Multitranche Financing Facility Republic of Uzbekistan: Central Asia Regional Economic Cooperation Corridor 2 Road Investment Program

Facility Administration Manual Project Number: 42107 MFF Number: 0042-UZB Loan Numbers: 2635-UZB (Project 1), 2746-UZB (Project 2), and 2868-UZB (Project 3) 21 August 2013 Multitranche Financing Facility Republic of Uzbekistan: Central Asia Regional Economic Cooperation Corridor 2 Road Investment Program

Contents ABBREVIATIONS I I. PROJECT DESCRIPTION 1 II. IMPLEMENTATION PLAN 3 A. Program Readiness Activities 3 B. Overall Program Implementation Plan 4 C. Assessment of Physical Progress during Implementation 6 D. Physical Progress S-curve 7 III. PROJECT MANAGEMENT ARRANGEMENTS 10 A. Project Stakeholders Roles and Responsibilities 10 B. Key Persons Involved in Implementation 111 C. Program Organization Structure 12 IV. COSTS AND FINANCING 13 A. Cost Estimates by Expenditure Category 13 B. Allocation and Withdrawal of Loan Proceeds 144 C. Expenditure Accounts by Financiers 16 D. Expenditure Accounts by Outputs/Components 16 E. Expenditure Accounts by Year 18 F. Contract Award and Disbursement S-curve 222 G. Fund Flow Diagram 244 V. FINANCIAL MANAGEMENT 26 A. Financial Management Assessment 26 B. Disbursement 28 C. Financial Accounting and Auditing 29 VI. PROCUREMENT AND CONSULTING SERVICES 30 A. Advance Contracting and Retroactive Financing 30 B. Procurement of Goods, Works and Consulting Services and Procurement Plan 30 C. Detailed Contract Packaging 45 D. Consultant's Terms of Reference 48 VII. SAFEGUARDS 89 A. Environment 89 B. Land Acquisition and Resettlement, and Ethnic Minority 90 C. Execution of Civil Works Contracts 90 D. Labor, Gender, Health, and Social Protection 91 VIII. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION 92 A. Project Design and Monitoring Framework 92 B. Monitoring 101 C. Evaluation 133 D. Reporting 134 E. Stakeholder Communication Strategy 134 IX. ANTICORRUPTION MEASURES 136 X. ACCOUNTABILITY MECHANISM 137 XII. RECORD OF FAM CHANGES 138

Facility Administration Manual Purpose and Process The facility administration manual (FAM) describes the essential administrative and management requirements to implement the investment program on time, within budget, and in accordance with Government and Asian Development Bank (ADB) policies and procedures. The Road Fund under the Ministry of Finance is wholly responsible for the implementation of ADB-financed CAREC Corridor 2 Road Investment Program, as agreed jointly between the Government and ADB, and in accordance with Government and ADB s policies and procedures. ADB staff is responsible to support implementation including compliance by the Road Fund of their obligations and responsibilities for program implementation in accordance with ADB s policies and procedures. At Loan Negotiations the Government and ADB agreed to the FAM and ensured consistency with the Framework Financing Agreement (FFA), and the Loan Agreements for the first, second, and third projects. Such agreements were reflected in the minutes of the Loan Negotiations. In the event of any discrepancy or contradiction between the FAM on one hand, and the FFA and the Loan Agreement on the other hand, the provisions of the FFA and the Loan Agreement shall prevail. After ADB Board approval of the investment program'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 FAM.

ABBREVIATIONS ADB Asian Development Bank ADF Asian Development Fund CAREC Central Asia Regional Economic Cooperation CGAP community and gender action plan DMF design and monitoring framework EARF environmental assessment and review framework EIA environmental impact assessment EMDP ethnic minority development plan EMP environmental management plan EMPF ethnic minority planning framework FAM facility administration manual FIDIC International Federation of Consulting Engineers FFA framework financing agreement ICB international competitive bidding IEE initial environmental examination LAR land acquisition and resettlement LARF land acquisition and resettlement framework MFF multitranche financing facility MOE Ministry of Economy MOF Ministry of Finance NCB national competitive bidding NGO nongovernment organization OCR ordinary capital resources PAI project administration instructions PFR periodic financing request PMU program management unit PPP public private partnership PPTA project preparatory technical assistance QCBS quality- and cost-based selection RRP report and recommendation of the President to the Board SOE statement of expenditure SPS safeguard policy statement TOR terms of reference

I. PROJECT DESCRIPTION 1. The Government gives high priority to the improvement of 1,204 km A380 highway from Guzar to Dautata for completion by 2014. The highway is the main route between the northwest and southeast of Uzbekistan and serves as an increasingly important international corridor between Afghanistan (via Termez), Tajikistan, and Turkmenistan, and Kazakhstan and Russian Federation. The A380 highway is designated as CAREC Corridors 2 and 6 and part of Asian Highway, Transport Corridor Europe Caucasus Asia Corridor, and European Highways. The adjoining 84 km Kazakhstan section Aktau Beyneu is being implemented under ADB loan approved in 2010. The Road Fund has estimated $1.6 billion for the A380 highway investment during 2009 2014. 2. The pavement condition of the current two-lane A380 highway has deteriorated because of traffic increase and deferred maintenance. With the expected growth of local and regional traffic, the reconstruction of this international road has become the urgent necessity and is found economically viable. Out of about 1,200 km A380 highway, 300 km is being constructed and 900 km will be reconstructed during 2009 2014. ADB s investment for reconstructing A380 highway will help the Government accelerate completion of the overall program. 3. The investment program will cover about 222 km of A380 highway in the Republic of Karakalpakstan and Khorezm and Bukhara provinces. ADB s Multitranche Financing Facility (MFF) with 4 tranches will be applied for the investment program. 4. A Framework Financing Agreement (FFA) was signed by the Republic of Uzbekistan and ADB on 18 March 2010 for the Investment Program. 5. Impact: Sustainable economic development. 6. Outcome: Better connectivity and an efficient transport system along the Uzbekistan section of CAREC Corridor 2 Road. 7. Outputs: (i) (ii) (iii) Uzbekistan section of CAREC Corridor 2 road constructed Cross-border facility operational Road sector sustainability strategy and plans adopted by the Road Fund 8. Tranches (i) (ii) Loan 2635. The first tranche of the MFF was approved on 21 April 2010 for an amount of $115 million (ADF). The Project outputs are (1) Road Development. Approximately 50 km reconstructed section of the A380 highway between Km440 and Km490; and (2) Road Sector Sustainability. (a) expanded road asset management system; and (b) community development, which includes detailed needs assessment of social and healthcare facilities on villages along Project 1 road and implementation of a community development and gender action plan. Loan 2746. The second tranche of the MFF was approved on 31 March 2011 for $240 million (OCR). The outputs of the project include (1) Road Development. Rehabilitation of approximately 85 km of CAREC Corridor 2 road (between

2 Km355 and Km440 of A380 highway); and (2) Road Sector Sustainability. Procurement of pile boring equipment. (iii) Loan 2868. The third tranche of the MFF was approved on 5 June 2012 for an amount of $100 million (ADF). The outputs of the project include (1) Road development. Rehabilitation of approximately 40 km of CAREC Corridor 2 Road (between Km315 and Km355 of A380 highway); and (2) Road sector sustainability. Improvement of cross-border facilities and expansion of the community development program.

3 II. IMPLEMENTATION PLAN A. Program Readiness Activities 9. At the completion of the Loan Fact-finding Mission on 8 February 2010, the project management unit (PMU) with four key staff (procurement, engineering, financial management, and accounting) had been established; detailed designs, tender documents, and safeguards documents for project 1 were completed. Tender invitation for the only ICB package and consultants selection process for the construction supervision had also commenced for completion by September 2010. Overall program readiness activities are in Table 2.1: Table 2.1: Program Readiness Activities Indicative Activities Months Responsible Jan Feb Mar Apr May Jun Jul Party Establishment of the PMU with key staff in Road Fund pace Government counterpart funds allocation MOF Retroactive financing actions Road Fund Completion and approval of the detailed design of project 1 Completion, approval, and disclosure of safeguards documents (EARF, LARF, EMPF) project 1 Advance contracting actions A. Construction supervision consultants Recruitment Commencement Completion Road Fund Road Fund and ADB Road Fund and ADB B. Civil Works bidding Road Fund and Invitation for bids for First ICB ADB Contract Award ADB Board approval ADB Issuance of corresponding government resolution Government and Road Fund Loan signing ADB and Government Issuance of legal opinion Government Loan effectiveness Government ADB = Asian Development Bank; EARF = Environment Assessment and Review Framework; EMPF = Ethnic Minority Planning Framework; ICB = International Competitive Bidding; LARF = Land Acquisition and Resettlement Framework Source: Road Fund and ADB. 10. For the subsequent projects, the detailed design, safeguard documents will be prepared under project 1. For each subsequent tranches, the Road Fund will provide (i) a project appraisal report, including technical, economic, financial, environmental, and social assessments; and (ii) a PFR. The project report will be prepared in accordance with the criteria and procedures stated in Schedule 5 of the FFA and other related requirements of the Government and ADB. After appraising each tranche for technical and economic feasibility and compliance with safeguard requirements, the Road Fund will submit to ADB a summary appraisal report to be agreed between ADB and the Road Fund. ADB will then undertake due diligence in accordance with its relevant policies and procedures, and approve the appraisal,

4 subject to any amendments. If required by ADB, the Road Fund will amend the PFR and submit it to ADB for approval on or before the due date of the PFR. B. Overall Program Implementation Plan 11. The 6-year investment program is scheduled for completion by 30 June 2016. Overall program implementation plan is shown in Figure 2.1. This may be updated annually by the Road Fund (the executing agency) together with ADB. The updated draft implementation plan will be submitted to ADB in month 10 of the preceding year for no objection, a response on which will be provided on or before month 12.

Figure 2.1 - Implementation Schedule 5

6 C. Assessment of Physical Progress during Implementation 12. Each project implementation activity carries certain weight and should be accounted for while computing the physical progress. In this respect, Table 2.2A shows guidelines for computing physical progress of the project 1, Table 2.2B for project 2, and Table 2.2C for project 3. This will be used both by Road Fund and ADB for the assessment of physical progress at any time during the project implementation. Table 2.2A: Project 1 Implementation Progress (as of 21 August 2013) Activities (a) (b) (a) (b) Year 1 Year 2 Year 3 Year 4 Assigned Actual Weighted 2010 2011 2012 2013 Weight Progress Progress Establishment and 5% 100% 5% Staffing of PMU Consultants 5% 100% 5% Recruitment Detailed Design and 10% 100% 10% Tender Documents Tendering of Civil 12% 100% 12% Works Physical Completion 55% 95% 52% of Works & Overall Disbursements Road Asset 8% 50% 4% Management Support Community Development 5% 100% 5% Total Weight 100% Implementation Progress 93% Table 2.2B: Project 2 Implementation Progress (as of 21 August 2013) Year 2 Year 3 Year 4 (a) (b) 2012 2013 2014 Assigned Actual Activities Year 1 2011 Consultants Recruitment Tendering of Civil Works Physical Completion Works & Overall Disbursements (likely to be extended) Procurement of Equipment (a) Assigned weight for each activity (b) Actual progress of each activity (a) (b) Weighted progress for each activity Project progress = sum of all weighted progress for each activity (a) (b) Weighted Weight Progress Progress 5% 100% 5% 10% 70% 7% 70% 0% 0% 15% 90% 13.5% Total Weight 100% Implementation Progress 23.5%

7 Table 2.2C: Project 3 Implementation Progress (as of 21 August 2013) Year 2 Year 3 (a) (b) 2013 2014 Assigned Actual Activities Year 1 2012 Consultants Recruitment Tendering of Civil Works Physical Completion Works & Overall Disbursements Procurement of Equipment Community Development (a) Assigned weight for each activity (b) Actual progress of each activity (a) (b) Weighted progress for each activity Project progress = sum of all weighted progress for each activity D. Physical Progress S-Curve (a) (b) Weighted Weight Progress Progress 5% 100% 5% 10% 100% 10% 65% 0% 0% 15% 100% 15% 5% 0% 0% Total Weight 100% Implementation Progress 30% 13. Figure 2.2A shows graph of expected overall physical progress over the life of the project 1. Figure 2.2B shows graph of physical progress for project 2. Figure 2.2C shows graph of physical progress for project 3. These graphs will help identifying the status of project either achieving the anticipated targets or underperforming with delays. This data will also be used for the project performance rating (PPR) and early warning system, which are explained in Section VIII.

Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Physical Progress 8 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Figure 2.2A: Project 1 Physical Progress S-Curve UZB: MFF CAREC Corridor 2 Road Investment Program Tranche 1 21 Apr Ideal curve 30 Sep 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Time Elapse Figure 2.2B: Project 2 Physical Progress S-Curve

Figure 2.2C: Project 3 Physical Progress S-Curve 9

10 III. PROJECT MANAGEMENT ARRANGEMENTS A. Project Stakeholders Roles and Responsibilities Project Stakeholders Road Fund (the executing agency) Asian Development Bank Ministry of Finance Customs Committee Office Road Equipment Pool Company Ministry of Foreign Economic Relations, Investment, and Trade Management Roles and Responsibilities establishing the PMUs with the required staffing; recruiting consultants; finalizing surveys, detailed design, bidding documents, and contract awards; timely provision of agreed counterpart funds for project activities; monitoring and evaluation of project activities and outputs, including periodic review, preparation of review reports reflecting issues and time-bound actions taken (or to be taken); involving beneficiaries and civil society representatives in all stages of project design and implementation; public disclosure of project outputs; quality assurance of works, and services of consultants and counterpart staff; establishing strong financial management system and submitting timely withdrawal applications to ADB, conducting timely financial audits as per agreed timeframe and taking recommended actions; complying with all loan covenants (road sector reforms, social and environmental safeguards, financial, economic, and others); preparing regular periodic progress reports, and project completion reports and their timely submission to ADB; and ensuring projects' sustainability during post implementation stage and reporting to ADB on the assessed development impacts. assist the Road Fund and its PMU in providing timely guidance at each stage of the project for smooth implementation in accordance the agreed implementation arrangements; review all the documents that require ADB approval; conduct periodic loan review missions, a mid-term review, a completion mission for each project under the MFF, and a overall program completion mission; supervise compliance of all loan covenants (road sector reforms, social and environmental safeguards, financial, economic, and others); timely process withdrawal applications and release eligible funds; supervise the compliance of financial audit recommendations; regularly update the project performance review reports with the assistance of Road Fund; and regularly post on ADB web the updated project information documents for public disclosure, and also the safeguards documents as per disclosure provision of the ADB safeguards policy statement signing the FFA and the Loan Agreement for each Project; monitoring of the investment program implementation and providing respective coordination and facilitation; allocating and releasing counterpart funds; endorsing to ADB the authorized staff with approved signatures for WAs processing; and processing and submitting to ADB any request, when required, for reallocating the loan proceeds. Timely custom clearance and appropriate registration of imported goods under MFF; and Provide technical specification of equipment to be procured under Transport Logistics component and participate as member of the evaluation committee; Managing the pool of road equipment and providing corresponding services for the road sector. Appraisal and registration of contracts for imported goods and international services under MFF.

11 B. Key Persons Involved in Implementation Executing Agency The Road Fund Program Management Unit Jamol Shukurov Executive Director +998-71-239-46-79 mff-pmu-uz@inbox.ru 29, Istiklol str. 100017 Tashkent Republic of Uzbekistan Shomansur Nasirov Director, Program Management Unit +998-71-239-10-36 mff-pmu-uz@inbox.ru 29, Istiklol str. 100017 Tashkent Republic of Uzbekistan Asian Development Bank Division Director Mission Leader Xiaohong Yang Director, Transport and Communications Division Central and West Asia Department (CWRD) Telephone No: +63-2-632-6765 Email address: xyang@adb.org 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines Narendra Singru Senior Transport Specialist, CWRD Telephone No: +63-2-632-5804 Email address: nsingru@adb.org 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines

12 C. Program Organization Structure 14. The Road Fund has established a Program Management Unit (PMU) to implement the investment program and appointed a PMU project director and key staff (procurement, engineering, financial management, and accounting). The Road Fund will ensure that, during the entire period of the investment program implementation, a team of staff on procurement, engineering, financial management, accounting, program monitoring and evaluation, legal, administrative, and secretarial staff remains in place. In addition, procurement, environment safeguards, and social safeguards specialists will also be engaged to support the work of the PMU as appropriate by the signing of loan agreement. PMU will also be equipped with the necessary office space, equipment, and facilities. 15. Under the transport logistics component in project 3 of the investment program, the Road Fund will procure cross-border facility equipment to be used by the Customs Committee. The Customs Committee will provide the Road Fund with the technical specifications of the equipment and be part of the bidding evaluation committee for the procurement of the crossborder facility equipment. Figure 3.1: Program Organization Structure Road Fund PMU Director PMU Team: Engineer Procurement Specialist Financial Management Specialist Accountant Coordinator and Results Monitoring Specialist Legal Specialist Office Manager Interpreter Driver Procurement Specialist Safeguard Team Construction supervision teams Civil works contractors Road asset management support consultants Community development support consultants

13 IV. COSTS AND FINANCING A. Cost Estimates by Expenditure Category 16. The total cost of the investment program is estimated at $738 million equivalent including taxes and duties, physical and price contingencies, interest, and other charges. The total costs of projects 1, 2, 3 and 4 including taxes, duties, physical and price contingencies, interest, and other charges are estimated at $146 million, $289 million, $117 million, and $186 million equivalent respectively. The summary of cost estimates for the investment program is in Table 4.1. Item Table 4.1: Cost Estimate for the Investment Program ($ million) a Tranche 1 2 3 4 Total Cost Road Development Land Acquisition and Resettlement 0 0.1 0.1 1.6 1.8 Civil Works 91.6 176.2 74 123.8 465.6 Consulting Services Procurement and Safeguard Support 0.4 0.4 0.4 0 1.2 Construction Supervision 2.5 3.5 1.5 2.0 9.5 Project Appraisal 0.4 0 0 0 0.4 Detailed Design 4.5 0 0 0 4.5 Transport Logistics Cross-border facility 0 0 5.0 0 5.0 Road Sustainability Road Equipment 0 15 0 0 15.0 Road Asset Management Support 1.8 0 0 1.2 3.0 Community Development 0.2 0 0.2 0 0.4 Recurrent costs b 0.5 0.5 0.5 0 1.5 Taxes and duties 22.1 40.6 14.9 30.6 108.2 Total Base Cost 124 236.3 96.6 159.2 616.1 Physical and price contingencies c 19.9 38.7 18.4 24.4 101.4 Financing charges during implementation d 2.1 14 2 2.5 20.6 Total 146 289 117 186 738.1 In mid-2009 prices for Tranches 1 and 2; 2011 prices for Tranches 3 and 4. b Program Management Unit (PMU) expenses related to the investment program including: PMU staff salary, operational expenses, travel, training, and other eligible expenditures; excluding single social payment. c Generally, physical contingency is estimated at about 10% of the total base cost and price contingencies estimated at about 5% include provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. In case of Tranches 3 and 4, this has varied taking into account recently approved projects. d Includes interest and commitment charges considering tranches 1, 3 and 4 are funded by ADF and tranche 2 by OCR. Source: Asian Development Bank estimates. 17. The maximum financing amount available under the Facility is $600 million equivalent, comprising $240 million from ADB s ordinary capital resources (OCR) and $360 million

14 equivalent from ADB's Special Funds resources (i.e., from the Asian Development Fund ADF). Financing will be provided in individual tranches. 18. In the event that OCR financing under the MFF increases from $240 million to a maximum of $300 million, any additional OCR financing will be accompanied by a corresponding reduction in the ADF financing, so that the total available amount under the MFF will not exceed $600 million equivalent. Table 4.2: ADB Financing by Expenditure Category ($ million) ADB Expenditure Category Tranche 1 (L2635) Tranche 2 (L2746) Tranche 3 L2868) Tranche 4 Total Civil works 91.6 176.2 74 123.8 465.6 Goods 0 15 5 0 20.0 Consultant services 5.3 3.9 2.1 3.2 14.5 Recurrent cost 0.5 0.5 0.5 0 1.5 Unallocated 17.6 44.4 18.4 18.0 98.4 Total 115 240 100 145 600 ADB = Asian Development Bank. Source: Asian Development Bank estimates. B. Allocation and Withdrawal of Loan Proceeds 19. Table 4.3A shows allocation and withdrawal of funds under all the categories for project 1, Table 4.3B for project 2, and Table 4.3C for project 3. Table 4.3A: Allocation and Withdrawal of Loan Proceeds Project 1 (L2635) Category ADB Financing Basis Total Amount Allocated for ADB Financing Percentage of ADB Financing Number Item (SDR) from the Loan Account Category Subcategory 1 Civil Works 59,586,000 100 percent of total expenditure 2 Consulting Services 3,447,000, 2A Procurement and Safeguard Support Specialists 260,000 2B Construction Supervision 1,626,000 2C Project Appraisal 260,000 2D Road Asset Management Support 1,171,000 2E Community Development 130,000 3 Recurrent costs 325,000 4 Unallocated 11,449,000 Total 74,807,000 ADB = Asian Development Bank, SDR = special drawing right. * Exclusive of local taxes and duties imposed within the territory of the Borrower. claimed* 100 percent of total expenditure claimed* 100 percent of total expenditure claimed* 100 percent of total expenditure claimed* 100 percent of total expenditure claimed* 100 percent of total expenditure claimed* 100 percent of total expenditure claimed* 100 percent of total expenditure claimed* 100 percent of total expenditure claimed*

15 Number Table 4.3B: Allocation and Withdrawal of Loan Proceeds Project 2 (L2746) CATEGORY ADB FINANCING Total Amount Allocated for Percentage and Basis for Item ADB Financing Withdrawal from the Loan ($) Account Category Subcategory 1 Works 176,200,000 100% of total expenditure claimed* 2 Equipment 15,000,000 100% of total expenditure claimed* 3 Consulting Services 3,900,000 100% of total expenditure claimed* 3A Procurement and Safeguards Support Specialists 400,000 100% of total expenditure claimed* 3B Construction Supervision 3,500,000 100% of total expenditure claimed* 4 500,000 100% of total expenditure Recurrent Costs claimed* 5 Interest and 14,000,000 100% of amounts due Commitment Charge 6 Unallocated 30,400,000 Total 240,000,000 ADB = Asian Development Bank, SDR = special drawing right. * Exclusive of local taxes and duties imposed within the territory of the Borrower. Table 4.3C: Allocation and Withdrawal of Loan Proceeds Project 3 (L2868) Category ADB Financing Basis Number Item Total Amount Allocated for ADB Financing (SDR) Category Percentage and Basis for Withdrawal from the Loan Account 1 Works 47,902,000 100% of total expenditure claimed* 2 Equipment 3,237,000 100 % of total expenditure claimed* 3 Consulting Services 1,359,000 100% of total expenditure claimed* 4 Recurrent costs 324,000 100% of total expenditure claimed* 5 Unallocated 11,911,000 Total 64,733,000 ADB = Asian Development Bank, SDR = special drawing right. * Exclusive of taxes and duties imposed within the territory of the Borrower.

16 C. Expenditure Accounts by Financiers Table 4.4: Summary Financing Plan of the Investment Program ($ million) Financier Tranche 1 Tranche 2 Tranche 3 Tranche 4 Total Asian Development Bank 115 240 100 145 600 Government 31 49 17 41 138 Total 146 289 117 186 738 Source: Asian Development Bank estimates. D. Expenditure Accounts by Outputs/Components Table 4.5A: Detailed Cost Estimates by Financiers Project 1 ($ million) a Item ADB Government Total Road Development Land Acquisition and Resettlement 0.0 0.0 0.0 Civil Works 91.6 0.0 91.6 Consulting Services Procurement and Safeguard Support 0.4 0.0 0.4 Construction Supervision 2.5 0.0 2.5 Project Appraisal 0.4 0.0 0.4 Detailed Design 0.0 4.5 4.5 Road Sustainability Road Asset Management Support 1.8 0.0 1.8 Community Development 0.2 0.0 0.2 Recurrent costs b 0.5 0.0 0.5 Taxes and duties 0 22.1 22.1 Total Base Cost 97.4 26.6 124.0 Physical and price contingencies c 17.6 2.3 19.9 Financing charges during implementation d 0.0 2.1 2.1 Total 115.0 31.0 146.0 a In mid-2009 prices. b Program Management Unit (PMU) expenses related to the investment program including: PMU staff salary, operational expenses, travel, training, and other eligible expenditures; excluding single social payment. c Physical and price contingencies. Price contingencies include provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. d Includes interest and commitment charges considering tranche 1 is funded by ADF. Source: Asian Development Bank estimates.

17 Table 4.5B: Detailed Cost Estimates by Financiers Project 2 ($ million)ª Item ADB Government Total Road Development Land Acquisition and Resettlement 0.0 0.1 0.1 Civil Works 176.2 0.0 176.2 Consulting Services Procurement and Safeguard Support 0.4 0.0 0.4 Construction Supervision 3.5 0.0 3.5 Road Sustainability Equipment 15.0 0.0 15.0 Recurrent costs b 0.5 0.0 0.5 Taxes and duties 0 40.6 40.6 Total Base Cost 195.6 40.7 236.3 Physical and price contingencies c 30.4 8.3 38.7 Financing charges during implementation d 14.0 0.0 14.0 Total 240.0 49.0 289.0 In mid-2009 prices. b Program Management Unit (PMU) expenses related to the PMU staff salary, operational expenses, travel, training, and other eligible expenditures. c Physical contingency is estimated at about 10% of the total base cost. Price contingency, estimated at about 5%, includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. d Includes interest and commitment charges considering Tranche 2 is funded by OCR. Financing changes are capitalized. Source: ADB estimates Table 4.5C: Detailed Cost Estimates by Financiers Project 3 ($ million)ª Item ADB Government Total Road Development Land Acquisition and Resettlement 0.1 0.1 Civil Works 74.0 74.0 Consulting Services 2.1 2.1 Recurrent Costs 0.5 0.5 Border infrastructure equipment 5.0 5.0 Taxes and duties 14.9 14.9 Total Base Cost 81.6 15.0 96.6 Physical and price contingencies b 18.4 18.4 Financing charges during implementation c 0.0 2.0 2.0 Total 100.0 17.0 117.0 a In 2011 prices. b Contingency estimated at about 19% of the total base cost to cover variations in the costs owing to change in detailed design. This is based on the consultations with Road Fund taking into account the recently approved projects. c Includes interest charge considering Tranche 3 is funded by ADF. Source: ADB estimates.

18 E. Expenditure Accounts by Year Table 4.6: Estimated Expenditure Accounts by Year for the Investment Program ($ million) a Item Year 2010 2011 2012 2013 2014 2015 Total Road Development Land Acquisition and Resettlement 0.1 1.7 1.8 Civil Works 9.0 88.0 170.2 114.8 58.7 24.9 465.6 Consulting Services Procurement and Safeguard Support 0.1 0.3 0.4 0.2 0.2 1.2 Construction Supervision 0.2 2.4 3.3 2.4 1.2 9.5 Project Appraisal 0.4 0.4 Detailed Design 4.5 4.5 Transport Logistics Cross-border facility 5.0 5.0 Road Sustainability Road Equipment 15.0 15.0 Road Asset Management Support 0.9 0.9 0.6 0.6 3.0 Community Development 0.1 0.1 0.1 0.1 0.4 Recurrent costs b 0.1 0.3 0.5 0.3 0.3 1.5 Taxes and duties 4.0 24.9 33.6 29.6 16.1 108.2 Total Base Cost 17.9 117.4 230.7 148.0 77.2 24.9 616.1 Physical and price contingencies c 3.3 23.6 31.4 28.0 15.1 101.4 Financing charges during implementation d 0.4 5.0 7.3 6.3 1.6 20.6 Total 21.6 146.0 264.4 187.3 93.9 24.9 738.1 a In mid-2009 prices. b Program Management Unit (PMU) expenses related to the investment program including: PMU staff salary, operational expenses, travel, training, and other eligible expenditures; excluding single social payment. c Physical is estimated at about 10% of the total base cost. Price contingencies estimated at about 5% include provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. d Includes interest and commitment charges considering tranche 1, 3 and 4 are funded by ADF and tranche 2 by OCR. Source: Asian Development Bank estimates.

19 Table 4.7A: Expenditure Accounts by Year for the Project 1 ($ million) a Year Item 2010 2011 2012 Total ADB Government ADB Government ADB Government Road Development Civil Works 9.0 41.0 41.6 91.6 Consulting Services Procurement and Safeguard Support 0.1 0.2 0.1 0.4 Construction Supervision 0.2 1.3 1.0 2.5 Project Appraisal 0.4 0.4 Detailed Design 4.5 4.5 Road Sustainability Road Asset Management Support 0.9 0.9 1.8 Community Development 0.2 0.2 Recurrent costs b 0.15 0.2 0.15 0.5 Taxes and duties 4.0 14.1 4.0 22.1 Total Base Cost 9.4 8.5 44.2 14.1 43.8 4.0 124.0 Physical and price contingencies c 2.9 0.4 11.8 1.5 2.9 0.4 19.9 Financing charges during implementation d 0.4 1.3 0.4 2.1 Total 12.3 9.3 56.0 16.9 46.7 4.8 146.0 ADB = Asian Development Bank In mid-2009 prices. b Program Management Unit (PMU) expenses related to the investment program including: PMU staff salary, operational expenses, travel, training, and other eligible expenditures; excluding single social payment. c Physical contingencies are estimated at about 10% of the total base cost. Price contingencies estimated at about 5% include provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. d Includes interest charges considering tranche 1 funded by ADF. Source: Asian Development Bank estimates

20 Table 4.7B: Expenditure Accounts by Year for the Project 2 ($ million) a Item Year 2011 2012 2013 2014 ADB Govt ADB Govt ADB Govt ADB Govt Total Road Development Land Acquisition and Resettlement 0.0 0.1 0.0 0.1 Civil Works 20.3 42.0 63.0 50.9 176.2 Consulting Services Procurement and Safeguard Support 0.1 0.1 0.1 0.1 0.4 Construction Supervision 0.5 1.5 1.5 0.0 3.5 Road Sustainability Equipment 1.5 13.5. 15.0 Recurrent costs b 0.2 0.2 0.2 0.5 Taxes and duties 4.7 9.7 14.5 11.7 40.6 Total Base Cost 22.6 4.8 57.3 9.7 64.8 14.5 51.1 11.7 236.3 Physical and price contingencies c 3.4 1.0 8.6 2.6 10.8 2.8 7.7 1.9 38.7 Financing charges during 0.2 0.0 3.0 8.0 0.0 14.0 implementation d 2.8 Total 26.1 5.8 68.8 12.3 83.6 17.3 61.5 13.6 289.0 ADB = Asian Development Bank; Govt = Government a In mid-2009 prices. b Program Management Unit (PMU) expenses related to the investment program including: PMU staff salary, operational expenses, travel, training, and other eligible expenditures; excluding single social payment. c Physical contingencies are estimated at about 10% of the total base cost. Price contingencies estimated at about 5% include provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. d Includes interest and commitment charges considering tranche 2 funded by OCR. Source: Asian Development Bank estimates

Road Development Item Table 4.7C: Expenditure Accounts by Year for the Project 3 ($ million) a Year 2012 2013 2014 ADB Govt ADB Govt ADB Govt Total Land Acquisition and Resettlement 0.1 0.1 Civil Works 8.0 29.6 36.4 74.0 Consulting Services Procurement and Safeguard Support 0.1 0.1 0.2 0.4 Construction Supervision 0.2 0.6 0.7 1.5 Community Development 0.1 0.1 0.1 0.2 Road Sustainability Equipment 0.5 4.5. 5.0 Recurrent costs b 0.2 0.2 0.2 0.5 Taxes and duties 4.0 5.0 5.9 14.9 Total Base Cost 9.0 4.1 35.0 5.0 37.6 5.9 96.6 Physical and price contingencies c 1.4 7.2 9.8 18.4 Financing charges during implementation d 0.4 0.6 1.0 2.0 Total 10.4 4.5 42.2 5.6 47.4 6.9 117.0 ADB = Asian Development Bank; Govt = Government a In 2011 prices. b Program Management Unit (PMU) expenses related to the investment program including: PMU staff salary, operational expenses, travel, training, and other eligible expenditures; excluding single social payment. c Contingency estimated at about 19% of the total base cost to cover variations in the costs owing to change in detailed design. This is based on the consultations with Road Fund taking into account the recently approved projects. d Includes interest charges considering Tranche 3 is funded by ADF. Source: Asian Development Bank estimates 21

22 F. Contract Award and Disbursement S-curves 20. Figures 4.8A and 4.8B shows the estimated contract award and disbursement progress over the implementation period of the project 1, Figures 4.8C and 4.8D of the project 2, and Figures 4.8E and 4.8F of the project 3. These will help to assess disbursement performance at any time during the project implementation. In case of delays and poor disbursements, these will help as an early warning system for taking timely remedial measures. Figure 4.8A: Project 1 Contract Award S-Curve Note: Contract awards up to 2010 are displayed as cumulative actuals in Q4 2010. Figure 4.8B: Project 1 Disbursement S-Curve Note: Disbursements up to 2010 are displayed as cumulative actuals in Q4 2010.

23 Figure 4.8C: Project 2 Contract Award S-Curve Note: Figures up to Q1 13 are actuals. Figure 4.8D: Project 2 Disbursement S-Curve Note: Figures up to Q1 13 are actuals.

24 Figure 4.8E: Project 3 Contract Award S-Curve Figure 4.8F: Project 3 Disbursement S-Curve G. Fund Flow Diagram 21. Fund flow diagram, as illustrated in Figure 4.9, shows how the funds will flow from ADB, and the Government to implement projects 1, 2 and 3. The flow of financial documents is in Figure 4.10.

25 Figure 4.9: Fund Flow Diagram Figure 4.10: Flow of Financial Documents

26 A. Financial Management Assessment V. FINANCIAL MANAGEMENT 22. Key findings of the financial management assessment undertaken for the Road Fund during the investment program preparation are as follows. Table 5.1: Summary of the Financial Management Assessment Particulars Conclusions A. Funds Flow Funds flow arrangements are reliable, predictable and secure. Road Fund has Arrangements enough capability to smoothly work under both the ongoing project 1 and the proposed investment program. B. Staffing Road Fund is staffed with experienced financial specialists. Within the Road Fund, a project management unit (PMU) has been established to implement the MFF. The PMU headed by the program director is fully staffed. PMU specialists and Road Fund financial staff are being trained by project 1 consultants on ADB financial C. Accounting Policies and Procedures D. Internal and External Audits G. Reporting and Monitoring H. Information Systems management procedures. The Road Fund s accounting policy is based on the Uzbekistan National Accounting Standards and Financial Reporting Regulations for State Budget Financed Organizations. Uzbekistan National Accounting Standards are progressively being modernized in accordance with International Accounting Standards. A separate accounting policy and financial management manual for the PMU is being established in accordance with MOF and ADB requirements. There is no internal audit unit within the Road Fund. The Road Fund is audited annually by Chamber of Accounts. The PMU is audited by independent external auditors on an annual basis in accordance with the International Standards on Auditing (ISA), which complies with the requirements of ADB. The Road Fund reports comply with the reporting requirements of the MOF, the Ministry of Economy (MOE), the State Tax Committee, and other government bodies. Current PMU's quarterly progress reports are being regularly submitted to ADB. The Road Fund and PMU operate accounting system called 1S Accounting, which suits well with the project requirements and produces acceptable reports. Source: ADB. 2009. Technical Assistance to the Republic of Uzbekistan for the CAREC Transport Corridor 2 Road Investment Program. Manila (TA 7375-UZB), for $900,000, approved on 11 November. 23. Actions required to be taken by the Road Fund and/or the Ministry of Finance are as follows: (i) (ii) (iii) Road Fund need offer incentives to the PMU staff in order to avoid frequent staff turnover and adverse impacts on implementation of the ongoing project and the investment program. Introduction of project allowance is one of the major actions needed to be taken urgently; PMU specialists and Road Fund financial staff must undergo trainings on ADB financial management procedures to further strengthen its capacity and enable the Road Fund to undertake itself the internal audit; A separate accounting policy and financial management manual for the existing PMU should be established in accordance with MOF and ADB requirements without any further delays; and 1 Loan 2403-UZB: CAREC Regional Road Project

27 (iv) Road Fund should maintain separate accounts for each of the projects under the investment program and have such accounts audited annually, in accordance with appropriate auditing standards consistently applied by independent auditors whose qualifications, experience, and terms of reference are acceptable to ADB. 24. Risk Analysis. During the implementation phase, the PMU might face some risks that can generally be divided in two main categories: (i) country level; and (ii) organization/project level. Unavailability or delay in the release of counterpart funds and weak public procurement legislation can be attributed as major country specific risk for the investment program. Further, all the contracts with foreign suppliers/consultants financed out of loan funds are subject to approval by the Ministry for Foreign Economic Relations, Investments and Trade of Uzbekistan, which takes considerable time and eventually negatively affect the project implementation. This, together with project-specific risks and activities to mitigate them, are summarized as follows. Financial management risks shall need to be considered and updated throughout the life of the investment program. Risk mitigation measures shall also be updated accordingly. Table 5.2: Risk Assessment and Mitigation Measures Risk Risk Assessment* Risk-Mitigation Measures Inherent Risk 1. Country-specific Risks M MOF and Road Fund shall ensure the timely release of counterpart funds, as per loan covenants 2. Entity-specific Risks M Extensive training of PMU staff on ADB procedures shall be carried out. 3. Project-specific Risks N Overall Inherent Risk M Control Risk 1. Implementing Entity M Organizational capacity augmentation with the induction of experienced PMU staff will support the existing organizational structure 2. Funds Flow M Timely availability of counterpart funds will be ensured by implementing the proposed funds flow arrangements 3. Staffing M Dedicated and qualified accounting and financial management staff at PMU level shall be recruited. Project management consultants shall assist the Road Fund to determine training needs of the new staff. It shall assist them to design and implement the training program especially for ADB financial reporting requirements and their integration into overall national financial reporting requirements as per NAS and other statutes. 4. Accounting Policies and Procedures H Accounting Policy shall be drafted taking into account the national accounting standards and the requirements of ADB. 5. Internal Audit N Internal auditor shall be appointed for PMU by the Road Fund. 6. External Audit H Audit of the project accounts shall be done in accordance with the International Standards on Auditing, by the Auditor acceptable to ADB. 7. Reporting and Monitoring H PMU shall regularly report in accordance with ADB requirements on inherent adequate control mechanisms

28 Risk Risk Assessment* Risk-Mitigation Measures 8. Information Systems S The accounting system "1S-Accouting" shall be installed at PMU efficient information system and reporting. Overall Control Risk S * H High, S Substantial, M Moderate, N Negligible or Low. Source: ADB. 2009. Technical Assistance to the Republic of Uzbekistan for the CAREC Transport Corridor 2 Road Investment Program. Manila (TA 7375-UZB), for $900,000, approved on 11 November, and updated by Road Fund in March 2011. B. Disbursement 25. The Loan proceeds will be disbursed in accordance with ADB s Loan Disbursement Handbook (2012, as amended from time to time) 2. Direct payment procedures will generally be used for civil works contracts and consulting services. Payment for individual consultants (national) may be made from the Imprest Account. The Road Fund will establish an imprest account at a commercial bank acceptable to ADB, with a ceiling equivalent to estimated eligible project expenditures for the next 6 months or 10% of the loan amount, whichever is less. The imprest account will be established, managed, and liquidated in accordance with ADB s Loan Disbursement Handbook and detailed arrangements agreed by the Government and ADB. The statement of expenditure (SOE) procedure will be used to reimburse eligible expenditure and to liquidate and replenish the imprest account for individual payments of $100,000 and below. 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 26. The request for initial advance to the imprest account should be accompanied by an Estimate of Expenditure Sheet 4 setting out the estimated expenditures for the first six (6) months of project implementation, and submission of evidence satisfactory to ADB that the imprest account has been duly opened. For every liquidation and replenishment request of the imprest account, the Road Fund will furnish to ADB (a) Statement of Account (Bank Statement) where the imprest account is maintained, and (b) the Imprest Account Reconciliation Statement (IARS) reconciling the above mentioned bank statement against the EA s records. 5 27. Pursuant to ADB's Safeguard Policy Statement (2009) (SPS), 6 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. ADB will ensure that the investment program is in compliance with applicable national laws and regulations and will apply the prohibited investment activities list. 28. Road Fund 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. Before the submission of the first 2 Available at: http://www.adb.org/documents/handbooks/loan_disbursement/loan-disbursement-final.pdf 3 Checklist for SOE procedures and formats are available at: http://www.adb.org/documents/handbooks/loan_disbursement/chap-09.pdf http://www.adb.org/documents/handbooks/loan_disbursement/soe-contracts-100-below.xls http://www.adb.org/documents/handbooks/loan_disbursement/soe-contracts-over-100.xls http://www.adb.org/documents/handbooks/loan_disbursement/soe-operating-costs.xls http://www.adb.org/documents/handbooks/loan_disbursement/soe-free-format.xls 4 Available in Appendix 29 of the Loan Disbursement Handbook. 5 Follow the format provided in Appendix 30 of the Loan Disbursement Handbook. 6 Available at: http://www.adb.org/documents/policies/safeguards/safeguard-policy-statement-june2009.pdf

29 withdrawal application, the government shall 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. 29. The Road Fund 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. Financial Accounting and Auditing 30. The Road Fund will (i) maintain separate accounts for each of the projects under the investment program; (ii) have such accounts audited annually, in accordance with appropriate auditing standards consistently applied by independent auditors whose qualifications, experience, and terms of reference are acceptable to ADB; (iii) furnish to ADB as soon as available but in any event not later than 6 months after the end of each related fiscal year, certified copies of such audited project accounts and the report of the auditors relating thereto (including the auditors separate opinions on the use of the loan proceeds and compliance with the financial covenants of the loan agreement; and (iv) furnish to ADB such other information concerning such accounts and the audit thereof as ADB shall from time to time reasonably request. The independent auditors will be engaged and financed under the investment program.

30 VI. PROCUREMENT AND CONSULTING SERVICES A. Advance Contracting and Retroactive Financing 31. Under each tranche, ADB may, subject to its policies and procedures, allow on request (a) advance contracting and (b) retroactive financing of eligible expenditures for up to 20% of the proposed individual loan, incurred prior to loan effectiveness but not earlier than 12 months before the date of signing of the related legal agreement. Uzbekistan acknowledges that any approval of advance contracting and/or retroactive financing will not constitute a commitment by ADB to finance the related project. 32. In line with the above, the Government requested for the project 1 (i) advance action for procuring civil works and goods, and (ii) retroactive financing of up to 20% of the loan amount provided that expenditures are in accordance with agreed procedures and were incurred during the 12 months before the signing of the Loan Agreement. The Road Fund proposed that the PMU establishment including hiring of the project director and all PMU staff be retroactively financed by ADB. Advance contracting will be for works and consulting services; and the steps to be concluded in advance are (i) tendering, and bid evaluation for civil works packages; and (ii) recruitment of consultants. 33. All advance contracting and retroactive financing will be undertaken in conformity with ADB s Procurement Guidelines (March 2013, as amended from time to time) (ADB s Procurement Guidelines) 7 and ADB s Guidelines on the Use of Consultants (March 2013, as amended from time to time). 8 The issuance of invitations to bid under advance contracting and retroactive financing will be subject to ADB approval. 34. Under Project 2 and Project 3, the Government requested advance action for procuring civil works, goods and recruitment of consulting services for construction supervision. Advance contracting will be undertaken in conformity with ADB s Procurement Guidelines (March 2013, as amended from time to time) (ADB s Procurement Guidelines) 9 and ADB s Guidelines on the Use of Consultants (March 2013, as amended from time to time). 10 B. Procurement of Goods, Works and Consulting Services, and Procurement Plans 35. Procurement of goods, civil works, and related services financed from the ADB loans will be done in accordance with ADB s Procurement Guidelines (March 2013, as amended from time to time) and the procurement plans for the projects. The procurement plan for project 1 is in Figure 6.1 and the procurement milestones for civil works contracts and supervision consultants are shown in Tables 6.1 and 6.2 respectively. The Procurement Plan for project 2 is in Figure 6.2 and the procurement milestones for civil works contracts and supervision consultants are shown in Tables 6.3 and 6.4 respectively. The Procurement Plan for project 3 is in Figure 6.3 and the procurement milestones for civil works contracts, supervision consultants and border infrastructure are shown in Tables 6.5, 6.6 and 6.7 respectively. Procurement plans for the subsequent project 4 will be developed during its preparation. To ensure competitive bidding, international competitive bidding (ICB) contract packages will be adopted. ICB will be used for civil works over $2 million and goods over $1 million. National competitive bidding (NCB) for civil works could be conducted for contracts not exceeding $2 million. Civil works contracts will be 7 Available at: http://www.adb.org/documents/guidelines/procurement/guidelines-procurement.pdf 8 Available at: http://www.adb.org/documents/guidelines/consulting/guidelines-consultants.pdf 9 Available at: http://www.adb.org/documents/guidelines/procurement/guidelines-procurement.pdf 10 Available at: http://www.adb.org/documents/guidelines/consulting/guidelines-consultants.pdf

31 procured through ICB using post-qualification. ADB s prior review procedures will be followed. The Road Fund agreed to include the relevant sections of ADB s Anticorruption Policy (1998) in all bidding and contractual documents. Figure 6.1: Procurement Plan and Contract Packages for Project 1 Basic Data Project Name: CAREC Corridor 2 Road Investment Program Tranche 1 Country: Republic of Uzbekistan Executing Agency: Road Fund, Ministry of Finance Loan Amount: $146 million Loan (Grant) Number: 2635-UZB (SF) Date of First Procurement Plan: 18 March 2010 Date of this Procurement Plan: 21 August 2013 CAREC = Central Asia Regional Economic Cooperation B-1. Process Thresholds, Review and 18-Month Procurement Plan 1. Project Procurement Thresholds 36. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works. Method Procurement of Goods and Works Threshold International Competitive Bidding (ICB) for Works 1 > $2,000,000 2. ADB Prior or Post Review 37. 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 Recruitment of Consulting Firms Quality- and Cost-Based Selection (QCBS) Prior Least Cost Selection Prior Audit Service for PMU (each contract for 2 fiscal-years) Recruitment of Individual Consultants Individual Consultants Prior

32 3. Goods and Works Contracts Estimated to Cost More Than $1 Million 38. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description Contract Value ($million) Procurement Method Prequalification of Bidders (Y/N) Advertisement Date Comments Civil works 86.7 ICB N 5 January 2010 Contract awarded and under implementation 4. Consulting Services Contracts Estimated to Cost More Than $100,000 39. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description Construction supervision Contract Value ($) Recruitment Method 1 Advertisement Date (quarter/year) International or National Assignment Comments 2.19million QCBS Q1-2010 International Contract awarded and under implementation Procurement and safeguards support Road Asset Management Support Community 0.21million Individual Q1-2010 One international and two national Contracts awarded and under implementation 1.74 million QCBS Q1-2011 International Contract awarded 0.012million Individual Q2-2011 One national Contract awarded Development Quality: cost ratio 80:20 ADB = Asian Development Bank, ICB = international competitive bidding, N = no, QCBS = quality- and cost-based selection, UZB = Uzbekistan, Y = yes. Sources: Road Fund. 5. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000 General Description Audit Service for PMU (each contract for 2 fiscal-years) Contract Value ($) Recruitment Method 1 Advertisement Date (quarter/year) International or National Assignment $50,747 LCS Q 1 National Comments Least Cost Selection (LCS) method. Source of finance - recurrent cost item of loan, Contract awarded for FY 2010, 2011, 2012, and 2013

33 B-2. Indicative List of Packages Required Under the Project 40. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project. General Description Estimated Value (cumulative) Estimated Number of Contracts Procurement Method Domestic Preference Applicable (Y/N) Comments Works $86.7million 1 ICB Y General Description Estimated Value (cumulative) Estimated Number of Contracts Recruitment Method Type of Proposal Comments Consulting Services $2.19 million $0.21 million 1 3 QCBS Individual Full Technical Biodata $1.8 million 1 QCBS Full Technical $0.01 million 1 Individual Biodata - 1 LCS Biodata Audit Service B-3. Review of Contract Modifications 41. ADB will review contract modifications in accordance with the procedures set forth in the loan agreement between the government and ADB. Figure 6.2: Procurement Plan and Contract Packages for Project 2 Basic Data Project Name: CAREC Corridor 2 Road Investment Program Tranche 2 Country: Republic of Uzbekistan Executing Agency: Road Fund, Ministry of Finance Loan Amount: $240 million Loan (Grant) Number: 2746 Date of First Procurement Plan: 14 February 2011 Date of this Procurement Plan: 21 August 2013 CAREC = Central Asia Regional Economic Cooperation B-1. Process Thresholds, Review and 18-Month Procurement Plan 1. Project Procurement Thresholds 42. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works. Method Procurement of Goods and Works Threshold International Competitive Bidding (ICB) for Works 1 > $2,000,000 International Competitive Bidding for Goods 1 >=$1,000,000 2. ADB Prior or Post Review 43. 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.

34 Procurement Method Prior or Post Comments Procurement of Goods and Works ICB Works Prior ICB Goods Prior Recruitment of Consulting Firms Quality- and Cost-Based Selection (QCBS) Prior Least Cost Selection (LCS) Prior Audit Service for PMU (each contract for 2 fiscal-year) Recruitment of Individual Consultants Individual Consultants Prior 3. Goods and Works Contracts Estimated to Cost More Than $1 Million 44. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description Civil works Goods Contract Value ($million) 176.2 15.0 Procurement Method ICB ICB Prequalification of Bidders (Y/N) N N Advertisement Date 10 February 2011 31 March 2011 Comments 4. Consulting Services Contracts Estimated to Cost More Than $100,000 45. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description Construction supervision Contract Value ($) Recruitment Method 1 Advertisement Date (quarter/year) International or National Assignment 3.5 million QCBS 28 Jan 2011 International Comments Procurement and safeguards support Quality: cost ratio 80:20 400,000 Individual 15 May 2011 One international and one national 5. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000 General Description Audit Service for PMU (each contract for 2 fiscal-year) Contract Value ($) Recruitment Method 1 Advertisement Date (quarter/year) International or National Assignment 22,500 LCS 18 Feb 2013 National Comments Contract awarded. Source of finance - recurrent cost item of loan

35 B-2. Indicative List of Packages Required Under the Project 46. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project. General Description Estimated Value (cumulative) Estimated Number of Contracts Procurement Method Domestic Preference Applicable (Y/N) Comments Goods 15.0 1 ICB Y Works 176.2 1 ICB Y General Description Estimated Value (cumulative) Estimated Number of Contracts Recruitment Method Type of Proposal Comments Consulting Services $3.5 1 QCBS Full Technical $0.4 3 Individual Biodata - 1 LCS Biodata B-3. Review of Contract Modifications 47. ADB will review contract modifications in accordance with the procedures set forth in the loan agreement between the government and ADB. Figure 6.3: Procurement Plan and Contract Packages for Project 3 Basic Data Project Name: CAREC Corridor 2 Road Investment Program Tranche 3 Country: Republic of Uzbekistan Executing Agency: Road Fund, Ministry of Finance Loan Amount: $100 million Loan Number: 2868 Date of First Procurement Plan: 14 February 2012 Date of this Procurement Plan: 21 August 2013 CAREC = Central Asia Regional Economic Cooperation. B-1. Process Thresholds, Review and 18-Month Procurement Plan 1. Project Procurement Thresholds 48. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works: Procurement of Works and Goods Method Threshold International Competitive Bidding (works) > $2,000,000 International Competitive Bidding (Goods) >=$1,000,000

36 2. ADB Prior or Post Review 49. 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 Recruitment of Consulting Firms Quality- and Cost-Based Selection (QCBS) Recruitment of Individual Consultants Individual Consultants Prior Prior 3. Goods and Works Contracts Estimated to Cost More Than $1 Million 50. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. Contract Description Estimated Costs Procurement ($ million) a Methods Date of Advertisement Prior Review Y/N 1. Civil Works 74.0 ICB Nov 2012 Y 2. Goods 5.0 ICB Jul 2012 Y ADB = Asian Development Bank, ICB = international competitive bidding, Y = yes. Sources: Road Fund and Asian Development Bank estimates. Comments This package has been rebid. Contract awarded on 12 Dec 2012. Delivery stage in progress. 4. Consulting Services Contracts Estimated to Cost More Than $100,000 51. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description Construction supervision Advertisement Date (quarter/year) International or National Assignment Contract Value ($) Recruitment Method Comments 1.5 million QCBS 1 Mar 2012 International Contract awarded on 18 Feb 2013. Procurement and Safeguards Support 400,000 Individual TBD One international and two nationals Contract for procurement support awarded on 23 Apr 2013. Community Development 200,000 Individual TBD One national TBD = to be determined. 1 Quality: cost ratio 90:10

37 5. Goods and Works Contracts Estimated to Cost Less Than $1 Million and Consulting Services Contracts Less than $100,000 None B-2. Indicative List of Packages Required Under the Project 52. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project. General Description Estimated Value (cumulative) Goods Supply and Works Contracts Estimated Number of Contracts Procurement Method Domestic Preference Applicable (Y/N) Comments Goods 2.05 1 ICB N. Works 66.57 1 ICB N Contract awarded ICB = international competitive bidding. General Description Estimated Value (cumulative) Consulting Services Estimated Number of Contracts Recruitment Method Type of Proposal Comments Consulting Services $1.5 1 QCBS with quality: cost ratio of 90:10 Full Technical Proposal Contract awarded. $0.4 3 Individual 1 contract awarded. $0.2 1 Individual B-3. Review of Contract Modifications 53. ADB will review contract modifications in accordance with the procedures set forth in the loan agreement between the government and ADB. 54. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages are explained below.

38 Project 1 Table 6.1: Civil Work Contracts Procurement Schedule for Project 1 (Actual, 50km) No. Activity Calendar Date Cumulative Days Days 1 GPN & IFB/Preparation (RF to upload- ADB) 0 14-Dec-09 0 2 Clearance by ADB 4 18-Dec-09 4 3 Early Draft Bidding Documents Preparation 6 31-Dec-09 10 4 GPN & IFB/Preparation (RF to upload-www.adb) 5 05-Jan-10 15 5 Detailed Design Completed by RF 41 15-Feb-10 56 6 BDs ready including BOQ and Tech Specs 13 28-Feb-10 69 7 Clearance and approval of BD by State of Architecture & EA's 5 05-Mar-10 74 Bidding Committee 8 Submit completed draft BD to ADB for Approval 10 15-Mar-10 84 9 ADB No-Objection to the Draft BD 4 19-Mar-10 88 10 Issue Bid Documents to Interested Contractors 17 05-Apr-10 105 11 Receive bids and Opening of Tech Qualifications 47 21-May-10 152 12 Extension - Receive bids and Opening of Tech Qualifications 31 21-Jun-10 183 13 Post Qualification &Technical Evaluation by RF 15 06-Jul-10 198 14 Clearance and approval by EA's Bidding Committee 3 09-Jul-10 201 15 ADB's Comments and No objection of the technical evaluation 7 16-Sep-10 208 16 Opening of Price Bids 4 20-Sep-10 212 17 Overall Evaluation Report by RF 0 20-Sep-10 212 18 Clearance and approval by EA's Bidding Committee 1 21-Sep-10 213 19 Forward Overall Evaluation Report with Recommendations to ADB 2 23-Sep-10 215 including Draft Contract 20 ADB's Comments and No objection 5 28-Sep-10 220 21 Issuance of Letter Of Acceptance to Contractor including forwarding 0 28-Sep-10 220 Contract Agreement 22 Technical Meeting with Contractor 13 11-Oct-10 233 23 Contract Signing 7 18-Oct-10 240 24 Contract approval by MFERIT 19 06-Nov-10 259 25 Contractors Submits Performance Security 9 15-Nov-10 268 26 NTP & submit copy of Contract to ADB 4 19-Nov-10 272 27 Mobilization 26 15-Dec-10 298 55. Consulting Services. All consultants will be recruited according to ADB s Guidelines on the Use of Consultants. 11 The terms of reference for all consulting services are detailed in Section D. 56. An estimated 404 person-months (106 international, 298 national) of consulting services under project 1 are required as detailed in the following: (i) (ii) Procurement and Safeguard Support Services - Individual consultants will be recruited for each tranche to help the PMU conduct procurement actions and advise the EA on implementation and monitoring of environment and social safeguard actions. A total of 10 person-months of international consultant inputs and 12 person-months of national consultants will be required intermittently over 24 months. Construction Supervision - Consulting firms will be engaged using the qualityand cost-based selection (QCBS) method with a standard quality:cost ratio of 11 Checklists for actions required to contract consultants by method available in e-handbook on Project Implementation at: http://www.adb.org/documents/handbooks/project-implementation/

39 80:20. A total of 50 person-months of international consultant inputs and 220 person-months of national consultants will be required. Consulting services are expected to take place over 24 months (actual duration of service shall be in line with civil works schedule). The Consultant team will administer the construction contracts and ensure that the contractual clauses for both quality and specifications of work are complied with, and the works are constructed in accordance with the provisions of the construction contracts. (iii) (iv) (v) Project Appraisal - The Consultants will be selected by the Road Fund through a cost-based selection (QCBS) method with a standard quality:cost ratio of 80:20. A total of 4 person-months of international consultant inputs and 20 person-months of national consultants will be required. Consulting services are expected to take place over 4 months. The consultants will prepare due diligence report including technical and economic appraisal, environmental, social, and poverty impacts assessment for subsequent projects, prepare project implementation and financing plan, review the investment program compliance and draft periodic financing requests. Road Asset Management Support - The consultation services, which will be rendered by consulting firms, will require a total input of about 40 person-months of international consultants and the same number of person-months of national consultants. Consulting firms will be engaged using the quality- and cost-based selection (QCBS) method with a standard quality:cost ratio of 80:20. The consultation service will be carried out over an 18-month period to help address concerns related to the financing of road works, to the way road information and data are collected, stored and processed, and to the approach by which maintenance options are identified and selected. Community Development Program - An individual consultant will be recruited for 6 months on intermittent basis to facilitate the implementation of the community and gender action plan (CGAP) and address the identified needs of (i) capacity building on social and gender issues at Road Fund and Saramaya Khokimiyats; (ii) development of social infrastructure and business skills in Saramaya; and (iii) improved access to health care in Saramaya. The consultant shall ensure the successful and timely implementation of the Gender Action Plan and prepare regular progress reports submitted to ADB and PMU in an agreed format.

40 Table 6.2: Supervision Consultants' Recruitment Schedule for Project 1 (Actual, 50km) No. Activity Calendar Date Cumulative Days Days 1 Publication of EOI in ADB BO, EA website, local 0 12-Feb-10 0 Newspaper, DgMarket, etc. 2 Receipt of EOI 29 12-Mar-10 29 3 SL & RFP Submission to ADB (Submission #1) by EA 27 08-Apr-10 56 4 ADB Approval of RFP & SL 28 06-May-10 84 5 Issue RFP to Short listed Firms by EA 12 18-May-10 96 6 Receipt of Proposal (Tech and Financial) 45 01-Jul-10 141 7 Technical Evaluation & Submission (#2) to ADB 48 18-Aug-10 189 8 ADB's approval of technical evaluation 20 06-Sep-10 209 9 Issue of notice- Public Opening Financial Proposal 0 06-Sep-10 209 10 Public Opening of Financial Proposal by EA 3 09-Sep-10 212 11 Overall Ranking and approval of the EA's Bidding 0 09-Sep-10 212 Committee 12 Submission (# 3) to ADB 1 10-Sep-10 213 13 ADB's Approval of the Final Ranking 5 15-Sep-10 218 14 EA Issue Invitation for contract negotiation 0 15-Sep-10 218 15 Notification for contract Negotiations 0 15-Sep-10 218 16 Negotiation Period 5 20-Sep-10 223 17 Submit (#4) Min of Neg & Draft Contract to ADB 2 22-Sep-10 225 18 ADB's approval of contract 37 28-Oct-10 262 19 Signing of Contract 1 29-Oct-10 263 20 Contract approval by MFERIT 7 23-Nov-10 270 21 EA issuance Notice to Proceed 0 23-Nov-10 270 22 Consultant's Mobilization 25 18-Dec-10 295 57. Project 1 involves one ICB package for civil works. Should there be a need for NCB procurement, ADB and the Road Fund will review the Government s procurement procedures to ensure consistency with ADB requirements before commencement of NCB procurement. Any necessary modifications or clarifications to the Government s procedures will be reflected in the procurement plan. Project 2 Table 6.3: Civil Work Contracts Procurement Schedule for Project 2 (Actual) No. Activity Calendar Days Date Cumulative Days 0 GPN for three tranches under MFF (RF to upload) 0 05-Jan-10 0 1 GPN at ADB BO 0 05-Jan-10 0 2 Early Draft Bidding Documents Preparation (2 weeks) 15 29-Dec-10 15 3 Detailed Design Completed by RF 31 29-Jan-11 46 4 Clearance and approval of BD by State of Architecture & 2 31-Jan-11 48 EA's Bidding Committee and MFERIT 5 Issue IFB in ADB BO (REBIDDING) 2 29-May-11 139 6 Issue IFB in Newspaper 3 01-Jun-11 142 7 Issue Bid Documents to Interested Contractors 0 01-Jun-11 142 8 Receive bids and Opening of Tech Qualifications 42 12-Jul-11 184 9 Post Qualification &Technical Evaluation by RF 33 15-Aug-11 217 10 Clearance and approval by EA's Bidding Committee 12 27-Aug-11 229 11 ADB's Comments and No objection of the technical 12 08-Sep-11 241 evaluation 12 Opening of Price Bids 13 21-Sep-11 254 13 Overall Evaluation Report by RF 2 23-Sep-11 256 14 Clearance and approval by EA's Bidding Committee 2 25-Sep-11 258 15 Forward Overall Evaluation Report with Recommendations to ADB including Draft Contract 1 26-Sep-11 259

41 No. Activity Calendar Days Date Cumulative Days 16 ADB's Comments and No objection 15 11-Oct-11 274 17 Issuance of Letter Of Acceptance to Contractor inc 9 20-Oct-11 283 forwarding Contract Agreement 18 Technical Meeting with Contractor 1 21-Oct-11 284 19 Contractors Submits Performance Security 30 11-Nov-11 314 20 Contract Signing 6 17-Nov-11 320 21 Contract approval by MFERIT 129 24-Mar-12 449 22 NTP & submit copy of Contract to ADB 60 22-May-12 509 23 Mobilization 7 29-May-12 516 Project 2 (Rebidding due to contract termination of Company Kukdong Engineering & Construction Co. Ltd. (Korea)) Table 6.3: Civil Work Contracts Procurement Schedule for Project 2 Rebid (85km) No. Activity Planned Calendar Date Cumulative Days Days 1 Submission of bidding document by EA to ADB 0 11-Jan-13 0 2 ADB's Comments and No objection of the bidding document 13 23-Jan-13 13 3 Issue IFB in ADB website 6 29-Jan-13 19 4 Issue IFB in Newspaper 0 29-Jan-13 19 5 Issue Bid Documents to Interested Contractors 1 30-Jan-13 20 Receive bids and Opening of Tech Qualifications, including 63 02-Apr-13 extension of the bid submission deadline (initial deadline: 19 83 6 March 2013 7 Post Qualification &Technical Evaluation by RF 75 15-Jun-13 158 Clearance and approval by EA's Interministrial Tender 46 30-Jul-13 8 Committee 204 9 ADB's Comments and No objection of the technical evaluation 30 29-Aug-13 234 10 Opening of Price Bids 14 12-Sep-13 248 11 Overall Evaluation Report by RF 5 17-Sep-13 253 Clearance and approval by EA's Interministrial Tender 5 22-Sep-13 12 Committee 258 Forward Overall Evaluation Report with Recommendations to 1 23-Sep-13 13 ADB incl Draft Contract 259 14 ADB's Comments and No objection 7 30-Sep-13 266 Issuance of Letter Of Acceptance to Contractor inc forwarding 1 01-Oct-13 15 Contract Agreement 267 16 Technical Meeting with Contractor 7 08-Oct-13 274 17 Contract Signing & submit copy of Contract to ADB 2 10-Oct-13 276 18 Contractors Submits Performance Security 17 27-Oct-13 293 19 Contract approval by MFERIT 30 28-Nov-13 323 20 Notice of Contract Effectiveness 1 29-Nov-13 324 21 Mobilization 21 20-Dec-13 345 58. Under project 2, an estimated 376 person-months (97 International and 279 national) consulting services will be recruited. This includes (a) construction supervision consulting services with 352 person-months (85 person-months of international consultants and 267 person-months of national consultants); and (b) individual consultants for procurement and safeguards support with 12 international for procurement specialist and 12 national personmonths for safeguards specialist. Due to urgency of the procurement and safeguard support services necessary for advance procurement action for works, the current individual consultants for procurement and safeguard support services under project 1 will be retain for project 2. A supplementary consultancy agreement will be entered into to cover the extended consulting services.

42 59. The consulting services for construction supervision under project 2 will be recruited using quality- and cost-based selection (QCBS), full technical proposal with quality:cost ratio of 80:20. A total of 352 person-months (85 person-months of international consultants and 267 person-months of national consultants) will be required. Consulting services are expected to take place over 24 months (actual duration of service shall be in line with civil works schedule). The Consultant team will administer the construction contracts and ensure that the contractual clauses for both quality and specifications of work are complied with, and the works are constructed in accordance with the provisions of the construction contracts. Table 6.4: Supervision Consultants' Recruitment Schedule for Project 2 (Actual, 85km) No. Activity Calendar Days Date Cumulative Days 1 Publication of EOI in ADB BO, EA website, local Newspaper, 2 26-Jan-11 - DgMarket, etc. 2 Receipt of EOI 28 24 Feb 11 28 3 SL & RFP Submission to ADB (Submission #1) by EA 127 30-Jun- 11 155 4 ADB Approval of RFP & SL 65 02-Sep-11 220 5 Issue RFP to Short listed Firms by EA 4 06-Sep-11 224 6 Receipt of Proposal (Tech and Financial) 45 20-Oct-11 269 7 Technical Evaluation & Submission (#2) to ADB 51 9-Dec-11 320 8 ADB's approval of technical evaluation 111 29-Mar-12 431 9 Issue of notice- Public Opening Financial Proposal 91 28-Jun-12 522 10 Public Opening of Financial Proposal by EA 7 5-Jul-12 529 11 Overall Ranking and approval of the EA's Bidding Committee 1 6-Jul-12 530 12 Submission (# 3) to ADB 3 9-Jul-12 533 13 ADB's Approval of the Final Ranking, EA to informally notify 9 18-Jul-12 the first ranked firm to prepare for visa etc. subject to ADB final approval 542 14 EA Issue Invitation for contract negotiation 0 18-Jul-12 542 15 Notification for contract Negotiations 8 26-Jul-12 550 16 Negotiation Period 5 31Jul-12 555 17 Submit (#4) Min of Negotiations & Draft Contract to ADB 3 3-Aug-12 558 18 ADB's approval of contract 5 08-Aug-12 563 19 Signing of Contract 1 09-Aug-12 564 20 Contract approval by MFERIT 60 09-Oct-12 624 21 EA issuance Notice to Proceed 2 11-Oct-12 626 22 Consultant's Mobilization 21 2-Nov-12 647 Project 3 Table 6.5: Civil Work Contracts Procurement Schedule for Project 3 No. Activity Calendar Planned Days Date Cumulative Days 1 GPN for three tranches under MFF (uploaded in ADB's 0 05-Jan-10 0 website) 2 Detailed Design and BoQ Completed by RF 21 17-Feb-12 21 3 Preliminary Draft Bidding Documents submitted to ADB 12 29-Feb-12 33 4 Draft Bidding Documents approved by Bidding Committee 61 30-Apr-12 94 submitted to ADB 5 ADB No Objection 15 15-May-12 109 6 Issue IFB in ADB BO / Issue IFB in Newspaper 7 22-May-12 116 7 Issue Bid Documents to Interested Contractors 0 22-May-12 116 8 Receive bids and opening of technical bids, including the 58 19-Jul-12 174 period of extension the deadline 9 Post Qualification &Technical Evaluation by RF 39 27-Aug-12 213

43 No. Activity Calendar Planned Days Date Cumulative Days 10 Clearance and approval by EA's Bidding Committee, 14 10-Sep-12 227 submitted to ADB proposed rebidding 11 ADB's Comments and No objection of the technical bid 51 31-Oct-12 278 evaluation (BER) - Rebidding 12 Submitted Bidding Document using new Standard Bidding 9 09-Nov-12 287 Document (SBD) 13 Rebid - Bidding Documents approved by ADB 17 26-Nov-12 304 14 Issuing IFB in ADB BO, MoF Website 3 29-Nov-12 307 15 Issue IFB in Newspaper 0 29-Nov-12 307 16 Issue Bid Documents to Interested Contractors 1 30-Nov-12 308 17 Receive bids and Opening of Tech Qualifications by EA's 48 17-Jan-13 356 Working Level Bidding Committee 18 Post Qualification &Technical Evaluation by EA 39 25-Feb-13 395 19 Clearance and approval by EA's Bid Evaluation Committee 9 06-Mar-13 404 20 ADB's Comments and No objection of the technical 47 22-Apr-13 451 evaluation 21 Opening of Price Bids by EA's Working Level Bidding 50 11-Jun-13 501 Committee 22 Overall Evaluation Report by EA 17 28-Jun-13 518 23 Forward Overall Evaluation Report approved by the Inter- 13 11-Jul-13 531 Ministerial Tender Committee (IMTC) to ADB incl Draft Contract 24 ADB's Comments and No objection 5 16-Jul-13 536 25 Issuance of Letter of Acceptance to Contractor inc forwarding 0 16-Jul-13 536 Contract Agreement 26 Technical Meeting with Contractor 6 22-Jul-13 542 27 Signing Contract and Contractor Submits Performance 33 24-Aug-13 575 Security 28 Contract Submit to MFERIT for registration and submit copy 2 26-Aug-13 577 of Contract to ADB 29 Contract approval by MFERIT (including respond to 36 01-Oct-13 613 MFERIT's comments 30 Letter of contract effectiveness 1 02-Oct-13 614 31 Mobilization 28 30-Oct-13 642 60. Under project 3, an estimated 248 person-months (62 International and 186 national) consulting services will be recruited. This includes (a) construction supervision consulting services with 212 person-months (50 person-months of international consultants and 162 person-months of national consultants); (b) individual consultants for procurement and safeguards support with 12 international for procurement specialist and 12 national personmonths for safeguards specialist; and (c) community development with 12 national personmonths for gender and community development specialist. Due to urgency of the procurement and safeguard support services necessary for advance procurement action for works, the current individual consultants for procurement and safeguard support services under projects 1 and 2 will be retain for project 3. A supplementary consultancy agreement will be entered into to cover the extended consulting services. 61. The consulting services for construction supervision under project 3 will be recruited using quality- and cost-based selection (QCBS), full technical proposal with quality:cost ratio of 90:10. Consulting services are expected to take place over 24 months (actual duration of service shall be in line with civil works schedule). The Consultant team will administer the construction contract and ensure that the contractual clauses for both quality and specifications

44 of work are complied with, and the works are constructed in accordance with the provisions of the construction contract. Table 6.6: Supervision Consultants' Recruitment Schedule for Project 3 (40km) No. Activity Calendar Days Planned Date Cumulative Days 1 Publication of EOI in ADB BO - CSRN 0 13-Mar-12-2 Receipt of EOI 34 16-Apr-12 34 3 CSC Meeting and evaluation 38 24-May-12 72 4 SL & RFP Submission to ADB (Submission #1) by EA 7 01-Jun-12 79 5 ADB Approval of RFP & SL 54 25-Jul-12 133 6 Issue RFP to Short listed Firms by EA 4 30-Jul-12 137 7 Receipt of Proposal (Tech and Financial) 45 12-Sep-12 182 8 Technical Evaluation & Submission (#2) to ADB 50 30-Oct-12 232 9 ADB's approval of technical evaluation 21 21-Nov-12 253 10 Issue of notice- Public Opening Financial Proposal 21 12-Dec-12 274 11 Public Opening of Financial Proposal by EA 9 21-Dec-12 283 12 Overall Ranking and approval of the EA's Bidding Committee 0 21-Dec-12 283 13 Submission (# 3) to ADB 3 24-Dec-12 286 14 ADB's Approval of the Final Ranking 26 18-Jan-13 312 15 EA Issue Invitation for contract negotiation 5 23-Jan-13 317 16 Negotiation start 19 11-Feb-13 336 17 Submit (#4) Min of Neg & Draft Contract to ADB 2 13-Feb-13 338 18 ADB's approval of contract 5 18-Feb-13 343 19 Signing of Contract 0 18-Feb-13 343 20 Contract approval by MFERIT 119 16-Jun-13 462 21 EA issuance Notice to Proceed (Contract Effectiveness) 107 01-Oct-13 569 22 Consultant's Mobilization (for Contract period of 24 months) 20 20-Oct-13 589 Table 6.7: Schedule for Procurement of Border Infrastructure Equipment for Project 3 No. Activity Calendar Days Date Cumulative Days 0 GPN for three tranches under MFF (RF to upload- ADB) 0 5-Jan-10 0 1 GPN at ADB BO 0 5-Jan-10 0 2 Technical Specifications 20 18-Mar-12 20 3 Draft Bidding Documents 82 8-Jun-12 102 4 Clearance and approval of BD by State of Architecture & EA's 12 20-Jun-12 114 Bidding Committee and MFERIT - submitted to ADB 5 ADB no-objection 20 10-Jul-12 134 6 Issue IFB in ADB BO/ Issue IFB in Newspaper 8 18-Jul-12 142 7 Issue Bid Documents to Interested Contractors 1 19-Jul-12 143 8 Receive bids and Opening 56 12-Sep-12 199 9 Bids Evaluation Report 18 30-Sep-12 217 10 Clearance by EA's Bidding Committee, submitted to ADB 11 11-Oct-12 228 11 ADB's Comments and No objection of the bids 1 12-Nov-12 229 12 Issuance of Letter Of Acceptance to Contractor inc forwarding 2 13-Nov-12 231 Contract Agreement 13 Suppliers Submits Performance Security 26 07-Dec-12 257 14 Contract Signing 5 12-Dec-12 262 15 Contract approval by MFERIT 65 15-Feb-13 327 16 NTP & submit copy of Contract to ADB 1 16-Feb-13 328 17 Commence of delivery 16 04-Mar-13 344

45 C. Detailed Contract Packaging 62. Detailed contract packaging for projects 1, 2, and 3 are in Tables 6.8, 6.9 and 6.10, respectively. These will be updated during the course of implementation. Ref Contract Description A. Civil Works 1 Unit Length (km) Table 6.8: Detailed Contract Packaging for Project 1 Estimated Costs ($ million) a Mode of Procurement Duration (months) CWP 1 50 91.6 ICB 18 Total Civil Works B. Consulting Services 1 CSP-1: Procurement and safeguard support 2 CSP-2: Project appraisal 3 CSP-3: Construction supervision 4 CSP-4: Road asset management support 5 CSP-5: Community development program Total Consulting Services 6 Audit Services for PMU (each contract for 2 fiscal years) 50 91.6 Personmonth (total) 22 0.4 Individual 24 24 0.4 QCBS 4 270 2.5 QCBS 24 80 1.8 QCBS 18 6 0.2 Individual 12 402 5.3 0.051 ADB No Objection 3 Jun 2010 23 Jul 2010 21 Jan 2011 23 Jul 2010 25 Mar 2012 21 Jan 2011 LCS 18 15 Feb 2013 Contract Starting 19 Nov 2010 25 Oct 2010 Contract Completion 18 May 2012 25 Nov 2011 Responsible Agency Road Fund Road Fund 1 Apr 2011 29 Jul 2011 Road Fund 28 Oct 2010 20 Apr 2012 28 Oct 2012 31 Aug 2013 Road Fund Road Fund 1 Apr 2011 1 Apr 2012 Road Fund 10 Apr 2013 10 Oct 2014 ADB = Asian Development Bank, CSP = consulting service package, CWP = civil works package, ICB = international competitive bidding, km = kilometer, QCBS = quality- and cost-based selection. a Cost estimates for civil works do not include taxes, physical, and price contingencies. Source: Road Fund and ADB estimates. PMU

46 Ref Contract Description Unit Table 6.9: Detailed Contract Packaging for Project 2 Estimated Costs ($ million) a Mode of Procurement Duration (months) ADB No Objection Contract Starting Contract Completion Responsible Agency A. Civil Works Length (km) 1 CWP 2 85 176.2 ICB 24 Total Civil Works 85 176.2 20 Oct 2011 10 Apr 2012 9 Apr 2014 Road Fund B. Road Sustainability Set (count) 1 Road Equipment 1 15 QCBS 8 1 Jul 2011 20 Apr 2012 20 Dec 2012 Road Fund Total Equipment 1 15 C. Consulting Services Person-month (total) 1 CSP-1: Construction supervision 352 3.5 QCBS 27 23 July 2011 1 Apr 2012 31 Jul 2014 Road Fund 2 CSP-2: Procurement and safeguard support Total Consulting Services 6 Audit Services for PMU (each contract for 2 fiscal years) 24 0.4 Individual 36 390 3.945 0.0225 23 July 2011 LCS 18 15 Feb 2013 18 Jan 2012 10 Apr 2013 18 Jan 2013 10 Oct 2014 Road Fund ADB = Asian Development Bank, CSP = consulting service package, CWP = civil works package, ICB = international competitive bidding, km = kilometer, LARP = land acquisition and resettlement package, QCBS = quality- and costbased selection. a Cost estimates for civil works do not include taxes, physical, and price contingencies. Source: Road Fund and ADB estimates. PMU

47 Ref Contract Description Unit Table 6.10: Detailed Contract Packaging for Project 3 Estimated Costs ($ million) a Mode of Procurement Duration (months) ADB No Objection Contract Starting Contract Completion Responsible Agency A. Civil Works Length (km) CWP 3 40 74.0 ICB 18 Apr 2012 Total Civil 40 74.0 Works B. Road Sustainability Vehicle scanning equipment border infrastructure Total Equipment Set (count) Jan 2013 1 5.0 ICB 18 Mar 2012 Oct 2012 1 5.0 Jun 2014 Mar 2014 Road Fund Road Fund C. Consulting Services 1 CSP-1: Procurement and safeguard support Personmonth (total) 24 0.4 Individual 12 Mar 2012 Aug 2012 Jul 2013 Road Fund 2 CSP-2: Construction supervision 212 1.5 QCBS 20 May 2012 Jan 2013 Aug 2014 Road Fund 3 CSP-3: Community Development Total Consulting Services 12 0.2 Individual 30 Mar 2012 Jun 2012 Dec 2014 248 2.1 ADB = Asian Development Bank, CSP = consulting service package, CWP = civil works package, ICB = international competitive bidding, km = kilometer, LARP = land acquisition and resettlement package, QCBS = quality- and costbased selection. a Cost estimates for civil works do not include taxes, physical, and price contingencies. Source: Road Fund and ADB estimates. 63. The procurement plans cover the first 18 months of procurement activity, which shall be finalized at the loan negotiations. Within one year after the date of loan effectiveness, the Road Fund shall submit a revised procurement plan to ADB for approval that captures all ongoing procurement and that planned for the following 18 months. Each plan shall be updated annually (or as required after every loan review mission or after award of each major ICB contract), on the same basis for the duration of the project. 64. When a need arises during project implementation to change procurement arrangements (threshold, review requirements, method of procurement, contract packaging), the Road Fund, in consultation with the ADB Project Officer, will prepare a letter justifying the change submitted together with an updated procurement plan, and present it for ADB approval. 65. For the purpose of oversight and monitoring, OSFMD will be responsible for posting the initial procurement plan and subsequent updates on ADB website.

48 D. Consultant s Terms of Reference 66. Outline terms of reference for all consultant contracts are discussed in the Appendix, including procurement and safeguard support services package, construction supervision package, and community development program package.

49 Appendix - TERMS OF REFERENCE OF CONSULTANTS A. Procurement and Safeguard Support Services Package Under Project 1 1. Objective 67. Individual consultants will be recruited for each tranche to help the project management unit (PMU) conduct procurement actions and advise the executing agency (EA) on implementation and monitoring of environment and social safeguard actions. They will ensure that the procurement and safeguard actions are carried out in compliance with the procedures agreed with ADB. 2. Input 68. A total of 12 person-months of international and 12 person-months of national consultants will be recruited. The consulting services are expected to take place over 24 months. 3. Scope of Works 69. The tasks of each consultant will include but not be limited to the following: a. Procurement Specialist (International, 12 person-months) (i) Update procurement plan as and when required. (ii) Undertake procurement activity in accordance with the agreed procurement plan for the investment program. (iii) Prepare bidding documents and request for proposals documents (iv) Propose qualification criteria and evaluation method for contractors and suppliers, and shortlisting and evaluation criteria of consultants' selection. (v) (vi) (vii) (viii) (ix) (x) Prepare invitation for bid and request for proposals. Receive, open, and assist in evaluation of bids and proposals; and finalize contracts. Prepared bid evaluation report, technical and combined evaluation for consultants report, draft contract, and publication of award in acceptable format. Prepare additional particular technical specifications and terms of reference for consultants, if needed. Record and archive complaints on procurement, and advise the EA for debriefing. Keep all procurement records in proper order, acceptable to the EA and the ADB. Assist ADB staff on procurement during post-review missions; b. Environmental Specialist (National, 6 person-months) (i) Manage and coordinate the preparation, updating, implementation and monitoring the initial environmental examination (IEE)/environmental impact assessment (EIA) as required by the framework financing agreement (FFA) and loan agreement.

50 (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) Set up internal monitoring system on the project s environmental issues and requirements. Project Information Management and Development. Assess and prepare capacity building program on environmental issues. Conduct internal and external coordination with relevant parties in environment requirements of the project. Report preparation and submission. Provide advice/ recommendation to the EA on environment problems and/or requirements. Provide independent monitoring on the contractors' compliance to environmental management plan. Prepare environmental monitoring report and compliance report as required by the FFA and loan agreement. Engage with relevant civil society organizations interested in the project implementation. c. Social/Resettlement Specialist (National, 6 person-months) (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) Manage and coordinate the preparation, updating, implementation and monitoring the approved Land Acquisition and Resettlement Plan (LARP/s) and/ or Ethnic Minority Development Plan (EMDP/s), if any, as required by the FFA and loan agreement. Set up internal monitoring system on the project s social and resettlement issues and requirements Select and review an External Monitoring Agency (EMA) to be approved by the Program's Director. Project Information Management and Development Assess and prepare capacity building program on social issues Conduct internal and external coordination with relevant parties in social/resettlement activities/ requirements of the project. Set up redress and grievance mechanism for project activities Report preparation and submission Provide advice/recommendation to the EA on social safeguard/ resettlement problems/requirements Redress or follow up actions based on findings and requirements of EMA reports Provide independent monitoring on the contractors' compliance to (a) core labor standards, labor laws and incorporate applicable workplace occupational safety norms; (b) no differentiation of payment between men and women for work of equal value; (c) no child labor in the construction and maintenance activities; (d) no forced or compulsory labor; (e) discrimination in respect of employment; (f) freedom of association; (g) to the extent possible, maximize employment of local poor and disadvantaged persons for project construction purposes, provided that the requirements for job and efficiency are adequately met; and (h) land acquisition and resettlement framework and plans. Engage with relevant civil society organizations interested in the project implementation.

51 4. Qualification of Consultants 70. International Procurement Specialist: Masters in Civil engineer with minimum 10 years experience in procurement of civil works, especially major highways, and recruitment of consultants; and preferably familiar with ADB procurement guidelines. He/she should be familiar with FIDIC contract administration. Experience in Russian speaking countries will be an advantage. 71. National Environment Specialist: Minimum Bachelor degree in Environment engineer or specialist with minimum 5 years experience in project implementation, and monitoring of environment safeguards. He/she should be preferably familiar with ADB environment guidelines. 72. National Social/Resettlement Specialist: Minimum Bachelor degree in social development with minimum 5 years experience in project implementation, and monitoring of social safeguards including resettlement issues. He/she should be preferably familiar with ADB social safeguard guidelines. 5. Output/Reporting Requirements 73. Each consultant will submit regular progress reports and a final report to be agreed with the PMU. 6. Facilities Provided by the Client 74. The Road Fund will provide the following services and facilities for the consultants, either directly or through the construction contracts in accordance including: (i) (ii) Furnished air-conditioned office space, international telephone, fax and email facilities in Tashkent office, and Visa supporting letters and registrations in Uzbekistan Immigration Office 75. In view of the advance procurement action for CWP2, the services of procurement and safeguard support consultants will be extended to assist the Road Fund in procurement activities and review of due diligence for project CWP2. B. Construction Supervision Package for Project 1 1. Objectives 76. The civil works will be carried out under project 1 as one contract. The reconstruction includes clearing, sub base, base, cement concrete pavement, shoulder, guardrails, road marking and signing, bus stops. Contract CWP1: Km 440-490 Km Length Bridges 50 None Type of Pavement Cement Concrete Number of Lane Treatment 4 Full work 77. Civil works will be carried out based on the International Federation of Consulting Engineers (FIDIC) contract MDB (Version 2006). A consultant team (the Consultant) will be engaged to act as the Engineer. The Consultant will administer the construction contracts and

52 ensure that the contractual clauses for both quality and specifications of work are complied with, and the works are constructed in accordance with the provisions of the construction contracts, The Engineer s Representative will be a full-time professional resident engineer for the contract package, in accordance with the provisions of the construction contracts. 78. The Consultant, while supervising construction works, will make all necessary arrangements for implementation of quality assurance and quality control plans following industry standards and best practices. The Consultant in consultation with the Road Fund will make all engineering decisions required for the successful and timely completion of the construction contracts, and will have all the powers defined as those of the Engineer. 79. The Consultant will carry out a critical review of the detailed design prior to the commencement of works. This review will be carried out immediately after the services commence and will be completed within 4 weeks. Upon completion of the review, the Consultant will prepare a report, setting out all findings and recommendations for correcting any major defects, omissions, or any changes that may have been taken place. 80. The Consultant shall use a computerized project scheduling software for administration of the construction contracts. 2. Scope of Services 81. The Consultant will be responsible for the following tasks: a. Design Review (i) Review the geometry, pavement, bridge, and other structural designs, drawings specifications, construction method etc, prepared by the employer. Recommend to revise or update the design, if needed, for achieving greater economy, safety, reliability, and/or durability. b. Construction Supervision and Project Administration Actions (i) (ii) (iii) (iv) (v) Supervise the contractors work and certify the constructors' work in accordance with contract conditions. Ensure that the construction methods proposed by the contractor for carrying out the works are satisfactory. Develop quality assurance system and quality control plan, especially concentrating on provisions of cement concrete pavement. Inspect Contractor s construction equipment, results of material and soil tests, safety of the works, property and personnel. Inspect and test all materials and works to ensure compliance with specifications and giving immediate notice to the Contractor to remedy in the event that such materials and works fail to comply with the specifications. Recommend the EA of the rates for any unscheduled items of work that may arise. Certify work volume and process interim and final payments of the Contractors.

53 (vi) (vii) (viii) (ix) (x) Establish efficient procedures for verifying Contractor performance and reporting progress and problems in a timely manner, including quality control reports, quantity survey records, requests for variation or change orders, requests for time extension, and Contractor s claims and invoices. Ensure project financial management procedures are in place and are strictly followed, specifically relating to payments, financial accounting, financial reporting and record keeping. Check as built drawing prepared by the Contractors. Keep and record a complete set of as built drawings in paper and electronic formats for archiving in the Employers repository. Ensure that road safety design requirements are implemented in accordance with the contract documents and specifications. Assist the EA for provisional and final hand over by the contractors. Prepare a project completion report. c. Safeguard Compliance Monitoring (i) (ii) (iii) (iv) (v) (vi) Monitor Contractors conformity with environmental and social impact controls. If land acquisition and resettlement is necessary, prepare and supervise the implementation of the land acquisition and resettlement plan. Monitor Contractors conformity with traffic control and road safety action plan during construction. Carry out the following duties related to environmental mitigation: (a) ensure that all the environmental mitigation measures required to be implemented are incorporated in the contract documents; (b) supervise and monitor the implementation of environmental management plan (EMP); and (c) in the event of occurrence of any unexpected environmental impacts, coordinate with the PMU to recommend necessary mitigation measures to the EA and ADB for implementation.. Monitor Contractors compliance with and performance of required actions regarding HIV/AIDS, human trafficking, and labor core standards in accordance with the contract documents, such as awareness and education of laborers and workers. If required, collect baseline data to prepare a LARP and the other impacts assessments carried out in accordance with ADB's Safeguard Policy Statement (2009) and relevant laws and regulations in Uzbekistan. d. Reporting (i) (ii) Monitor the record-keeping and instruct the Contractor to keep further contemporary records including any statutory requirements concerning the Contractor s reporting of dangerous occurrences or accidents to government or other public authorities. Reporting and updating the works implementation schedule, highlighting any foreseen delays, and timely proposing corrective measures. Ensure that prior consultation with Road Fund is

54 (iii) (iv) (v) required for any adjustment of the works implementation schedule. Collect baseline data based on the indicators agreed in the project's design and monitoring framework; and measure the indicators over time during the assignment period. Undertake project performance monitoring and evaluation in accordance with the project framework and ADB s Project Performance Management System Handbook, including the baseline data survey and the following annual survey and reporting up to project completion. Design a simple MS Excel or similar system for recording the baseline and periodic data. Prepare the following reports, in a format and content acceptable to the employer and as per the guidelines in the Facility Administration Manual. Maintain up to date financial and other records for review, if and when needed, by ADB 82. If required by the EA, the Consultant will provide any of the following as additional services: (i) prepare reports, including technical appraisals, additional contract documentation, and/or review and comment on the Contractor s proposals, as may be required for the successful completion of the Project; and (ii) provide any other specialist services as may be required from time to time. 83. The EA will authorize any additional service, other than minor extras that do not materially affect the scope of the supervision work, at the rates established in the construction supervision Contract, or at the rates mutually agreed upon when the services require the use of specialists not listed in the contract. 3. Input 84. The services will be carried out by international firms in association with national consultants. A total of 50 person-months of international consultant inputs and 220 personmonths of national consultants will be required. 85. Consulting services are expected to take place over 24 months (actual duration of service shall be in line with civil works schedule).

55 International Consultants Chief Resident Engineer/Highway Engineer No. Proposed Key Staffing Perso n- Month National Consultants No. Perso n- Month 1 24 Deputy Resident Engineer/Highway Engineer 1 24 Material Engineer 1 Design Engineer 1 Highway Engineer 1 10 Material Engineer 2 36 Legal Specialist 1 2 Site Inspector 4 72 Environmental Safeguard 1 10 Specialist. Social Safeguard Specialist 1 6 Quantity Surveyors (2) 2 48 Cement Concrete Specialist 1 12 International Consultants 4 50 National Consultants 13 220 All input shall be in field, except the international legal specialist who may provide his/her service from home office 86. The consultants will maintain a central office at a central location in the project area for the duration of the project. Qualification descriptions of each expert are as follows: (i) (ii) Chief Resident Engineer/Highway Engineer [International, 24 personmonths] He/she shall be leading the team and be responsible for the overall tasks. He/she shall hold a bachelor degree in civil engineering and preferably a master degree holder in road engineering with sufficient experience in cement concrete pavement, road construction, and project management. He/she will coordinate and supervise the road construction works in the field. The chief resident engineer, with minimum 15 years experience in major road construction and proficient written and spoken English, will (i) maintain records and advise the EA with the day-to-day coordination and supervision of project 1 and its components, including the preparation of regular progress reports, (ii) coordinate and review updated designs and cost estimates prepared by the design consultants, (iii) coordinate and supervise the work of field teams in supervising and certifying construction in accordance with contract conditions. He/she shall be familiar with various international standards for design and construction (FIDIC) including stage of works and method of construction such as temporary works, construction plans, schedules, construction method, assignments of equipment and personnel, testing and trials, and drawings. Material Engineer [International, 14 person-months] The material engineer shall hold a bachelor degree in civil engineering, be proficient in both written and spoken English and have a minimum of 12 years experience in major road construction works especially in material testing. He/She will (i) advise the CRE on the contractors' compliance to material specifications and testing, (ii) provide input to the design team, and (iii) coordinate and supervise the work of field teams in supervising and certifying

56 construction in accordance with contract conditions including acceptance standards of materials, approval of source supply, and material testing methods. (iii) (iv) (v) (vi) (vii) Highway Engineer [International, 10 person-months] The highway engineer shall hold a bachelor degree in civil engineering, be proficient in both written and spoken English and have a minimum of 12 years experience in highway design and supervision, especially in cement concrete design and construction for roads. He/she will review the concrete pavement design, advise the CRE on the material quality and specifications, concrete mixing methodology, concrete additives, safety protection, laboratory and-field material tests for quality control, field equipment, and cement concrete placing and calibration of equipment. He/she will also advise the field teams in the using of cement concrete and certifying construction in accordance with contract conditions. He/she will also (i) maintain records and assist the EA with the dayto-day coordination and supervision of project 1, (ii) coordinate and review updated designs and cost estimates prepared by the design consultants, and (iii) coordinate and supervise the work of field teams in supervising and certifying construction in accordance with contract conditions. Legal Specialist [International, 2 person-months] Legal Specialist, a lawyer with proficient written and spoken English and a minimum of 15 years experience in road works contract administration including FIDIC contract administration, will (i) evaluate and settle variations and standard format of claims and (ii) asses contract amendments and updated particular conditions of contract. Deputy Chief Resident Engineer/Highway Engineer [National, 24 personmonths]: He/she will assist CRE on coordination and supervision the road construction works in the field including coordination and liaison with Employer. The Assistant Resident Engineer shall have a bachelor degree in civil engineering, be proficient in both written and spoken English and with a minimum of 12 years experience in road construction. He/she will assist CRE in day-to-day construction supervision, monitoring schedule, preparing monthly certificates, reviewing and approving shop drawings and as-built-drawings. Road Design Engineer [National, 12 person-months] He/she will assist CRE in ensuring that the design complies with technical and safety standards. The road design engineer shall have a bachelor degree in civil engineering, be proficient in both written and spoken English and with a minimum of 10 years experience in road design and construction. He/she will update designs and cost estimates prepared by the design consultants. Material Engineer [National, 36 person-months] Under the guidance of the international material engineer, he/she will undertake day-to-day supervision of compliance to material specifications and testing, supervise the contractors work, and certify the construction in accordance with contract conditions including acceptance standards of materials, approval of source supply, and material testing methods. The material engineer shall have a bachelor degree in civil engineering, be proficient in both written and spoken

57 English and with a minimum of 8 years experience in major road construction works especially in material testing. (viii) (ix) (x) (xi) (xii) Site Inspector [National, 72 person-months] The site inspectors shall have a bachelor degree in civil engineering, be proficient in both written and spoken English and with a minimum of 8 years experience in major road construction works especially in workmanship and construction method. Under the guidance of the international highway engineer, they will undertake day-to-day supervision for roads and small structures, monitor contractors' work and certify the construction in accordance with contract conditions. Environmental Safeguard Specialist [National, 10 person-months] The safeguard specialist shall have a bachelor degree in environment sciences, be proficient in both written and spoken English and preferably with a minimum of 8 years experience in civil works. He/she will (i) review all documents and reports regarding the integration of environmental including contractor s environmental action plan, (ii) supervise the contractors' compliance to EMP, and (iii) prepare compliance reports. Social Safeguard Specialist [National, 6 person-months] The social safeguard specialist, a social related university graduate, be proficient in both written and spoken English and with 8 years experience in supervising civil works contracts, will assess the contractors' compliance to contract provisions specifically on social safeguards. He/she will check the implementation of land acquisition and resettlement (if relevant), compliance to contractors' obligation in addressing communicable diseases/sexually transmitted infections (STI), compliance to core labor standards. Quantity Surveyor [National, 48 person-months] The quantity surveyor, a civil engineer proficient in both written and spoken English and with minimum 10 years experience in supervision of major road projects, will assist Highway Engineer in daily supervision, check the quantity, variations, justification and verify the monthly certificates. Cement Concrete Specialist [National, 12 person-months] The cement concrete specialist, a civil engineer proficient in both written and spoken English and with minimum 8 years experience in cement concrete pavement design and technology will assist the international highway engineer in undertaking day-to-day supervision of the cement concrete pavement construction 4. Deliverables 87. The Consultant will prepare reports including monthly reports on the project progress in a format and level of detail agreed with the EA and ADB. The Consultant will maintain records documenting information supplied by the field teams, decisions made at meetings, progress on civil works, certified achievements and milestones, financial records, and any deviations from or changes to the contract plans. The Consultant will assist PMU in preparing quarterly progress reports, safeguard compliance reports, a project completion report, and monitoring and

58 evaluation reports as required under the Financing Framework Agreement and Loan Agreement for Project 1. 5. Reports 88. The Consultant will submit the reports in hardcopy and softcopy as follows: Type of Reports Inception Report Monthly Progress Report Quarterly Progress Report Project Completion Report Road Fund (English & Russian) 3+4 3+4 3+4 3+4 Recipient ADB (English) 3 3 3 3 Submission Date Within 2 (two) month after commencement 10 th of each following month 14 th of each following quarter Maximum one month after Contract completed 89. Minimum contents of the reports: (i) (ii) (iii) (iv) Inception Report: initial findings and the work program for the balance of the assignment. Monthly Progress Report: brief details of the works carried out during the previous month, the problems encountered or anticipated, together with the steps taken or recommendations for their correction, and financial and physical progress to date. Quarterly Report: detailed description of the achieved progress of works, difficulties and delays encountered or anticipated, and remedial actions taken or suggested, the overall progress of the project as monitored against the PPMS indicators. Project Completion Report: detailed description of all the works by items of technical and non-technical matters, financial and disbursement data, analyses, difficulties and delays encountered or anticipated, and remedial actions taken or suggested, the overall progress of the project as monitored against the PPMS indicators, including recommendations to EA and ADB. 6. Facilities to be provided by the Client 90. The Client will provide visa supporting letters and registrations in Uzbekistan Immigration Office. Furnished air-conditioned office spaces with support facilities in the construction site will be provided by the contractor. C. Project Appraisal 1. Objectives 91. The consultants will:

59 (i) (ii) (iii) (iv) prepare due diligence report including technical and economic appraisal, environmental, social, and poverty impacts assessment for subsequent projects; prepare project implementation and financing plan for ADB financing; review the investment program compliance to the framework financing agreement (FFA) and loan agreement; and draft periodic financing requests in accordance with a format agreed with the EA and ADB. 2. Scope of Services 92. Due-diligence Report Preparation (4 person-months of a national transport economist who is also acting as the team leader and 2 person-months of a national road/traffic engineer) (i) (ii) (iii) (iv) The consultants shall compile all due-diligence works completed under previous tranches. Update project cost and the economic analysis. Prepare project implementation schedule and reflect it in the procurement plan. Prepare the project disbursement schedule and identify critical project preparation activities. Review the investment program compliance to the framework financing agreement (FFA) and loan agreements. Draft periodic financing requests in accordance with a format agreed with the EA and ADB 93. Environmental Impact Assessment (2 person-months of international and 8 personmonths of national environmental specialist) (i) (ii) (iii) Prepare an environment impact assessment (EIA) report in accordance with the Safeguard Policy Statement (SPS) (2009) and relevant laws and regulations in Uzbekistan. In the review of potential environmental impacts, temporary and permanent damage to the environment, particularly forests, wildlife reservations, areas with archaeological value, and potential risks from toxic and hazardous chemicals should be included. An environmental management and monitoring plan should be included in the EIA report. The consultation with affected people will also be carried out during the preparation of EIA. The consultant will (a) determine costs of the proposed environmental measures, (b) appraise the level of cost against expected environmental benefits, (c) incorporate appropriate mitigating measures into the designs of all subprojects under the investment program, and (d) prepare contractor specifications for environmental management and monitoring. Public consultation with stakeholders and affected peoples will be carried out in accordance with SPS. Complete records of public consultation, including lists of participants, will be maintained and submitted as part of the report. 94. Social Impact, Resettlement, and Gender Analysis (2 person-months of international and 6 person-months of national social development/resettlement specialist) (i) In conjunction with the feasibility study, the consultant shall determine any possible need for temporary and permanent land acquisition and compensation/resettlement arrangements; and prepare a land acquisition and resettlement plan (LARP) as required, according to the format and scope

60 (ii) (iii) (iv) (v) (vi) required by the ADB. The consultant shall assess the potential adverse impacts on ethnic minorities, and prepare an ethnic minority development plan if required. Assess the investment program impacts and benefits: (i) livelihood improvement of local populations; (ii) core-labor standards issues; (iii) gender impacts (if any); (iv) civil works and road operations impacts; (v) communicable diseases/sexually transmitted infections (STI), and; (vi) human or drug trafficking. Reflect the results of the above and update the poverty and social assessment (PSA) prepared under the previous tranches. The updated PSA will include the socioeconomic and poverty status of the project areas of influence, including the nature, extent, and determinants of poverty in these areas; identify and estimate the likely socioeconomic and poverty reduction impacts of the project; and prepare proposals for monitoring and evaluating the benefits and impacts before and after implementing the projects under the investment program. Prepare a consultation and participation plan. Update the community and gender action plan prepared under the previous tranches. If necessary, conduct additional gender analysis and identify elements in the MFF design that have the potential to address gender equity. Identify existing gender issues in the transport and communication (roads) sector and assess the conditions of roads in terms of comfortable short and long distances traveling, from a gender perspective. Conduct generalized analysis and desk study based on available gender-related information and gender-sensitive indicators in transport sector (such as access to roads and transport, activity patterns, time use, income-generating effects, migration, etc). Conduct small-scale social survey and consultations with the main stakeholders to identify gender issues in the project area. The consultant shall assess quantitatively the poverty impact of the project. Define the project influence area as the basis for the analysis and outline the mechanisms through which the project helps reduce poverty. Identify relevant indicators and formulate a methodology to monitor the impact of the project on poverty in the project influence area, and ensure that such indicators are introduced in the project s DMF. 3. Input 95. The services will be carried out by a firm comprising international and national experts. The Consultant will be selected by the EA through a single source selection method in accordance with ADB s Guidelines on the Use of Consultants (2007, as amended from time to time). A total of 6 person-months of international consultant inputs and 20 person-months of national consultants will be required. 96. Consulting services are expected to take place over 4 months. The team leader will be a senior national transport economist with a graduate degree in transport economics and 10 years experience in road construction. The other experts should also have relevant qualifications and experience. All experts must be proficient in both written and spoken English.

61 International Experts Table 1: Staffing Person- Month National Experts Social/Resettlement Specialists 2 Transport Economist/TL 4 Environment Specialists 2 Road/Traffic Engineer 2 Person- Month Environment specialist 8 Social Development Specialist 6 Total 4 Total 20 4. Deliverables 97. The Consultant will submit the reports in hardcopy and softcopy as follows. Type of Reports Inception Report Interim Report Draft Final Report Final Report Road Fund (English & Russian) 3+4 3+4 3+4 3+4 Recipient ADB (English) 3 3 3 3 Submission Date Within 4 weeks after commencement 8 weeks after commencement 15 weeks after commencement Within one month after submission of Draft Final Report 98. Minimum contents of the reports. (i) (ii) (iii) (iv) Inception Report: work plan, early working paper, review and data requirement for due diligence of subsequent projects and methodology and strategy to reach the project objective. Interim Report: detailed description of the achieved progress of works and preliminary findings. Draft Final Report: full due-diligence reports for subsequent projects including economic analysis, EIA, LARP, PSA, environment compliance and FFA compliance reports Detailed description of all the works by items of technical and non-technical matters, implementation schedule for subsequent projects and other related documents. Final Report: improvement of the draft final report incorporating the EA and ADB comments. 5. Facilities Provided by the Client 99. The Client will provide the following services and facilities for the Consultant. (i) (ii) (iii) Furnished air-conditioned office spaces in Tashkent office for carrying out the services. International telephone, fax and email facilities in Tashkent office. Visa supporting letters and registrations in Uzbekistan Immigration Office.

62 D. Road Asset Management Support Under Project 1 1. Background and Objectives 100. Given the size of the road network, Uzbekistan s road network is arguably the country s most valuable public asset. Managing this asset in a systematic and transparent manner is a major concern of the Government. The concern is related to the financing of road works, to the way road information and data are collected, stored and processed, and to the approach by which maintenance options are identified and selected. To address these concerns, the Government proposes to introduce a Road Asset Management System (RAMS), which is aimed at an optimal sourcing and allocation of resources for the management, operation, preservation and enhancement of the road infrastructure. The RAMS is expected to provide a more objective and rational approach to road planning and resource allocation. The Table below summarizes the key themes of a RAMS: Strategic Approach Whole of Life Optimization Resource Allocation Customer Focus and Accountability Scope A systematic process that takes a long term view on road development and management. The whole-life or life-cycle of an asset is considered. Maximizing benefits by considering relevant options and by balancing competing demands. Understanding the rate of asset deterioration and when to intervene. Addressing the variation in maintenance standards and their optimization. Development of funding models to optimize road user costs Allocation of resources based on assessed needs. Explicit consideration of customer expectations through defined levels of service. A highway network comprising all assets, including pavements, bridges, culverts, gabions, retaining walls, footways, earthworks, drains, and other structures. 101. Some of the prerequisites of an asset management system are already, or will soon be, in place. Road Fund staff and staff from Uzavtoyul s research institute are being trained on the Highway Development and Management Model 4 (HDM-4). HDM-4 may be regarded as the brain of road asset management in that it processes data to facilitate and rationalize decision making. The use of HDM-4 will help determine network-wide funding requirements, assess the impacts of various development and road preservation options on the performance of the road network, and generate funding levels for a given set of targeted network performance indicators. 102. The Road Board through the Road Fund or Uzavtoyul should become the guardian of the proposed asset management system. This would imply that the road fund becomes more independent with regard to fund allocations. The flow of funds should be allowed to automatically adjust to traffic and network expansions, rather than relying on allocations that are to some extent discretionary and not well aligned to the cost incidence. The introduction of a road asset management system would bring about major changes in the way roads are planned, maintained and financed. Sustained capacity building assistance will be required for such a system to take root. 103. The overall objective of the TA is to ensure road sector sustainability and provide an objective basis for road sector funding. Staff from the Road Fund and Uzavtoyul will be familiarized with the rationale and techniques of a RAMS by adopting the system in a pilot

63 Oblast. The TA will also improve contract management practices by introducing quality control procedures. Specific activities include: 2. Scope of Services 104. Consultant services will be provided to lay the foundations for a RAMS. The scope of the TA will be limited to a pilot project that will test the RAMS in one or perhaps two selected Oblast. This approach is justified by the magnitude of the task to design a RAMS for the entire network of 42,350 kilometers. Designing a RAMS for the entire network - formatting a database for 42,350 km, data collection, defining adequate service levels, interaction with stakeholders, valuation of assets, and testing and calibrating a decision model- would be too time-consuming. 105. The TA will cover the following areas: (i) (ii) (iii) (iv) (v) Review of current regime of road user charges: The review will focus on the resource requirement in relation to the sources of road financing. The expected result of the assessment will be recommendations for a road user charge tariff that is better aligned to the damage and the respective cost inflicted by the various groups of road users on the road pavement. The assessment will be aimed at separating road user taxes and fees from general taxation. Based on this, the excess of revenues from road user charges over the proceeds allocated to the general budget will be determined and their adequacy to close the financing gap examined. Review of current expenditure practices: Current expenditure practices will be examined with regard to the allocation of resources to the main road expenditure categories and the compliance of the allocation with prescribed rules and criteria; In this context, contract management practices and procedures will be reviewed and the cost efficiency of work carried out examined. The task will result in realistic proposals for achieving economies. Based on a quantification of the findings, the current and anticipated resource gaps should be revised. Creation of an enabling environment for the use of Public Private Partnerships (PPPs): Keeping in view the aim to augment the financial space for the Road Fund, the extent of private sector involvement in road works will be assessed. A PPP will be designed as a pilot project and, if feasible, taken up to the stage of contract award. Review the current contract management practice: and establish procedures for quality control consistent with the FIDIC terms of contracts. Improve routine maintenance contracts with a view to expanding the application of performancebased contracts. Creation of a data base to serve as an asset register: Select or design a format for a data base that is compatible with the used of HDM IV. Determine a list of asset types to be included in the RAMS. Assess the quality of the existing inventory data available with Uzavtoyul. Prepare a user manual for data collection and systems application. If so needed, design a format for fresh data collection. Assist in the procurement of equipment needed for data collection, notably traffic counting equipment and GPS equipment. Start valuation of the assets included in the RAMS and provide staff training and organize study tours to countries that have successfully implemented RAMS. Prepare long-term program for the countrywide application of the RAMS including.

64 (vi) (vii) Review of the institutional setting: Determine the most suitable location and institution to become the road asset manager and recommend appropriate institutional and organizational arrangements. Develop cement concrete road maintenance guidelines: Prepare guidelines for (a) cement concrete pavement surveys and investigations, (b) technical specifications for maintenance of cement concrete roads, (c) road maintenance works and equipment, and (d) capacity building and training. 3. Required Inputs 106. The services, which will be rendered by consulting firms to be engaged in accordance with ADB s Guidelines on the Use of Consultants, will require a total input of about 40 personmonths (PMs) of international consultants and the same number of person-months of national consultants. They will be carried out over an 18-month period. The international and national consultants will have expertise in the eight areas stated above and will consist of (i) highway engineer (8 PMs), (ii) transport economist (8 PMs), (iii) contract management specialist (4 PMs), (iv) institutional expert (4 PMs), (v) HDM-IV and database system expert (8 PMs), and (vi) PPP expert (8 PMs). A combination of the tasks may be assumed by one expert. The envisaged assignment distribution of the experts over the seven work areas is shown in the matrix below: Scope of works Highway engineer Transport economist/ financing Contract specialist Institutional expert HDM and database expert PPP expert Regime of road user charges 1 3 4 Expenditure review 1 3 4 Public private partnership 1 1 8 10 Contract management practice 1 4 5 Data base and HDM-IV 1 1 8 10 Review of institutional setting 1 4 5 Cement concrete road maintenance guidelines 2 2 Person-month 8 8 4 4 8 8 40 Total person - month 107. The Highway Engineer (8 person-months) will be the team leader and involved in carrying the following specific tasks: (i) (ii) (iii) (iv) (v) Assistance in the calibration of the HDM-IV model to suit the selected pavement option and strategy; A review of design standards applied to different classes of roads; Assistance in the formulation of contracts; Assistance in the introduction of quality control procedures; and Develop cement concrete road maintenance guidelines. 108. The Contract Management Specialist (4 person-months) will undertake a review of contract management practices, draft guidelines and procedures for the introduction of FIDIC based quality control of completed contracts, assess the current experience with performance based maintenance contracts and recommend measures to expand the scope for applying such contracts.

65 109. The Transport Economist/Financing (8 person-months) will assist the Highway Engineer in the calibration of the HDM model to determine adequate pavement designs. The economist could also carry out the tasks of the road finance specialist in valuing the assets to be included in the pilot RAMS. The Transport Economist/Financing will also assist the Highway Engineer in the preparation of proposals for cost savings and quantification of the envisaged savings. The Transport Economist/Financing will assist the PPP expert in the assessment of viable PPP options. In addition, the tasks of the Transport Economist/Financing will include: (i) (ii) (iii) (iv) (v) Compilation of Government revenues being related to the utilization of roads; Definition of suitable pricing principles for the various classes of roads; Identification of revenues collected from road users that (i) have a more direct relationship to road costs, including fuel taxes, and registration and license fees, and (ii) those road related revenues that are more indirectly related to road usage, including import duties and vehicle sales taxes; Comparison of road user revenues under (i) above with the current appropriations for road maintenance as adjusted by the efficiency savings determined above; Recommendations on revisions to the structure of road user charges based on the general pricing requirement that users should pay. 12 110. The tasks of the Institutional Expert (4 person-month) will include an assessment of the comparative advantage of the sector agencies in becoming the road asset manager. In this context, the expert will undertake an assessment of existing skills and a needs assessment for the agency recommended to become the road asset manager. 111. The tasks of the HDM-IV and Database System Expert (8 person-month) will include: (i) (ii) (iii) (iv) (v) (vi) Design of a database for the pilot RAMS consistent with the requirements of the selected decision model (HDM); Determining the scope of the data base what asset types to include; Preparation of a manual for data collection; Procurement of traffic counting and data collection equipment Assistance in calibrating the HDM model; and Guidelines for the maintenance of the system and training. 112. The tasks of the PPP expert (8 person-months) will include: (i) (ii) (iii) (iv) (v) (vi) (vii) Training of Road Fund staff in the use of the PPP concept; Assessment of the existing legislation relevant to PPPs; Recommendation of policy and legislative changes; Assessment of the potential for full-fledged PPP contracts; Using the scale below, determine the scope for introducing a PPP as a pilot project and design such a PPP up to contract award; Training of staff in special cases of PPP, including treatment of unsolicited bids and viability gap projects; and Draft of a PPP law. 12 To assist with setting road user charges the World Bank Road User Charges Model (RUCM) may be used. This model is spreadsheet-based and is designed to help estimate road user charges to cover the routine and periodic maintenance costs of the road network.

66 4. Output Requirements 113. The consultants will prepare and submit a brief Inception Report within four weeks after the commencement of their services. This report will review the availability of information and report on any factors that may affect the quality, content, or timing of the services to be provided. It should also contain recommendations on how best to overcome any perceived difficulties including, where appropriate, revisions to the work program. The consultants will conduct one stakeholder workshop towards the end of their assignment presenting the preliminary findings of the reviews. A Draft Final Report will be submitted by the Consultant three weeks prior to the completion of the services and will contain details of the findings, conclusions, and recommendations. In particular, the report will: (i) (ii) (iii) present the results of the workshop and document any issues raised. The rationale for incorporating the preferences of the participants into the final recommendations is to be described; present draft proposals and preliminary recommendations after 4 month of team mobilization; and present the recommended structure and key contents of the final report after about ten months upon team mobilization. 114. A Final Report, to be submitted by the consultants will update the draft Final Report taking account of comments provided by the Road Fund and Uzavtoyul and other stakeholders. A brief Executive Summary Report highlighting the main findings and conclusions of the study, in a format suitable for high level government officials will also be prepared. The following will be the consultant s outputs: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) Proposals and recommendations on rationalizing expenditure management and the ensuing cost savings; Present the recommended structure of road user charges and quantified measures to ensure dependable and predictable resource availability for the Road Fund and Uzavtoyul; A draft PPP law and a pilot PPP project contract; Electronic road asset inventory established for pilot Oblast; Organizational requirements determined for the adoption of a RAMS; Ownership of the concept fully confirmed; Decision model selected and calibrated; Format for data collection prepared; Types of assets for inclusion in RAMS identified; and Plans for institutional development and expansion of the RAMS developed.