendations.

MOFT, MID Prior to Loan Approval

Area 4: Safeguards: Environment and Involuntary Resettlement

4.1 Implement SPM and update it, as required, to reflect changes to country safeguards systems

MID 2016–2020

4.2 Ensure and maintain a full-time safeguards team covering social, community development, governance, and gender matters supported by intermittent inputs of international specialist (GAP)

MID

2016–2020

4.3 Twice a year, provide training to (i) MID engineers, technical specialists, and safeguards staff on scope and procedures established in the SPM; and (ii) contractors and community advisory committees on key responsibilities in program safeguards requirements (GAP).

MID, ADB

2016–2020

Area 5: NTP and NTF 5.1 Verify the government’s transfer of annual commitment to

the program in the NTF (DLI 3). ADB, MID By Q1 every

year 5.2 Submit annual update of the next year (DLI 4), NTP 3-YAP MID By 30 Sep 5.3 Verify the financial expenditure rate of the program (DLI

6). MID By 31 Dec

ADB = Asian Development Bank, CPIU = central project implementation unit, DLI = disbursement-linked indicator, DMF = Design and Monitoring Framework, GAP = Gender Action Plan, GoA = Government of Australia, IAD = Internal Audit Division, MID = Ministry of Infrastructure Development, MOFT = Ministry of Finance and Treasury, NTF = National Transport Fund, NTFB= National Transport Fund Board, NTP = National Transport Plan, Q = quarter, SPM = Safeguards Procedures Manual, TSDP = Transport Sector Development Project. Source: Asian Development Bank.

Gender Action Plan Proposed Gender Mainstreaming Activities

Targets and Indicators Responsible Institution

Output 1: Transport infrastructure rehabilitated and maintained with access for all users, with safety, gender-responsiveness, and climate- and disaster-resilience improved

All Machine based maintenance (MBMC), rehabilitation and/or new construction of subprojects include gender responsive design features (waiting/resting areas at major truck pick up/market points and major wharves equipped with separate male and

(a) At least two shaded resting areas equipped with separate male and female toilets located one at a market point and another at a wharf; (b) At least two laundry facilities on streams near water crossings and roads; (c) At least one improved access to river or

MID & Local Communities

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female toilets; Shaded waiting areas for people and rain protection for produce on wharves; Laundry facilities established and improved access to water; and/or footpaths for safe pedestrian access)

stream for water and laundry; and (d) At least one small boat access at a major wharf using pontoons and ramps

Construction of foot paths/walkways in communities to provide access to schools, health clinics and streams

At least two foot paths/walkways constructed as pilot projects in communities to address women’s access to schools, health clinics & streams.

MID, Local Communities

Information on personal safety and on registering complaints is prepared and disseminated through various media channels (e.g., information brochures, posters, or radios) and/or through NGOs.

(a) x number of information/media materials developed (b) x number of dissemination activities undertaken

MID, Honiara City Council & Local Community

Training of public bus operators (including other transport operators) and local police on sexual harassment awareness including specific guidelines on how to respond to observed situations of sexual harassment and how to address related complaints

(a) X male and x female public bus operator and/or other transport operators (e.g. tax drivers) staff trained. (b) X male and x female local police trained.

MID, Chamber of Commerce & Honiara City Council

Women and women’s groups trained and contracted and employed in LBES contracts for road maintenance

(a) At least 30% of LBES contracts are awarded to women-led groups and at least 40% of people employed by contractors are women

(b) X number of pre-tender training workshops are offered to potential women workers and/or contractors

(c) X number of post-tender training workshops are offered including mentoring

MID & Local Community

Signage and traffic calming measures (speed bumps) in village areas constructed to reduce road traffic accidents.

X road signs and x speed bumps constructed. MID & Local Community

Public consultations with community men and women; consultations to include road safety messages.

At least 40% of CAC Committees to be women MID & Local Community

Ensure all planning and preparation data from road user and household surveys and consultations are disaggregated by sex.

All data available disaggregated by sex MID & Local Community

All wages or sub contract payments paid by contractors are collected in monthly logbook disaggregated by sex

Equal pay MID & Local Community

All sub contracts and/or employment agreements are recorded by CAC in minutes of meeting to address equity in employment and payment and improve transparency

CAC Minutes review on sample basis MID & Local Community

Output 2: Country systems strengthened to finance and implement the NTP

NTP safeguards manual reviewed to include revised CAC guidelines including results of review of gender equity, payment and transparency improvements

NTP safeguards manual reviewed by gender experts and comments incorporated in the final document

MID

Annual update of National Transport Plan’s 3 Year Action Plan includes gender equity as a key feature

NTP annual update reviewed by gender expert and comments incorporated in final document

MID

National Road Safety Bill includes attention to gender and social safeguards

Gender and social safeguards issues included in update of National Road Safety Bill

MID

Annual review of GAP and MID Gender Plan will ensure that GAP activities are aligned with and support gender activities being implemented by the MID gender focal point

GAP and MID Gender Plan reviewed annually by MID Gender Focal Point and Gender/Community Development Specialist

MID/CPIU

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Carry out regular liaison & coordination meetings with the Ministry of Women, Family Affairs, Youth & Children ( MWFYC) and GoA In order to address issues raised in development of maintenance contracts for women/ community groups with support from other programs (e.g., PSDI) .

Meetings held and minutes of meetings prepared.

MID

Output 3: MID’s management and supervision capacity strengthened

Train MID staff on gender equality issues.

All MID management and program job managers (male and female) trained on gender equality issues with attendance specified as compulsory in job descriptions

MID

Build the capacity of the MID Gender Focal Point to effectively support the MID PS with his/her gender mainstreaming responsibilities as outlined in the TOR for the PS.

MID gender focal point trained on gender equality issues and mentored by international Safeguards Specialist

MID/CPIU

Promote appointment of female managers in CPIU

10% of CPIU regional managers are female MID

Regular collection of sex disaggregated data for all project related information to be used for project monitoring and reporting requirements, including project progress reports.

Sex disaggregated data collected, analyzed, and reported in regular progress reports..

MID

Social development and gender officer employed to manage the implementation of gender design features and GAP

Officer appointed and satisfactory progress of GAP implementation at first supervision mission

MID

Implementation Arrangement

The GAP will be implemented by the CPIU which will include one Project Management Safeguards Specialist designated as manager in the CPIU, overseeing execution and compliance of all safeguards issues including gender. The CPIU will coordinate with the MID Gender Focal point to ensure GAP activities are aligned with and complement existing gender activities implemented by MID. The CPIU will include one full-time national Safeguards Specialist (NSS) for the duration of project implementation under the supervision of an international Safeguards Specialist (SSS) working intermittently. There will also be one full time Gender/ Community Development Specialist (national). The specialists will be responsible for incorporating the GAP into project planning, design and implementation programs, including awareness training and establishment of sex-disaggregated indicators for project performance and monitoring. The progress of GAP activities will be included in regular progress reports on overall project activities submitted to ADB and the government CAC = community advisory committee; CPIU = central project implementation unit; GAP = gender action plan; MID = Ministry of Infrastructure Development; NTP = national transport plan; PSDI = private sector development initiative.

VII. TECHNICAL ASSISTANCE

A. Summary 50. The MID is responsible for infrastructure development in Solomon Islands. Its main responsibilities are planning transport infrastructure development, providing transport infrastructure asset management, and contracting transport infrastructure works including road, wharf, and airstrip routine maintenance, periodic maintenance, rehabilitation and upgrading, and new construction. The MID’s Transport Infrastructure Management Services Department performs these responsibilities through the Central Project Implementation Unit (CPIU). 51. The Transport Sector Development Project7 and its attached technical assistance were implemented to improve capacity of the MID by developing an institutional reform and capacity

7 ADB. 2010, Proposed Grant and Administration of Technical Assistance Grant Solomon Islands: Transport Sector

Development Project. Manila.

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development plan and assisting the MID in implementing the plan. In the 5 years since, the MID’s capacity has developed moving from project to sector approach, service and works delivery mode to outsourcing and contract management, restructuring the organization, strengthening training systems and delivery, and strengthening procedural compliance. However, institutional assessment completed during preparation of the RBL program indicated that while progress has been made, gaps in managerial capacity remain, with a need to strengthen contract and project management, procurement, safeguards, work processes, and the role of manager. The assessment also concluded that further competency development is needed for staff to perform necessary functions and processes at the required level. 52. Purpose of the technical assistance. Based on the findings of the institutional assessment, the TA will further develop the MID’s capacity to deliver the NTP efficiently and effectively using better systems, allowing continued tapering of TA and consulting services support, while improving financial sustainability. 53. Composition of the TA. The TA comprises a Program Lead advising and assisting the MID core management team; two senior technical specialists, responsible for Administration & Operations and Procurement & Contract Management, ensuring that integrated management occurs across the CPIU functions; and a senior safeguards/land acquisition and resettlement specialist leading safeguards within management and across the whole of the CPIU.

54. Output 1: Capacity of the MID’s management team improved to manage the NTP work program. The TA will support the achievement of the RBL program’s output 3 (MID’s management and monitoring of work program strengthened) by strengthening the management team in its strategic and performance management of planning and design, quality control and assurance, and operations and management functions. There is a need for the management team to better integrate the work processes across all functions, gaining process efficiencies, improved resource deployment, higher staff output, and information management directed to decision-support. The specialists will review and assist the MID’s implementation of the annual work plan (AWP), and assess and develop their planning, coordination, monitoring, safeguards, procurement, financial management capacities, as well as resolving related managerial and human resources performance issues. They will advise at strategic and managerial decision-making levels.

55. The specialists will (i) strengthen the MID in work program planning and scheduling, and in performing technical functions; (ii) lead the procurement of international and national experts and any outsourcing of national expertise; and (iii) assist, monitor, and assess MID performance in delivering the AWP. They will assist the CPIU director to manage the CPIU processes and all other consulting services, implementing performance management and quality improvement strategies. In providing this assistance, they will advise on infrastructure planning and management and contract management, and human resources performance issues, and support the MID management to conduct engineering investigations, processes and decisions, and safeguards management and procurement transactions.

56. Output 2: Country systems strengthened to implement the NTP. The TA will support the achievement of the RBL program’s output 2 (country systems strengthened to finance and implement the NTP) through systems development, a key focus of which will be to ensure competent and compliant system implementation. The TA will review, monitor, improve, and develop systems used to implement the NTP. The MID will benefit from a full range of up-to-date, documented, and approved systems in key areas including contract administration, works supervision, subproject accounting, technical audit, reporting and evidence-based decision-

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making, safeguards, financial management, and employee performance management. The TA will support the MID in (i) developing the next 3-Year Action Plan (3-YAP), (ii) implementing the NTP and the 3-YAP, and (iii) achieving key program results agreed and outlined under the RBL program.

57. The specialists will actively support the achievement of planned results, disbursement linked indicators verification and reporting, technical and safety audits, baseline data collection systems, performance management process, labor-based maintenance arrangements review and efficiency and cost effectiveness improvement, and gender-responsive climate-resilient design. They will ensure the implementation of the safeguards procedures manual and finance management manual. Processes for working with the NTF Secretariat for the annual update of the 3-YAP and in the preparation and implementation of the annual work program will also be supported.

B. Cost and Financing

58. The TA is estimated to cost $4.5 million, which will be financed on a grant basis by the Government of Australia and administered by ADB. The government will provide counterpart support in the form of counterpart staff, office accommodation, and meeting space, and other in-kind contributions.

Table 14: Cost Estimates and Financing Plan

($'000)

Item Amount

Government of Australiaa 1 Consultants

a Remuneration and per diem i. International consultants 3,962

b International travel 125 c Reports and communications

2 Contingencies 201 Sub-Total 4,238

3 ADB Administration fee 212 Total 4,500

a Administered by the Asian Development Bank. This amount also includes ADB’s administration fee, audit costs, bank charges, and a provision for foreign exchange fluctuations (if any), to the extent that these items are not covered by the interest and investment income earned on the grant, or any additional grant from Government of Australia. The Government of Australia’s TA contribution, subject to its approval processes, is up to A$5.7 million (to be given in A$). The currency conversion is based on 12 February 2016 rates: $1.0 = A$1.41.

Source: Asian Development Bank estimates.

C. Implementation Arrangements

59. The MID will be the executing agency for the TA. The TA activities will be directed to and monitored by the Transport Infrastructure Management Services Department. Consultants under the TA will also liaise with the MID’s Corporate Services section as well as the Ministry of Finance and Treasury (MOFT) and other relevant agencies.

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60. ADB will engage individuals directly to provide a total of 191 person-months of consulting inputs. The selection and engagement of consultants will be carried out in accordance with ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time). All disbursements under the TA will be done in accordance with ADB's Technical Assistance Disbursement Handbook (2010, as amended from time to time). The equipment will be handed over to the MID upon TA completion. The TA will be implemented over 55 months from the fielding of the consultants, which is anticipated from June 2016 to December 2020.

61. Summary of consulting services. The TA will ensure that the CPIU develops by gaining improved management capacity applied across all functions. The TA will be implemented through the support of the CPIU Director and management team. The consultant team will include four international consultants: a program lead, a management accounting and operations specialist, a procurement and contract management specialist and a safeguards specialist. The program lead will operate at the strategic and managerial levels supporting the CPIU Director. The two senior specialists will assist the program lead and work cross-functionally to ensure that efficient and effective decision-making and system improvements are achieved. Both of these specialist roles are located within the CPIU management team and will ensure that integrated management occurs across the CPIU functions. Crucial support will also be provided by the safeguards specialist to ensure that a timely and compliant approach to safeguards is instilled through the whole of the CPIU. While other MID staff and national consultants will provide the daily safeguards operations, the specialist will build the capacity of managerial and technical CPIU members so that a fully compliant and proactive safeguards system is delivered at all levels. The required consulting services inputs are summarized in Table 15 below and described in detail in the program implementation manual.8 D. Consulting Service Requirement 62. ADB will engage individuals to provide a total of 191 person-months of international consulting inputs as outlined in Table 16.

Table 16: Summary of Consulting Services

Area of Expertise Duration (person-months) A. International 1. Program Lead 55 2. Management Accounting & Operations Specialist 55 3. Procurement & Contract Management Specialist 55 4. Safeguards Specialist 26

Total (A+B) 191

E. OUTLINE TERMS OF REFERENCE FOR CONSULTANTS

(i) General

63. The capacity development TA will support the MID to implement the NTP to be financed by the NTF.

(ii) Consultancy Inputs

8 Program Implementation Document (accessible from the list of linked documents in Appendix 2 of the Report and

Recommendation of the President to the Board of Directors).

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64. ADB will engage individuals directly to provide the following consulting inputs:

• Program Lead (International, 55 person-months). The Program Lead will support the CPIU Director in strategic, systems, functions, staff and consultants to ensure that compliant, efficient, and effective actions are taken to achieve improved and more economical transport infrastructure for nationwide access to social services and inclusive growth. S/he will advise and assist the CPIU Director in all engineering matters, act on their behalf as needed, coordinate the work of all TA consultants and program consultancy services, and strengthen management teamwork. Within the overall scope, the key tasks of the Program Lead will be, to:

(i) Strengthen capacity in the role, decision-making and performance of the Director and Deputy Directors of the CPIU, ensuring that MID’s performance and their learning and development is enhanced;

(ii) Lead work program planning and scheduling for MID’s work program and identify financial and personal resource and system needs;

(iii) Lead and manage technical assistance and capacity building so that consultants and experts are mobilized as and when needed and planned program outputs are achieved;

(iv) As Technical Lead, advise MID on transport infrastructure civil works and maintenance, so that engineering decisions reflect best possible practice for the context;

(v) Contribute to the process for the annual rollover of the 3YAP; (vi) Contribute to the preparation of the AWP and monitor and report progress to

stakeholders; (vii) Lead improvements and utilize systems for planning (including asset

management), design (including gender responsive features), implementation, supervision and quality assurance of maintenance, rehabilitation and new works, according to MID guidelines and operations manuals, as required;

(viii) Ensure independent set out in the PAP are commissioned and completed, including technical, safety audits, project cost review and LBES review;

(ix) Lead CPIU in the development and monitoring of annual budgets, (x) Work with Regional Managers and Job Managers, coaching and improving

their knowledge and performance in managing subprojects, (xi) Manage administration, integration of work processes across functions (eg

engineering, procurement, safeguards and finance), implementation, monitoring and reporting of capacity building provided under the program,

(xii) Ensure the development of reports for monthly progress of subprojects against plan, as well as environmental, social, and gender aspects,

(xiii) Submit regular and timely reports as required (monthly, quarterly, annual and project completion, program results verification reports) to MID, NTF Board, and development partners, and

(xiv) Oversee management of the M&E system for the CPIU, working with other members of the core team.

Outputs: The Program Lead is expected to produce these outputs, achievements/delivery of which is to be clearly demonstrated by:

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(i) CPIU Director support strengthened on strategy and management; (ii) Management (financial, procurement, safeguards) systems implemented to

improve processes and decisions; (iii) TA and capacity building consultants outputs are delivered and achieve

contracted requirements; (iv) Increased engineering capability in CPIU; (v) Effective subproject management, monitoring and reporting (on budget, on

time, within scope and to the required quality), monitoring and reporting to meet government and partners, GoA and ADB requirements;

(vi) Improved leadership on design and management of subprojects; (vii) MID annual work plan targets, Program Action Plan and DMF milestones

achieved; (viii) Increased MID capacity for planning, design and implementation of transport

asset maintenance and rehabilitation; (ix) Increased MID capacity to foster development of private sector for

implementation of transport asset maintenance and rehabilitation; (x) Independent studies’ (project cost studies, labor based maintenance review,

asset management review, technical and safety audit) completed amd findings/recommendations implemented;

(xi) Revised road classification system finalized, submitted and approved in 2017; (xii) Asset management – road network condition survey updated annually, as

required; and (xiii) Improved efficiency, effectiveness, accountability, transparency and value for

money in the expenditure of NTF funds (demonstrated based on indicators proposed by team leader).

Minimum Qualification Requirements: The Program Lead will have a background appropriate to the tasks and output set out above, with at least 10 years successful experience in a leadership role in relevant transport infrastructure projects, a degree in transport engineering, civil engineering, or the equivalent from a recognized university, a comprehensive understanding of good management practice in developing countries, and demonstrably skilled trainer, coach and mentor for changed behaviour.

• Management Accounting and Operations Specialist (International, 55

person-months). The Management Accounting and Operations Specialist will support the Program Lead to ensure compliant, efficient, and effective accounting, administration and operations for improved management of CPIU subprojects. S/he will work by applying cross-functional expertise, building capacity and performance in and through the MID-CPIU management team, and work closely with the Procurement and Contract Management Specialist.

Within this overall scope, the key tasks of the specialist are to:

(i) Analyse problems and strengthen the financial management of the CPIU (including contract tracking, monitoring, supervision, reporting and payments), leading to improves decision and more cost-effective operations;

(ii) Manage CPIU budgets and expenditure accounting for contracts and program administration, and provide reports for CPIU management decision-making;

(iii) Lead and improve project and program performance monitoring system, reporting on the DMF and disbursement linked indicators (DLIs) as

38

appropriate as well as program and subproject progress and problems, and train engineers in data entry and report creation;

(iv) Monitor and interpret works expenditure regularly; (v) In consultation with the project engineers and the contract management

specialist, integrate current reporting systems in a CPIU management information system and train users to deliver coordinated, consistent, accurate and timely decision-support reporting for management on DMF and DLI progress through M&E, physical and financial project performance, procurement progress, and asset inventory and condition data;

(vi) Maintain the M&E system (and further add to it, as needed) with agreed indicators, targets, established systems for data collection, analysis and recording of baseline and progress data;

(vii) Lead in the development and administration of systems for preparation of NTF payment requests and ensure that all documents are complete, BOQ calculations, progress of works, and monthly payment certificates are accurate and that value for money has been achieved prior to submission of payment requests to MID finance and accounting section for certification by the a GoA financial management specialist;

(viii) Lead, advise and assist CPIU administration and operations, providing support for compliant implementation of the work program ensuring that it is within budget and timeframe and sound administration procedures; and

(ix) Strengthen capacity of CPIU Director, Deputy Directors and Chief Engineers in managing project accounting and related processes and decision-making; and all financial management, administration and operations matters, ensuring that their learning and development is enhanced.

Outputs: The specialist is expected to produce these outputs, achievements/delivery of which is clearly demonstrated:

(i) Transparent and accurate accounting systems is setup and used; (ii) Contract management, administration and monitoring system in CPIU set up

and managed; (iii) Contract accounting data prepared and verified, with financials reconciled; (iv) Effective office administration and operations; (v) Reports of progress on DMF and DLIs produced; (vi) Accessible record keeping system implemented; (vii) Tracking and monitoring systems operational, including those needed for

DLIs achievement and verification; (viii) Contract financials reconciled; MOFT and MID systems, guidelines and

manuals used and revised to meet MID CPIU requirements to deliver work program;

(ix) Anticorruption corruption systems fully operational to detect, verify, and report according to established procedures and agreements; and

(x) Capacity developed in the CPIU on administration and operational matters; and cooperation with and from MID finance team, MOFT and auditors.

Minimum Qualification Requirements: The Management Accounting and Operations Specialist will have a background appropriate to the tasks and output set out above, with at least 10 years successful experience in management accounting and operations management in relevant international development projects, a degree in accounting, commerce, economics, business or other related fields from a recognized

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university, a good understanding of management information systems and their use in decision-making in a government agency responsible for infrastructure maintenance and civil works in developing countries, and demonstrably skilled trainer, coach and mentor for changed behaviour.

• Contract Management Specialist (International, 55 person-months). The

Procurement and Contract Management Specialist will support the Program Lead to ensure compliant, efficient, and effective procurement and contract management through the contract life cycle. S/he will apply cross-functional expertise and building capacity and performance in and through the MID-CPIU management team and will also work closely with the Management Accounting and Operations Specialist. The Specialist will also assist MID to strengthen its role and responsibilities for procurement in the context of the effective and efficient operation of the SIG public procurement system.

Within this overall scope, the key tasks of the specialist will be to:

(i) Advise and assist the CPIU Director in all procurement and contract management matters;

(ii) Strengthen capacity of Director, Deputy Directors and CPIU staff in all procurement and contract management matters, ensuring that they have a sound understanding of the country systems and good practices;

(iii) Develop and manage the CPIU Procurement Plan in alignment with the AWP and annual budget, including by ensuring procurement planning is fully integrated into MID annual planning and budget processes;

(iv) Lead CPIU’s management of the life cycle including bid invitation, bid evaluation, contract award, contract implementation, works supervision and reporting, computation of payments, communications with contractors, assessing suggested contract variations;

(v) Work with the Management Accounting and Operations Specialist in consolidating and refining current information provision to establish a CPIU management information system (MIS), and be specifically responsible to set up and implement the components for procurement performance monitoring based on conformity indices and contract management based on subproject progress;

(vi) Further develop a procurement performance monitoring system (to be integrated into the CPIU MIS);

(vii) Ensure that procurement procedures in use comply with legislation, policies, systems and procedures of government, and the relevant updates;

(viii) Monitor and report compliance with required procurement and contract management systems;

(ix) Review tender documents for correctness and compliance with applicable documentation requirements;

(x) Provide technical advice on procurement strategies for packaging works for subprojects and consultant services;

(xi) Monitor and advise on the performance of the Tender Evaluation Committee processes and outputs;

(xii) Mentor, coach and train MID-CPIU personnel in good practice procurement and contract management as appropriate to their needs and context, including by supporting the design and delivery of procurement training; and

(xiii) In consultation with the Management Accounting and Operations Specialist and the project engineers, set up and implement a system to analyse, track

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and control unit rates and use it for bid evaluation purposes (liaising with MOFT Procurement Unit as appropriate).

(xiv) Strengthen MID procurement structures, policies and oversight, as required, including by building the data/information requirements to support decision making and strengthening reporting against MID procurement plans.

(xv) Add to MOFT Procurement Instruction Manual or prepare addendum for MID needs;

(xvi) Ensure any areas of non-compliance in procurement and contract management are detected and reported to MID management, MoFT Procurement Unit and others based on agreements.

(xvii) Maintain close working relationships with key stakeholders, including the procurement adviser, to contribute to strengthening procurement legislative and regulatory framework including its operationalization.

Outputs: The specialist is expected to achieve the following outputs, achievements/delivery of which is clearly demonstrated:

(i) Effective integration of procurement and contract management in the CPIU to deliver transport infrastructure and services;

(ii) Annual procurement plans for the delivery of the work program developed and implemented according to schedule;

(iii) Procurement Performance Monitoring system in place and implemented, performance targets achieved, and follow-up actions taken as appropriate;

(iv) Bidding documents properly prepared; (v) Contracts for projects properly managed and administered through the

contract life cycle ensuring full compliance with procurement regulations and contract clauses and conditions, in consultation with management accounting and operations specialist;

(vi) All tender documents are accurate and prepared in compliance with country system requirements;

(vii) System to analyze, track and control unit rates set up and used in works costing and bid evaluation;

(viii) Written advice provided on packaging of works and consultant services to achieve DMF targets for reducing overall number of contracts;

(ix) Monitoring of reports regularly prepared on Tender Evaluation Committee processes and outputs is improved;

(x) Capacity developed in the CPIU on contract management and procurement performance systems, and skill development for MID procurement officers;

Minimum Qualification Requirements: The Procurement and Contract Management Specialist will have a background appropriate to the tasks and output set out above, with at least 10 years successful experience in procurement and contract management in relevant international development projects, a degree in engineering, commerce, economics, business or other related fields from a recognized university, a good understanding of contract management systems and their use in procuring and managing infrastructure maintenance and civil works contracts in developing countries including demonstrated ability to manage and monitor contracted works, and demonstrably skilled trainer, coach and mentor for changed behavior.

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• Safeguards Specialist (International, 26 person-months). The Safeguards Specialist will support the Program Lead and build capacity in the MID-CPIU management team in order to ensure compliant, efficient, and effective safeguards planning, consultations and reporting across the CPIU. S/he will apply specialist functional expertise and build capacity and performance in and through the MID-CPIU management team and technical CPIU members so that a fully compliant and proactive safeguards system is delivered at all levels.

Within the overall scope, the key tasks of the Safeguards Specialist will be, to: (i) Coach and motivate MID and CPIU to apply the Safeguards Procedures

Manual (SPM) at all levels; (ii) Ensure that all activities under the program recognize and conform to

country safeguards systems, ADB SPS safeguards principles, and international good practices;

(iii) Address issues arising from changes in environmental and land acquisition and resettlement (LAR) procedures (e.g. proposed under TA 8217 Solomon Islands: Strengthening Country Safeguard Systems in the Transport Sector);

(iv) Ensure smooth co-ordination between the MID and other relevant ministries (MLHS, MECDM);

(v) Conduct training and provide other capacity building support so as to ensure that relevant procedures are recognized, adopted and implemented;

(vi) Twice a year, provide a training program to: (1) MID engineers, technical specialists and safeguards staff on scope and procedures established in the SPM; and (2) contractors and community advisory committees on key responsibilities in program safeguards requirements, including the Gender Action Plan,

(vii) Develop, review, update and oversee the implementation of a Consultation and Communication Plan;

(viii) Ensure that routine monitoring of contractors is undertaken and reported so as to respect the rights, expectations, culture and property of local communities, and that corrective actions are further monitored and reported;

(ix) Supervise and review preparation of safeguard documents (including LARP and PER) for subprojects, and control and improve quality of documents prepared by national safeguards staff/consultants;

(x) Ensure integration of appropriate level of environmental management plan (EMPs) and development consent conditions into contract documentation prior to tender and contractors’ compliance with each level of EMP (simple EMP for LBES, developed EMP for MBMC and full EMP for rehabilitation and major works) and CAC, Climate Change and other guidelines as set out in the SPM, and ensure compliance with safeguards assurances under the Loan/Grant Agreements;

(xi) Oversee, monitor and report progress on the implementation of the Gender Action Plan [GAP];

(xii) Support national staff/consultants, CPIU counterparts and contractors with community liaising, environmental concerns, social and development concerns, community education, and implementation of grievance-redress mechanism (GRM)

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(xiii) Coach, train and support safeguards staff/consultants, all CPIU staff, and contractors on their safeguards responsibilities.

Outputs: (i) Compliant and proactive safeguards system in place that meet the CSS

and SPS; (ii) Capacity developed and strengthened for the management team, CPIU

staff, communities and contractors fully competent in the use of SPM; (iii) Safeguards systems meet required standards; Implementation of

safeguards in compliance with CSS and SPS, with CPIU staff proactive in safeguards monitoring;

(iv) Program Community Consultation and Communication Plan development and implemented;

(v) CPIU staff capacity strengthened to ensure that all staff are proactive in safeguards monitoring;

(vi) Appropriate levels of environmental management plan and development consent conditions are included in all tender documents;

(vii) Annual Reports on the implementation of the GAP are delivered and gender-disaggregated data included in all DMF reports;

(viii) Reports delivered on routine monitoring of contractors for compliance with safeguards requirements;

(ix) SPM updated as required to reflect changes to country safeguards systems; and

(x) Training programs delivered every six months for (1) MID staff and (2) contractors and community advisory committees.

Minimum Qualification Requirements: The Safeguards Specialist will have a background appropriate to the tasks and output set out above, with at least 10 years successful experience in safeguards management in relevant international development projects, a degree in engineering, economics, development or other related fields from a recognized university, a strong knowledge and understanding of safeguards systems, planning and implementation in developing countries, a strong familiarity with ADB safeguards systems and expectations, and demonstrably skilled trainer, coach and mentor for changed behaviour.

65. All Consultant TORs and Contracts to Include Performance Management Clause. The ADB will consult with DFAT in writing on each contract’s terms of reference (and any variations to them) of each TA consultant. The ADB will be responsible for the selection, engagement and management of TA consultants in accordance with the ADB’s Guidelines on the Use of Consultants by ADB and its Borrowers, dated March 2013, as amended from time to time. Each TA contract will be subject to an ADB performance evaluation review, conducted every six months. The review shall be based on achievement of assignment specific outputs on time and on budget. ADB and DFAT will jointly conduct TA implementation review missions. DFAT input will be sought to ensure quality and timely delivery of TA outputs; determine adequacy of TA inputs and for any adjustments, as needed; review will include workplan preparation, consultant performance evaluation and overall work progress. ADB reserves the right to terminate the contract i) if outputs are not achieved on time and at a quality level acceptable to ADB; ii) services are no longer required or iii) for any other reasons in the interest

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of the project. Pre-termination of the contract is subject to 2-weeks’ notice.

VIII. MONITORING OF KEY PROGRAM COVENANTS A. Summary of Key outstanding issues

Table 17: Key Outstanding Issues and Actions (As of March 2016)

Number Key

Issues

Status in Addressing the

Issues Next Steps

Responsible Agencies and

People Timeframe for

Implementation Sources: Asian Development Bank and Solomon Islands Government.

B. Accountability Mechanism 66. People who are or may in future be adversely affected by the program may submit complaints through ADB’s accountability mechanism. The accountability mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted operations voice, and seek a resolution of their problems and seek resolution of these problems, as well as report alleged violations of ADB’s operational policies and procedures.9 67. Before submitting a complaint to the Accountability Mechanism, affected people should make a good faith effort to resolve their problems and/or issues by working with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, they approach the Accountability Mechanism. C. Changes in program scope and implementation arrangements 68. Changes in scope and implementation arrangement during the course of implementation (including both major and minor changes) are recorded in this section to provide a chronological history of these changes for the program and are reflected in Table 19.

Table 18: Changes in Scope and Implementation Arrangements (As of March 2015)

Number

Changes and Key

reasons

Date

Names of Documents

Sources: Asian Development Bank and Solomon Islands Government

D. Organizational Structure 69. Figure 2 illustrates the reporting relationship between key units involved in the program implementation. This is based on CPIU’s organizational structure as of March 2015 but has been reorganized to key program structure for the implementation of the program.

9 ADB. 2012. Review of the Accountability Mechanism Policy. Manila.

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Figure 2: MID Organization Structure (As of March 2015)

Co

rpo

rate

Se

rvic

es

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70. The MOFT will be the executing agency while the MID through the CPIU will implement the program. The program will be implemented from June 2015 to June 2020. A program steering committee will be formed that will assist the CPIU to implement the program. Given that the program will be financed through the NTF, the NTF Board will approve will Annual Work Plan prepared from the 3YAP.

71. Actions to mitigate fiduciary risks are included in the PAP. The PAP is a living document that can be refined, improved and updated during the implementation of the program, if needed. E. Program Officers and Focal Persons

1. Initial Arrangements

Table 20: Program Officers and Focal Persons (As of March 2016)

No.

Key Government Staff and Positions

Key ADB Staff and Positions

1. Harry Kuma, Permanent Secretary, MOFT Olly Noronjono, Director, Pacific Transport Energy and Natural Resources (PATE)

2. Henry Murray, Permanent Secretary, MID Sarosh Khan, Senior Transport Specialist, PATE

3. Jimmy Nuake, Undersecretary (Technical), MID Rishi Adhar, Senior Project Officer, PLCO

4. Harry Rini, Director, TIMSD Jogendra Ghimire, Counsel, OGC

5. Mike Qaqara, Deputy Director, TPP, TIMSD Janyna Rhor, Senior Procurement Specialist, OSFMD

6. Jabin Laedola, Deputy Director, Operations and Maintenance, TIMSD

Abbas H. Kizilbash, Financial Management Specialist, OSFMD

7. Ishmael Alulu, Deputy Director, Quality Assurance, Research, and Monitoring and Evaluation, TIMSD

Ninebeth Carandang, Safeguards Specialist, PATE

8. Ma. Antonietta S. Salvador, Operations Officer, PATE

9. Marie Miel de Villa, Project Analyst, PLCO

Source: Asian Development Bank, Ministry of Finance and Treasury and Ministry of Infrastructure Development.

2. Changes during Implementation

Table 21: Changes in Key Executing Agency Staff and ADB Mission Leader (As of March 2016)

Number Changes Date Reasons for the Change

Source: Asian Development Bank and Ministry of Finance and Treasury