TECHNICAL ASSISTANCE: HIMACHAL PRADESH POWER SECTOR CAPACITY DEVELOPMENT AND IMPLEMENTATION SUPPORT

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1 Himachal Pradesh Clean Energy Transmission Investment Program (RRP IND 43464) TECHNICAL ASSISTANCE: HIMACHAL PRADESH POWER SECTOR CAPACITY DEVELOPMENT AND IMPLEMENTATION SUPPORT A. INTRODUCTION 1. The Himachal Pradesh Clean Energy Transmission Investment Program (the Program) is a proposed multitranche financing facility (MFF) for 2011 included in the Country Partnership Strategy for India (March 2009). The proposed capacity development and implementation support technical assistance (TA) is listed in the 2011 Country Operations Business Plan will coincide with the proposed Program as a "piggy-back" TA. 2. The MFF and tranche 1 loan are scheduled for approval in September 2011 and as such, this TA for $600,000 is expected to commence implementation in January The TA will target specific capacity development needs of the executing agency of the MFF, H.P. Power Transmission Corporation Ltd. (HPPTCL) and help them to prepare future tranches. B. THE PROPOSED TA 1. Impact and Outcome 4. As a piggy-back TA coinciding with the MFF, this TA supports the impact and outcome of the MFF. The TA's objectives are stronger institutional capacity within HPPTCL on general project implementation matters, and solid implementation of the Himachal Pradesh Clean Energy Transmission Investment Program combined with knowledge transfer. 2. Methodology and Key Activities 5. ADB's technical assistance is attached to the multitranche financing facility (MFF) and will target specific capacity development needs of the executing agency, including future tranche preparation, project implementation support, and capacity development activities. 6. The TA will consist of consultants working with the project management unit (PMU) of HPPTCL. 3. Cost and Financing 7. The total cost of the TA is $650,000 equivalent. ADB will provide technical assistance not exceeding the equivalent of $600,000 to be financed on a grant basis by the Technical Assistance Special Fund Other Sources (TASF-Other Sources). The Government of Himachal Pradesh (GOHP) will contribute $50,000 equivalent in kind by providing office accommodation, support facilities, counterpart staff, maps, reports, and other logistical support.

2 4. Implementation Arrangements 8. The start date of the TA will be 31 October The completion date of the TA will be 31 December The executing agency (EA) will be the H.P. Power Transmission Corporation Ltd. (HPPTCL). The Project Management Unit (PMU) of HPPTCL is in charge of implementing the Himachal Pradesh Clean Energy Transmission Investment Program and will be the recipient of assistance under this TA. 9. The TA will require the services of individual consultants in the fields of transmission system engineering, transmission system planning, environment and social safeguards, financial management, economic and financial analysis, and human resource management. Detailed terms of reference (TOR) are covered in Appendix 2. ADB will recruit the consultants in accordance with its Guidelines on the Use of Consultants (2007, as amended from time to time). The Government of Himachal Pradesh, through HPPTCL, will provide office accommodate and transport as required, as well as counterpart office staff to be made available. Disbursements will be made in accordance with ADB s Technical Assistance Disbursement Handbook (May 2010, as amended). Attachment: (1) Design Cost Estimates, Financing and Implementation Plan (2) Outline Terms of Reference for Consulting Services 2

3 Attachment 1 COST ESTIMATES, FINANCING AND IMPLEMENTATION PLAN A. Cost Estimates and Financing 1. The total cost of the TA is estimated at US$650,000 equivalent. ADB will finance U$600,000 on a grant basis. The Government will finance the remaining US$ 50,000 equivalent in kind through the provision of administrative setup, including office space, office equipment, and local communication and transportation. Detailed cost estimates and financing plan are in Table 1. Item Table 1 COST ESTIMATES AND FINANCING (US$'000) Total Cost A. Asian Development Bank Financing a 1. Consultants a. Remuneration and Per Diem i. International Consultants 367,170 ii. National Consultants 107,710 b. International and Local Travel b 24,100 c. Reports and Communications 4, Surveys 25, Misc. Admin. Costs 5, Contingencies 66,420 Subtotal (A) 600,000 B. Government Financing c 1. Office Accommodation and Transport 20, Remuneration and Per Diem 20,000 of Counterpart Staff 3. Contingencies 10,000 Subtotal (B) 50,000 Total 650,000 a Financed by ADB Technical Assistance Special Fund [TASF-Other Sources]. b Includes airfare, land travel and/or vehicle hire. c These costs are in-kind costs borne by the executing agency. Source: Asian Development Bank estimates. B. Implementation Arrangements 2. The TA will require the services of 6 individual consultants (4 international and 2 national), for a total of 32 person-months. The consultants include a Transmission Engineer, an Environment Specialist, Social Safeguards Specialist, Economic and Financial Specialist, Human Resource Specialist, and Transmission System Planning Specialist. ADB will recruit the consultants in accordance with its Guidelines on the Use of Consultants (2007, as amended from time to time). All consultants will be recruited individually. Disbursements will be made in accordance with ADB s Technical Assistance Disbursement Handbook (May 2010, as amended).

4 3. H.P. Power Transmission Corporation Ltd. (HPPTCL) will be the executing agency (EA). HPPTCL is to provide adequate office accommodation and administrative support to the consultants for carrying out the tasks of the TA. The start date of the TA will be 31 October The completion date of the TA will be 31 December

5 OUTLINE OF TERMS OF REFERENCE FOR CONSULTING SERVICES 1. The team composition of the experts along with their estimated person months is shown in the table below: A. Consultants Team Composition A. Consultants No. of Experts Total P-M 1. Transmission Engineer 1 International 8 2. Environment Specialist 1 National 8 3. Social Safeguards Specialist 1 International 8 4. Project Economics/Financial International 1 Assessments Consultant 3 5. Human Resource Specialist 1 National 3 6. Transmission System Planning Specialist 1 International 2 Total 6 32 B. Scope of Works 2. The primary responsibility of the Consultants is to advise and assist the EA in preparation sub-projects under the MFF, providing technical support, and assist in the implementation of the loan financed projects 1. Transmission Engineer (8 person months) 3. The scope of works under the TA will supplement/complement the HPPTCL s project preparatory works for future MFF tranches and to provide technical guidance and coordinate with HPPTCL on the loan processing in line with ADB s Guidelines and GOI regulations. (i) As Team Leader, interface with the Government of Himachal Pradesh, HPPTCL officials and the ADB on all matters related to future tranche loan processing. (ii) (iii) (iv) (v) Review detailed project reports (DPRs) for the proposed transmission system investments and confirm that the proposed subprojects are consistent with the state s transmission system master plan and with the project criteria as outlined by the Framework Financing Agreement. Prepare technical description of the future tranche loan subprojects, and work with HPPTCL to ensure proper electrical diagrams/maps are produced to illustrate and delineate the subprojects. Work with HPPTCL to prepare and finalize detailed cost estimates for the proposed future tranche subprojects. Coordinate with the other TA consultants preparing the economic, financial, social and environmental due diligence, as well as the capacity development aspects of future MFF tranches. As Team Leader, liaise with HPPTCL and other Government of HP agencies on all such matters and ensure understanding on the part of HPPTCL on the inputs they

6 (vi) need to provide to the other consultants in order for all such work to be timely completed. Review HP s transmission system, and ensure subprojects proposed for future MFF tranches are properly defined in scope taking into consideration ADB environment safeguard guidelines related to associated facilities. Output/Reporting Requirements: Technical descriptions of the proposed subprojects. 2. Environment Specialist (8 person months) 4. The consultant will supplement/complement the H.P. Power Transmission Corporations Ltd s (HPPTCL) project preparatory works related to the environmental safeguards aspects of future tranches of the Himachal Pradesh Clean Energy Transmission Investment Program. The consultant will be responsible for the Initial Environmental Examinations. (i) Review the detailed project reports (DPRs) for relevant project and environmentalrelated information, and review environmental impact assessment reports, if any, for the proposed investment components in future MFF tranches and the required mitigation measures in the design, construction and maintenance of the proposed investment components, and policy options. Conduct site visits to the subproject areas. In each case, assess conformity with ADB's Safeguard Policy Statement (2009) 1, Operations Manual F1/BP and F1/OP (2010) 2, Environmental Guidelines for Selected Industrial and Power Projects and Environmental Assessment Requirements. (ii) (iii) (iv) Assist HPPTCL in preparing Initial Environmental Examination (IEE) reports and environment management plans (EMPs) for the respective transmission investments in accordance with ADB's Safeguard Policy Statement (2009), Operations Manual F1/BP and F1/OP (2010), Environmental Guidelines for Selected Industrial and Power Projects and Environmental Assessment Guidelines, outlining environmental impacts, proposing mitigation measures and identifying costs related to the mitigation of adverse environmental impacts. These IEE reports are to include an Executive Summary at the beginning. 3 Coordinate your activities, including any required site visits, with the executing agency, H.P. Power Transmission Corporation Ltd. (HPPTCL), and ensure assigned counterpart HPPTCL staff receive knowledge transfer on ADB environment safeguard matters and documentation. Work with HPPTCL counterpart staff to complete the environmental safeguards compliance report, suited to the particular investment components in previously approved loan tranches. Output/Reporting Requirements: Initial Environmental Examination (IEE) reports, including executive summaries, and 1 This supercedes ADB's Environment Policy (2002). 2 This supercedes Operations Manual F1/OP (2003). 3 This replaces the need for a separate Summary Initial Environmental Examination (SIEE) as per the new ADB Safeguard Policy Statement (2009). 6

7 environmental management plans (EMPs) for the respective transmission components of future MFF tranches. Environmental safeguards compliance reports. 3. Social Safeguards Specialist (8 person months) 5. The consultant will supplement/complement the H.P. Power Transmission Corporations Ltd s (HPPTCL) project preparatory works related to the social safeguards aspects of future MFF tranches. The consultant will be responsible for the Involuntary Resettlement and Indigenous Peoples planning documents preparation. Firstly, in accordance with all relevant policies, in particular with the Indian National Policy on Resettlement and Rehabilitation (2008), the Land acquisition Act (1894), the State of Himachal Pradesh relevant laws and policies, ADB's Safeguard Policy Statement (2009) 4, Operations Manual F1/BP and F1/OP (2010) 5 :, the consultant shall: (i) (ii) (iii) (iv) (v) Review the national legal policies on land acquisition and involuntary resettlement to verify adequacy and consistency with ADB's Safeguard Policy Statement (2009) in terms of involuntary resettlement and indigenous people matters and if gaps are found, recommend measures to bridge the gap. Analyze and confirm the following aspects (at national and local levels) that will apply to land acquisition and resettlement in the subproject areas: (a) laws and regulations, including local practices; (b) budgetary processes (tentative agreement from concerned authorities on provision of outlays necessary for land acquisition and resettlement); and (c) relevant administrative arrangement and requirements. Prepare a Summary Poverty Reduction and Social Strategy (SPRSS) in accordance with ADB Guidelines for each future MFF tranche. Prepare a Resettlement Plan (RP) for future tranche subprojects in full consultation with the stakeholders, and in accordance with ADB's Safeguard Policy Statement (2009), Operations Manual F1/BP and F1/OP (2010), and relevant local laws, policies and regulations. i. Organize field investigations including questionnaire interviews in the project area/ project impact area, and consult with relevant officials from the government and other organizations to supplement available secondary data. ii. Prepare a poverty profile of the project area and project impact area. Provide number of people under different income levels. Assess the poverty reduction impacts of the Project in line with ADB s poverty reduction strategy, taking into account the project related components. Provide a detailed discussion of the potential impacts on the economy in the project area, particularly on the poor. Coordinate your activities, including any required site visits, with the executing agency, H.P. Power Transmission Corporation Ltd. (HPPTCL), and ensure assigned counterpart HPPTCL staff receives knowledge transfer on ADB social safeguard matters and documentation. Draft the relevant sections for the Periodic Financing Request (PFR). 4 This supercedes ADB's Policy on Involuntary Resettlement (1995), and Policy on Indigenous Peoples (1998). 5 This supercedes F1/OP (2003).

8 (vi) (vii) (viii) (ix) (x) Assess the need for a Indigenous Peoples Development Plan (IPDP); and carry out any further IP-targeted surveys as necessary. Together with the EA, identify any development interventions that may be incorporated in the subproject design to assist in improving the welfare and economic conditions of affected persons (APs) and communities in the subproject areas, in particular indigenous peoples (IPs), if any, women and other vulnerable groups. If required, identify an independent monitoring and evaluation agency (to be incorporated in the project structure NGOs, community service organizations, and research institutes may be considered), design a mechanism and prepare the independent monitor's terms of reference to ensure that compensation, relocation and income restoration measures, among other things, are carried through effectively and efficiently in the resettlement management process. Assess the existing organizational structures (executing agency, national government, local governments) relevant to land acquisition and resettlement in the project, and recommend new or modified structures that will improve the effectiveness of the proposed land acquisition and resettlement plan. Develop an awareness program for construction camp workforce on socially transmitted diseases, including HIV/AIDS and other communicable diseases. Output/Reporting Requirements: Summary Poverty Reduction and Social Strategy (SPRSS) papers, Resettlement Plans. Indigenous Peoples Plans (if applicable). 4. Project Economics/Financial Assessments Consultant (3 person months) 6. The consultant will be responsible for conducting the economic and financial assessments as part of the project preparatory works for future tranches of the Himachal Pradesh Clean Energy Transmission Investment Program. (i) Review the proposed investment project costs and prepare cost estimates in the standard format, taking into account physical and price contingencies. (ii) (iii) (iv) Review the proposed investment project costs and design and analyze the financial viability of the future tranche subprojects, or if applicable, the investment program or the master plan, in accordance with ADB s Financial Management and Analysis of Projects (2005), using the financial internal rate of return (FIRR) method and comparing it with the relevant weighted average cost of capital (WACC). FIRR and WACC should be computed on an after-tax basis in real terms using constant prices. Provide a table detailing the conversion of economic cost from the financial cost of the Projects and the specific conversion factors used. Incorporate an economic quantification of environmental impact due to the Project in accordance with ADB s Guidelines on the Economic Analysis of Projects (1997) and Workbook on Economic Evaluation of Environmental Impacts (1996). Review the proposed investment project costs and design and ensure that economic analyses are conducted in accordance with ADB s Key Areas of Economic Analysis of Projects: An Overview (November 2003), as well as ADB s Economic Analysis Retrospective 2003 Update (June 2004). 8

9 (v) Provide quantitative and qualitative benefits for the proposed investment project. Carry out an economic analysis of (a) power demand, (b) least-cost and equalizing discount rate, (c) economic viability, and (d) risk analysis. Calculate the economic internal rate of return of the future MFF tranche subprojects or the investment plan/master plan as a whole (as applicable). The analysis should be in accordance with ADB s Guidelines for Economic Analysis of Projects (1997), Guidelines for the Economic Analysis of Projects and Handbook for Integrating Risk Analysis in the Economic Analysis of Projects. Discuss alternative methodologies for carrying out the economic analysis and justify the method(s) chosen. Output/Reporting Requirements: Completed Financial and Economic Analysis as described above, in the form of documents suitable for inclusion in Periodic Financing Requests (PFRs) 5. Human Resource Specialist (3 person-months) 7. The consultant will be responsible for working with HPPTCL within the PMU to facilitate the implementation of the capacity development component under the ADB MFF. i. Organization and management. Assess and propose necessary improvements for organizational effectiveness: clear functional responsibilities by department and district offices, efficient reporting structure and procedure, and staffing allocation for PMU and Divisional offices; ii. Capacity development plan. Prepare a capacity development plan for HPPTCL, by taking the report prepared by the Institutional specialist including the needs assessment, description of improvement programs with implementation time frame, and indicators and milestones for measuring progress and achievements; iii. Training. Conduct a diagnostic needs assessment of the current technical and management skills and capacity, identifying specific deficiencies and proposing targeted improvements with a time frame. Based on this, develop and implement practical training programs consisting of in-house workshops and seminars. Recommend an effective setup for the on-the-job training and monitor progress; iv. Assist in developing key capacities within the PMU and field staff. Some illustrative topics include, but are not limited to: Procurement, Financial disbursements, safeguards reporting, Transmission System Planning and usage of CYME software for load management, Construction Management Compliance reporting to electric regulatory commission (ERC) regulations, manpower planning and organization design etc.; and, v. Assist in the selection of suitable candidates for training programs and local study tours and appropriate venues for their training through the combined knowledge and experience of the consultant team. Output and Reporting Requirements: Training plan including TOR and budget for consultant training needs. 6. Transmission System Planning Specialist (2 person-months)

10 8. The consultant will assist EA in use of CYME software to update transmission system master plan based on updated data. i. Review the additional and updated Himachal Pradesh power system data. Discuss with HPPTCL and, if required, other stakeholders. ii. After discussions, update CYME system planning model accordingly. iii. Update transmission system master plan down to the 33/11 kilovolt (kv) substation level based on the new data and discussions above. Run scenarios as appropriate. iv. Provide training of CYME system software to new HPPTCL staff and refresher training for existing, trained staff. Output and Reporting Requirements: Updated transmission master plan scenarios and printouts. 10

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