People's Republic of Bangladesh: Dhaka Chittagong Expressway PPP Design

Transcription

1 Dhaka Chittagong Expressway PPP Design (RRP BAN 45174) Project Administration Manual Project Number: Loan Number: October 2011 People's Republic of Bangladesh: Dhaka Chittagong Expressway PPP Design

2 Contents ABBREVIATIONS I. PROJECT DESCRIPTION 1 II. IMPLEMENTATION PLAN 1 A. Project Readiness Activities 1 B. Overall Project Implementation Plan 2 III. PROJECT MANAGEMENT ARRANGEMENTS 3 A. Project Implementation Organizations Roles and Responsibilities 3 B. Key Persons Involved in Implementation 3 C. Project Organization Structure 4 IV. COSTS AND FINANCING 4 A. Cost Estimates by Expenditure Category and by Financier 5 B. Allocation and Withdrawal of Loan Proceeds 6 C. Fund Flow Diagram 6 V. FINANCIAL MANAGEMENT 7 A. Financial Management Assessment 7 B. Disbursement 8 C. Accounting 9 D. Auditing 9 VI. PROCUREMENT AND CONSULTING SERVICES 9 A. Advance Contracting 9 B. Procurement of Goods, Works and Consulting Services 9 C. Procurement Plan 10 D. Consultant's Terms of Reference 10 VII. SAFEGUARDS AND SOCIAL DIMENSIONS 10 VIII. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION 11 A. Project Design and Monitoring Framework 11 B. Monitoring 14 C. Evaluation 14 D. Reporting 15 E. Stakeholder Communication Strategy 15 IX. ANTICORRUPTION POLICY 15 X. ACCOUNTABILITY MECHANISM 15 XI. RECORD OF PAM CHANGES 16 Attachment A: Procurement Plan Attachment B: TOR for Design Consultants Attachment C: TOR for Transaction Advisors Attachment D: Safeguard Implementation Support Consultants Attachment E: Detailed Cost Estimate for the Consulting Services

3 Project Administration Manual Purpose and Process 1. The Project Administration Manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with Government and Asian Development Bank (ADB) policies and procedures. The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM. 2. The Ministry of Communications (MOC) is wholly responsible for the implementation of ADB financed projects, as agreed jointly between the borrower and ADB, and in accordance with Government and ADB s policies and procedures. ADB staff is responsible to support implementation including compliance by MOC of their obligations and responsibilities for project implementation in accordance with ADB s policies and procedures. 3. At Loan Negotiations the borrower and ADB shall agree to the PAM and ensure consistency with the loan agreement. Such agreement shall be reflected in the minutes of the Loan Negotiations. In the event of any discrepancy or contradiction between the PAM and the loan agreement, the provisions of the loan agreement shall prevail. 4. After ADB Board approval of the project's report and recommendations of the President (RRP) changes in implementation arrangements are subject to agreement and approval pursuant to relevant Government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval they will be subsequently incorporated in the PAM.

4 Abbreviations ADB = Asian Development Bank ADF = Asian Development Fund AFS = audited financial statements DMF = design and monitoring framework EIA = environmental impact assessment EMP = environmental management plan IEE = initial environmental examination IPP = indigenous people plan NGOs = nongovernment organizations PAI = project administration instructions PAM = project administration manual PIU = project implementation unit PPP = Public Private Partnership QCBS = quality- and cost based selection RRP = report and recommendation of the President to the Board SOE = statement of expenditure SPS = Safeguard Policy Statement SPRSS = summary poverty reduction and social strategy TOR = terms of reference

5 1 I. PROJECT DESCRIPTION 1. The proposed technical assistance loan (the TA Loan) will finance the preparation of the Dhaka Chittagong Expressway design for an ensuing investment project to be financed under a public private partnership (PPP) scheme readily available for implementation. 2. Impact and Outcome. The TA loan will facilitate project preparation for a follow-on investment project resulting in the Dhaka Chittagong Expressway being efficiently constructed, operated and managed under a PPP scheme. As outcome of the TA loan, an agreed design of the Dhaka Chittagong Expressway for implementation under a PPP-scheme will be prepared. 3. Outputs The project will provide (i) a feasibility study with assessment of route alignment options, (ii) the economic and financial analysis for the Follow-on Project, structuring of the PPP-scheme, establishing the financial model in support of the Follow-on Project, and recommendation of the PPP structure for the Follow-on Project, (iii) capacity development in the Executing Agency for PPP-Project implementation; (iv) prepare the detailed engineering design for the selected option including the finalization of all safeguard documentation, (v) Transaction Advisory Services for the preparation of the pre-qualification and bidding documents for the Concession Agreement, preparation of the Concession Agreement, and support for the Project Executing Agency during the bidding process, and (vi) Safeguard Implementation Services to support and assist in relation to safeguard implementation for the Follow-on Project. II. IMPLEMENTATION PLAN A. Project Readiness Activities Sep Oct Nov/ Dec Loan Processing Project Implementation (Consultants) ADB Actions Government Actions ADB Actions Government Actions Loan Fact-Finding Management Review Meeting, Loan negotiations ADB Board Approval Aide Memoire Confirmation, TAPP submission PEC recommendation on TAPP, Loan negotiations Advertisement RFP Finalization Shortlisting RFP Issuance Project coordinator assigned PIU Setup Jan TAPP Approval Technical Evaluation Feb Signing Financial Evaluation Mar/ April Effectiveness Contract Negotiations

6 B. Overall Project Implementation Plan Item JFMA M JJA SO N D JFMA M JJA S O N D JFMAMJJA S O ND JFM AM JJASO ND JFMA M JJASO N D A. Loan Processing and Approval by ADB Loan Effectiveness B. Recruitment of Consultants 1. Bidding 2. Consultant Contract Negotiations 3. Consulting Services Execution C. Feasibility Study 1. Inception Period 2. Feasibility Study 3. Consultation and approval of Final Report D. Preparation of Detailed Design 1. Preparation of Detailed Design 2. Approval of Detailed Design and DPP E. Land Acquisition/Resettlement Plan (RP) Impl.*) Support during Land Acquisition/RP implementation F. PPP-Scheme Design 1. Assessment of PPP Options and Viability 2. Recommendation of PPP-Scheme G. PPP-Contract Procurement 1. Pre-Qualification of Bidders 2. Preparation of PPP Contract and Bid Documents 3. Bidding Process 4. Support during Bid Evaluation 5. Contract Negotiations/Award of PPP-Contract Note: *) To enhance project readiness should the ensuing investment project be financed by ADB. Source: Asian Development Bank

7 3 III. PROJECT MANAGEMENT ARRANGEMENTS A. Project Implementation Organizations Roles and Responsibilities Project implementation organizations Executing agency Management Roles and Responsibilities Ministry of Communications Establish PIU and Project Director day-to-day project management consultant recruitment and management withdrawal applications project progress reports maintaining project accounts and complete loan financial records ADB monitor and review overall implementation of the project in consultation with the executing agency including: the project implementation schedule; actions required in terms of safeguard implementation if applicable; timeliness of budgetary allocations and counterpart funding; project expenditures; progress with disbursement; statement of expenditure when applicable; compliance with particular loan covenants; and the likelihood of attaining the project s immediate development objectives. B. Key Persons Involved in Implementation Executing Agency Ministry of Communications ADB Transport and Communications Division of South Asia Regional Department (SATC) Mission Leader Md. Mozammel Haque Khan, Secretary (Roads Division) Fax No Bangladesh Secretariat Dhaka, 1000 Sri Widowati Director, SATC Telephone No.: (63) address: swidowati@adb.org Markus Roesner Senior Transport Specialist, SATC Telephone No.: (63) address: hyamaguchi@adb.org

8 C. Project Organization Structure 4. The flow chart below shows the reporting lines in the internal structures of key organizations involved in implementation, including coordination by MOC as the executing agency and chair of the steering committee for intergovernmental coordination. Steering Committee Chai: Secretary MOC Ministry of Communications Roads Division Executing Agency Asian Development Bank Project Director Roads and Highway Department Project Implementation Unit IV. COSTS AND FINANCING 5. The TA loan is estimated to cost $12.5 million, including taxes and duties of about $1.25 million. The total cost includes physical and price contingencies, and interest and other charges during implementation. The investment plan is summarized in Table 1. Table 1: Project Investment Plan ($ million) Item Amount a A. Base Cost b 1. Consulting Services Project Management Taxes and duties 1.25 Subtotal (A) B. Contingencies c 1.00 C. Financing Charges During Implementation d 0.25 Total (A+B+C) a Includes taxes and duties of $1.25 million io be financed from Government resources. b In mid-2011 prices. c Physical contingencies computed at 10% for consulting services. Price contingencies computed at 5% on foreign exchange costs and 8% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. d Includes interest. Interest during implementation for ADB loan(s) has been computed at the rate of 1.0% per annum. Source: Asian Development Bank estimates. 6. The government of Bangladesh has requested a loan in various currencies equivalent to $10 million from ADB s Special Funds resources to help finance the project. The loan will have a 32-year term, including a grace period of 8 years, an interest rate of 1.0% per annum during the grace period and 1.5% per annum thereafter, and such other terms and conditions set forth in the draft loan agreement.

9 5 7. The Government will provide $2.5 million for local taxes and duties, and project administration. The ADB and the Government will finance 80% and 20% of total investment cost, respectively. The financing plan for the TA loan is in Table 2. Table 2: Financing Plan Source Amount ($ million) Share of Total (%) Asian Development Bank Government Total Source: Asian Development Bank estimates. A. Cost Estimates by Expenditure Category and by Financier 8. The detailed cost estimates for the consulting services is provided in Attachment E, the detailed cost estimate by expenditure category and detailed cost estimates by financier are presented as table 3 below. Table 3: Detailed cost estimate and financing plan ($ million) Total ADB Government Item Cost a Total [%] Total [%] A. Consulting services 1. Engineering Design Transaction Advisor Safeguard Implementation Subtotal (A) B. Project Management C. Taxes and duties D. Contingencies b E. Financing Charges during Implementation c Total (A+B+C+D+E) a In mid-2011 prices. b Physical contingencies computed at 10% for consulting services. Price contingencies computed at 5% on foreign exchange costs and 8% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. c Includes interest. Interest during implementation for ADB loan(s) has been computed at the rate of 1.0% per annum. Source: Asian Development Bank estimates.

10 B. Allocation and Withdrawal of Loan Proceeds Number Item CATEGORY Amount Allocated USD (million) 1 Consulting Services 8,75 2 Interest Charge 0.25 ADB FINANCING Percentage and Basis for Withdrawal From the Loan Account 100 percent of total expenditure claimed* 100 percent of amount due 3 Unallocated 1,00 Total *Exclusive of taxes and duties imposed within the territory of the Borrower. C. Fund Flow Diagram 9. The TA loan will adopt the direct payment procedure and the reimbursement payment procedure. 10. In case of reimbursement procedures adopted, the following diagram shows how the funds will flow from ADB and the Borrower to implement project activities. Confirms Consultant s claim Asian Development Bank Pays directly to consultant Project Director Submits claims To Project Director For certification Consultants Submits claims for work done Key Documents Funds Flow Flow

11 7 11. In case of reimbursement procedures adopted, the following diagram shows how the funds will flow from ADB and the Borrower to implement project activities. Requests Donor to reimburse for payments made by GoB Donor Releases funds to Bangladesh Bank (BB) Project Director Bangladesh Bank Maintains funds under PIU A/c No. Instructs BB to pay contractor from Bank Account GoB A/c No. for PIU in Bangladesh Bank Key Documents Funds Flow Flow Consultants Receives funds for work done V. FINANCIAL MANAGEMENT A. Financial Management Assessment 12. Financial management risks should be considered and updated throughout the life of the TA loan. Risk mitigation measures should also be updated accordingly. 13. The accounting function of RHD is performed by the Audit and Accounts Department under the Management Services Wing which reports to the Chief Engineer of RHD. The two accounts officers are deputed from the Comptroller and Auditor General s (C&AG) Office. RHD has the necessary accounting policies, procedures and chart of accounts for the proper recording of project financial transactions, including the allocation of expenditures in accordance with the respective disbursement categories and sources of funds. It has most of the controls in place for the preparation and proper approval of transactions. It also retains all accounting and supporting documents in a secure place. They are properly catalogued to allow authorized users easy access and retrieval of documents. 14. RHD submits monthly, quarterly and annual reports to the Controller General of Accounts (CGA) under the Comptroller and Auditor General. The reporting is on cash basis with report of the expenditures of each division submitted to CGA who collates the accounts for

12 RHD. RHD s Director, Audit and Accounts, also collates RHD s accounts and reconciles it with CGA s account so that the output is consistent. The reporting by the divisions is submitted on a disc which is entered into RHD s CMS system which helps to collate the data. Project accounts are done manually on Excel spreadsheets and are not part of the CMS. The financial reports for projects are prepared monthly, quarterly and annually with a comparison of actual expenditure against budget. 15. RHD has an internal audit function which is the responsibility of one of the Accounts Officers under the Director of Audit and Accounts. The establishment manning provides for 3 officers but currently there are only 2 officers. As mentioned earlier, due to the limited staff, hardly any internal audit is carried out on the operations or projects during or after implementation. 16. Project accounts are audited annually by the government s audit authority, Foreign Aided Project Audit Directorate (FAPAD). The audit is conducted in accordance with International Standards of Auditing. FAPAD has generally conducted the audit in time as required under the donors' loan agreements. This is usually performed 6 months after the end of the financial year. The audit is in effect mainly a financial (not technical) audit and the opinion is limited to funds received and expenditure incurred by the project authority. 17. RHD has significant experience in implementing externally financed projects and has the organization structure in place to implement these projects. RHD assigns well qualified and experienced accounts officers who are familiar with ADB procedures and would be able to support and train the accounts officers in the project implementation units. Areas for possible enhancement include streamlining cheque clearance mechanism and strengthening internal audit capacity. These are ongoing activities and will be enhanced during implementation of follow-on investment projects. B. Disbursement 18. The Loan proceeds will be disbursed in accordance with ADB s Loan Disbursement Handbook (2007, as amended from time to time), 1 and detailed arrangements agreed upon between the Government and ADB. 19. Pursuant to ADB's Safeguard Policy Statement (2009) (SPS), 2 ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth at Appendix 5 of the SPS. All financial institutions will ensure that their investments are in compliance with applicable national laws and regulations and will apply the prohibited investment activities list (Appendix 5 of SPS) to subprojects financed by ADB. 20. Direct payment procedure and reimbursement procedure will be adopted. Statement of expenditure (SOE) procedures will be used for reimbursing eligible expenditures for any individual payment transaction up to $100,000 equivalent. SOE records should be maintained and made readily available for review by ADB's disbursement and review mission or upon ADB's request for submission of supporting documents on a sampling basis, and for independent audit. 3 1 Available at: 2 Available at: 3 Checklist for SOE procedures and formats are available at:

13 9 21. The EA will be responsible for (i) preparing disbursement projections, (ii) requesting budgetary allocations for counterpart funds, (iii) collecting supporting documents, and (iv) preparing and sending withdrawal applications to ADB. 22. Before the submission of the first withdrawal application, the borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the borrower, together with the authenticated specimen signatures of each authorized person. The minimum value per withdrawal application is US$100,000, unless otherwise approved by ADB. The borrower is to consolidate claims to meet this limit for reimbursement and imprest account claims. Withdrawal applications and supporting documents will demonstrate, among other things that the goods, and/or services were produced in or from ADB members, and are eligible for ADB financing. C. Accounting 23. The EA will maintain separate project accounts and records by funding source for all expenditures incurred on the Project. Project accounts will follow international accounting principles and practices. D. Auditing 24. The EA will cause the detailed consolidated project accounts to be audited in accordance with International Standards on Auditing by an auditor acceptable to ADB. The audited accounts will be submitted in the English language to ADB within 6 months of the end of the fiscal year by the EA. The Government and the EA have been made aware of ADB s policy on delayed submission, and the requirements for satisfactory and acceptable quality of the audited accounts. ADB reserves the right to verify the project's financial accounts to confirm that the share of ADB s financing is used in accordance with ADB s policies and procedures. VI. PROCUREMENT AND CONSULTING SERVICES A. Advance Contracting 25. All advance contracting will be undertaken in conformity with ADB s Procurement Guidelines (April 2010, as amended from time to time) (ADB s Procurement Guidelines) 4 and ADB s Guidelines on the Use of Consultants (2010, as amended from time to time) (ADB s Guidelines on the Use of Consultants). 5 The issuance of invitations to bid under advance contracting will be subject to ADB approval. The borrower and the EA have been advised that approval of advance contracting does not commit ADB to finance the project. Advance contracting includes recruitment of consultants. B. Procurement of Goods, Works and Consulting Services 26. All procurement of goods and works will be undertaken in accordance with ADB s Procurement Guidelines. All consultants will be recruited according to ADB s Guidelines on the Available at: 5 Available at:

14 Use of Consultants. 6 The terms of reference for all consulting services are detailed in Section D. 27. Consulting firms will be engaged using the quality- and cost-based selection (QCBS) method with a quality to cost ratio of 90:10 for the Engineering Design Consultant Services and the Transaction Advisory Services. This higher ratio of quality is adopted due to the scope covering a large scale Expressway project, the first in the country with PPP as a new financing modality in the transport sector, requiring high-level project coordination and management. Capacity development also requires innovativeness in change management in the organization. For the safeguard implementation support advisory consulting services, the standard quality to cost ratio of 80:20 shall apply. C. Procurement Plan 28. The procurement plan is in Attachment A and describes all procurement of consulting services for the TA loan. D. Consultant's Terms of Reference 29. The consultant's terms of reference are provided in the following: Attachment B: TOR for Design Consultants Attachment C: TOR for Transaction Advisors Attachment D: Safeguard Implementation Support Consultants VII. SAFEGUARDS AND SOCIAL DIMENSIONS 30. The TA loan is expected to ensure development of environmentally and socially viable follow-on investment projects. Projects under follow-on loans will be prepared in compliance with ADB's Safeguard Policy Statement (2009) and government guidelines, regulations, and policies. The TA loan is not expected to have any adverse on social and environmental consequences due to the nature of project preparation. Social and environmental impacts relating to follow-on loans will be assessed and mitigated in accordance with ADB's Safeguard Policy Statement (2009) and government guidelines, regulations, and policies. 31. The TA loan is not expected to have any impact in gender and social dimensions. Projects under follow-on loans will be prepared in compliance with ADB's Guidelines for Incorporation of Social Dimensions in Bank Operations (1994), and ADB's Handbook on Social Analysis (2007). Gender, consultation and participation, labor, HIV/AIDs, and other social risks relating to follow-on loans will be assessed and mitigation plan will be prepared to address those issues. 6 Checklists for actions required to contract consultants by method available in e-handbook on Project Implementation at:

15 11 VIII. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION A. Project Design and Monitoring Framework Design Summary Impact Dhaka Chittagong Expressway efficiently constructed, operated and managed under a PPP scheme Outcome Agreed design of the Dhaka Chittagong Expressway for implementation under a PPP-scheme Outputs 1. Feasibility study with assessment of different route alignment options 2. Economic and financial analysis for the Follow-on Project, structuring of the PPP-scheme, establishing the financial model and recommendation of the PPP structure for the Follow-on Project Performance Targets and Indicators Dhaka Chittagong Expressway in operation under a PPP-scheme by 2020 Submission and approval of Feasibility Study including recommended PPPscheme in 2013 Submission and approval of Design and PPP contract documents in 2015 Option for detailed design selected and detailed design and tender documents completed by 2015 PPP-scheme selected by 2014 Data Sources and Reporting Mechanisms Reporting mechanism to be drafted under PPP concession agreement Project feasibility study and detailed design reports Draft PPP concession agreement Project feasibility study and detailed design reports Draft PPP concession agreement Assumptions and Risks Assumptions Willingness of private sector to invest in Bangladesh s transport infrastructure Positive investment climate in Bangladesh Assumption Active support from other Government agencies and other stakeholders to support selection of route alignment options Assumption Sufficiently qualified consulting firms participate Risk Delays in Government approvals 3. Capacity Development for PPP-Project implementation Training Program established by 2013 and training implemented by 2015 Training Program and Training Report 4. Detailed engineering design for the selected option including the finalization of all safeguard documents Detailed Design Report completed by 2015 Detailed design Report

16 Design Summary Performance Targets and Indicators Data Sources and Reporting Mechanisms Assumptions and Risks 5. Transaction Advisory Services for the preparation of the pre-qualification and bidding documents for the Concession Agreement, preparation of the Concession Agreement, and support for the Project Executing Agency during the bidding process Concessionaire under proposed PPPscheme selected by 2015 Concession Agreement 6. Support for safeguard implementation for follow-on project 7 Safeguard documents prepared by 2014 Safeguard documents Activities with Milestones 1. Feasibility Study 1.1 Consultant selection by March Feasibility Study including data collection, surveys, engineering feasibility study and evaluation of options, economic analysis, financial modeling and analysis, PPPstructuring, environmental, resettlement and indigenous people assessment completed by March Option for detailed design selected by September Institutional environment for PPP-Projects 2.1 Assess the institutional environment for PPP- Projects and identify the needs for industry restructuring for PPP by March Identify legal prerequisites for PPP-Projects by March Value for Money Analysis and identify options for PPP-structuring of the investment project by July Action plan for improvements for PPP-project implementation by July 2013 Inputs Loan ADB: $10 million Item Amount ($ million) Consulting Services 8.75 Financing Charges during implementation 0.25 Contingencies 1.00 Government: $2.5 million Item Amount ($ million) Project Management 1.25 Taxes and Duties Expected output if the follow-on project is financed by ADB.

17 13 Activities with Milestones 3. Capacity development for PPP-Project implementation 3.1 Training Program drafted by March Training completed and Training Report submitted by March Detailed Design 4.1 Commencement Detailed Design by October Detailed Design including detailed engineering design, support during PPP procurement, social assessment, resettlement and indigenous people assessment and environmental studies completed by September Approval of detailed design by March PPP Transaction Advisory Services 5.1 Consultant selection by September PPP-scheme selected by June Public Private Partnership agreements drafted by September Selection of contractor under proposed PPPscheme by March Support for Safeguard Implementation (to be carried out 2014/2015, if ensuing project is financed by ADB) 6.1 Provide advice on ADB s policies, procedures, and best practices, helping them implement plans as required 6.2 Help to establish units to implement plans relating to resettlement, social aspects, and environment 6.3 Provide training to government officials and NGOs 6.4 Facilitate coordination and lines of communication between ADB and government agencies, line departments, and organizations or individuals involved with resettlement aspects of projects 6.5 Monitor project management to ensure effective coordination and implementation of safeguard-related plans Source: ADB

18 14 B. Monitoring 32. Project performance monitoring The achievement of the project performance targets will be assessed following the design and monitoring framework. The EA will establish a project performance management system. Indicators to be monitored include (i) the number of traffic before and after the follow-on investment loans; (ii) project implementation period and (ii) the number of RCI transport projects before and after the Project; (iii) the amount of private sector investment realized, and (iv) the extent of due diligence of social and environmental safeguard measures completed at ensuing loan fact-finding mission stage, during the project implementation. Progress will be monitored and reported monthly by the consultants. These reports will provide information necessary to update ADB's project performance reporting system Compliance monitoring: Regular monitoring of TA Consultants' outputs to ensure policies compliance will be conducted through the Bangladesh Resident Mission and SATC. As necessary, special loan administration missions and a midterm review mission will be fielded to ensure policy compliance. The EA will monitor project implementation in accordance with the schedule and time-bound milestones, and keep ADB informed of any significant deviations that may result in not achieving the milestones. 34. Safeguards monitoring: Regular safeguards monitoring of TA Consultants' outputs to ensure that ADB's Safeguard Policy Statement (2009) are met will be conducted through the Bangladesh Resident Mission and SATC. As necessary, special loan administration missions and a midterm review mission will be fielded to ensure safeguard policy compliance. The EA will monitor project implementation in accordance with the schedule and time-bound milestones, and keep ADB informed of any significant deviations that may result in not achieving the milestones. 35. Gender and social dimensions monitoring: Regular gender and social dimensions monitoring of TA Consultants outputs to ensure ADB's Gender and other social related policies are met will be conducted through the Bangladesh Resident Mission and SATC. As necessary, special loan administration missions and a midterm review mission will be fielded to ensure compliance of Gender and other social related policies. The EA will monitor project implementation in accordance with the schedule and time-bound milestones, and keep ADB informed of any significant deviations that may result in not achieving the milestones. C. Evaluation 36. A project inception mission will be fielded soon after the legal agreements for the TA loan are declared effective; thereafter, regular reviews will follow at least annually. As necessary, special loan administration missions and a midterm review mission will be fielded, under which any changes in scope or implementation arrangement may be required to ensure achievement of project objectives. The EA will monitor project implementation in accordance with the schedule and time-bound milestones, and keep ADB informed of any significant deviations that may result in the milestones not being met. Within 6 months of physical completion of the TA loan, the EA will submit a project completion report to ADB. 9 8 ADB's project performance reporting system is available at: 9 Project completion report format available at: Sector-Landscape.rar

19 15 D. Reporting 37. The EA will provide ADB with (i) quarterly progress reports in a format consistent with ADB's project performance reporting system; (ii) consolidated annual reports including (a) progress achieved by output as measured through the indicator's performance targets, (b) key implementation issues and solutions; (c) updated procurement plan and (d) updated implementation plan for next 12 months; and (iii) a project completion report within 6 months of completion of the TA loan. To ensure projects continue to be both viable and sustainable, project accounts and the executing agency AFSs, together with the associated auditor's report, should be adequately reviewed. E. Stakeholder Communication Strategy 38. While conducting poverty and social assessment, the TA consultants will conduct field visits and direct consultations/interactions with stakeholders using participatory approaches at the local and line Ministry levels. If there are any gaps emerging from the communication needs assessment, the TA consultants will have to formulate, in discussion with internal stakeholders and key decision-makers, a communications strategy for the TA loan. IX. ANTICORRUPTION POLICY 39. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the Project. 10 All contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts of the executing agency and all Project contractors, suppliers, consultants and other service providers. Individuals/entities on ADB s anticorruption debarment list are ineligible to participate in ADBfinanced activity and may not be awarded any contracts under the Project. 11 To support these efforts, relevant provisions are included in the loan agreement, regulations and the bidding documents for the Project. In particular, all contracts financed by ADB in connection with the Project shall include provisions specifying the right of ADB to audit and examine the records and accounts of RHD and BR, and consultants and other service providers, as they relate to the Project. The Government will also allow and assist ADB representatives' carrying out random spot checks on the work in progress and the utilization of funds for the Project. A further transparency measure is establishment of a publicly accessible project website within the existing RHD website where the Borrower will disclose key project related information including on costs, safeguards, and procurement. X. ACCOUNTABILITY MECHANISM 40. People who are, or may in the future be, adversely affected by the project may submit complaints to ADB s Accountability Mechanism. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice, and seek a resolution of their problems, as well as report alleged violations of ADB s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, affected people should make a good faith effort to solve their problems by working 10 Available at: 11 ADB's Integrity Office web site is available at:

20 16 with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism. 12 XI. RECORD OF PAM CHANGES 41. All revisions/updates during course of implementation should be recorded and retained under this Section to provide a chronological history of changes to implemented arrangements recorded in this PAM. 12 For further information see:

21 Attachment A 17 PROCUREMENT PLAN Basic Data Project Name: Dhaka Chittagong Expressway PPP Design Country: Bangladesh Executing Agency: Ministry of Communications Loan Amount: $10 million ADF loan Loan Number: Date of First Procurement Plan:15 September 2011 Date of this Procurement Plan: 15 September 2011 A. Process Thresholds, Review, and 18-Month Procurement Plan 1. Project Procurement Thresholds 1. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works. Procurement of Goods and Works Method Threshold International Competitive Bidding (ICB) for Works Above $1 million International Competitive Bidding (ICB) for Goods Above $500,000 National Competitive Bidding (NCB) for Works Beneath that stated for ICB, Works National Competitive Bidding (NCB) for Goods Beneath that stated for ICB, Goods Shopping for Works Below $100,000 Shopping for Goods Below $100, ADB Prior or Post Review 2. Except as ADB may otherwise agree, the following prior or post review requirements apply to the various procurement and consultant recruitment methods used for the Project. Procurement Method Prior or Post Comments Procurement of Goods and Works ICB Works Prior ICB Goods Prior NCB Works and Good Post Shopping for Works Post Shopping for Goods Post Recruitment of Consulting Firms Quality- and Cost-Based Selection (QCBS) Prior ADB will select the consultants. EAs will negotiate and sign the contract. 3. Consulting Services Contracts Estimated to Cost More Than $100, The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description Contract Value Recruitment Method Feasibility study and detailed design consultants, PPP preparation Transaction Advisor $8.0 million $0.5 million Quality and Cost Based Selection (90:10) Quality and Cost Based Selection (90:10) Advertisement Date (quarter/year) International or National Assignment Q4/2011 International firm Q4/2011 International firm Comments

22 18 Attachment A General Description Contract Value Recruitment Method Safeguard Implementation Support (two packages) $0.25 million Quality and Cost Based Selection (80:20) Advertisement Date (quarter/year) International or National Assignment Q1/2013 National firm Comments B. Indicative List of Packages Required Under the Project 4. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project. Contracts financed by the Borrower and others should also be indicated, with an appropriate notation in the comments section. General Description Estimated Value (cumulative) Estimated Number of Contracts Recruitment Method Type of Proposal Consulting Services $8.50 million 2 QCBS (90:10) Full, STP and BTP Consulting Services $0.25 million 1 QCBS (80:20) STP Comments ADB will select the consultants. EAs will negotiate and sign the contract. C. National Competitive Bidding 1. General 5. The procedures to be followed for national competitive bidding shall be those set forth for the National Open Tendering Method in the Government s Public Procurement Rules, 2008 (as updated and issued pursuant to the Bangladesh Public Procurement Act, 2006) with the clarifications and modifications described in the following paragraphs required for compliance with the provisions of the Procurement Guidelines. 2. Advertising 6. Bidding of NCB contracts estimated at $500,000 or more for goods and related services or $1,000,000 or more for civil works shall be advertised on ADB s website via the posting of the Procurement Plan. 3. Anti-Corruption 7. Definitions of corrupt, fraudulent, collusive and coercive practices shall reflect the latest ADB Board-approved Anti-Corruption Policy definitions of these terms and related additional provisions (such as conflict of interest, etc.). 4. Location of Bid Submission 8. Submission of bids to primary and secondary locations, or multiple droppings of bids, shall not be required or allowed. Advertisements and bidding documents shall specify only one location for delivery of bids.

23 Attachment A Rejection of All Bids and Rebidding 9. Bids shall not be rejected and new bids solicited without ADB s prior concurrence. 6. Member Country Restrictions 10. Bidders must be nationals of member countries of ADB, and offered goods must be produced in member countries of ADB. 7. Lottery 11. A lottery system shall not be used to determine a successful bidder, including for the purpose of resolving deadlocks. 8. Qualification Requirements 12. A successful bidder must be determined by an assessment process that shall include the application of qualification requirements to all bids. 9. Rejection of Bids 13. A bid shall not be rejected on the grounds that its bid price is not within a percentage range above or below the contract estimate.

24 20 Attachment B TERMS OF REFERENCE Engineering Consultant A. Introduction 1. The Government of Bangladesh (the Government) has received a loan from Asian Development Bank (ADB) for the Dhaka Chittagong Expressway PPP Design TA Loan (the Project) and intends to apply a portion of proceeds to engage firms of international consultants (the consultants) to prepare the feasibility studies and detailed engineering designs for a new access controlled expressway between Dhaka and Chittagong. 2. The main objective of the consulting services is to carry out (a) the necessary surveys for traffic forecast, to establish base maps for the design and safeguard documents related surveys, and (b) feasibility study and detailed engineering design for the expressway (including structures and bridges), which consist of: (i) appropriate condition surveys, (ii) engineering design and cost estimates for the improvements, (iii) economic and financial analysis, (iv) financial modeling and PPP-structuring, (v) social and environmental assessment in accordance with ADB's Safeguard Policy Statement 2009 (SPS) as well as government regulations and policies, (vi) establishing bidding documents and providing procurement assistance for the PPPconcession, and (vii) other assistance as may be required by ADB Mission for loan processing. 3. The Ministry of Communications (MOC) is the Executing Agency (EA). The EA will establish a Project Implementation Unit (PIU) in the Roads and Highways Department and appoint a senior official as the Project Director to implement the TA loan. The consultant will also coordinate with the government s Steering Committee, the concerned local authorities, with the assistance of the EA, for data collection, site visits, and other appropriate consultations. 4. A Steering Committee with representatives from related Ministries and Government agencies covering National Planning, Commerce, Trade, Finance, Energy, Agriculture, Shipping, the PPP-cell in the Prime Minister s Office, etc. and representation from the two municipalities as well as the concerned districts of Bangladesh will be establish for high-level policy decisions for the project, to agree on issues needing decisions beyond the level of the Ministry of Communications, such as the selection of the preferred route option or PPP-scheme. 5. The TA loan will be implemented for 3 years from April 2012 to September Advance contracting actions will be undertaken for consultants' recruitment to enhance project readiness. The consultants will be selected based on ADB s quality- and cost-based selection method using full technical proposals in accordance with ADB s Guidelines on the Use of Consultants (2010, as amended from time to time) and a quality to cost ration of 90: Two international consulting firms will be recruited for the (i) preparation of the engineering design and (ii) transaction advisory services. The preliminary outline terms of reference for consulting services for design services are listed under chapter B for the engineering design consultant and under chapter C for the transaction advisory services. It is estimated that about 115 person-months of international staff and about 390 person-months of national staff will be required for the engineering design services under chapter B and about 5 person-months of international staff and about 10 person-months of national staff will be required for the transaction advisory services under chapter C. A third consulting contract may be requested by the government for Social Safeguard Implementation for subprojects to be financed by ADB, if any. About 240 person-months of national staff will be required for this consulting service; the terms of reference for this consulting service are in Appendix 6.

25 Attachment B The consultants shall carry out regular workshops for private sector investors interested in the project to update them on the progress of project preparation and to collect feedback from potential investors on the project design, structuring of the PPP-scheme and other technical, financial and institutional terms of the project. The workshops shall be carried out at least twice annually with participation of the transaction advisor, one recruited, and shall be linked to major milestones of the consultancy contract, such as report finalization or sufficiently in advance of advertising of bidding processes etc. 8. Procurement of equipment needed to carry out the consulting services and to be financed from the ADB loan will be undertaken in accordance with ADB's Procurement Guidelines (2010, as amended from time to time). B. Outline Terms of Reference for the Engineering Consultant 1. Scope of the Assignment 9. Possible options to be appraised in the Feasibility Study include, but are not limited to the following: Option I At-grade alignment along a new right of way (ROW) Option II Elevated alignment within the ROW of the national highway Option III At-grade and elevated alignment along the national highway Option IV Elevated alignment in a new ROW 2. Feasibility Study 10. The purpose of this Feasibility Study is to examine the various alignment options from a technical, environmental, social, and financial perspective to assess the best option that can be carried into the Detailed Design Phase. The terms of reference for the consultants for feasibility study include, but are not limited to, the following: a. Studies, data collection and surveys 11. The consultants will have the following tasks: (i) (ii) (iii) (iv) Establish a national highway development plan for Bangladesh, linking the proposed Dhaka Chittagong Expressway with other planned Expressways, feeder roads, the national highway network and the trans-asian road network, major Air- and Sea Ports, etc. Establish a base-map as part of a graphic information system covering the entire corridor between Dhaka and Chittagong for all studies under the TA loan. Carry out zoning for the origin-destination Survey, collect the necessary socioeconomic data and carry out additional traffic surveys and interviews with households, vehicle owners, truck and bus operators, freight forwarders, etc. Review previous studies and map planned and ongoing infrastructure projects in the base map established above.

26 22 Attachment B (v) (vi) Establish an approval procedure within the Government of Bangladesh to select and freeze the selected route alignment option. Establish selection criteria for the selection of the alignment option for the detailed design after completion of the Feasibility Study. b. Engineering Study 12. The consultants will have the following tasks: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) Establish a design manual for the expressway project including design criteria and a catalogue of standard design solutions for the cross section, structures such as culverts, bridges, retaining walls etc. Survey conditions along the corridor, including the condition of the existing national highway and roads crossing the future alignment, including geometric features, type and condition of drainage structures, pavement strength, and other major features; determine residual life; and categorize the roads into homogeneous sections. Design auxiliary functions such as toll plazas, service and rest areas for travelers, service areas for operations and maintenance of the road, weight stations, police stations and traffic monitoring and supervision centers, etc. Investigate the suitability of local construction materials, and, where necessary, locate new quarries and borrow pits, and assess the quality and quantity of materials and hauling distances. Prepare cost estimates for the alternative route alignment options, separating foreign exchange, local currency, and tax and duty elements. Propose an approach to contract packaging consistent with ADB s Guidelines for Procurement. Prepare a report summarizing the findings and recommendations, and presenting the supporting data and analysis, for review by the Government and ADB. Based on the agreed selection criteria, recommend one option to be further studied in the detailed engineering design and facilitate the Government s and Steering Committee s approval process for the selected option. In cooperation with local road authorities, consult with stakeholders regarding project design, and ensure that the selected roads reflect the result of consultation. Conduct an independent road safety audits with use of ADB s Road Safety Audit for Road Project: An Operational Tool Kit and: The Federal Highway Administration (FHWA) of the United States Department of Transportation: FHWA Road Safety Audit Guidelines (2006).